Teva Plans Sale of Women’s Health and European Oncology and Pain BusinessesBy
Teva Pharmaceutical Industries reports that it plans to sell certain non-core assets, including its global women’s health business and its oncology and pain business in Europe, to pay down debt. The company made the announcement as part of its first-quarter earnings report.
The announcement, made by Teva’s Interim Chief Executive Officer (CEO) Yitzhak Peterburg, also highlighted the company’s progress in its cost-savings programs, including synergies from the intergration of its $40.5-billion acquisition of Allergan’s generics business, which was completed in August 2016. The Teva Interim CEO said that transaction synergies and additional cost reductions are on track, and that the company now expects to realize cumulative net synergies and cost reductions of approximately $1.5 billion by the end of 2017, an increase of $200 million compared to the company’s previous guidance. He noted that the company reduced its gross debt by $1.2 billion in the first quarter (ending March 31, 2017).
Peterburg took the helm at Teva following the departure of Erez Vigodman, who stepped down as president and CEO in February 2017. Key for Teva going forward is its integration of the former Allergan’s generics business and its performance in the generic-drug market, particularly in the US generics market, as well as navigating generic-drug incursion for its top-selling product, Copaxone (glatiramer acetate injection), a multiple sclerosis (MS), with 2016 sales of $4.2 billion. Copaxone sales in the first quarter 2017 were $970 million, down 4% from the year-ago period.
Teva has two main product segments: generics, which had 2016 sales of approximately $11.99 billion, and its specialty medicines segment, which includes Copaxone, and which had overall segment 2016 sales of $8.67 billion. The company’s global women’s health business and its oncology and pain business are part of Teva’s specialty medicines segment. Its global women’s health business had 2016 sales of $458 million, and its global oncology business had sales of $1.14 billion. Its pain-care drugs are part of the company’s central nervous system drug franchise, which includes MS, its leading product area that includes Copaxone as well as drugs to treat neurodegenerative diseases, movement disorders, pain care, and migraines.
With respect to Copaxone, Teva successfully applied a defense strategy for generic versions of Copaxone when it launched a 40-mg/mL formulation of the product with a three-times a week dosing regime following the patent expiration of a first-generation 20-mg/mL formulation with more frequent dosing. Patents covering Copaxone 20 mg/mL expired in May 2014, and in most of the rest of the world in May 2015. The 40-mg/mL Copaxone was launched in the US in January 2014 and was approved in Europe in December 2015. Teva’s business strategy for Copaxone relies heavily on the continued migration of a substantial percentage of Copaxone patients using daily doses (the 20-mg/mL formulation) to the 40- mg/mL, three-times-a-week version. The issue for Teva going forward is potential generic competition for the 40-mg/mL formulation. In February 2017, Teva suffered a setback when a federal district court ruling invalidated four of its patents relating to the 40-mg/mL formulation, and how patent litigation for the 40-mg/mL formulation plays out is an important revenue consideration for the company. Teva’s Copaxone 40 mg/mL version accounted for more than 85% of total Copaxone prescriptions filled in the US and more than 70% of its prescriptions filled in Europe based on QuintilesIMS data as of March 2017 and as reported by Teva.
In other news, Teva also announced an interim replacement for its chief financial officer (CFO), Eyal Desheh, whose departure was announced in April 2017. Michael McClellan will serve as the Interim CFO, effective July 1, 2017. For the last two years, he has served as the CFO of Teva’s Global Specialty Medicines Division. Prior to joining Teva, he was the US CFO at Sanofi, where his career spanned over 20 years in roles of increasing responsibility in global finance and healthcare.
Source: Teva Pharmaceutical Industries