Debt-Ridden Teva Gets Ready to Unload Another Asset Worth $800 Million

Published: Sep 15, 2017

Debt-Ridden Teva Gets Ready to Unload Another Asset Worth $800 Million September 14, 2017
By Alex Keown, Breaking News Staff

TEL AVIV, Israel – Saddled with debt between $30 and $35 billion, generics giant Teva Pharmaceuticals is nearing a deal to sell its women’s health assets outside of the United States to equity firm CVC Capital Partners.

Bloomberg, which was the first to report the news, estimated the sale could fetch the Israel-based company up to $800 million. Citing unnamed sources familiar with the details, Bloomberg said the deal with CVC has not yet closed and there are other parties interested in making an acquisition, including the Chemo Group from Spain. No party has provided comment, Bloomberg noted. A final decision has not been made and there is no information as to when Teva might pull the trigger.

Earlier this week, Teva sold its branded contraceptive line Paragard, a product within its global Women’s Health business, to CooperSurgical for $1.1 billion.

Teva has struggled for some time due to declining revenues from its branded medicines business, particularly in the United States. With its massive debt the company has been looking to unload several non-core businesses, including its Medis and respiratory units. Teva’s Medis business is a generic drugmaking unit based in Iceland. That business unit develops generic drugs for other pharmaceutical companies. In August, Teva confirmed it was looking to sell the Medis asset, which could provide a cash infusion of between $500 million and $1 billion. There are also indications the company could be interested in selling its European oncology business.

In addition to the debt, Teva also saw disappointing quarterly reports for the most recent quarter that ended June 30. Teva saw an 18.4 percent drop in earnings for the quarter. Those losses prompted the company to not only look at divesting assets, but also terminating thousands of employees and shuttering several global manufacturing facilities.

One area the company has finally found a solution for is its chief executive officer position. Earlier this week, the company announced Kåre Schultz as its its new CEO. Schultz most recently served as CEO of H. Lundbeck A/S . In an interview with Bloomberg earlier this week, Schultz said he was looking forward to the challenges facing Teva. One possible solution to the debt issue could be breaking the company up, something some critics have suggested. Supporters of breaking Teva believe it should be two companies, one for generics and one for patented drugs like Copaxone.

The debt will certainly be a priority issue, though. Part of that debt is related to Teva’s 2015 $40.5 billion acquisition of Actavis , Allergan ’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.

Teva shares saw some slight upward movement in premarket trading, climbing to $18.91. The stock closed Wednesday at $18.86 per share.

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