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Teva cedes spot as Israel's biggest firm in blow to prestige
[TEL AVIV] Teva Pharmaceutical Industries Ltd lost its position atop Israel's corporate hierarchy for the first time in 15 years in yet another sign of the precipitous decline in fortunes at the world's biggest maker of cheap copycat medicines.
The drugmaker's market capitalisation fell to US$17.6 billion on Monday, capping a year in which more than two-thirds of Teva's value was erased, and continued its slump in Israeli trading on Tuesday. Meanwhile, Tel Aviv-based Check Point Software Technologies Ltd narrowly edged past it to US$17.7 billion.
Teva's tumble was precipitated by botched acquisitions that left the company mired in debt and wiped out US$32 billion in market value in the past year. The drugmaker, long considered "menayat ha'am" (Hebrew for "the people's stock,") was worth more than the combined value of the next 10 biggest publicly traded Israeli companies at the end of 2015, data compiled by Bloomberg show.
The Petach Tikva-based company is now under siege from investors and creditors as it struggles to stem a decline in profits and make debt payments. The company has also failed to identify a new CEO since Erez Vigodman's ouster more than six months ago.
Its temporary overseers, forced to take increasingly aggressive steps to stem the rout in market value, have slashed dividend payments, exited markets, stepped up asset sales and deepened job cuts in recent weeks.
Shares of Teva dropped 0.8 per cent to 61.53 shekels, the lowest in more than 15 years, as of 11:09am in Tel Aviv trading. In New York, it slumped 0.8 per cent to US$17.16 by the end of the day.
Teva, for decades Israel's only corporate giant by global standards, accounts for 1.2 per cent of the nation's gross domestic product and is one of the largest private employers.
Since the death of Teva's longtime chief Eli Hurvitz in November 2011, Teva's connection to its country of birth has begun to slip. The drugmaker started reducing its local workforce in 2012, when it was led by the South African-born and US-trained Jeremy Levin. Now, about 5 per cent of its shareholders are Israeli.