Teva reaching for more of U.S. generic drug market

CEO Jeremy Levin says he has changed the leadership lineup.
CEO Jeremy Levin says he has changed the leadership lineup.
Posted: May 25, 2012

Teva Pharmaceuticals Ltd.’s new chief executive officer, Jeremy Levin, said Thursday that he has changed the leadership lineup in hopes of regaining more of the U.S. generic drug market, in which Teva has dominated for years but now faces increasing competition.

Chief financial officer Eyal Deshah said the company has "instituted a cost-cutting and efficiency program throughout Teva’s operations," but a spokeswoman later said via e-mail that there have been no new layoffs, including in the Americas division, which encompasses facilities in the Philadelphia area.

Teva, which is based in Israel, has four regional divisions: Europe, the Americas, Asia, and EMIA (Eastern Europe, Israel, the Middle East, and Africa).

The Americas division is based in North Wales, Montgomery County, but it has other facilities in this area. Teva is building a new facility on the site of the former Budd Co. plant in Northeast Philadelphia.

Allan Oberman, who led Teva’s EMIA division, will now lead the U.S. generics division. Tim Crew, who previously guided that unit, is moving to another role in the organization, according to a spokeswoman. Bill Marth who joined Levin in Thursday’s conference call with financial analysts, is the leader of the Americas group.

"Bill remains the head of the Americas," Levin said. "We have instituted an augmentation of the U.S. generics team, and that was an important step for us to bring in the greater depth of management and greater capability there, to assist in what I believe we can do here, which is to rebuild that market share."

Teva had about $4 billion in U.S. generic revenue in 2011, down 32 percent compared with approximately $5.8 billion in 2010, according to a Securities and Exchange Commission filing.

Teva leads the world in generic sales, but it has expanded its patent-protected branded-drug portfolio for the sake of diversity. The $6.8 billion purchase of Malvern-based Cephalon in 2011 was meant to help that cause. There have been job cuts with that integration. Former Cephalon CEO Kevin Buchi departed May 8, when Michael Hayden was named president of global research and development, though Buchi got a $5 million cushion when Cephalon was sold, according to an SEC filing.

Levin joined Teva on Feb. 1, replacing Shlomo Yanai on May 10. The Teva board of directors hoped Levin could reinvigorate the company, whose stock closed Thursday at $38.69, up 11 cents for the day. The stock has a 52-week range of $35 to $51.15.

Thursday’s analyst chat was meant to bolster the share price, with a bit more on approach and new financial guidance for this year, since previous 2012 guidance was withdrawn May 9.

At Bristol-Myers Squibb, Levin was credited with a successful string-of-pearls strategy in buying or partnering with other companies. Levin said Thursday he will hold off delivering his long-term strategy until later this year. Meanwhile, he scaled back predictions for the rest of 2012, projecting global revenue of between $20 billion and $21 billion, down from the previously predicted $22 billion.

One example of a change in strategy is Teva’s decision to not have a full-fledged U.S. launch of atorvastatin, the generic name for Lipitor, Pfizer’s blockbuster cholesterol drug, which lost patent protection last year. With seven or eight companies trying to sell their versions of atorvastatin, Teva decided there was greater profit potential in shifting production at its 74 factories to other drugs.

"I believe in core depth, not spread," Levin said of where to put money, including with research and development. "There are many companies that spread R&D, especially big companies, and I don’t envision that we’re going to take that approach. We’re going to be thoughtful and pick out the areas we want."

Contact David Sell at 215-854-4506, dsell@phillynews.com or @PhillyPharma on Twitter. Read his PhillyPharma blog on philly.com.

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