Floundering Teva is struggling under debt pressure—but it may have a billionaire who can help with that.
Businessman Len Blavatnik is weighing a hefty investment in the Israeli drugmaker and talks are in the initial stages, Globes reported. Fellow local newspaper TheMarker said Sunday that Blavatnik was eyeing a stake of up to $3 billion.
Teva could certainly use the support; after a disastrous $40.5 billion buy of Allergan’s generics unit put it in a tough spot, a trio of guidance slashes have kept shares in the basement. The company’s market cap currently sits at about $12.6 billion—a fraction of what it paid for the Allergan portfolio.
To make matters worse, Allergan CFO Tessa Hilado last week said the Dublin drugmaker would begin selling off its 10% Teva holding in the near future, taking a “measured approach” that would wrap sometime next year. Blavatnik, though, may buy his stake directly from Allergan, Globes noted, a move that would keep the extra negative pressure off shares.
That’s not to say Teva hasn’t had any success paying down debt; true to its promises, the company in September inked a pact to sell its Paragard intrauterine copper contraceptive to CooperSurgical for $1.1 billion in cash, and it’s working to sell off additional pieces of its women’s health business, too.
Still, though, the company has “some important decisions to make in order to stay investment grade,” interim CFO Mike McClellan acknowledged on last week’s third-quarter conference call—and that’s where new CEO Kåre Schultz, who officially took the helm next week, comes in.
“We'll be working on our 2018 plan together with our new CEO and evaluating all options to make sure we do what's in the best interest of all stakeholders,” McClellan said.