For the first time since 2016, Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) enlarged its workforce during 2023. The Israeli company had 36,472 employees at the end of 2023, up 1,347 or 3.8% from 2022, according to the expanded financial report for last year, which the company filed earlier this week.
In Israel, the number of employees grew 4.5% last year to 3,385, an increase of 145 from 2022. At the end of 2023, employees in Israel represented 9.3% of Teva's overall workforce.
Throughout most of the past decade, Teva has been gradually reducing its number of employees in Israel, mainly following the aggressive streamlining plan of former CEO Kare Schulz but also before he assumed leadership of the pharmaceuticals company. At its peak in 2012, Teva had almost 7,400 employees in Israel (more than double today's number), representing 16% of the company's total employees. Since then the number of employees fell every year until 2023, when Teva again reported revenue growth after five years of shrinking sales.
Teva's headquarters is in Israel and throughout the years, it has adhered to the company's regulations that it is managed from the country. Several years ago the company's headquarters was transferred from Petah Tikva to Tel Aviv. The company's logistics center is in Hevel Modi'in, and it has offices in Netanya (Abic), Kfar Saba, and Teva Tech at Ramat Hovav in the Negev, which is part of TAPI (Teva active pharmaceutical ingredients), which is due to be sold.
In the past Teva has operated at other sites in Israel, which were sold or shut down as part of the streamlining plan that was implemented in recent years, including the Kiryat Shmona plant that was sold to FIMI Opportunity Funds and plants in Jerusalem that were closed down. The streamlining plan followed the huge debt that Teva took on, mainly to acquire Actavis in 2016 for $40 billion.
"The share is positioned to present a recovery in multiples"
Teva, managed by CEO Richard Francis, is traded on the NYSE with a market cap of $14.8 billion, after rising 26% since the start of the year, although down nearly 80% from its peak in 2016, when Teva was considered the "share of the nation."
Earlier this week, investment bank Pipe Sandler upgraded Teva's recommendation from "Neutral" to "Overweight" and raised its price target from $12 per share to 19% - a 45% premium on the company's current share price.
Piper Sandler has not held a positive recommendation for Teva since 2011, long before the company's peak before the failed Actavis acquisition, because of the anticipated erosion of Copaxone sales after its patent expired and its dependence on the US generics market.
Pipe Sandler says that the Actavis acquisition pushed Teva back a decade. However, they currently believe that Teva's stock is well positioned to present a recovery in multiples for several reasons: its branded drugs in the neurological sector led by Austedo, which could in their assessment lead by itself a long-term stabilization in EBITDA; generics and biosimilars in the US, which are under less pressure than in the past; and an improvement in the company's capital structure.
The debt has been reduced by $1.4 billion
Teva reported at the end of the fourth quarter of 2023 that its debt has fallen by $1.4 billion to $19.8 billion with a net debt of $16.6 billion. 2023 revenue grew 6.2% to $15.8 billion and the company expects 2024 revenue of $15.7-16.3 billion. GAAP net loss in 2023 was $557 million, narrowing 77% from 2022. Non-GAAP net profit in 2023 was $2.9 billion. The gap between GAAP and non-GAAP results was due to reductions of intangible assets, legal costs, write-offs of goodwill and more.
Published by Globes, Israel business news - en.globes.co.il - on February 15, 2024.
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