Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) CEO Kare Schultz has told the J.P. Morgan Healthcare Conference, held this year in a virtual format, that as a result of the streamlining program and reduction in debt, the company can now focus on growth. He expects low-to-medium single digit growth in 2021, while an expansion of profit margins according to the company’s target, will allow Teva to increase earnings-per-share.
Schultz said that two factors had frustrated Teva’s return to growth in recent years. The first was the fall in prices in the US generics market, which has now stabilized with reasonable pricing and the second was Copaxone, where sales are now falling more moderately. At the same time there is growth in Teva’s newly launched specialty products, he said. The result of all this is a return to growth after years of falling revenue.
Schultz reiterated that Teva’s target is to continue reducing debt with no plans for any mergers and acquisitions at least until Teva is below three times net debt to EBITDA.
Schultz spoke about migraine treatment Ajovy. “We had a very good launch but there are three players in the market and we did not have an auto-injector. We launched it a few months ago and we are regaining share with a market share of 25%. We see Ajovy catching on very nicely in Europe.”
He added, “We have Austedo that is doing very well in the US and that’s also been launched in China. And we see very big volume possibly for Austedo in tardive dyskinesia, where we are still only scratching the surface of the patient population in the US.”
In the field of biosimilars, Schultz mentioned the launch of Truxima and said that it now had a 20% market share and he expected this to grow and that prices were unlikely to come down because of the major investment involved. He expressed great satisfaction with the situation in biosimilars.
Looking ahead, Schultz said that Teva had a 28% operating margin target by 2023, which he was confident would be achieved, among other things, by consolidating sites. He pointed out that Teva had recent sold plants in Serbia and Russia and the consolidation would continue. He said that Teva is also consolidating procurement and streamlining its product portfolio.
On the legal risks and lawsuits weighing heavily on Teva, Schultz said, “Compared to a year ago, we have made progress but not nearly as much as I hoped for.”
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He had hoped to already have a settlement signed on the opioid suits but Covid-19 has seen all trials delayed. Schultz regretted that people see the risks in the opioid trials rather than the improvement in the company in terms of growth and debt. “When the trials are off the table,” he said, “people will understand the business situation.”
Published by Globes, Israel business news – en.globes.co.il – on January 13, 2021
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