"The company was created by a series of mergers and acquisitions. We
managed to accumulate 75 manufacturing facilities.We can reduce this number to
half of what we have today, and the remaining facilities will be efficient,
productive and of course of the highest quality, which is very important,"
Desheh said Tuesday at the Goldman Sachs Healthcare Conference, according to a
transcript of his remarks from SeekingAlpha.
With Teva's workhorse product, the multiple sclerosis drug Copaxone, going off
patent, the company has been scrambling to reduce expenses and to find new
revenue. The drug, which lost patent protection last month, makes up half of
the drugmaker's revenue. So far, a planned generic by Mylan has yet to hit the
market but it is just a matter of time.
The company for a couple of years has been working on ways to cut costs and
build revenue. After a court ruling last year put Copaxone in jeopardy a year
earlier than expected, Jeremy Levin laid out an aggressive plan to about 5,000
employees--10% of its workforce--by the end of this year and bank $2 billion in
savings before the end of 2017.
Erez Vigodman was named CEO in January after Levin left because of board
disagreements. He has talked a lot about plans to boost the top line, but has
been short on details about the cost-cutting, much of which Levin said would
come from slimming the manufacturing network. Vigodman gave some indication in
a May conference call with analysts about how the plan was developing. He said
the company had identified 11 plants for closure and was evaluating 16 others,
although specific targets have never been identified. Now Desheh is suggesting
the number could be 38 or so plants.
The drugmaker is doing other things to make its way through this patent
cliff dive. It has been convincing doctors to move patients to a new
longer-acting version of Copaxone, a move analysts say will take some of the
sting out. "Generics will be approved at some point, but it's no longer
going to be devastating," John Park, co-manager of Jackson Park Capital's
Oakseed Opportunity Fund, told Bloomberg last month.
Vigodman also told a conference in May that a trio of drugs is launching
that will also offset some of the loss. Estimates have put about $1 billion in
peak sales to the three drugs, migraine patch Zecuity, Symbicort generic
DuoResp Spiromax, and Adasuve, an inhalation powder to treat agitation in
schizophrenia patients. The CEO has also said it is looking to invest in some
smaller acquisitions and to to build its biosimilars program.
