That big generics pricing hit that’s helped lop billions off of Teva’s market cap over the last week? The company knew it was coming—and stayed mum for five weeks.
As Haaretz reports, wholesalers Walmart and McKesson forced the Israeli drugmaker to slash prices on drugs it sold them sometime during the second quarter, interim CEO Yitzhak Peterburg told analysts following a disastrous earnings announcement. And that quarter ended June 30.
The pressure followed a move by the pair to form a single joint purchasing entity, dubbed ClarusOne, and increase their bargaining power. “This development and other new contracts had a greater-than-expected negative impact on our Q2 results and especially on the outlook for the remainder of the year,” Peterburg said, as quoted by the newspaper.
While the move wasn’t illegal, it doesn’t exactly inspire confidence in Teva’s transparency or management, Haaretz notes. RBC Capital Markets analyst Randall Stanicky, for one, cited “lack of confidence in Teva’s ability to forecast the business” as one factor when he downgraded the stock last week.
Teva has been pummeled since it unveiled weak results last Thursday—and walked back guidance by $1 billion-plus, took a $6.1 billion write-down on its generics business, slashed its dividend, announced thousands of layoffs and more. It’s also run into the risk of breaching its debt covenants, thanks to a $35 million hole it dug with a disastrous purchase of Allergan’s generics unit.
On the debt front, though, the company is hoping some asset sell-offs can help gin up cash—and it may have found at least one interested buyer. India’s Intas, which last year snapped up the U.K. and Ireland assets Teva had to divest to close its Allergan deal, is prepping a $1.5 billion bid for Teva’s European women’s health, oncology and pain management divisions, The Economic Times says.
Teva also indicated this week that it was weighing a cast-off of Medis, an Iceland-based unit that develops generics for other drugmakers. And according to Bloomberg, the company is considering selling off some of its respiratory treatments, too.
By Carly Helfand
Source: Fierce Pharma
Avivi joins Bayer fresh off a yearlong stint as chief marketing officer of Advance Auto Parts, which followed about three years spent as marketing chief of another auto parts company, Tenneco. Rounding out her nearly 30-year career in marketing are leadership roles at consumer goods giants Kimberly-Clark and Procter & Gamble.
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