Teva Pharmaceutical Industries Ltd., the world’s largest maker of generic medicine, plans to divest some belongings together with its international women’s health and European most cancers and pain-treatment divisions to scale back debt.
Interim Chief Executive Officer Yitzhak Peterburg set a extra formidable goal for cost-reductions this yr, elevating the objective to $1.5 billion, and promoted Michael McClellan briefly to the submit of chief monetary officer, efficient July 1.
The steps introduced on Thursday will probably ease no less than a few of the challenges that confront the drugmaker. Teva continues to be on the lookout for candidates to substitute its top managers, and to counter eroding gross sales of its best-selling drug, Copaxone. A brand new CEO would wish to devise a technique to increase progress and finally persuade buyers to purchase again into the inventory, which is buying and selling close to an 11-year low.
At the identical time, the plans to promote belongings, juxtaposed with a steep drop in Teva’s money move, raised considerations amongst buyers about its capacity to repay debt, in accordance to Bloomberg Intelligence analyst Elizabeth Krutoholow. The firm had $500 million in money circulate within the quarter, a few third of the $1.four billion generated a yr earlier.
Shares of Teva fell 1.9 % to $30.76 at 11:43 a.m. in New York.
Peterburg additionally stated he expects generic drug costs to fall by 7 % within the U.S., a steeper decline than the 5 % the drugmaker had beforehand forecast.
The drugmaker final yr paid about $40.5 billion to purchase the generics enterprise from Allergan Plc simply as costs of low cost copycat medicine started to fall. The ill-timed transfer saddled the drugmaker with virtually $36 billion in debt, forcing Teva to slash its revenue forecast twice, and ultimately led to the exit of Chief Executive Erez Vigodman in February.
The firm is working with Morgan Stanley to assist discover a purchaser for its women’s health enterprise, Bloomberg News had reported final month. The CEO confirmed on Thursday that the U.S. financial institution was advising on the sale.
The unit, which makes fertility and menopause remedies as nicely as contraception, tallied $560 million in income final yr, Rob Koremans, head of worldwide specialty medicines, stated on a name with analysts. It might fetch as a lot as $2 billion, individuals acquainted with the matter had stated, asking not to be recognized as a result of the deliberations are personal.
Teva additionally stated it has employed Bank of America Corp. to advise on the attainable sale of its oncology and ache companies in Europe. Those divisions generated $320 million of gross sales final yr, Koremans stated. Bloomberg News had earlier reported that Teva was weighing divesting these belongings.
Profit excluding some prices declined to $1.06 a share final quarter, the Petach Tikva, Israel-based firm stated in a press release on Thursday. That beat the $1.03 common of 19 estimates compiled by Bloomberg. The firm additionally reiterated its forecast for 2017.
Sales of Copaxone, an injection for a number of sclerosis, dropped four % to $970 million. U.S. courts invalidated patents shielding Teva’s 40 milligram model of the drug, offering authorized cowl for rival corporations to promote cheaper copies in its most profitable market. Momenta Pharmaceuticals Inc., which markets a much less potent type of Copaxone with Novartis AG’s generic drug unit, stated final week it’s aiming to launch a 40-mg rival within the second half of this yr.
Chief Financial Officer Eyal Desheh final month turned the newest in a collection of prime executives exiting the Israeli firm, with plans to depart in coming months for a brand new position at one other agency. Sigurdur Olafsson, the previous head of the worldwide generics division and one of many architects of the cope with Allergan, give up in December.