Israel-based Teva, the world’s largest generic drugmaker, for the past five years has been hit hard by a weak U.S. generics market and stiff competition from competition to its blockbuster multiple sclerosis drug Copaxone.
After years of negotiations, Teva on Tuesday proposed a $4.35 billion nationwide settlement – mostly cash and partly medicines – to resolve its opioid lawsuits. [nL1N2Z72MS]
The agreement in principle should take a few weeks to finalize and then it needs a host of approvals before it takes effect, chief executive Kare Schultz said on Wednesday.
He said that under terms of the agreement, it will cost the company between $300 million and $400 million over 13 years – a sum shareholders deem as a relief given its New York-listed shares are up 24%.
The deal “is the beginning of putting this behind us,” Schultz told a conference call of analysts.
“We have a very sustainable foundation, which means that we can return to growth in both our revenue and earnings,” he said, adding that growth in the coming years would be driven by its biosimilar products, along with its migraine drug Ajovy and Huntington’s disease treatment Austedo.
Truxima, Teva’s biosimilar to treat adult patients with non-hodgkin’s lymphoma, has already reached a 25% market share and accumulated revenue of $1 billion.
Schultz said that nearly $200 billion of drugs will be coming off patent in the next five years and $400 billion in the next decade. Teva, he said, has 1,100 products ongoing to cover some 80% of those.
In addition to annualised growth of mid double digits, Teva set targets to further reduce its debt and raise its operating income margin and cash to earnings by 2027. It has paid down $15 billion of debt the last five years to a level of $20 billion.
For all of 2022, Teva expects revenue of as much as $15.6 billion.
While Teva is not in a position for big moves, Schultz said it could make small product acquisitions to expand its product portfolio, while at the same time continuing to consolidate its manufacturing sites.
“We will stay the world leader in generics,” he said.
(Reporting by Steven Scheer; Editing by Jan Harvey and Angus MacSwan)