After more than a six-month search, Teva Pharmaceutical Industries (NYSE: TEVA) has chosen former H. Lundbeck CEO and renowned turnaround specialist Kare Schultz as its new CEO. Investors seem happy with the prospect of Schultz at the helm, sending TEVA stock 17 percent higher Monday.
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Schultz has more than 30 years of experience in the pharmaceutical industry. In addition to his years at H. Lundbeck, Schultz also formerly served as chief operating officer at Novo Nordisk ( NVO).
Teva investors are hoping Schultz will bring along a plan to right the ship as Teva struggles to adapt to pricing pressures from generic competitors. Teva has lost roughly two-thirds of its market capitalization in the past year. Things went from bad to worse for investors in August when a guidance cut and dividend reduction sent TEVA stock tumbling more than 20 percent.
The company’s struggles led to the departure of former CEO Erez Vigodman in February. In a statement, Teva said Schultz’s track record of leading successful restructuring initiatives at H. Lundbeck made him the right candidate for the CEO position.
“With extensive global pharmaceutical experience, a strong track record executing corporate turnaround strategies, driving growth and international expansion at low incremental cost and delivering on promises to shareholders, as well as a commitment to a culture of compliance, Kare is the right leader to take Teva to the next level,” said Dr. Sol J. Barer, chairman of Teva’s board of directors.
BTIG analyst Timothy Chiang says Schultz is the right man for the difficult job.
“We see the news of the Co.’s appointment of Kare Schultz as the new CEO as a positive catalyst that should help create a floor for the shares, and provide a boost to near term investor sentiment,” Chiang wrote on Monday.
Chiang says filling that leadership position was the most important factor in Teva’s long-term outlook as the company works to develop its exciting pipeline of drug candidates. Chiang says Teva’s fremanezumab migraine prevention treatment “could become a blockbuster product given its more flexible dosing regimen.”
[See: 7 of the Best Health Care Stocks to Buy for 2017.]
Following Schultz’s appointment, BTIG has upgraded TEVA stock to a “buy” rating and set a $24 price target for shares.
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Teva Pharmaceuticals (TEVA) Stock Soars 15 Percent on New CEO originally appeared on usnews.com
