E Teva CEO Vigodman Is Out

Today a CEO at one of our companies was fired, as I have been preaching for a couple of months. However it is still too soon to crow. It reminds me of Oscar Wilde. “To lose one parent may be regarded as a misfortune; to lose both looks like carelessness.” 

Israel’s Teva (TEVA) which 3 1/2 years ago fired Dr. Jeremy Levin as its CEO today has sacked Erez Vigodman who replaced him after a spate of negative reports on the company’s balance sheet. Vigodman, an Israeli CPA and former army officer and chemical company head, is blamed for the overpriced purchase of the Actavis generics arm of Allergen after getting into a losing battle to buy Mylan.

Apart from the price, Vigodman also picked up a series of larcenous and illegal sales practices on which Teva has had to pay fines to the US SEC and DoJ and regulators in foreign countries, so much so that its debt is unlikely to be covered by earnings in the near terms.

Teva appointed Dr. Yitzhak Peterburg, its board chairman, as interim CEO. He used to head R&D as a group VP and is a pharma guy with experience in hospitals and a startup biotech before that. De Petersburg will be replaced as chairman by Dr Sol J. Barer, an American board member who founded the Celanese biotech arm, Celgene, which he chaired until 2010. He has a PhD from Rutgers and a BS from Brooklyn College. The board has begun another search for a CEO.

Former fired CEO Levin took up Israeli nationality (he already spoke Hebrew) when he was appointed. He created the Bristol Myers “string of pearls” strategy which was immensely successful. A South African who studied in the UK before moving to the US, he got into trouble with another American on the Teva board which resulted in the Israel group deciding to get rid of both non-Israelis. He now runs a biotech looking into brain diseases in NYC called Ovid.

Since I have been calling for Vigodman’s head for months and since I recently bought more Teva at a ridiculously low price of $31.50 (reported in my tables yesterday) I am glad the need for change has been recognized by the Teva board. Now let’s hope they find a good CEO.