September 9, 2014
By Jessica Wilson, BioSpace.com Breaking News Staff
Teva Pharmaceutical Industries Limited , the Petach Tikva, Israel-based pharma company and the world’s largest generic-drug maker, has no plans to cut more jobs. Chief financial officer, Eyal Desheh, said Monday at the Morgan Stanley Global Healthcare Conference in New York in response to the question of whether Teva would cut more: “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,” according to the Philadelphia Inquirer.
In October 2013, Teva announced it would eliminate 5000 jobs. In the wake of this news, then Chief Executive Officer, Jeremy Levin left the company due to a dispute with the board regarding how to cut costs in order to boost share prices and exactly how to implement the job cuts. At the time of the leadership shake-up, Bloomberg reported that Chairman of the Board, Phillip Frost, with whom Levin allegedly clashed, said, “The differences were over nuances rather than disagreement about the strategy itself….It just got to the point where the slight differences couldn’t be resolved and we thought it was better to part ways.” Frost, a billionaire from Miami, is the largest shareholder of the company.
After these cost-cutting measures, in January 2014, Teva acquired Malvern, Pennsylvania-base NuPathe Inc. (PATH) for $144 million and in June 2014 the company acquired San Francisco, CA-based Labrys Biologics Inc. for $825 million.
After the latter purchase, in June 2014, Teva announced a major reorganization of the company, which the Wall Street Journal described as follows, “Starting next month, Teva’s new structure will include its two commercial business units—global specialty medicines, established in April 2013, and the newly formed global generic medicines group. It also will include a corporate development, strategy and innovation unit and a global corporate marketing and communications segment.”
CFO Desheh also said at the Morgan Stanley Global Healthcare Conference that the company hopes to realize $1 billion of savings by making its supply chain more efficient. “Right now, we spend about $10 billion a year buying from others - all kinds of stuff,” he said. “Materials, machines, finished products - not a lot but some - services, rent, you name it. Everything we spend, other than royalties and cost of labor, we consolidated under one head of global procurement, and she sits in New Jersey and manages our operation.”
Though based in Israel, Teva has several locations in the U.S., concentrated in New Jersey and Pennsylvania, which is home to its U.S. headquarters in New Wales.
