12:00 AM
Dec 17, 2012
 |  BioCentury  |  Strategy

Teva's puzzle pieces

How Teva will reshape cost structure; regionalize product offerings; pursue BD

Teva Pharmaceutical Industries Ltd.'s new management expects to achieve organic, profitable growth by globalizing key operating functions to reshape its cost structure while regionally tailoring its product offerings and using business development to amass capabilities incrementally.

In a preview of its strategy with BioCentury, the company disclosed it is refocusing R&D on key growth drivers in complex and combination generics called new therapeutic entities (NTEs), and branded specialty drugs for CNS and respiratory diseases (see BioCentury, Dec. 10).

In the roll out of its plan in New York last week - the company's first investor day since Jeremy Levin took over as president and CEO - management went on to describe a strategy that involves marrying these different product lines to the appropriate populations around the world (see "Global Teva," A6).

"We have the portfolio to drive growth in all major markets," Levin told BioCentury.

"There are opportunities in parts of the world where we are not very present - and these include China, Brazil and India - and in countries where we are present, to selectively change and ameliorate our portfolio," he added.

For example, while Teva expects North America to remain a large market for its multiple sclerosis drug Copaxone glatiramer acetate, the company expects to drive growth with its respiratory products, complex generics and NTEs.

In Western Europe, however, the drivers will include MS; existing drugs for Parkinson's disease, cancer and women's health; respiratory products; and both branded and complex generics.

In emerging markets, the growth opportunities vary by region, with branded generics important across this space but OTC products figuring importantly in Latin America and Eastern Europe.

Growing generics

Investor day also was the first time Teva's new management described how it plans to continue to grow its generics business, which still accounts for about half of the company's revenue.

Investor concerns about slowing growth rates in Teva's generics business predate Levin's tenure - especially in the U.S., where competition has increased for the 180-day exclusivity afforded to the first generic to market under Paragraph IV (see BioCentury, Jan. 16).

"Today there are fewer Paragraph IV exclusivities, and there will be even fewer in the future. In addition, there is increasing competition in commodity generics. This is particularly true in the U.S. and in Europe," Levin told BioCentury.

Nevertheless, President and CEO of Americas Generics Allan Oberman last week told investors that Teva has the largest portfolio of first-to-file generics in the U.S., and these products will account for about half of the North American generics business...

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