Teva targets growth through innovation

Teva Pharmaceutical Industries Limited (New York Stock Exchange: teva; level: teva) today announced its new strategy with a focus on growth and innovation. The strategy, dubbed “Pivot to Growth,” was unveiled at an investor conference on the New York Stock Exchange by its new chairman and CEO Richard Francis, who took over the reins of the company at the start of the year.

Francis said: “Our new strategy is built on four key pillars to achieve short and long-term growth from our commercial portfolio and biosimilars, innovative pipelines, strength of generics, and focused capital allocation. With our pivotal growth strategy, I am confident we will gain momentum as a stronger and more Daring and simpler.”

The strategy will be implemented in three phases over a period of five years. The first phase between 2023 and 2024 should lead to a return to growth (after five consecutive years of declining revenues) and include a focus on resource allocation and continued debt repayment of the company. The second phase is accelerated growth between 2025 and 2027 with a clear focus on the list of priorities to accelerate growth through innovative products and biosimilars and focus on business development opportunities. The final stage of 2028 is sustainable growth.

Francis told reporters he was “very excited about the future of Teva” and stressed that the strategy would make Teva a much stronger company. Francis presented the four main pillars of the strategy: return to growth by accelerating a strong portfolio of innovative medicines; Expanding the innovative pipeline and focusing on core therapeutic areas with first-in-class and best-in-class opportunities; maintaining the strength of generics based on high-value, complex products; Focus work on areas with the greatest potential for growth and patient impact.

Most of the growth will come from Teva’s innovative assets, which include Austedo to treat tardive dyskinesia and Huntington’s disease, Uzedi, which recently launched to treat schizophrenia, and Ajovy to treat migraines. Francis said Ostedo fills a huge need. “We believe this product could reach $2.5 billion in sales by 2027.” In 2023, Oestido’s sales are expected to reach $1.2 billion. Frances also mentioned seven biosimilar drugs, four of which were developed with partners.

On innovation, Francis added, “We have high-quality assets in the pipeline,” and pledged to invest more in research and development in the future.

Francis: We will ensure the sustainability of the generic drug business

On generics, Francis said: “Teva is the world leader in generics. We want to ensure that this business is sustainable and growing and that’s why we need focus. We will reduce the number of products in research and development and this will bring increased profit margins.” Teva is expected to focus on complex generic products – in this case Francis isn’t talking about a new policy although Francis admits it hasn’t always been successful in the past. “We will focus on fewer products and increase our success rate,” he said.

Teva will discontinue production and marketing of some of the generic products in its portfolio, especially those with lower profit margins and many of the manufacturers in the market.

In conclusion, Francis said, “We know where we need to focus our resources and attention in order to increase revenue and bottom line. This is a new chapter for Teva.”

He succeeded Francis Carr Schultz as CEO. During Schultz’s five years in office, he rehabilitated Teva with deep spending cuts and paid off much of the company’s debt after the massive $40 billion acquisition of Actavis in 2016, which saddled the company with debt. Schultz was succeeded by Erez Vigodemann who led the disastrous acquisition of Actavis and also the more successful acquisitions that brought in Ostedo and Ajovi.

Published by Globes, Israel business news – en.globes.co.il – on May 18, 2023.

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