Teva Pharmaceuticals ($TEVA) has money in the bank, drugs in the pipeline and big plans for the future. Given those assets and four more years, CEO Jeremy Levin told investors on Tuesday they will have a whole new Teva.
Levin, who came over from Bristol-Myers Squibb ($BMY) in May to remake Teva into a drug company with more branded products, said Tuesday the company will get to its new form by 2017. But to get there it will also focus on emerging markets, especially China, and expanding over-the-counter offerings through its relationship with drug and consumer products behemoth Procter & Gamble, according to Reuters.
It also plans to develop what Levin referred to as "new therapeutic entities," or NTEs, which would include new formulations, new ways to deliver drugs or new combinations of existing products. Michael Hayden, founder of biotech company Xenon Pharmaceuticals and now Teva's chief scientific officer, said going this route should bring more bang for the buck than developing new molecules, Reuters reported. The company has a goal of approving 15 of these next year and getting them to market by 2016. Teva and Xenon also announced plans to develop a new pain drug together to start that process.
Levin said the company would continue its dividend and its share repurchasing program. While Teva has $10 billion for business development over the next 5 years, it will also pay for Levin's plans with up to $2 billion in cost savings. It will close small plants in favor of larger, more efficient ones and take the Wal-Mart approach of centralized, big-discount purchasing to find some of that money. It believes it can find up to $140 million in extra bucks through supply-chain inventory control.
But to reach the envisioned new form, Levin must help Teva build a bridge over the impending revenue hit in 2015. That is when its patent on multiple sclerosis drug and Teva workhorse Copaxone expires. The drug generates 50% of Teva's profits on 20% of its sales, according to Reuters. And Levin also needs to convince investors this is all possible. Tuesday they were still mulling it over. Teva shares closed down 2% in U.S. trading.
- read the Reuters story
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