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Amid Exec Departure, Teva's 2017 Outlook Now More Important Than Ever

Teva TEVA Exec Departure Means 2017 Outlook Is Even More Crucial

Teva Pharmaceutical Industries Ltd (ADR) TEVA 5.83% announced that Dipankar Bhattacharjee, the CEO of Teva generics Europe, has been appointed as the new head of global generics.

Deutsche Bank’s Gregg Gilbert maintains a Buy rating on the company, with a price target of $54.

Executive Departure

Bhattacharjee will replace Siggi Olafsson, who is to step down from his position at the end of Q1:17.

“Mr. Olafsson has led TEVA’s global generic business since joining the company in 2014, and was instrumental in the acquisition of Actavis Generics (which he previously headed before joining TEVA),” Gilbert mentioned.

The analyst noted that many have criticized the company for paying a very heavy sum for the acquisition of Actavis Generics during a time when pressures were rising in the generic industry, as well as for paying a high multiple for a Mexican business that developed problems shortly after acquisition.

Impact On Stock

“In light of these issues, and taking a step back, it is not altogether surprising to see a management change, but we were surprised by the seemingly sudden resignation of such a well-respected generic executive,” Gilbert went on to say.

The analyst believes this executive change could lead to additional pressure on Teva Pharma, and possibly on other generic stocks.

“TEVA’s detailed guidance for 2017, which the company moved up from early February to sometime in January, will be more important than ever,” Gilbert added.

At last check, shares of Teva were down 6.21 percent at $34.74.

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

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