Less than two months into its "Pivot to Growth" strategy under a new CEO, Israeli-American generics giant Teva Pharmaceutical could be weighing a major shake-up of its key drug ingredients business.
Teva is looking at strategic options for its active pharmaceutical ingredient (API) unit, with a potential sale on the table, BNN Bloomberg and Benzinga have reported.
The company is hashing out options with advisers as it gauges interest in the API unit, which could be worth around $2 billion, the outlets reported, citing sources. The review is just getting underway, and Teva could still decide to keep the business unit, sources told the publications.
At present, Teva’s drug ingredients arm boasts more than 400 APIs cranked out at 16 different production plants. The unit has more than 1,000 customers worldwide and hosts a workforce of roughly 5,000.
"As part of our ongoing operations, we also continue to regularly review our businesses and opportunities," a Teva spokesperson said via email, neither confirming nor denying reports of a potential sale.
She described Teva's API unit as a "strong business with incredible capabilities," noting that "it can grow" and "directly contribute" to Teva's development under its new CEO, Richard Francis.
Word of the potential drug ingredients divestment comes shortly after Francis in May outlined his “Pivot to Growth” strategy, which rests on four pillars. Those are: the company’s commercial portfolio and biosimilars, its innovative pipeline, Teva's generics "powerhouse" and focused capital allocation.
Despite including generics in its four-pronged strategy, Teva’s copycat drugs business appears to be on its way to being de-emphasized. The company says it wants to “sustain” its generics arm by shifting focus to “high-value opportunities,” which would include complex products like drug-device combos and long-acting injectables.
For all of 2022, Teva reported revenues of $14.9 billion. Over that same stretch, its generics business logged sales declines in each of its three geographic regions, reaching sales of $8.6 billion. Teva’s generics unit brought home $9 billion in 2021.
In Francis’ first quarter as Teva’s CEO, the company reeled in $3.7 billion in sales—flat versus the same period last year.