Teva scales down Japanese operations

Kare Schultz / Photo: Cadya Levy, Globes

Teva and Takeda have sold much of their joint venture and will focus on 20 generic drugs and several branded assets.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) today announced new measures to improve its operations in Japan. The Israeli pharmaceuticals company reported on a new strategic focus in the Japanese market and as part of this, the joint venture that it set up five years ago with Takeda Pharmaceutical Co., it will focus on selected special generic products and sell the rest of its products and operational assets to Nichi-Iko Pharmaceutical Co. Ltd. The deal is expected to be completed in early 2021.

Financial details about the deal were not disclosed by Teva. Nichi-Iko revealed that in 2019 annual revenue from the Teva-Takedo activities that it is buying was ¥31.9 billion ($304 million) and the assets are worth ¥33.3 billion. Nichi-Iko is buying the Takayama manufacturing site, which has several hundred employees producing 486 generic products for marketing across Japan.

The Teva-Takeda joint venture will retain 20 generic molecules and several pipeline assets, as well as its robust portfolio of authorized generics, LLPs and specialty assets. Teva said that the joint venture will seek to address unmet patient needs with products from its portfolio and pipeline and will continue to combine Teva’s marketing expertise, commercial and medical excellence, coupled with financial rigor, with Takeda’s leading brand reputation and strong distribution presence in Japan. Teva EVP international market commercial Gianfranco Nazzi said: "The Teva and Takeda business venture has always aimed to address the wide-ranging needs of patients and healthcare professionals in Japan. Our new strategy will allow each of the parties to leverage its core strengths, and ultimately better serve the Japanese patients. For Teva, and in line with the company's strategic objectives, the new model presents a chance to drive better performance by focusing our Japan business on a portfolio of select generics and pipeline of specialty assets, while continuing to put patients and healthcare professionals at the center of our strategy."

An example of the activities that will remain in the hands of Teva in Japan is the migraine treatment Ajovy. Yesterday, Teva announced that it has submitted a new drug application filing for marketing Ajovy in Japan. This branded Teva treatment is already approved in the US and Europe and in Japan it was developed as part of a commercialization agreement with Otsuka.

Teva has struggled to gain marketing momentum in Japan and sales have been falling because the Japanese regulator has been reducing prices.

Teva's latest action will significantly reduce operations in Japan but by reducing costs and its workforce it could significantly increase profitability. This is part of Teva's worldwide optimization of its portfolio since Kare Schultz became CEO in December 2017.

Teva's share price rose 3.77% on the NYSE yesterday to $11.85, giving a market cap of $12.37 billion. The company will announce its second quarter results next Wednesday, August 5.

Published by Globes, Israel business news - en.globes.co.il - on July 30, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Kare Schultz / Photo: Cadya Levy, Globes
Kare Schultz / Photo: Cadya Levy, Globes
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