|Teva CEO Erez Vigodman|
Troubled Teva is circling its research wagons around CNS and respiratory diseases, carving out more than $500 million in research costs over the next three years with plans to shelve or spin out 14 clinical programs as it retreats from women's health and oncology.
The R&D emphasis at Teva ($TEVA)--which has struggled to develop critically needed new drugs--will remain on multiple sclerosis, neurodegenerative diseases and pain in the CNS franchise, with asthma and chronic obstructive pulmonary disease staying in the spotlight on the respiratory side. The company said that following its strategic review of the pipeline it is reducing its focus on women's health and cancer to late-stage efforts.
Teva added that it "will continue to evaluate opportunities for commercially oriented activities and collaborations." The cutbacks will allow the Israeli biopharma company to focus more of its resources in its two remaining core franchises, while cutting back on overall expenses.
The reduction will amount to $150 million in R&D costs in 2015 and in excess of $200 million for each of 2016 and 2017, according to Teva.
Teva's had a hard time trying to reorganize in recent years. It's changed CEOs, seized and discarded reorganization plans and experienced some bitter setbacks in the clinic as it hunts for a turnaround in the face of a generic challenge to Copaxone. A few months ago the company bought out an anti-CGRP migraine drug--one of several in the clinic--when it inked an $825 million buyout deal for Labrys.
Teva enthusiastically projected peak sales for the new drug at $3 billion a year and clearly expects a major turnaround in R&D, despite the latest retrenchment.
"Our late-stage pipeline assets are expected to generate great value--out of the 30-plus product launches we anticipate by 2019, with a total of over $4 billion in new revenue on a risk-adjusted basis, over 20 products will be launched in these two core therapeutic areas," says CEO Erez Vigodman.
- here's the release