Teva Pharmaceuticals to Cut 25% of Jobs in Huge Reshaping

Teva Pharmaceuticals to Cut 25% of Jobs in Huge Reshaping

2017-12-14 19:18:07

“We will execute this plan in a timely and prudent manner, remaining focused on revenue and cash flow generation, in order to make sure Teva is ready to meet all of its financial commitments,” Mr. Schultz said in a news release.

“Teva will optimize its cost base while ensuring that we protect our revenues and preserve our core capabilities in generics and in select specialty assets, in order to secure long-term growth,” added Mr. Schultz.

The company said it expected to take a restructuring charge of at least $700 million next year, mainly related to severance costs, and could take additional charges tied to the closing of manufacturing plants, research facilities and other offices.

Prices for generic drugs have been falling across the industry, as major pharmacy chains, wholesalers and pharmacy benefit managers have united into colossal buying groups to drive harder bargains with generic drugmakers.

In a twist, Teva is also struggling because its leading brand-name drug, the multiple-sclerosis treatment Copaxone, now has generic competition. Copaxone brought in just over $1 billion in sales in the first three quarters of this year, or about 19 percent of the company’s total revenues. Those sales included about $800 million in the United States, an 8 percent decline over the same period in 2016 that management said was because of the new generic competition.

In addition to pressure on its generics business, Teva is saddled with some $35 billion in debt, much of it taken on in a spree of acquisitions in recent years.

As part of its reshaping, Teva said it would seek to improve its margins through price increases or the discontinuation of some drugs.

It also plans to close or sell a significant number of manufacturing plans in the United States, Europe, Israel and other markets.

Teva’s shares rose 17 percent in premarket trading in New York on Thursday after the announcement.

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