Teva woes keep piling up with another investigation for bribery

Teva

Teva is reportedly under investigation by police in Israel for bribing foreign officials.

When it rains it pours, and Teva is experiencing a flood of bad news of near biblical proportions. The same day that the company showed CEO Erez Vigodman the door, the drugmaker was said to be under investigation by Israeli police for bribing foreign officials in an investigation that mirrors charges it recently settled with U.S. authorities.

The company acknowledged to Haaretz that Israeli police are conducting a bribery investigation similar to the U.S. probe. Sources told Haaretz it centered on Teva paying hundreds of millions of dollars in bribes to foreign officials and then creating falsified documents to hide the payments.

That U.S. case concerned issues that had occurred between 2007 and 2013 in Russia, Mexico and Ukraine. The company agreed in December to pay nearly $520 million to the U.S. Department of Justice and Securities and Exchange Commission to resolve the violations of the Foreign Corrupt Practices Act. The criminal fine to the DOJ totaled more than $283 million, while Teva ponied up $236 million to the SEC.

The latest disclosure is among a mounting list of problems that has embroiled the company and cost Vigodman his job just 18 months after announcing its $40.5 billion deal for Allergan’s generics unit that many thought would be the big turnaround for the company. The problems started with the fact that it took Teva so long to close the Allergan deal that some investors had lost faith in its upside.

Just months after finally getting it closed last August, generics CEO Siggi Olafsson—a cheerleader for the deal—unexpectedly said he was leaving, spooking investors since he was considered essential to making it work. On top of that a tough pricing environment for the generics industry has left questions in investors minds about how Teva will untangle the mess.

As if in answer, the company told them in January the company was going to have to trim its sales guidance for 2017 by more than $1 billion.

Now with the company’s stock price down more than 50% from its August 2015 highs, Vigodman is out and Chairman Yitzhak Peterburg will handle the day-to-day CEO duties while a permanent replacement is sought. Director and Celgene vet Sol Barer will serve as chairman.

On Tuesday, though, one analyst saw something to like in the whole mess. Credit Suisse analyst Vamil Divan told investors in a note that the change at the top may allow for a fresh start.

“We believe the changes underscore the difficulties Teva has faced over the past 18 months and may be well received as investors look for fresh faces to lead a potential turnaround at the company,” Divan wrote.

Divan has some specific issues that he expects management to answer next week when Teva reports earnings. He wants to see if even the revised earnings projections will be walked back further in light of a court ruling late last month that tossed out four patents on long-acting multiple sclerosis star Copaxone, putting billions of dollars at risk. The analyst wants to know what this is going to do to Teva’s ability to pay down debt and what it will mean for the company’s dividend.

As he sees it, “It will be imperative for TEVA to bring in a CEO who understands the intricacies of the generics business but who can also work to bolster a specialty pharma business,” Divan wrote to clients.

thanks to: FiercePharma

Teva ‘s $520M bribery settlement with the feds sparks shareholder lawsuit

Justice statue with sword and scales
Teva is starting the new year facing a shareholder lawsuit after it last month paid $520 million to resolve bribery charges in Russia, Ukraine and Mexico.

Just after forking over $520 million to resolve federal bribery charges relating to its operations in Russia, Ukraine and Mexico, Teva is starting the new year facing a shareholder lawsuit.

Ra’bcca Technologies has filed a petition for approval for a derivative suit against Teva and several of its current and former officers, including ex-board members Chaim Hurvitz, Shlomo Yanai, Dan Suesskind, and former chairman Phillip Frost, Israel’s Globes news service reports.

Last month, Teva agreed to pay nearly $520 million to the U.S. Department of Justice and Securities and Exchange Commission to resolve violations of the Foreign Corrupt Practices Act. The criminal fine to the DOJ totaled more than $283 million, while Teva ponied up $236 million to the SEC.

“The respondents, past and present officeholders in Teva, bear responsibility for Teva’s act and failure in violating U.S. law, and should therefore compensate Teva for all the damages caused to it,” Ra’bcca representatives said, according to Globes.

In announcements detailing Teva’s admitted violations, U.S. authorities say company execs and employees in Russia bribed an official there to boost the government’s purchases of its multiple sclerosis med Copaxone.  The government official made $65 million between 2010 and 2012 setting up the purchases, even as Russia sought to cut costs on foreign drugs, prosecutors said.

Between 2001 and 2011 in Ukraine, Teva bribed a top official in order to “influence” the government’s decisions on Teva drug approvals, prosecutors said, providing the “registration consultant” with $200,000 monthly through a fee and other expenses.

And in Mexico, a Teva subsidiary’s employees bribed doctors to prescribe Copaxone since “at least 2005,” according to the U.S. government’s release. The company additionally admitted it didn’t have an adequate control system in place to catch the violations, and hired managers “who were unable or unwilling to enforce” existing policies, according to prosecutors.

Teva’s settlement—the largest fine paid by a pharma company over FCPA violations—comes after years of investigations into its practices. The company in November notified the Tel Aviv Stock Exchange that it had set aside $520 million to cover expected expenses for the violations. Early in 2015, after conducting its own investigation, the company said it had “likely” violated FCPA in a number of countries.

Along with paying the fines, Teva agreed to continue to work with the feds and to boost its internal compliance efforts. Prosecutors said the company received a 20% discount from the low end of sentencing guidelines due to its “substantial cooperation and remediation.”

The FCPA probe wasn’t Teva’s only legal entanglement, however. Among a number of generics makers, the company now faces a Justice Department probe into possible price collusion.

thanks to: FiercePharma

 

The Israeli pharmaceutical giant Teva must pay over $520 million following corruption charges

Israeli drug firm fined for bribing officials in Russia, Ukraine & Mexico

A building belonging to generic drug producer Teva, Israel’s largest company with a market value of about $57 billion, is seen in Jerusalem. © Baz Ratner / Reuters

The Israeli pharmaceutical giant Teva must pay over $520 million following corruption charges made by the US Department of Justice (DOJ). The company breached the Foreign Corrupt Practices Act (FCPA) by bribing officials in Russia, Ukraine and Mexico.

Teva is the world’s largest manufacturer of generic pharmaceutical products. According to the DOJ, its fully-owned subsidiary Teva LLC (Teva Russia) bribed a top Russian official to increase sales of the multiple sclerosis drug, Copaxone, during drug purchase auctions held by the Russian Ministry of Health.

Between 2010 and at least 2012, Teva earned an extra $200 million from Copaxone sales in Russia. The Russian official allegedly received $65 million through inflated profit margins. His name and department were not disclosed.

Overall, Teva will pay $520 million which includes the US criminal and regulatory penalties for its illegal activity in Russia, Ukraine and Mexico.

In Ukraine, Teva hired a senior government official in the Ministry of Health as “registration consultant.” Between 2010 and 2011, the Israeli company paid him a monthly fee and covered his expenses, amounting to $200,000. In Mexico, Teva bribed doctors to prescribe Copaxone from at least 2005.

“Teva and its subsidiaries paid millions of dollars in bribes to government officials in various countries, and intentionally failed to implement a system of internal controls that would prevent bribery,” said Assistant Attorney General Caldwell.

“Companies that compete fairly, ethically and honestly deserve a level playing field, and we will continue to prosecute those who undermine that goal,” Caldwell added.

“As demonstrated by this case, the Foreign Corrupt Practices Act has a long reach. Teva’s egregious attempt to enrich themselves failed and they will now pay a tough penalty,” said William J. Maddalena, Assistan

thanks to: RT