Teva Pharmaceutical Industries Ltd. today reported an 18.4 percent drop in earnings for the second quarter ended June 30, 2017, citing price weakness in the United States market, and noted the company’s intention to cut a thousand more staff and close or sell more than a dozen plants through 2018. The company’s stock fell some 14 percent on the news.
Following release of the quarterly results, a variety of news reports from Israel Thursday cited comments made by Yitzhak Peterburg, Teva’s interim president and CEO, as saying that “swift and decisive actions” would result in an additional 1,000 job cuts at the company, bringing the total of recently announced layoffs to about 7,000 workers. Peterburg also said that the company plans to sell or close 15 manufacturing plants around the globe, including six this year and remainder by the end of 2018, and to pull out of 45 countries by the end of 2017.
“Second quarter results were lower than we anticipated due to the performance of our U.S. Generics business and the continued deterioration in Venezuela. These factors also led to a lowering of our outlook for the remainder of the year. All of us at Teva understand the frustration and disappointment of our shareholders in light of these results,” Peterburg said. “In our U.S. Generics business, we experienced accelerated price erosion and decreased volume mainly due to customer consolidation, greater competition as a result of an increase in generic drug approvals by the U.S. FDA, and some new product launches that were either delayed or subjected to more competition.
“Given the current environment, we have had to take swift and decisive actions,” Peterburg continued. “We are focused on executing meaningful cost reductions, rationalizing our assets and maximizing their value, actively pursuing divestiture opportunities and strengthening our balance sheet. We will continue to take action to aggressively confront our challenges.”
Peterburg said that other parts of Teva’s business continues to perform well and in line with expectations.
“In our Specialty business, we have achieved several very significant milestones, including the positive phase III results for our anti-CGRP asset fremanuzemab in both chronic and episodic migraine, and the approval and subsequent launch of Austedo in Huntington Disease and its pending approval in Tardive Dyskinesia,” Peterburg said. “The FDA has also accepted the Biologics License Applications that Teva has submitted for review with its partner, Celltrion, Inc., for biosimilar versions of both Rituxan and Herceptin. In our Generics business, our deep R&D capabilities and strong pipeline of new products in the U.S. where we have more than 300 ANDAs under review at the FDA, of which more than 100 are first-to-file, and our broad geographical footprint, will help us weather the current conditions in the U.S. market.”