After denying reports of his threatened resignation on Sunday, Teva Pharmaceutical Industries president and CEO Dr. Jeremy Levin announced on Wednesday that he will be leaving the company.
Levin’s departure was reportedly due to irreconcilable differences with Teva chairman Dr. Phillip Frost, who sought a harder line on a controversial round of layoffs and against higher taxes in Israel.
Parting words were civil. Frost thanked Levin “for his meaningful contribution to Teva during the last two years.” Levin wished the company “every success.”
VP and CFO Eyal Desheh, was chosen as Levin’s interim replacement.
Teva’s share price fell 7.1% in premarket trading on the New York Stock Exchange, and trading in Teva’s shares was suspended on TASE Wednesday morning following the unexpected announcement.
The change of leadership during a time of turmoil at Teva has generated concern about the company’s stability, the future of its employees in Israel and the impact on the national economy.
Erez Zadok of Aviv Risk-hedged Funds Management told Globes that the resignation spells trouble for the employees, because Frost has been a hardliner on downsizing.
“Levin’s resignation is bad news for Teva’s employees in particular and for Israel in general,” says Zadok. “Frost has taken a tough stance on layoffs at the company and against any rise in taxation…If a CEO is appointed who follows Frost’s line, Teva will not hesitate to transfer activity out of Israel if it is required to pay higher taxes, nor will it hesitate to lay off workers, while the failed management continues to enjoy all its privileges.
“It could be that, for investors, this is good news in the short term, but unless there is substantial change in the company’s senior management … then the share will probably continue to underperform in the long term.”