A Year On, Teva CEO Richard Francis Celebrates 'Pivot to Growth' Progress

Over the first quarter of the year, Teva Pharmaceutical Industries saw a 5% increase in sales at constant currencies, reaching $3.8 billion. Much of this growth was attributed to improvements in its generics business and a significant 67% rise in sales for its Huntington's disease medication, Austedo.

Since the launch of a new strategic plan under CEO Richard Francis about a year ago, Teva has successfully revitalized its generics division, gained approvals for several high-profile biosimilars, and seen strong market performance with Austedo. Francis, who took charge during a challenging period for the company in early 2023, emphasized that the current financial results validate the comprehensive turnaround strategy he introduced last May.

Although he acknowledged that Teva still has significant progress to make, Francis believes the company has effectively executed its "Pivot to Growth" strategy, which focuses on four key areas: commercial and biosimilar portfolios, innovative pipeline, generics powerhouse, and focused capital allocation.

Part of this strategy involves reducing Teva's manufacturing footprint. The company closed three sites in 2023, bringing the total number of facilities to 49, according to CFO Eli Kalif. Teva plans to close or sell another four facilities by the end of 2025, aiming to operate between 40 and 42 plants by 2027. Additionally, Teva is in the process of divesting its generics business in Japan, with a sale expected within the next year.

Despite reporting a 5% revenue increase for the first quarter of 2024, Teva's profits fell slightly short of analyst expectations. The revenue growth was driven largely by Austedo, which saw a 67% increase in U.S. sales to $282 million, and the generics business, which experienced a 9% revenue rise across all regions.

Teva's migraine prevention drug, Ajovy, also contributed to the revenue growth, generating $113 million in the first quarter—a 18% increase from the same period last year. Additionally, Teva and its partner MedinCell received approval for an extended-release version of risperidone for schizophrenia, branded as Uzedy, and launched the product in May.

The number of hospitals ordering Uzedy is steadily increasing, and many are returning for additional orders, according to Francis. Teva aims to leverage its Uzedy resources to help launch another MedinCell-partnered schizophrenia drug, TEV’749, by 2025 or early 2026, depending on the FDA's review timeline.

Teva recently announced a Phase 3 success for TEV’749, which combines olanzapine with MedinCell's SteadyTeq controlled-release technology, the same platform used for Uzedy. This positive outcome helped boost Teva's shares by over 13%, reaching a peak not seen since 2019.

On the biosimilar front, Teva plans to launch Simlandi, a biosimilar referencing AbbVie's Humira (adalimumab), in partnership with Alvotech. However, the market for Humira biosimilars is competitive, with at least nine other biosimilars and the branded version still in play. Despite challenges faced by other companies like Boehringer Ingelheim, Teva hopes to see a shift in the U.S. market towards biosimilars as cost-saving measures gain more attention.

Looking ahead, Teva maintains its forecast for 2024, expecting to generate sales between $15.7 billion and $16.3 billion for the year.