Teva Pharmaceutical Industries ($TEVA) got a new CEO over the summer. Now, it has a new M&A strategy. Bringing along the string-of-pearls mindset he pioneered at Bristol-Myers Squibb ($BMY), CEO Jeremy Levin intends to focus on small deals, rather than the multibillion-dollar transactions Teva has relied upon in the past.
That's the word from Chairman Phillip Frost, who offered the first real glimpse at the post-Shlomo Yanai Teva in an interview with Bloomberg. Levin has kept mostly silent about his intentions, as he works up a comprehensive new approach--dubbed "Project Spring," Bloomberg says--to be presented to investors in New York Dec. 11.
Teva's philosophy going forward: Small is beautiful. "Acquisitions don't have to be major to be important," Frost said. He highlighted opportunities to buy in products or technology, and to snap up small companies.
So, don't expect more deals along the lines of Teva's $6.2 billion deal for Cephalon, or its $4.9 billion buyout of fellow generics maker Ratiopharm. That sort of buyout "is going to be reserved for very special cases going forward, in which the desirability is so compelling and so game-changing that everyone will feel it has to be done," Frost told the news service.
Frost also emphasized that Teva will look to build up its R&D expertise. Besides buying new products, the company can recruit new people "who themselves are capable of creating the new products," he said. In the long run, Levin and his new chief scientific officer, Michael Hayden, "will have their influence permeate the company so that the mindset will over time shift from being a generic company to a more broadly based pharmaceutical business."
- read the Bloomberg interview
Special Reports: The top M&A dealmakers in biopharma | Jeremy Levin - The 25 most influential people in biopharma today