Teva Pharmaceutical Industries ($TEVA) CEO Jeremy Levin has been very frank about the need to cut costs by cutting jobs--about 5,000 jobs. But that does not mean the world leader in generic drug sales will not invest and hire in those places where it will pay returns. One of those places is Croatia, where it has opened a $100 million plant and hired 200 workers.
The plant in Zagreb is slated to make drugs for the U.S. and Europe and will start production once the company gets approvals from regulators in those markets, according to dalje. The new facility boosts the tablet and capsule capacity at Teva's Pliva subsidiary by 25%, allowing it to produce up to 2 billion units a year. It also has added capacity in sterile manufacturing, according to dalje.
Levin this month said the company would hasten its cost-cutting after a U.S. court ruling shortened by a year and a half the time that its best-selling drug, Copaxone, will be patent-protected. The multiple sclerosis drug, which brought in nearly $4 billion last year, accounts for about 40% of Teva's sales. Its patent will now expire in May. Levin has said most of the cost reductions will come by the end of next year and the majority will flow from making its production network and supply chain more efficient.
Shifting production to lower-cost countries has always been an important piece of that strategy, and Croatia is one of those areas. Teva picked up Pliva in its 2008, $7.5 billion buyout of Barr Pharmaceuticals. Barr had acquired Pliva, Croatia's largest drugmaker, in a 2006 deal for $2.2 billion that overbid an offer from Actavis ($ACT). The new plant was also reason for Croatia to celebrate, and the opening drew Croatian Prime Minister Zoran Milanović. According to dalje, Milanović said the new facility was an indication of Croatia's new place in the world.
Croatia, however, is not the only place the drugmaker is expanding production. Last year it opened a $110 million sterile injectables plant in Hungary. It also is reportedly investing more than $200 million to double capacity in Japan.
Special Report: Top 10 generics makers by 2012 revenue - Teva