After announcing that it has officially filled its vacant CEO seat, Teva Pharmaceutical Industries (NYSE:TEVA), a pharma company primarily focused on generic drugs, jumped 18% as of 1:45 p.m. EDT on Monday.
Teva announced today that it has hired Kare Schultz as its new president and CEO. Schultz is an industry veteran with more than 30 years of experience who has held leading positions at pharma companies like Lundbeck and Novo Nordisk.
He will be taking over from Teva's current interim CEO, Dr. Yitzhak Peterburg, once his family officially relocates to Israel. Dr. Peterburg has held the top post since February, when Teva's former CEO, Erez Vigodman, left the company abruptly for undisclosed reasons.
Dr. Sol Barer, the chairman of Teva's board, offered up the following commentary on Schultz's hiring:
With extensive global pharmaceutical experience, a strong track record executing corporate turnaround strategies, driving growth and international expansion at low incremental cost and delivering on promises to shareholders, as well as a commitment to a culture of compliance, Kare is the right leader to take Teva to the next level.
Before officially stepping aside, Peterburg shared the following commentary with investors:
We are delivering on the commitments we have made over the last several months. We are optimizing our operations and geographical footprint while focusing our resources on the specialty and generics pipeline assets that offer the most attractive return on investment. In addition, we are on course to hit our target of generating at least $2 billion from the sale of non-core assets, which we will use to strengthen Teva's balance sheet.
That all sounds great, but there's no doubt that Schultz has a heck of a challenge in front of him to get this company back on track. During its last earnings release, Teva reported declining specialty revenue, a huge drop in margins, and falling profitability. In turn, it was forced to cut its guidance and slashed its dividend by 75% in order to preserve cash. When combined with its massive debt load, I continue to believe that the smart move is to keep far away from this troubled company.