Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) shareholder and former senior executive and director Chaim Hurvitz has been soothing investor fears about the impact of Mylan N.V.'s (Nasdaq: MYL; TASE: MYL) announcement that the US Food and Drug Administration (FDA) had approved its application to market 20mg and 40mg Copaxone for the treatment of multiple sclerosis.
The son of the late Teva CEO Eli Hurvitz who transformed a small family company into a global pharmaceutical corporation, Chaim Hurvitz stressed that the company's $35 billion debt, taken on to acquire Actavis, is manageable. "No bank has an interest in demanding that the debt is immediately repaid and then seeing Teva collapse. The moment Teva's debt falls below $30 billion the situation will be different. This is already happening now because of streamlining - quietly firing 14% of the workforce, 7,000 employees and that's significant. There is also the sale of assets like the women's health division and they will continue to sell other assets. I believe that there are $4-5 billion in assets available to be realized."
Is it worth selling non-core assets even if they are profitable?
"Women's health activities are excellent but require a different marketing approach from the other products so it is perhaps more suitable for another company. I think it's good to sell non-core assets and be very focused. That is the order of the day in the pharmaceuticals industry. After selling these assets the debt will fall to an absolutely reasonable level. To my mind, it's even worth having a little debt as it's so cheap and Teva took on very cheap debt."
He said, "Losing exclusivity for Copaxone was of course not a surprise. We feared it would already happen three years ago and we were prepared,' said."
Hurvitz believes that Teva will hang on to some of its Copaxone market share. "Teva set up a customer service center to support multiple sclerosis patients in a way that does not exist for any other drug. Patients won't give up on it so quickly."
Hurvitz is also confident that incoming CEO Kåre Schultz will be able to turn things around quickly. "He is an excellent man," he said.
Published by Globes [online], Israel business news - www.globes-online.com - on October 8, 2017
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