Teva Pharmaceutical Industries Limited Won't Disclose How Many Layoffs Go With Pipeline Cuts In Oncology And Women's Health
October 7, 2014
By Mark Terry, BioSpace.com Breaking News Staff
Israeli-based Teva Pharmaceutical Industries Ltd. announced today that it was undergoing a strategic review of its therapeutic areas. The company has several facilities in Pennsylvania and New Jersey. The company is active in 60 countries and employs 46,400 people worldwide. It develops, manufactures and markets a broad range of specialty therapeutics, generic and over-the-counter medications, active pharmaceutical ingredients and novel therapeutic compounds.
To date, Teva indicates it has identified 14 pipeline projects the company will either terminate or attempt to sell. They account for more than $150 million in research and development costs in 2015, and were slated for $200 million for 2016 and 2017. The savings will be partly redirected to core therapeutic areas.
“Teva is committed to being a world-leader in CNS and Respiratory, both areas underpinned by significant and growing unmet patient needs,” said Erez Vigodman, Teva president and CEO in a press release. “With our existing portfolio, integrated global R&D and innovation capabilities, we are in a strong position to deliver for patients and payers, and to generate long-term value for our shareholders. Our late-stage pipeline assets are expected to generate great value—out of the 30 plus product launches we anticipate by 2019, with a total of over $4 billion in new revenue on a risk-adjusted basis, over 20 products will be launched in these two core therapeutic areas.”
At least part of the restructuring is related to a 2012 goal of cutting $2 billion in costs. Although the company in its new release did not discuss layoffs, the company stated in early September that the company did not plan to cut more jobs. It seems likely, however, that this new restructuring, with new CEO Erez Vigodman, will lead to layoffs as part of the cost-cutting strategy.
As reported in early September by BioSpace the company’s Chief Financial Officer Eyal Desheh, speaking at the Morgan Stanley Global Healthcare Conference in New York, said, “I want to be very careful because this is a major managerial challenge: Reduce your costs, become more efficient, and at the same time grow the business and enter new areas….That’s a little bit contradictive. I think we can do both, but another cost-cutting round will be counterproductive to growth.”
The company had announced in October 2013 that it would cut 5,000 jobs. This led to a dispute between the company’s board and then CEO Jeremy Levin. Levin stepped down as a result of the dispute. Insiders have indicated that Levin and the board, especially board chair Phillip Frost, were on the same page about the strategy, but could not agree on how to cut costs. Specifically, Frost was willing to go head-to-head with the unions in Israel and make no compromises regarding layoffs, while Levin was willing to negotiate.