Teva targets growth through innovation

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) today launched its new strategy with an emphasis on growth and innovation. The strategy called “Pivot to Growth” was unveiled at an investor conference at the New York Stock Exchange by its new president and CEO Richard Francis who took over the reins of the company at the start of the year.

Francis said, “Our new strategy is built on four key pillars to deliver short- and long-term growth from our commercial portfolio and biosimilars, innovative pipeline, generics powerhouse and focused capital allocation. With our Pivot to Growth strategy, I am confident we will gain momentum as a stronger, bolder and simpler organization.”

The strategy will be implemented in three phases over five years. The first phase between 2023 and 2024 should result in a return to growth (after five consecutive years of reduced revenue) and includes a focus on allocation of resources continued repayment of the company’s debt. The second phase is accelerated growth between 2025 and 2027 with a clear focus on a list of priorities for to speed up growth through innovative products and biosimilars and a focus on business development opportunities. The final phase from 2028 is sustainable growth.

Francis told journalists that he “is very excited about Teva’s future” and stressed that the strategy will make Teva a much stronger company. Frances presented the four key pillars to the strategy: Return to growth by accelerating a strong innovative medicines portfolio; expand innovative pipeline and focus on core therapeutic areas with first-in-class and best-in-class opportunities; sustain generics powerhouse based on high-value and complex products; focus the business on areas with the greatest potential for growth and patient impact.

Most of the growth will come from Teva’s innovative assets, which include Austedo for treating tardive dyskinesia and Huntington’s disease, Uzedi, which was recently launched for treating schitzophrenia, and Ajovy for treating migraines. Francis said that Austedo answers a huge need. “We believe that this produce could reach $2.5 billion in sales by 2027.” In 2023, Austedo’s sales are forecast to reach $1.2 billion. Frances also mentioned seven biosimilar drugs of which four have been developed with partners.

On innovation, Francis added, “We have assets of great quality in the pipeline,” and he pledged to invest more in R&D in the future.

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Francis: We will ensure that the generics business will be sustainable

On generics, Francis said, “Teva is the world leader in generics. We want to ensure that this business will be sustainable and growing and for this we need to be focused. We will reduce the number of products in R&D and this will bring an increase in profit margins.” Teva is expected to focus on complex generic products – in this instance Francis is not talking about a new policy although Francis conceded they have not always been successful in the past. “We will focus on less products and increase our rate of success,” he said.

Teva will halt production and marketing of some of the generic products in its portfolio especially those with low profit margins and many manufacturers in the market.

In conclusion Francis said, “We know where we need to focus our resources and attention in order to grow revenue and the bottom line. This is a new chapter for Teva.”

Francis succeeded Kare Schultz as CEO. In Schultz’s five years in charge, he rehabilitated Teva by major cuts in expenditure and repaying much of the company’s debt after the huge $40 billion acquisition of Actavis in 2016, which burdened the company with the debt. Schultz succeeded Erez Vigodman who led the disastrous acquisition of Actavis but also the more successful acquisitions that brought the company Austedo and Ajovy.

Published by Globes, Israel business news – en.globes.co.il – on May 18, 2023.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.