Israeli drugmaker Teva has announced a revamp of its business after disclosing that 2013 revenues will probably fall short of this year’s tally.
On a conference call, Teva predicted that revenues in 2013 will decline slightly on 2012 levels, coming in at $19.5bn-$20.5bn for the full year, while earnings per share (EPS) are expected to slide to $4.85-$5.15 from a range of $5.30-$5.40 in 2012.
Among the reasons for the decline will be increased competition for multiple sclerosis (MS) blockbuster Copaxone (glatiramer acetate), Teva’s biggest product by some distance with sales of $2.94bn in the first nine months of 2012.
Copaxone is already operating in an increasingly busy category with stiff competition from other injectable drugs, but will face a tougher time in future with the advent if orally-active MS drugs, notably Novartis’ already-marketed Gilenya (fingolimod) and Biogen Idec’s BG-12 which is tipped to be a big earner in future.
Meanwhile, with the end of the patent cliff in sight for many of the leading pharma companies Teva’s generic drug business is also facing leaner opportunities ahead and the needs to explore new strategies.
More detail on the restructuring will be given at an investor open day on December 11, but in the meantime the company’s chief executive Jeremy Levin said it intends to cut $1.5bn to $2bn in costs over the next three to five years, with cutbacks felt across all elements of its business.
Some of its R&D projects will be cut, and the company is also planning to streamline operations, and change procurement practices, while targeted acquisitions – and also potentially divestments – are possibilities, as are share buybacks.
Teva has a history of growing by acquisition and has snapped up a number of companies in recent years including Cephalon, Taiyo and Ratiopharm.
The company’s share price dipped on the announcement of the 2013 forecasts but recovered most of the lost ground as details of the restructuring plan emerged.