Te­va ax­ing 14,000 work­ers, putting R&D and man­u­fac­tur­ing fa­cil­i­ties on the block in mas­sive re­struc­tur­ing

Im­age: Kåre Schultz, Te­va CEO. News Øre­sund

New­ly ap­point­ed Te­va CEO Kåre Schultz un­veiled a mas­sive re­or­ga­ni­za­tion of the com­pa­ny to­day, with plans to ax 14,000 work­ers, shut­ter R&D and man­u­fac­tur­ing fa­cil­i­ties in var­i­ous places and rad­i­cal­ly pare down $3 bil­lion in costs glob­al­ly to re­make the com­pa­ny in the wake of a pun­ish­ing down­turn in the gener­ic drug busi­ness.

Schultz and the team he’s putting to­geth­er for Te­va are mak­ing a rad­i­cal break from the past, shed­ding a long run­ning re­luc­tance to cut staffers in Is­rael. Al­to­geth­er, the com­pa­ny is cut­ting more than 25% of its work­force and slash­ing a large por­tion of its $16 bil­lion cost struc­ture.

That is a bit­ter pill for staffers at the com­pa­ny, but it is mu­sic to the ears of its in­vestors who have watched the num­bers de­te­ri­o­rate. Te­va’s stock spiked 16% af­ter the re­struc­tur­ing news hit.

The com­pa­ny’s state­ment says that they will close or sell off a “sig­nif­i­cant num­ber of R&D fa­cil­i­ties.” Man­u­fac­tur­ing fa­cil­i­ties will al­so be put on the block. And Schultz plans to launch a top-to-bot­tom R&D re­or­ga­ni­za­tion, start­ing with a com­plete re­view of its spe­cial­ty and gener­ic pipelines. When it’s done, he says, Te­va plans to have a sub­stan­tial pipeline in place able to pro­duce new and gener­ic ther­a­pies. But a com­pa­ny spokesper­son tells me there are no specifics yet on who’s get­ting cut in R&D and which fa­cil­i­ties will be shut­tered.

Te­va is meld­ing to­geth­er its gener­ics and spe­cial­ty drug busi­ness, in­te­grat­ing two re­search groups for brand­ed and gener­ic drugs and look­ing for “syn­er­gies” that al­low the com­pa­ny to cut deep in­to R&D. R&D chief Michael Hay­den is al­so head­ed out, as the com­pa­ny an­nounced ear­li­er.

“The on­ly thing we are re­al­ly pro­tect­ing is the prod­uct flow,” Schultz told an­a­lysts Thurs­day morn­ing. Every­thing else, with the ex­cep­tion of man­u­fac­tur­ing of prof­itable prod­ucts, faces the ax. The cuts are “all over the place,” both in the dif­fer­ent groups as well as the ge­o­gra­phies where Te­va works glob­al­ly.

Fo­cus­ing on man­u­fac­tur­ing, Schultz says that Te­va has 80 man­u­fac­tur­ing sites un­der re­view and there will be “dou­ble-dig­it plant clo­sures the next two years.” If the com­pa­ny was to wipe the slate clean and then start over, it would have a to­tal of on­ly 8 to 12 sites. It’s not re­al­is­tic to do that now, he adds, but over the next 10 years that’s the di­rec­tion the com­pa­ny plans to take fol­low­ing ini­tial cut­backs

Te­va will al­so set the stage for a planned launch of Auste­do and their CGRP mi­graine drug fre­manezum­ab. And the CEO cit­ed CNS dis­eases as Te­va’s best hope for de­liv­er­ing new med­i­cines as Te­va re­fo­cus­es R&D.

The CEO is al­so scrap­ping div­i­dends and bonus­es for 2017 as Te­va grap­ples with its fi­nan­cial cri­sis.

