Teva Pharmaceuticals, a prominent player in the global generics market, has faced numerous challenges in recent years, including legal battles, pricing pressures, and regulatory hurdles.
Given your cautious optimism about Teva's future, how do you see the company balancing reinvestment in innovation, particularly in high-risk areas like immunology and long-acting injectables, with its need to maintain financial flexibility as it deleverages? Additionally, how might potential changes in U.S. healthcare regulations impact these strategic decisions over the next few years?
Sorry for my belated reply here and thank you for the questions! I think it is very encouraging to see how Teva has accelerated its branded drug portfolio - 7 biosimilars products in late-stage pipeline and/or under regulatory review, of which 4 are in collaboration with partners - and from a strategy point of view are very focused on what they are doing. OK, let´s see if I can unpack the questions here:
1) Financials: Capital allocation strategy is essentially to use cash-flow from Operations and optimization of the portfolio to drive Debt repayment (hyper important, is well underway but still a long way to go), investing in growth engines / new branded drugs that aligns portfolio to growth strategy, aligns to net working capital optimization, and aligns to cash conversion. For further financial flexibility Teva is focused on high-value generics and sites rationalization, which started under Kaare Schultz and that the new management team is continuing.
2) Healthcare regulations: This one is tough, but what is important to have in mind is that Teva´s Generics business in the U.S. is 40% of overall Generics, just to get that set. The main focus for US healthcare regulations - for existing drug classes - I would expect to come in GLP-1 and adjacent classes. The implications of these drugs are so big that it dwarfs any other development (again in existing classes). Teva has no exposure here in novel drugs but have some in Generics after they launched G-Victoza (liraglutide) earlier this year.
Given your cautious optimism about Teva's future, how do you see the company balancing reinvestment in innovation, particularly in high-risk areas like immunology and long-acting injectables, with its need to maintain financial flexibility as it deleverages? Additionally, how might potential changes in U.S. healthcare regulations impact these strategic decisions over the next few years?
Sorry for my belated reply here and thank you for the questions! I think it is very encouraging to see how Teva has accelerated its branded drug portfolio - 7 biosimilars products in late-stage pipeline and/or under regulatory review, of which 4 are in collaboration with partners - and from a strategy point of view are very focused on what they are doing. OK, let´s see if I can unpack the questions here:
1) Financials: Capital allocation strategy is essentially to use cash-flow from Operations and optimization of the portfolio to drive Debt repayment (hyper important, is well underway but still a long way to go), investing in growth engines / new branded drugs that aligns portfolio to growth strategy, aligns to net working capital optimization, and aligns to cash conversion. For further financial flexibility Teva is focused on high-value generics and sites rationalization, which started under Kaare Schultz and that the new management team is continuing.
2) Healthcare regulations: This one is tough, but what is important to have in mind is that Teva´s Generics business in the U.S. is 40% of overall Generics, just to get that set. The main focus for US healthcare regulations - for existing drug classes - I would expect to come in GLP-1 and adjacent classes. The implications of these drugs are so big that it dwarfs any other development (again in existing classes). Teva has no exposure here in novel drugs but have some in Generics after they launched G-Victoza (liraglutide) earlier this year.