The largest manufacturer of generic drugs in the world, Israeli Teva, announced on Friday an ambitious restructuring plan aimed at achieving a more economical and profitable operation, with lower costs.
The Israeli group, which includes Croatian Pliva, emphasizes that it will suspend certain research programs, carry out targeted acquisitions, and organize parts of its business more economically, ranging from procurement to inventory control.
Costs are expected to be reduced by $1.5 billion to $2 billion, with most of them occurring over the next three years and the remainder two years thereafter. Savings are planned in all aspects of the business, from raw material procurement to real estate values and methods of investing in information technology, Teva officials highlighted during a teleconference with investors.
– Teva will look completely different in the future – concluded CEO Jeremy Levin.
He added that the group no longer plans large but targeted acquisitions that will focus on core areas of their expertise, such as central nervous system disorders and respiratory diseases.
The group also reported that it expects adjusted earnings in the range of $4.85 to $5.15 per share for the next year. Analysts had expected an average of $5.71 per share. Revenues are expected to range from $19.5 billion to $20.5 billion.
Meanwhile, revenues from generic drugs are expected to amount to between $10.3 billion and $10.7 billion, while sales of branded drugs should generate between $7.6 billion and $8 billion. Revenues from the multiple sclerosis drug Copaxone are expected to range from $3.7 billion to $3.9 billion, Teva estimates.
