A Teva plant in Pennsylvania and hundreds of jobs have been spared the ax that the Israeli company has been swinging left and right as it cuts costs in the face of patent cliff issues. Instead, a family-owned business from New Jersey will acquire the Sellersville facility along with about two dozen drugs that are manufactured there.
G&W Laboratories will get the plant and 25 drugs from Teva Pharmaceutical Industries ($TEVA) that G&W will sell in the U.S. under its own label. The deal also gives the South Plainfield, NJ-based company the right to market one or two more Teva drugs under its own label that Teva will continue to produce at its plant in Zagreb, Croatia. G&W will manufacture some other products at Sellersville just until Teva can get them transferred to some of its other facilities. Terms of the deal, which is slated to be complete by the end of April, were not disclosed. G&W is offering jobs to the 280 employees still working at the facility, which is down nealy 200 from the number that worked there when the plant was put up for sale.
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| Carlo de Notaristefani |
"We have a qualified and dedicated team at Sellersville and are pleased that we were able to come to an agreement with G&W Laboratories that will enable them to continue working in their current community," Carlo de Notaristefani, CEO of Teva Global Operations, said in a statement.
Facing generic competition to its top-selling multiple sclerosis drug Copaxone, Teva announced in May of 2013 that the Sellersville plant and its 475 jobs were on its hit list of facilities to be closed in a sweeping plan of then-CEO Jeremy Levin to cut about $2 billion over 5 years. Levin gave de Notaristefani the job of figuring out how to do that.
Erez Vigodman, who became CEO last year, has continued along a similar cost-eradication path, and the company has indicated that up to half of its network of 75 plants could be closed. While Teva has so far fought off Copaxone competitors, its revenue barely budged last year, and Vigodman indicated last month that with the cost-cutting plan well underway, he was looking at doing some deals to help Teva improve its top line.
- here's the release