Shlomo Yanai to resign as Teva CEO in May

Yanai will be replaced by Dr. Jeremy Levin, a former senior executive at Bristol-Myers Squibb.

Teva 311 (photo credit: REUTERS/Ronen Zvulun)
Teva 311
(photo credit: REUTERS/Ronen Zvulun)
Shlomo Yanai is to resign as CEO of Teva Pharmaceutical Industries in May, the company announced Monday. He will be replaced by Dr. Jeremy Levin, a former senior executive at Bristol-Myers Squibb.
“My decision to resign is due to my wish to open a new chapter in my life at 60. This is the right time after ten years in business at Makhteshim Agan Industries and Teva,” Yanai said at a press conference in Tel Aviv.
“I made the decision after deep thought and in consultation with my family and [Teva Chairman] Philip Frost. I have headed the company for five years, no small period in terms of a giant company like Teva.
“I came to the conclusion that I wanted to take on new challenges, and I feel that this is the time to embark on a new road. I want to use my experience for the good of the Israeli economy and society. Over the past five years, a strong strategic infrastructure has been built at Teva, which promises that it will meet its long-term targets and financial performance.”
Market sources said Yanai had received some “interesting offers” both in business and in politics, while others pointed out that 2012 is expected to be a good year for Teva, and therefore an appropriate time for him to leave. Yanai was asked at the press conference which political party he would join, to which he replied: “I am embarking on an intensive six-month handover at Teva. After that, I will decide.”
Yanai was brought to Teva by the legendary Eli Hurvitz, then chairman of the company, who died last November. Yanai succeeded Israel Makov in the post in 2006, when Teva had annual revenue of $8.4 billion. For 2012, the company expects revenue of $22 billion.
His replacement, Levin, 58, was born in South Africa and has lived in the US since 1986. He received an undergraduate degree from Oxford University in Zoology, masters and doctoral degrees from Oxford University in Molecular Biology, and a medical degree from Cambridge University. Among numerous honors, he was the 2005 recipient of the Albert Einstein Award for Leadership in Life Sciences, awarded by Shimon Peres. He joined Bristol-Myers Squibb from in 2007, and before that served from 2003 to 2007 as global head of business development and strategic alliances at Novartis.
Levin surprised the audience at the press conference by speaking in fluent Hebrew, and made it clear that Teva would remain an Israeli company.
“Teva has a long history of success. It has been run by outstanding leaders, who built one of the world's great companies. I have been appointed to follow in their path,” he said. “I want to thank Shlomo Yanai, and I will work closely with him over the next five months. Teva is a unique company. It is Israeli, and it will remain such.”
He added: “We will continue to grow and build this special company. Teva’s human capital will lead us into the future. You have my promise of cooperation, and I believe that we will succeed. My Hebrew will improve, but I tell you - I won't be sold in Hebrew. I am excited about coming to live in Israel; I feel that I have come back home.”
In response to Yanai’s resignation, analysts believe it will have a positive effect on Teva’s shares. When Makov resigned from Teva in 2006, the company’s share price fell four percent that same day, but quickly corrected.
“We believe that the appointment of a manager from the pharma field, despite the fact that he is not an Israeli, is the correct course to take,” Clal Finance equity analyst Jonathan Kreizman said.
“Teva will face numerous challenges in the upcoming years. Following the acquisition of Cephalon, its success in innovative drugs will be a decisive factor in its future. In this respect, the tremendous experience that Levin brings with him from Novartis and Bristol will most definitely help the company.”
IBI analyst Natalie Gottlieb said, “For some time now, investors have been suggesting that he should be replaced. Therefore, the timing might be surprising, but the action is not. In addition, we believe that the appointment of Dr. Levin, who is from within the industry, will be perceived positively. Dr. Levin comes from the field of innovation at a time when Teva's most important task is to successfully merge Teva and Cephalon, an innovative company. All this will add to the positive effect on Teva's share price.”