Teva Pharma plans to cut about 5,000 employees (Update)

by Tom Murphy

Teva Pharmaceutical Industries Ltd. plans to cut about 5,000 employees mostly by the end of next year as part of a restructuring designed to slim the drugmaker's business and make it more efficient.

The Israeli company said Thursday it employs about 46,000 people worldwide, so the cuts amount to nearly a 10 percent global workforce reduction. The drugmaker plans to trim oversized parts of its business while growing its generic and core research and development programs. It plans to reinvest savings from the cuts in what it considers to be areas with high potential, like development of complex generics and specialty pharmaceutical products.

It also wants to increase its presence in emerging markets and broaden its product portfolio, especially with over-the-counter drugs, which can be sold without a prescription. Many drugmakers are targeting emerging markets like Brazil and China as possible sources for future growth.

Earlier this year, the company said it would close by 2017 a Sellersville, Pennsylvania, generic drug plant that employs about 450 people. It also plans to sell another plant in Irvine, California.

Teva said the moves are part of a global restructuring it announced in 2012. It now expects to save about $2 billion annually by the end of 2017, largely due to a reduction in the company's cost of goods. That represents the high end of its previously forecast savings range of $1.5 billion to $2 billion.

The company expects to end 2013 near the middle of its expected ranges of $4.85 to $5.15 per share in earnings on $19.5 billion to $20.5 billion in revenue.

Analysts expect, on average, earnings of $4.99 per share on $20.05 billion in revenue, according to the data firm FactSet.

Teva is one of the world's largest generic drugmakers, and it also has made a push in recent years to grow its branded medicine business.

In August, it said generic revenue fell 8 percent in the second quarter due to declining sales in the U.S. and Europe. It also has seen a steep sales drop for one of its brand-name drugs, Provigil, which treats tiredness caused by narcolepsy, obstructive sleep apnea, and changes in work schedule. Teva acquired the drug when it bought Cephalon Inc. in 2011. As part of that deal, antitrust regulators required Teva to sell U.S. rights to generic Provigil to another company.

Shareholders liked the moves Teva announced Thursday, at least initially. They sent U.S.-traded shares of Teva up nearly 3 percent, or $1.11, to $40.31 Thursday in premarket trading about 30 minutes ahead of the market opening.

Teva shares have traded between $36.63 and $42.83 over the past year.

not rated yet
add to favorites email to friend print save as pdf

Related Stories

Merck to cut 8,500 more jobs (Update)

Oct 01, 2013

Merck & Co. plans to cut another 8,500 jobs as the drugmaker continues its struggle with competition from cheaper generic medications that have squeezed the pharmaceutical industry for several quarters now.

Israeli generic drug giant Teva to buy Cephalon

May 02, 2011

Teva Pharmaceutical Industries, the world's largest generic drug maker, will buy US biopharma firm Cephalon in a $6.8 billion deal, the companies said in a joint statement Monday.

FDA approves first generic versions of Zyprexa

Oct 24, 2011

(AP) -- Federal health officials on Monday approved the first generic versions of the blockbuster drug Zyprexa, an expensive treatment for schizophrenia and bipolar mood disorder.

Pfizer painkiller gets longer patent protection (Update)

Mar 05, 2013

Drugmaker Pfizer Inc. said Tuesday that a new patent on one of its top drugs, anti-inflammatory painkiller Celebrex, extends its U.S. patent protection by 18 months, potentially bringing the company a few billion dollars ...

Recommended for you

WHO: Millions of Ebola vaccine doses ready in 2015

Oct 24, 2014

The World Health Organization says millions of doses of two experimental Ebola vaccines could be ready for use in 2015 and five more experimental vaccines will start being tested in March.

Added benefit of vedolizumab is not proven

Oct 23, 2014

Vedolizumab (trade name Entyvio) has been approved since May 2014 for patients with moderately to severely active Crohn disease or ulcerative colitis. In an early benefit assessment pursuant to the Act on the Reform of the ...

Seaweed menace may yield new medicines

Oct 22, 2014

An invasive seaweed clogging up British coasts could be a blessing in disguise. University of Greenwich scientists have won a cash award to turn it into valuable compounds which can lead to new, life-saving drugs.

User comments