"We consolidated Teva's divisions into a unified and functional organization in order that we should not go bankrupt and to service the debt, which a year ago was $35 billion, a very large amount. It's a great deal of money," Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) president and CEO Kåre Schultz said this morning at a press conference in Tel Aviv.
"If you can't pay your mortgage, for example, you are liable to lose your home. When revenue is falling there is only one option, to cut costs, and so we carried out the structural change," is how Schultz described Teva's situation when he took over as CEO.
On the low guidance that Teva provided for 2019, Schultz said, "When you beat market expectations people are liable to think that you are not in a difficult situation, which is liable to give the message that the problems have been solved, but unfortunately revenue is still on a downtrend. In 2019, we hope to stabilize. Copaxone will decline, but Austedo is expected to show a rise in sales. This year, we are losing. We won't see an improvement until 2020-2021, that's the situation," Schultz said.
"We have plans for changes in the head office in Israel," Schultz said, and hinted that the company did not intend to exit from Israel.
"We have no intention of getting into cannabis," Schultz said. "We have no research in that area." On speculation about attempts to take over the company, Schultz said, "We are not up for sale."
Schultz pointed out that drug prices on the generics market in the US had fallen 50%, and spoke about the tough competition that has forced the company to reduce prices.
On changes in Teva's workforce, Schultz said, "Many people left, and they were good people so they had no problem finding other work. It took time to close some of the activity in Israel, and we closed seven plants in 2018 and were left with 73 around the world, and another eleven plants are closing in 2019."
I have not met Warren Buffett personally and we have not spoken," Schultz said in answer to a question whether the legendary investor intended to take over the company further to the holdings he revealed over a year ago. "We have a dialogue with the shareholders, we have spoken with all of them, among them Berkshire, and we have a good dialogue with them," he added.
Last week, Teva released its quarterly financials, with guidance lower than market estimates, and its share price responded with a drop of 8% that day on Wall Street. At the time Schultz said that 2019 would be a low for Teva, which has lost about 70% of its market cap since peaking in 2015, weighed down by the acquisition of the generics division of Actavis, a business that was weak in the last quarter.
Published by Globes, Israel business news - en.globes.co.il - on February 19, 2019
© Copyright of Globes Publisher Itonut (1983) Ltd. 2019