Teva CEO Rumors Surface, Shares Higher
The world’s largest generic drug manufacturer, Teva Pharmaceuticals (NYSE:TEVA) , has underperformed the vast majority of the healthcare sector this year. Many prominent, large-cap, healthcare companies across the 5 major industries have done especially well on the back of increasing demand and growth. However, Teva has struggled to keep up as a result of a patent troubles, exuctive struggles, and a growth slowdown.
The specialty segment is the growth engine for Teva as its generic portfolio struggles to keep revenues flat. Unfortunately, the future growth estimates for its specialty portfolio have been cut in recent months. The company’s revenue engine, Copaxone, is facing a patent cliff that could dramatically impact the company. After a judge failed to extend the patent rights for the medication, a number of small generic competitors stepped in to offer their own treatments.
In the first half of 2014 some analysts are expecting a competing treatment to hit the market and consequently drive Teva’s revenues down. The company has claimed the complexity of Copaxone will stop instant FDA approval of generic competition. But at this point it looks like no one really knows.
Moreover, the company’s Chief Executive Officer stepped down in October. On Thursday, a report was released stating the company has found a viable replacement.
TheMarker cited unnamed sources as saying Teva would introduce Vigodman as CEO at the JP Morgan Healthcare Conference in San Francisco on Jan. 13. A Teva spokesman said the company does not comment on rumours.
Vigodman, a former Teva director, has sat atop the replacement list since Jeremy Levin stepped down at the end of October, amid a difference of opinion with the board. Shares of the company traded higher off the news, shares of Teva closed higher by a half a percent to $40.26. Maybe shares of the company will perform in line this year, time will tell. Traders will most certainly be watching for updated news regarding Copaxone in the first quarter.
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