Teva cost-cutting and re-organization

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Teva cost-cutting and re-organization

Home/Pharma News | Posted 14/12/2012 0 Post your comment

Teva Pharmaceutical Industries’ (Teva’s) new Chief Executive vowed to reshape the drugmaker and reduce annual costs by up to US$2 billion over the next five years, making it into ‘the most indispensable medicines company in the world’.

Mr Jeremy Levin, who took over as CEO of the Israel-based company in May 2012, also said on 11 December 2012 in a meeting with analysts and investors in New York he would pursue small- to mid-size acquisitions, as well as divestitures of certain non-core assets.

The generics giant plans to end five mid- and late-stage research programmes and focus drug-development efforts on respiratory and central nervous system illnesses as the company seeks to replace medicines set to lose patent protection in the next three years. The looming 2015 patent expiration of its most important brand-name product, the multiple sclerosis drug Copaxone, which accounts for about 20% of Teva sales and around 50% of its profits, is a driving force in the re-shaping of Teva.

Teva sells more generic drugs than any company in the world. However, Mr Levin said he would focus on what Teva is calling new therapeutic entities. Those could be new uses, formulations, delivery methods or combinations of existing products.

Mr Levin’s strategy marks a shift for Teva from growth through large acquisitions towards developing more profitable brand-name drugs through research and licensing agreements.

Toward that end, Teva said it will pay Xenon Pharmaceuticals US$41 million upfront and as much as US$335 million in development, regulatory, and sales-based milestones for experimental drug XEN402, which is in clinical development for the treatment of chronic pain.

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Source: Reuters, The Wall Street Journal