Teva Pharmaceutical Industries, the world’s largest generic drug maker, based in Israel, unveiled its restructuring plan yesterday, which comes with big cuts to its research and development (R&D) department and staff.
Teva Pharmaceutical Industries, the world’s largest generic drug maker, based in Israel, unveiled its restructuring plan yesterday, which comes with big cuts to its research and development (R&D) department and staff.
President and CEO Kare Schultz said in a letter, “The plan will address a number of key areas, including the closure or divestment of a significant number of R&D facilities, headquarters, and office locations across all geographies.”
The plan is said to lead to 14,000 layoffs beginning in 2018, which accounts for about 25% of Teva’s total workforce. The company plans to begin notifying affected employees over the next 3 months. Schultz said that “all business and regions will be affected.” In addition to the layoffs, Teva plans to suspend its dividend on ordinary shares.
Shares in Teva were up 14.6% on news of the plan, though its shares overall are down 53% since January.
The 2-year restructuring plan aims to cut Teva’s costs by $3 billion by the end of 2019, from an estimated base of $16.1 billion, according to Fierce Biotech. However, the restructuring itself will end up costing the company at least $700 million in 2018, mainly related to severance costs, according to a statement.
“We will execute this plan in a timely and prudent manner, remaining focused on revenue and cash flow generation, in order to make sure Teva is ready to meet all of its financial commitments,” said Schultz in the letter.
Reuters reports that Teva needed to make a change in order to stay afloat, as it was saddled with about $35 billion of debt after acquiring Allergan’s Actavis generic drug business for $40.5 billion.
The company also expects to receive help next year from 2 new branded products — its migraine drug fremanezumab and austedo, which treats abnormal, involuntary movements associated with Huntington’s disease. Teva is also partnered with Celltrion in the development of 2 biosimilars: CT-P10, a proposed rituximab biosimilar, and CT-P6, a proposed trastuzumab biosimilars.
Teva is expected to provide its 2018 outlook in February, and will give a longer-term strategic plan for the company later that year.
Eye on Pharma: Keytruda Biosimilar Deal; German Court Bans Imraldi; New Biosimilars for Japan
June 17th 2025Alvotech and Dr. Reddy's partner to develop a Keytruda biosimilar, a German court bans Humira biosimilar over patent dispute, and Samsung Bioepis enters a strategic agreement with NIPRO Corporation in Japan.
Escaping the Void: All Things Biosimilars With Craig & G
May 4th 2025To close out the Festival of Biologics, Craig Burton and Giuseppe Randazzo from the Association for Accessible Medicines and the Biosimilars Council tackle the current biosimilar landscape and how the industry can emerge from the "biosimilar void."
How AI Can Help Address Cost-Related Nonadherence to Biologic, Biosimilar Treatment
March 9th 2025Despite saving billions, biosimilars still account for only a small share of the biologics market—what's standing in the way of broader adoption and how can artificial intelligence (AI) help change that?
Eye on Pharma: Interchangeability Labels and Expanded Biosimilar Partnerships
May 29th 2025The FDA designates 2 biosimilars as interchangeable, enhancing access to treatments for inflammatory diseases and multiple sclerosis, while 2 other companies expand their biosimilar partnership to include more products.
The Trump Administration’s Drug Price Actions and Why US Prices Are Already Sky-High
May 17th 2025While the Trump administration’s latest executive order touts sweeping drug price cuts through international benchmarking, the broader pharmaceutical pricing crisis in the US reveals a far more complex web of development costs, profit incentives, and absent price controls—raising the question of whether any single policy, including potential drug tariffs, can truly untangle it.