Teva Pharmaceutical Industries ($TEVA) is searching for a new CEO after the abrupt departure of Jeremy Levin. It is in the midst of a restructuring that will whack 5,000 jobs, and it is counting down the days until its top-selling drug falls off a patent cliff. But its interim leader says investors should not worry. The company has a plan.
Teva has a "a very strong and clear strategy," Eyal Desheh explained at a conference in London, Reuters reports. The Teva chief financial officer was named interim CEO after Levin stepped down in October. Desheh said the company will look to emerging market growth, expand in the over-the-counter market and move further into biologics, although he acknowledged that developing biosimilars has turned out to be trickier than first envisioned.
The drugmaker also has 15 new therapeutic entities in its pipeline and is looking to buy some drugs under development or work out some licensing deals to pick up the pace of bringing new drugs to the market. Again, he acknowledged that this is not a simple task. "These things don't happen every day," Desheh said. "There are a handful of good opportunities and you have to pick the best."
In a recent presentation, Chief Scientific Officer Michael Hayden said the drugmaker expects to generate an additional $3 billion by reformulating existing products, Bloomberg reports. He said it will seek regulatory approval for 8 products in the next three years.
None of these are new strategies. Last year, Levin laid out his 5-year blueprint to diversify the company's product lineup, expand geographically and cut up to $2 billion in costs in preparation for lost sales from its foundational drug Copaxone. Before his falling out with Teva Chairman Phillip Frost, Levin had talked about expanding in China and Brazil, two rapidly growing emerging markets. The company has had a joint venture with Procter & Gamble ($PG) since 2011 with plans to manufacture and sell $4 billion worth of OTC products annually.
But the pressure is on Teva to figure out how to navigate through the looming loss of the U.S. patent for Copaxone. The drugmaker had believed it had until 2015 to prepare, but a federal court ruling made it vulnerable to generics in May of next year, 18 months sooner than the drugmaker had expected. The drug accounts for about half of the drugmaker's revenues, nearly $3.9 billion, with $2.9 billion of that coming from the U.S. last year. Recently leaked numbers, which the company says are incomplete, suggest it is expecting next year to lose up to 40% of the profits the drug has produced.
The drugmaker did have some good news to report last week. The FDA granted orphan status to its cancer-fighting drug, Treanda, a designation that should extend patent protection to April 2016. Sales of the drug, which Teva picked up in its 2011, $6.8 billion acquisition of Cephalon, were $531 million through the first 9 months of this year.