Here's Why Teva Pharmaceutical's (TEVA) Stock Is Down Today

Shares of Teva Pharmaceutical Industries (NYSE:TEVA) slipped over 5.8% in morning trading Tuesday after the company announced a change in upper-level management. Teva is replacing the chief executive of its global generics group, Siggi Olafsson, with Dipankar Bhattacharjee, the current chief of its European generics group.

Going Through Changes

Bhattacharjee, who has served as CEO of Teva Generics Europe since 2013, will take over immediately, while Olafsson will step down and remain active in the company until retiring at the end of the first quarter of 2017.

Teva’s generic medicines business has already undergone significant changes this year, as the company purchased Allergan’s (NYSE:AGN) Actavis generics group back in August. Nevertheless, heading into Tuesday, shares of TEVA were down nearly 45% on the year. The company has struggled with lagging revenues, and the entire generics industry has felt the pressure of a Justice Department probe.

Recent Challenges

Teva recently reported its third-quarter financial results, and although its earnings came in a penny higher than the Zacks Consensus Estimate, quarterly revenues missed expectations by nearly $300 million. The company also cut its outlook for the remainder of 2016 (Also read: Teva Pharmaceutical Beats on Q3 Earnings, Cuts View).

Investors have also been weary as the Department of Justice (DoJ) looks ready to file price collusion charges against several companies engaged in the generic drugs business. The DoJ investigation has been ongoing for several years and covers more than 12 companies and about 24 drugs.

Companies that have reportedly received subpoenas include Teva, Mylan (NASDAQ:MYL) , Impax Laboratories (NASDAQ:IPXL) , and Endo International (NASDAQ:ENDP) , among others.

Bottom Line

It’s interesting to see Teva’s stock sliding today, as some investors might think a changeup at the top is exactly what the company needs right now. However, it’s safe to say that most investors aren’t responding positively to what is a new batch of uncertainty thrown into an already volatile situation.

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