Sector News

Cost-cutting, check. Now, it’s on to dealmaking, Teva chief says

February 6, 2015
Life sciences
Okay, pharma. Teva is ready to make some deals now. Really. It’s serious.
 
It’s a mantra that’s seen quite a bit of play since CEO Erez Vigodman took up the reins at the generics giant early last year. But now, after a year of focusing on cutting costs and debt, and turning things around at the struggling drugmaker, he really means it.
 
“In 2015 we are reorienting towards inorganic moves,” he said on the company’s fourth-quarter conference call, as quoted by Reuters. Translation: We’re shopping.
 
As he’s said before, Vigodman has his eye on emerging markets and complex generics, to name a couple of potential deal targets. Rumors about a Mylan merger have persisted, though plenty of analysts have their doubts about that one. Perrigo, the OTC-focused drugmaker now based in Ireland, or Sweden’s Meda could also make sense, industry watchers have suggested.
 
So far, Teva itself has been quiet on the acquisition front, despite the wave of deals that took pharma by storm in 2014. “Teva has a healthy business, but in this environment if you’re not doing deals, you’re probably not taking advantage of the opportunities that are out there,” Gabelli & Co. analyst Kevin Kedra told Bloomberg last month.
 
Whatever M&A moves Teva does ultimately make could help the company on its quest to return to growth–especially if they’re in the generics department. Last quarter, generics revenue fell 8% to $2.47 billion, propelling a 4.8% overall sales drop. The decline was in line with analyst expectations, Bloomberg said.
 
Teva’s generics sales also took a dip on the full year, despite contributions from knockoffs of AbbVie’s heart pill Niaspan and Merck’s  brain cancer drug Temodar.
 
By Carly Helfand
 

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