Israel-based pharmaceutical group Teva has announced the group’s Q1 financial results, which have positively surprised investors, exceeding their expectations. They have especially been satisfied with new CEO Kare Schultz to keep his promises about price cuts–indeed, Teva is apparently making progress towards the $1.5bn price cut target before the end of 2018 and the $3.0bn cut target before the end of 2019. CFO Mike McClellan listed the most urgent financial targets at the meeting wit investors. The group’s priority is reducing its debt–in fact, it has been reduced by $1,7bn in the first quarter thanks to an excellent cash flow, and it has decreased below $30bn for the first time since Actavis was acquired. Teva has benefited from several favorable events during the quarter, for example it has won legal disputes with Allergan over the acquisition of Actavis, which have fetched Teva $1.3bn, plus $700m afterwards. An additional $240m came as a result of the court battle with GSK over Coreg, and $350m as a result of the compensation agreement with Espinosa brothers, who sold Rimsa to Teva in 2015. Teva is now seeking to reduce debt to $28bn before the end of the year and to reduce the debt/EBITDA ratio from the current 4.68 (vs 4.82 in 2017) to 4 before the end of 2020. The company has cut down its workforce by 6,200 people and has closed down 10 production facilities over the last few months, McClellan said at the results conference. The group is now aiming at reducing its headcount by 3,800 more units by the end of 2018 and by 7,800 before the end of 2019.
(Source: Teva Transcripts)