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Teva names new CFO and bulks up its opioid liability fund

Opioid liability issue overshadowed the company's Q3 results

Teva

Teva has raised the cash it needs to cover settlements or liabilities in opioid litigation in the US to around $1bn – and has a new chief financial officer to oversee its spending.

The Israeli drugmaker revealed during its third-quarter results that Eli Kalif – formerly of technology company Flex – would become its new CFO from 22 December, replacing Mike McClellan who has been in the role for the past two years.

The opioid liability issue overshadowed Teva’s third-quarter results, which saw a loss of $314m on a 6% decline in revenue to $4.3bn, which was actually a little better than expected as a cost-cutting drive by new chief executive Kåre Schultz had an impact.

Teva is one of several drugmakers and distributors trying to agree a settlement with federal and state authorities in the US that would bring an end to long-running litigation alleging that over-marketing of opioid drugs was a key factor in the epidemic of opioid abuse, overdoses and death that has swept the country over the last few years.

Under that settlement, Teva would pay $250m in cash over ten years and donate $23bn-worth of drugs to treat opioid addiction, without admitting any wrongdoing. It had previously set aside around half of the $1bn fund in the second quarter of this year, and now says it hopes the matter will be resolved by the end of the year.

The settlement offer has been tentatively agreed by a group of state attorneys general, but others are holding out.

“We believe that the agreement in principle is the best way forward for the patients or the people in the US suffering from addiction,” said Schultz on Teva’s third-quarter results call.

“We hope that this framework will materialise [and] we will be able to help alleviate some of the burden from the misuse of opioids in the US,” he added.

Teva’s third-quarter results were hit once again by weak generic sales and the continuing erosion of multiple sclerosis therapy Copaxone (glatiramer acetate) which has lost patent protection and is facing competition from both generics and newer MS drugs.

New migraine treatment Ajovy (fremanezumab) is supposed to offset the decline but continued to disappoint in the third quarter, bringing in $25m in three-months which was below analyst expectations. A new autoinjector formulation of the drug is due to launch in the coming months that could help accelerate growth.

One bright spot for the company this week was the US launch of Celltrion-partnered Truxima – the first biosimilar of Roche’s big-selling Rituxan (rituximab) to reach the US market – which could help boost the company’s sales in the fourth quarter.

Rituxan made around $4.3bn in sales from the US market last year and, while it is currently approved only for rituximab’s cancer uses and not other big indications like rheumatoid arthritis, Teva and Celltrion’s drug is expected to make quick headway in the market thanks to a 10% discount on Rituxan’s list price.

Article by
Phil Taylor

8th November 2019

From: Marketing

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