300 Employees Impacted as Teva to Shut Down or Sell Virginia Plant
March 16, 2017
By Mark Terry, BioSpace.com Breaking News Staff
Teva Pharmaceuticals , headquartered in Petah Tikva, Israel, announced its plans to sell or shutter its plant in Forest, Va.
It expects to end most of its production in the area by 2020. Denise Bradley, senior vice president of corporation reputation, in a statement to The News & Advance, said, “Our preference is to sell the plant, and to that end we are in the process of asking local, state and federal officials for their assistance in identifying a buyer for the site.”
If a buyer is not found by 2020, the company expects to close the plant. Approximately 300 employees would lose their jobs.
Teva’s Adeno antibiotics manufacturing line at the facility is expected to continue production past 2020 with its existing group of approximately 50 staffers.
Bradley indicated to The News & Advance that the restructuring is being performed to remain competitive and keep prices down to “better align production with market demand.”
The company is being assisted by Bedford’s Economic Development director Traci Blido and Lynchburg Regional Business Alliance chief executive officer Megan Lucas.
“The Alliance will work in concert with partner Traci Blido and the state as well as Teva to help them execute the plan that they’ve set in place,” Lucas said in a statement. “It’s early so we don’t have a strategy quite yet, but we will be working with the pharmaceutical industry to determine the highest and best use for the facility.”
Virginia’s Economic Development Partnership will assist in marketing the facility. “We will be actively and aggressively working with the county and the regional partners as well as talking to the company directly in the coming weeks and working to really market the facility as a turnkey plant with a ready workforce to any prospective [buyer],” Suzanne Clark, spokeswoman for the Virginia Economic Development Partnership (VEDP), said in a statement. “It would allow quick start up for production for any prospective companies.”
Teva has struggled over the last few years. Described as a “hybrid drugmaker of branded and generic therapeutics,” by Sean Williams, with The Motley Fool, the company stock has lost almost half of its value. The company’s lead brand drug is Copaxone, for multiple sclerosis (MS). It will be facing generic competition soon. The company also had to deal with a bribery scandal in select overseas market. And it recently brought on a new chief executive officer.
Williams writes, “However, it’s my contention that Teva and its 4 percent dividend yield may be ripe for the picking. For instance, Teva managed to reformulate Copaxone from a once-daily injection to a thrice-weekly injection, which is more convenient for MS patients. Though the patent battle over this reformulation is ongoing, Teva should be able to adequately shield a significant portion of its sales from generic competition. Plus, Teva has years of rapport built with patients and physicians that could keep them loyal to the Copaxone brand.”
The company also recently bought Allergan ’s generic-drug unit, Actavis , for $40.5 billion in cash and stocks. This makes Teva the largest generic-drug company in the world. Although it loaded the company up with debt, Williams thinks it “should be able to squeeze out $1.4 billion in annual cost synergies as early as 2019, and as a result it’ll likely have better pricing power based on its size. Not to mention, as branded therapies grow more expensive, global governments and insurers will frequently push for greater generic-drug usage. Teva can win the battle from both angles.”
Teva is currently trading for $34.34.