Chief Executive Change At Teva Illustrates Diversification Emphasis At Major Generic Drug Makers
Most of the top 20 generic drug makers are subsidiaries of diversified pharmas or smaller generics-only plays based in the Far East. But diversification, although long a goal, is now urgent for the three major independent generic firms – Teva, Mylan and Watson.
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The generic drug manufacturer said it will accelerate its cost reduction program and shrink its global workforce by 5,000 employees amid slowing sales growth and the looming threat of competition to its blockbuster branded medicine, Copaxone.
More organizational and strategic discipline, far greater selectivity in R&D and business development, and emphasis on profitable, not top-line, growth are at the core of the strategy put forth by Teva’s new management on Dec. 11. The reboot makes sense, given the company’s relentless focus on M&A over the past decade and its maturing generics businesses, so why are investors balking?
Watson’s merger with Actavis will create the world’s third-largest generic drug company, to be known as Actavis, with significant ex-U.S. market share, especially in the U.K., Nordic countries and Russia.