Teva names Frost to replace generic drug hero Hurvitz

Chairman ends 34-year tenure after having transformed Petah Tikva-based drugmaker into world’s leading generic pharmaceutical maker.

March 10, 2010 09:50
3 minute read.
Phillip Frost.

Phillip Frost 311. (photo credit: .)


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Teva Pharmaceutical Industries Ltd. has appointed Phillip Frost as its chairman, replacing Eli Hurvitz, who ends his 34-year tenure after having transformed the Petah Tikva-based drugmaker into the world’s leading generic pharmaceutical maker.

“The appointment of Frost as chairman of Teva is good news for shareholders, who will enjoy consecutive management in light of the long acquaintance built on many years between Frost, Hurvitz and Teva,” said Gilad Sarig, chemicals and pharmaceuticals analyst at Bank Hapoalim. “The strength of Teva and one of its main assets is its broad and talented management structure. Therefore, the replacement of the chairman is not expected to have a significant impact on the company’s activities.”

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Last month, Teva announced that Hurvitz, 78, was taking temporary leave from his duties for health reasons but was expected to return to his post.

However, on Tuesday, Teva said that its board of directors received a letter from Hurvitz indicating that he wishes to be released from his duties at Teva in order to focus on his full recovery. Following the decision, Teva’s board unanimously appointed its vice chairman, Frost, to serve as chairman and appointed Moshe Many, who served as acting chairman for the past three weeks, as his replacement.

“We are all saddened by the circumstances that have caused this development,” Frost said. “Under the leadership of Shlomo Yanai, Teva’s president & CEO, we have experienced remarkable growth over the last three years. As chairman, I intend, together with my colleagues on the board, to do our utmost to support Shlomo and his team in pursuit of the strategic plan recently approved by the board and presented to the investment community in January.”

Furthermore, Frost, 73, who is Teva’s largest single private shareholder with a 1.6 percent stake, removed any rumors about a transfer of the firm’s headquarters to the US following the change in management.

“I fully support our commitment to leadership in the global generics market from our headquarters in Israel,” he said.

Frost joined Teva as vice chairman in January 2006, as part of the acquisition of US firm Ivax Corporation by Teva. Prior to that he was chairman and CEO of Ivax Corporation from 1987 until 2006. Frost is presently also CEO of OPKO Health, Inc., a Miami-based specialty pharmaceutical company, chairman of the Ness Ziona company PROLOR Biotech, a investor in several Israeli companies, mainly in the biomed field, and chairman of Miami-based Ladenburg Thalmann Financial Services.

Following in the footsteps of Hurvitz, who has never been one to think small, will certainly be a challenge for Frost.

In 1957, Hurvitz began doing office work at Assia Chemical Labs Ltd. and moved to executive ranks. In 1964, Assia merged with Zori and in 1969 acquired a controlling interest in Teva. In 1976, the three firms merged into Teva Pharmaceutical Industries Ltd. with Hurvitz as the CEO. He resigned as CEO in 2002 and handed over the position to Israel Makov, and has since been the company’s chairman of the board.

Very early on, Hurvitz charted a clear path of investment in generic drug
production coupled with a hungry appetite for major acquisitions, first in Israel and, beginning in the 1980s, in the United States and elsewhere. Through the 1990s Teva continued to expand and became a major player in the global generic market by adopting an aggressive mergers and acquisition strategy in the US. This decade also saw the fruits of 10 years of intensive and innovative R&D activities, with the launch of flagship drug Copaxone, a treatment for multiple sclerosis.

The past decade has seen even more M&A activity from Teva, with the takeover of American women’s health drug-maker Barr Pharmaceuticals in 2008 for $7.5 billion. That nearly matched the previous record set by Teva’s 2005 acquisition of drug giant IVAX for $7.4b.

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