World's Largest Generic Drugmaker Teva Looks to Sell Medis Business

World's Largest Generic Drugmaker Teva Looks to Sell Medis Business August 10, 2017
By Alex Keown, Breaking News Staff

JERUSALEM – As Teva Pharmaceuticals continues to turn things around, the beleaguered company is now looking to sell off its Medis and respiratory units in order to streamline operations and pay down some of its debt.

Teva’s Medis business is a generic drugmaking unit based in Iceland. That business unit develops generic drugs for other pharmaceutical companies, Bloomberg reported. In an emailed statement to Reuters, Teva confirmed it is looking to sell off the Medis asset. In a statement, the company said it is looking at “every opportunity to focus our business and streamline operations, processes and structure,” which could include the divesture of the Medis unit.

A sale of the Medis unit could provide Teva with an infusion of between $500 million and $1 billion, Bloomberg said.

In addition to the Medis unit, the company could offload its respiratory unit as well, according to unnamed people familiar with the matter, Bloomberg added. Teva though has not made any announcement about the possible sale of that unit. Teva has already announced it was looking at selling off its women’s health business, as well as its European oncology business. According to Reuters, Teva could earn another $2 billion from the sale of those units.

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.”

“In our U.S. Generics business, we experienced accelerated price erosion and decreased volume mainly due to customer consolidation, greater competition as a result of an increase in generic drug approvals by the U.S. FDA, and some new product launches that were either delayed or subjected to more competition,” Interim Chief Executive Officer Yitzhak Peterburg said in a statement last week.

In addition to the downturn in its generics business, Teva is also attempting to restructure things in the wake of its acquisition of Actavis .

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 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 and rival Mylan . In the most recent quarter, sales of Copaxone declined 10 percent, according to company records.

Teva reported its debt at the end of 2016 was $35.8 billion, which was down nearly $10 billion from the previous year. But that debt amount has not fallen much since the end of the year. Debt now stands at between $32 and $35 billion. The company is expected to pay down approximately $5 billion of its debt this year, Reuters added.

Shares of Teva are trading at $17.53 as of 9:34 a.m.

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