Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) will halt oncology and women's health R&D and has identified 14 pipeline projects for discontinuation in its strategic review.
Teva said the review included an extensive evaluation of Teva’s current and future capabilities to address unmet patient needs, the competitive landscape, barriers to entry and profitability with the purpose of creating a winning strategy to achieve global leadership in each of the company's core therapeutic areas.
The company reaffirmed its long-term commitment to develop patient-centric solutions and significantly grow its specialty medicines business through investment in R&D, marketing, business development and innovation, while strengthening its commercial infrastructure and expanding its offering of patient centric solutions. The core therapeutic areas on which Teva will focus and where it has been establishing a leading position are Central Nervous System (including multiple sclerosis, neurodegenerative diseases and pain) and Respiratory (including asthma and chronic obstructive pulmonary disease).
Teva CEO Erez Vigodman said, “Teva is committed to being a world-leader in CNS and respiratory, both areas underpinned by significant and growing unmet patient needs. With our existing portfolio, integrated global R&D and innovation capabilities, we are in a strong position to deliver for patients and payers, and to generate long-term value for our shareholders.
He added, “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.”
In women’s health and oncology, Teva will now focus on market-ready or close-to-market assets to maximize sustainable profitability rather than R&D.
Teva has identified 14 pipeline projects for discontinuation or divestment. These projects amount to more than $150 million in R&D costs in 2015 and in excess of $200 million for each of 2016 and 2017. These cost savings will be directed, in part, to increasing resources in Teva's core therapeutic areas, while another part of which will support the company's efficiency objectives. This increased investment in core therapeutic areas will increase R&D productivity, without increasing the overall R&D budget.
Vigodman 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. It will allow us to more efficiently and effectively focus and build leadership in key disease areas and deliver sustainable long-term value.”
Published by Globes [online], Israel business news - www.globes-online.com - on October 6, 2014
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