Teva to close half its sites
pharmafile | June 17, 2014 | News story | Manufacturing and Production, Sales and Marketing | Jobs, Teva, cuts, generics, manufacturing
Teva Pharmaceutical Industries is to close around half of its 75 manufacturing sites within the next five years, chief financial officer Eyal Desheh has revealed.
Last month the Israel-based generics giant confirmed it was to close 11 of its production sites, with another 16 facilities ‘under evaluation’ – but Desheh’s comments confirm that even more are definitely for the chop.
The closures are part of a plan to cut $1 billion in expenses by the end of the year, with that figure set to reach $2 billion by 2017.
The firm has not confirmed which of its facilities will face the axe, although sites in Pennsylvania and California have already been earmarked for sale.
The news comes after Teva announced a restructure of its organisation with a number of senior leadership changes – but it insists that these moves are not a prelude to breaking up the company.
“It’s long overdue,” said Desheh, answering questions at the Goldman Sachs 35th Annual Global Healthcare Conference. “We’re a complicated company. One of the reasons for the organisational change is to simplify, to have a smaller number of groups, a smaller number of managers, to simplify the decision-making process.”
Last year Teva said it was to axe 5,000 jobs worldwide – and getting rid of dozens of sites makes sense in this context.
“The company was created by a series of mergers and acquisitions,” Desheh told the conference. “We managed to accumulate 75 manufacturing facilities. We are reducing this number as we speak. We can reduce this number to half of what we have today, and the remaining facilities will be efficient, productive and of course of the highest quality, which is very important.”
Its generic and specialty arms will expand gradually, he went on. “Don’t expect revolution. There is room to grow in established markets and there is room to grow in emerging markets. Mostly it’s about bottom-line management,” he said.
Central nervous system (CNS), autoimmune diseases, respiratory, pain and “selected other opportunities” including oncology are on the agenda for Teva. He described the company’s OTC prospects as “very, very promising”.
Adam Hill
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