Teva’s mega-cost-cutting drive hasn’t been popular with workers or its home country of Israel. Analysts, on the other hand, like what they’ve seen so far from the company’s new executives.
These days, Teva is “led by action-oriented leaders with a rapid and clear path to recovery,” Goldman Sachs’ Jami Rubin wrote in a note to clients after meeting with CEO Kåre Schultz and company last week. Compare that with ex-CEO Erez Vigodman’s C-suite, which Rubin characterized as “fairly reactionary and directionless,” and it makes for a “stark shift.”
So much so, in fact, that Rubin has recommended since December that investors buy Teva’s shares, despite the pricing pressure that continues to wreak havoc on the generics industry and the “limited track record” of the knockoff giant’s new management team.
“While still early in the turnaround phase, our confidence in the de-leveraging story and increasingly clear line of sight to growth (beginning in 2020) keeps us Buy rated,” she wrote.
Rubin isn’t alone. Earlier this year, Credit Suisse analyst Vamil Divan, M.D., upgraded Teva’s shares, pointing to “early signs of execution” on the $3 billion restructuring plan that’s set to claim 14,000 jobs.
Schultz, for his part, hasn’t tried to hide his own opinion of the way Teva’s former leaders handled the company. For one, they created a bloated corporate structure with too many layers, he said at January’s J.P. Morgan Healthcare Conference, and they grew through acquisitions in a way that Schultz found “very suboptimal from a cost-efficiency point of view.”
On top of that, “Teva used to focus on maximizing revenue in the generics business believing that if you just maximize revenue, everything will fall into place and you’ll get great profitability and so on,” Schultz said, stressing that instead, “you always need to maximize operating profit.”
Those philosophies helped Schultz, a veteran of Novo Nordisk and the former skipper at Lundbeck, land the Teva CEO job, along with a $17 million pay package the likes of which Teva’s top executives have never seen. And the way Rubin sees it, after Schultz has eased Teva’s debt and pared down costs, there will be plenty of opportunity for new products to chip in growth.
Neuro drug Austedo, for one, is “just scratching the surface” of a “huge” market for tardive dyskinesia, which Rubin thinks could make the product a blockbuster seller. And forthcoming migraine drug fremanezumab “could drive meaningful upside to EBITDA and cash flow for speedier debt repayment”—particularly if it launches this fall, as Teva executives expect.
By Carly Helfand
Source: Fierce Pharma
CureVac and the University of Texas’s MD Anderson Cancer Center have announced a co-development and licensing agreement to develop novel messenger ribonucleic acid (mRNA)-based cancer vaccines. The strategic collaboration will focus on the development of differentiated cancer vaccine candidates in selected haematological and solid tumour indications with high unmet medical needs.
FUJIFILM Corporation is planning to invest $1.2 billion to expand the planned FUJIFILM Diosynth Biotechnologies manufacturing facility in Holly Springs, North Carolina, US. This news follows the organisation’s announcement of a $2 billion investment in the facility in March 2021. This additional financial boost totals the investment to over $3.2 billion, FUJIFILM confirmed.
Sanofi’s global restructuring and downsizing is now fully underway, with layoffs stretching to the company’s Belgian offices. Belgian newspaper De Tijd reports that 67 employees have been laid off at a site in Ghent and 32 jobs are on the chopping block at Sanofi’s Belgium HQ in Diegem.
