When Teva announced its massive purchase of Allergan’s generics business, the Israel-based pharma said it’d be able to squeeze out $1.4 billion in annual expenses by the end of 2019. Working toward that goal, the company has unveiled plans to lay off more than 200 employees and close a plant in Malta.
Teva plans to end manufacturing operations in Hal Far, one of the plants it got in its deal with Allergan, a spokesperson confirmed, resulting in about 170 job cuts. It’s part of a wide-ranging integration of the Actavis business “designed to optimize network efficiency, eliminate excess capacity to reduce costs, and better align production with market demand,” according to a company statement.
The cuts, affecting both union and nonunion employees, are in manufacturing, IT, human resources and elsewhere, Malta Today reports. Teva also confirmed it will eliminate 35 jobs at a separate site in Malta that also was acquired in the Allergan deal for Actavis.
Generics giant Teva closed its $40.5 billion purchase of Allergan’s generics business in August after months of delays and multiple mandated divestments. Along the way, some investors fretted that the company “grossly” overpaid with pharma pricing increasingly coming under scrutiny as the companies pushed to close the deal.
With Actavis in its hands, Teva is examining its global network and eliminating redundancies. Manufacturing will end at Hal Far in early 2018.
The news comes just after the company posted “mediocre” third-quarter results, according to one analyst, as pricing scrutiny takes a toll on the sector as a whole. Revenue of $5.56 billion missed consensus estimates by 2.5%, but the miss wasn’t as bad as some analysts had expected.
In addition to that pressure, Teva was named in a newly unveiled Department of Justice price-fixing probe into several generics players. One analyst pegged the company’s potential liabilities up to $700 million based on what’s publicly known about the investigation.
But Teva is also striking out in new areas, announcing today that it will be the exclusive distributor in its home country of Israel of local company Syqe Medical’s cannabis inhaler.