The CEO at Teva Pharmaceutical Industries, the biggest generic drugs maker in the world, stepped down following a number of strategic missteps and operational and legal setbacks that have sent shares of the company plunging downward.
Teva is the largest company in Israel and it announced Monday that CEO Erez Vigodman would step down effective immediately and his replacement would be Yitzhak Peterburg, on an interim basis.
A number of costly and questionable acquisitions, as well as delayed launches of new drugs, has prompted many to call for an overhaul of management to lead to structural changes that include a possible spinoff of its businesses of branded drugs to restore the confidence of investors.
Shares of Teva reached $72 during July of 2015, but fell last week to a low of 10 years at $32.20, after a court in the U.S. found invalid patents on the most important branded product of Teva, Copaxone its treatment for multiple sclerosis.
That medication alone represented close to 20% of last year’s revenue at Teva.
Shares were down over 2% during extended trading following the departure of Vigodman, which comes following the resignation of Siggi Olafsson its generics drugs chief.
Vigodman started with Teva during 2014 after he helped rejuvenate a sluggish agrochemical company in Israel that earned him the reputation of being a specialist in turnarounds and a dealmaker.
However, the stumbles that occurred during his watch have had investors screaming for a big shakeup at the pharmaceutical giant.
Vigodman started a costly spree of acquisitions that culminated with the purchase last year of Actavis’ generic drugs division for a price of $40.5 billion that many investors said had been too high.
A deal of $2.3 billion for Rimsa a drug maker in Mexico led to both companies suing one another. Teva paid $144 million as well to acquire Zecuity a migraine patch, but was required to pull that product during 2016 after patients reported they had been burned or scarred.
In December of last year, Teva agreed to a settlement of over $519 million to end civil and criminal allegations the company had bribed officials overseas to gain new business for its medications.
In January, Teva provided a revenue and profit outlook for 2017 that was below estimates on Wall Street.
Peterburg announced that he would conduct a review of the business while a search is carried out for a new permanent CEO.