Teva Restructures Company and Leadership

On Nov. 27, 2017, Teva Pharmaceutical Industries announced a new organization and leadership structure that will enable strategic alignment across the company’s portfolio and across regions and between functions as well as allow the company to leverage scale, enhance agility, extract efficiencies, and provide increased proximity to markets. The new structure will be implemented effective immediately.

The restructuring follows the company’s report of its 2017 third-quarter financial results, in which it cited a 9% decline in US generic-drug revenues compared to the 2016 third quarter. The decline in US revenues was attributed to “challenging market dynamics,” including lower generic-drug prices. In addition, the company saw an 18% decline in generic-drug revenues in the rest of the world (excluding Europe). In Europe, generic-drug revenues rose by 6%.

Kåre Schultz, Teva’s president and CEO, said in a company press release, “Teva is taking decisive and immediate action to address external pressures and internal inefficiencies. Our new company structure will enable stronger alignment and integration between R&D, operations, and the commercial regions, allowing us to become a more agile, lean, and profitable company."

"We will focus on driving sustainable value creation. The new management team will position Teva for turnaround in the short to medium term. We are already working on a detailed restructuring plan for Teva and will share it in mid-December. It remains our absolute priority to stabilize the company’s operating profit and cash flow in order to improve our financial situation, while being focused on short-term revenue and cash generation, and at the same time, ensure we deliver on our commitment to supply high-quality medicines to patients around the world," Schultz added in the release.

New company structure

With the new company structure, commercial business will no longer be divided into two separate global groups for generics and specialty medicines. Business will instead be integrated into one commercial organization, operating through three regions: North America, Europe, and what the company terms “Growth Markets.” Each region will manage the entire portfolio-including generics, specialty medicines, and over-the-counter-with full end-to-end profit-and-loss accountability. The company will integrate some former global units into the new structure and will make other units redundant.

The former generic R&D and specialty R&D organizations will be combined into one global group that has overall responsibility for all R&D activities, including generic, specialty, and biologics. There will be a newly formed marketing and portfolio function responsible for overseeing the interface between regions, R&D, and operations throughout all product lifecycle stages. This new unit will also be responsible for optimizing generic and specialty portfolios across the therapeutic areas.

The new structure is expected to enhance alignment and integration between Teva's global operations, the commercial regions, R&D, and the portfolio function, which in turn is expected to increase productivity and simplify the organization. The commercial structure will rely on a leaner supporting organizational infrastructure that includes finance, legal, human resources, and global brand and communications. As a result of these changes, three officers-Dr. Michael Hayden, president of global R&D and chief scientific officer; Dr. Rob Koremans, president and CEO, global specialty medicines; and Dipankar Bhattacharjee, president and CEO, global generic medicines group-will retire from Teva, effective Dec. 31, 2017.

New executive management team

The new Teva executive management team will consist of:

• Michael McClellan as executive vice-president (EVP), chief financial officer (CFO), who will oversee the finance group, business development, investor relations, and information technology. Previously, he served as interim CFO and as senior vice president (SVP) and CFO global specialty medicines. Prior to joining Teva, McClellan was the US CFO at Sanofi.

• Dr. Hafrun Fridriksdottir as EVP, global R&D. Previously, she served as president of global generics R&D. Prior to joining Teva, Hafrun served as SVP and president of global generics R&D in Allergan.

• Brendan O'Grady as EVP, North America commercial. He has previously served as chief commercial officer, global specialty medicine, as interim head of Teva’s European specialty business, and as president and CEO for Teva’s North America generics business and as vice-president, US market access and reimbursement.

• Richard Daniell as EVP, European commercial, after having served as President and CEO, Teva Generics Europe.

• Gianfranco Nazzi as EVP, growth markets commercial. Nazzi has previously served as president and CEO of growth markets at the global generic medicines group. Prior to that he served as SVP, specialty medicines Europe.

• Sven Dethlefs as EVP, global marketing and portfolio. He previously served as global head of respiratory medicines and as chief operating officer, Teva Global Operations.

All appointments are effective immediately, while the retiring executives will stay with the company to support the transition until the end of the year.

Source: Teva Pharmaceutical Industries