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Key Exec Announcing His Retirement From Teva 'Creates More Uncertainties'

Teva TEVA Exec's Retirement 'Creates More Uncertainties'

After Monday's close, Teva Pharmaceutical Industries Ltd (ADR) TEVA announced Siggi Olafsson, head of global generics at the company, would be retiring at the end of Q1:17.

BTIG’s Timothy Chiang maintains a Neutral rating on the company, while expressing surprise regarding the announcement, especially since it comes at a “critical juncture,” given Teva Pharma recently acquired the generics business from Allergan plc Ordinary Shares AGN.

Uncertainties

“While Teva has announced that Dipankar Bhattarcharjee [sic] (the current head of Teva Generics Europe) will assume the role of Global Head of Generics, we believe the departure of Mr. Olaffson [sic] creates more uncertainty as we head into 2017,” the analyst stated.

Without Olafsson leading the global generics segment, Chiang believes investor sentiment could worsen, given the market continues to focus on the price erosion at the company’s base generics business.

“In addition, a key factor in Teva’s decision to buy the Allergan generics business was cost synergies, which we think still is the case. However, without Mr. Olaffson [sic], we think more questions will be asked by investors,” the analyst noted.

Looking Ahead

Also, Teva Pharma’s debt leverage at the end of Q3 allows little margin for error for the company, going forward.

Chiang further pointed out that a key U.S. court decision on the Copaxone 40mg patent case was expected in mid- to late-January 2017.

DateFirmActionFromTo
Nov 2016JefferiesDowngradesBuyHold
Nov 2016Morgan StanleyDowngradesOverweightEqual-Weight
Nov 2016BTIG ResearchDowngradesBuyNeutral

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