Says Schultz:

To­day we are launch­ing a com­pre­hen­sive re­struc­tur­ing plan, cru­cial to restor­ing our fi­nan­cial se­cu­ri­ty and sta­bi­liz­ing our busi­ness. We are tak­ing im­me­di­ate and de­ci­sive ac­tions to re­duce our cost base across our glob­al busi­ness and be­come a more ef­fi­cient and prof­itable com­pa­ny.

Rum­blings about these cuts have al­ready in­spired a string of protest plans on the part of Is­raeli unions, which hold a pow­er­ful po­si­tion at Te­va. Over the past year, though, Te­va has been in a fi­nan­cial tail­spin. Its deal to buy Al­ler­gan’s gener­ic busi­ness just ahead of the price ero­sion in the field has af­flict­ed all play­ers.

“I am aware that we will be part­ing with peo­ple who have ded­i­cat­ed years and con­tributed a great deal to this com­pa­ny,” Schultz says in a note to staffers, “and I deeply ap­pre­ci­ate their com­mit­ment. We are al­so aware that these changes im­pact not on­ly our work­force, but ven­dors, sup­pli­ers and com­mu­ni­ties where we have played a key role for years. How­ev­er, there is no al­ter­na­tive to these dras­tic steps in the cur­rent sit­u­a­tion.”

Health­care Dis­par­i­ties and Sick­le Cell Dis­ease

In the complicated U.S. healthcare system, navigating a serious illness such as cancer or heart disease can be remarkably challenging for patients and caregivers. When that illness is classified as a rare disease, those challenges can become even more acute. And when that rare disease occurs in a population that experiences health disparities, such as people with sickle cell disease (SCD) who are primarily Black and Latino, challenges can become almost insurmountable.

David Meek, new Mirati CEO (Marlene Awaad/Bloomberg via Getty Images)

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The biotech industry has faced repeated calls to diversify its workforce — and in the last year, those calls got a lot louder. Though women account for just under half of all biotech employees around the world, they occupy very few places in C-suites, and even fewer make it to the helm.

Some companies are listening, according to a recent BIO survey which showed that this year’s companies were 2.5 times more likely to have a diversity and inclusion program compared to last year’s sample. But we still have a long way to go. Women represent just 31% of biotech executives, BIO reported. And those numbers are even more stark for women of color.

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Lilly in-licensed global rights to sintilimab a year ago, building on the China alliance they have with Innovent. That cost the pharma giant $200 million in cash upfront, which they plan to capitalize on now with a long-awaited plan to bust up the high-price market in lung cancer and other cancers that have created a market worth tens of billions of dollars.

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Vicente Anido (University of West Virginia via YouTube)

Aerie fires CEO af­ter lead pro­gram flop, com­ments about pri­ma­ry end­points be­ing 'not re­quired'

Aerie Pharmaceuticals CEO Vicente Anido has left the company less than a week after trying to chart a Phase III study in the wake of a serious Phase IIb flop.

Anido’s last day at Aerie was Friday, the biotech announced in a news release Tuesday morning, and Benjamin McGraw is taking his place in an interim role. The now former CEO was terminated without cause, according to an SEC filing.

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Maralixibat’s roots trace back to Lumena, which was snapped up by Shire for $260 million-plus back in 2014. While the candidate had failed mid-stage studies at Shire, Mirum believes better trial design and patient selection will deliver the wins it needs. The drug is currently in development for Alagille syndrome (a condition called ALGS in which bile builds up in the liver), progressive familial intrahepatic cholestasis (PFIC, which causes progressive liver disease) and biliary atresia (a blockage in the ducts that carry bile from the liver to the gallbladder).

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Ted White, Verrica CEO

Ver­ri­ca hits an­oth­er bump in the road with CMO re­lat­ed let­ter from FDA

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The FDA didn’t raise issues that directly relate to the manufacturing of VP-102, the company said, but raised “general quality issues” at the CMO’s facility. There were also no clinical concerns, it said, or need to collect more data.

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