Teva R&D chief out as new CEO picks up the ax and aims at deep cuts to rescue a faltering biopharma — report
Kåre Schultz is once again starting a new job by wielding the ax.
Calcalist is reporting that Teva, which brought Schultz on just a few weeks ago, is planning to make deep cuts in its Israeli and US workforces, slashing up to 25% of its workforce.
The report notes that its cuts outside of Israel are expected to be concentrated in the US rather than in Europe. And R&D chief Michael Hayden, who’s had a disappointing record managing the pipeline over the past 5 years, is out, according to Calcalist.
The company told Hadashot News that “there is an intention to put into practice a streamlining plan, but there is not yet an agreed plan and its extent is unknown.”
The market has been expecting something drastic. Teva’s last set of quarterly numbers drove home this year’s theme: Poor financial results and weak generics prices at a time the internal pipeline lacks the kind and quantity of potential blockbusters needed is forcing a top-to-bottom reorganization. Teva just cut its financial forecast, with an early introduction of Copaxone 40 mg generics expected to bite hard. And this comes after Teva built up debt of close to $35 billion for some badly timed acquisitions that leave the company auctioning off assets.
To top it all off, Teva’s closely-watched successor to Copaxone flunked out in the clinic this year, which surprised no one following that multiple sclerosis program.
Schultz got started at Lundbeck by cutting 17% of that company’s workforce. Now he’ll follow up with a repeat performance with a budget ax.