Teva Sheds 14 Pipeline Projects, Saving $550 Million Through 2017
By Cyndi Root
Teva has reviewed its core therapeutic areas and decided to drop 14 projects, saving itself $550 million in R&D costs through 2017. The company announced the divestment in a press release, stating that it is still committed to treatments for the Central Nervous System and the Respiratory system. Oncology and Women's Health are two areas the company will be focusing on less, keeping attention trained instead on products in these areas that are ready for or soon-to-be on the market. Erez Vigodman, Teva’s President and CEO, said, “The decision announced today demonstrates progress in our efforts to solidify the foundation of the company, drive organic growth and ensure that we are pursuing the highest potential opportunities, both for patients and for the company.”
Teva’s Divestments
Teva states that it will drop 14 projects, including cancer and women’s health, but it did not divulge the other projects that it is divesting. The company did say that it will continue to evaluate opportunities for those areas in collaborations or commercialization activities. Additionally, it will maximize profitability in market-ready drugs from those therapeutic areas. Teva expects to save R&D costs of $150 million in 2015, $200 million in 2016, and $200 million in 2017. It plans to use the cost savings for its core therapeutic areas and its efficiency objectives.
Teva’s Core Therapeutics
Teva’s core areas of the Central Nervous System (CNS) include multiple sclerosis, neurodegenerative diseases, and pain and the Respiratory system, which include asthma and chronic obstructive pulmonary disease. The company intends to focus on patient needs in those areas as the industry as a whole becomes increasingly patient-centric. It hopes to invest in R&D, strengthen its commercial infrastructure, and develop specialty medicines. Mr. Vigodman, said, “Our late-stage pipeline assets are expected to generate great value – out of the 30 plus product launches we anticipate by 2019, with a total of over $4 billion in new revenue on a risk-adjusted basis, over 20 products will be launched in these two core therapeutic areas.”
Teva intends to share more information on its restructuring efforts during its third-quarter earnings presentation. The Inquirer, a Philadelphia-based newspaper, reports that Teva has declined to discuss how many people will lose their jobs due to the restructuring. Teva is based in Israel and has many facilities in the U.S., including Pennsylvania and New Jersey.