The Israel-headquartered generic drug firm announced it will sell or close 15 manufacturing facilities, sack 7,000 people and pull out of 45 national markets, citing a decline in second quarter profit.
CEO Yitzhak Peterburg said customer consolidation, competition in the US, a $6.1bn (€5.1bn) impairment charge and instability in Venezuela – where it expected to generate earnings of $0.11 per share in 2017 – had impacted profits, prompting the cost cutting plan.
“As part of the cost base reduction, by the end of 2017, we will have reduced our head count by approximately 7,000 people since the closing of the Actavis Generics deal, which is approximately 2,000 above our initial plan.
Peterburg added that: “We are continuing to optimize our operational network. As part of it, we anticipate closing or divesting six plants in 2017 and nine plants in 2018.”
API plant closure
Full details of the plant closures – six of which will take place this year with the remainder due in 2018 – were not provided.
However, a spokeswoman told us Teva will close an API plant in Netanya run by its subsidiary Abic Ltd. Previously the site made the diuretic drug ingredient hydrochlorothiazide, but production halted last year.
The spokeswoman explained that: “Production at Abic ceased at the end of 2016. Teva announced it would exit manufacturing from that site a few years ago as part of an internal restructuring” adding “production was transferred to other sites in our global network.”
She also said that, at present, “the site remains open and houses other Teva activities.”
Active pharmaceutical ingredients (APIs) are not Teva’s biggest source of revenue. The firm makes most of its money through generic drugs and products like the soon to be off patent multiple sclerosis medicine Copaxone (glatiramer).
However, Teva claims its drug ingredient business - Petah Tikva-based TAPI – is the largest supplier in the world. The firm has a portfolio of 370 APIs and claims it serves more than 1,000 customers in 100 countries.
According to its website, TAPI has manufacturing facilities in Italy, Hungary, the Czech Republic, Croatia, Israel, India, China, Mexico and the US.
In May Teva Pharmaceuticals confirmed it intends to sell or close its sterile injectables facility in Gödöllő, Hungary by the end of 2018.
This article was updated to include additional comment from Teva.