Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) shares rose by over 6 percent on Monday after the company had announced a new organization and leadership structure to “achieve better commercial focus and drive value creation.”
Kåre Schultz, Teva’s President and CEO, says the turnaround “will enable stronger alignment and integration between R&D, operations and the commercial regions, allowing us to become a more agile, lean and profitable company."
The new structure will have many parts to it to change the direction of the company. The commercial business will now be integrated into one operating organization in all three of its regions. The Generic R&D and Specialty R&D organizations will be combined into one as well. A newly formed Marketing & Portfolio will be responsible for overseeing interfaces.
Teva said current positions held by Michael Hayden, chief scientific officer, Rob Koremans, CEO of global specialty medicines, and Dipankar Bhattacharjee, president of the global generic medicines group, would step down effective at the end of the year.
Teva appointed Michael McClellan as permanent Chief Financial Officer after holding the role of interim CFO since July.
Other appointments include Dr. Hafrun Fridriksdottir as executive Vice President of Global R&D, Brendan O’Grady as executive Vice President of North America commercial, Richard Daniell as executive Vice President of European commercial, Gianfranco Nazzi as executive Vice President of Growth Markets Commercial, and Sven Dethlefs as executive Vice President of Global Marketing & Portfolio.
The company desperately needed a turnaround now that shares have fallen over 60 percent year to date. The world’s largest generic drug maker was facing huge setbacks and failed clinical trials resulting in a poor year.
The company has also sold off some of its assets as well as acquisitions to strengthen its portfolio.
But even though Teva has announced a restructuring of the company, investors should not be so quick to jump. Teva still has a long track this year of failed clinical trials, especially its Copaxone, which was halted. Teva will need to provide investors and analysts stronger and consistent results from studies in order for it to turnaround from its current decline.
“It remains our absolute priority to stabilize the company’s operating profit and cash flow in order to improve our financial situation,” added Schultz, “Ensure we deliver on our commitment to supply high-quality medicines to patients around the world.”