|Teva CEO Jeremy Levin|
Unveiling his plan for the future of Teva Pharmaceutical Industries ($TEVA), CEO Jeremy Levin emphasized the need to shed research programs outside of its key focus areas and dial up development of new treatments for neurological and respiratory diseases. And in the course of slicing up to $2 billion in expenses in the next 5 years, Bloomberg reported, the company has axed several R&D programs in areas such as oncology and cellular therapy.
"We've grown through multiple large acquisitions, leading to complexity," Levin said at the presentation, as quoted by the news service. "We've developed over time an unfocused pipeline. This represents a marvelous opportunity to build, enhance, create value."
Teva has opted to scrap development of obatoclax for lung cancer, the news service reported. Other programs on the chopping block include the StemEx stem cell program from Gamida as well as a cellular therapy for peripheral arterial disease from MultiGene Vascular Systems. While scuttling those efforts, Teva this week struck a potential $376 million deal to gain rights to an ion channel blocker from Xenon as part of Teva's focus on new treatments for pain.
Levin has a lot to prove to shareholders after taking over as CEO in May after a successful tenure at Bristol-Myers Squibb ($BMY). In his new strategy, the new chief executive noted the need to refocus the company after a string of 25 buyouts that made Teva into one of the largest pharma players in the world and the global leader in generics. Yet the company suffered a late-stage setback with its multiple sclerosis candidate laquinimod last year and its top-selling MS shot Copaxone faces increased competition. And analysts are skeptical.
"Cumulatively, we believe [Teva's] branded pipeline can start to deliver tangible contribution starting in 2015, but we are skeptical it can replace the revenue lost from legacy products facing competitive pressure," Jason Gerberry, an analyst at Leerink Swann, wrote to investors after hearing Levin's plan.
Levin hasn't given up hope that laquinimod could have a place in the treatment of MS, and the company is studying the treatment in a trial in which it's used in combination with Copaxone. But Biogen Idec ($BIIB) and Novartis ($NVS) have stolen the show in MS with oral therapies. