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Struggling Teva (TEVA) Seeks Partners to Fund Some Projects in Its Drug Pipeline



8/16/2017 5:30:35 AM

Struggling Teva Seeks Partners to Fund Some Projects in Its Drug Pipeline August 16, 2017
By Alex Keown, BioSpace.com Breaking News Staff

JERUSALEM – As Teva Pharmaceuticals (TEVA) deals with a lagging pipeline and massive debt, the beleaguered company is on the lookout for multiple partnerships to fund some of its pipeline development.


In a statement to Reuters, Teva spokeswoman Denise Bradley said the company is looking for a “series of partners” to fund some projects within the company’s pipeline. This announcement comes as the company looks to sell off some assets and streamline its operations. While Bradley confirmed that the world’s largest generic drugmaker is looking for developmental partnerships, unnamed sources told Reuters that Teva is looking to share any potential drug proceeds with partners in order to avoid “injecting any extra funding in new drugs.”

Teva’s partnership announcement is a strong indication of just how cash-strapped the company actually is. Teva is dealing with massive debt of between $30 and $35 billion and has seen a serious decline in sales in the United States. Part of that debt is related to Teva’s 2015 $40.5 billion acquisition of Actavis (ACT), Allergan (AGN)’s generics division. Many industry analysts have suggested that Teva paid too much for Actavis. Criticism over the Actavis acquisition lead to the abrupt departure of Teva Chief Executive Officer Erez Vigodman earlier this year.

Earlier this month, Teva announced it intended to sell off its Medis and respiratory units in order to streamline operations and pay down some of its debt. For much of this year, Teva has been looking at selling off some of its assets. In February, the company was said to be looking at selling or spinning off its branded generics business in an effort to reduce debt.

The news of the possible divestures comes on the heels of disappointing quarterly reports the company announced last week. Teva saw an 18.4 percent drop in earnings for the quarter, which ended June 30. When the company revealed the financials, it said it planned to eliminate thousands of employees as it plans on shuttering several global manufacturing facilities. The company’s disastrous financials was blamed in part on the company’s U.S. generics business. Teva said that during the second quarter it identified certain developments in the U.S. market that caused it to “revisit management’s assumptions regarding the market dynamics of the U.S. generics unit.”
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The company is facing losses due to the challenge of its top branded drug, Copaxone, which is used to treat multiple sclerosis. The drug accounts for about 16 percent of Teva’s sales, but is facing a patent challenge by a generic drug developed by Novartis (NVS) and rival Mylan (MYL). In the most recent quarter, sales of Copaxone declined 10 percent, according to company records.

The struggles of Teva have prompted some investors in the Israel-based company to call for it to break up into separate entities or divest itself of its generics business and focus on branded drugs, Reuters noted.

Since mid-July shares of Teva have lost nearly half its value. On July 3, shares of Teva were trading for $33.31. This morning, shares of Teva are trading at $17.66. Shares of Teva are down considerably over the past calendar year. One year ago today, shares of Teva were trading for $53.79.


Read at BioSpace.com


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