Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) CFO Eyal Desheh told the Oppenheimer Investment Bank conference in Tel Aviv not to eulogize Copaxone yet.
He also hinted at a possible impending acquisition. He said, "The year has certainly opened well. The company is generating cash and we'll see how we are going to use it."
He continued, "Teva's management is very focused on a small number of main procedures one of which is to amend everything that requires correction in the company. We are building the organization and improving procedures.
He also spoke at length about Copaxone. He said, "Teva is undertaking a great many measures to protect Copaxone, which this quarter contributed a little less to Teva's profits - 46% compared with over 50% last year, and that's not necessarily negative. We are not only talking about protecting it against generic and oral competition but also protecting its status as the leader in the field of multiple sclerosis."
He continued, "We believe the future is before us by extending the life of the product, improving the product, and developing activities around it. We believe that the safety of patients is the primary value. From research that we carried out we think that the generic products could harm patients and we are in the process of transferring 40% of patients to Copaxone 40 milligram dosage by the end of May. We are doing everything we can to protect our IP. We filed a suit against the FDA demanding they accede to our request to instruct that full clinical trials are conducted for generic Copaxone."
The patent expires in two weeks. We have an appeal with the US Supreme Court that agreed to hear our appeal. This is no small thing. If I'm not mistaken the US Supreme Court only agrees to hear 5% of cases.
Regarding organic growth Desheh said, "The company is very focused which is the heart of business improvement. Acquisitions are important but nothing replaces organic growth. Another thing we are focused on: how to position Teva for the long term. What must be corrected? Firstly to reduce expenditure. The plan is high on our list of priorities. It runs from our production system which is improving all the time by concentrating production in a smaller number of efficient plants in regions in which costs are low. It sounds simple and logical but getting there involves a great deal of effort. It takes time. The transformation of the operations system is at its peak and we are beginning to see results."
On strengthening Teva's leadership in generic pharmaceuticals Desheh said, "If someone has gained the impression that Teva is beginning to lose its leadership then that is not correct. We are striving to continue to increase our activities. We have announced a $2 billion program to reduce expenditure. By the end of the first quarter we had reduced our basic expenses by $600 million. The intention is to reach $1 billion by the end of this year."
He added, "We are also in the process of shutting down or selling activities that don't contribute to profit. The company is focusing on its profitable parts and growth. It is a never ending process. Company must always continue to streamline, and I assume there will be a second phase to this. Some of the savings will be for future investment."
Published by Globes [online], Israel business news - www.globes-online.com - on May 11, 2014
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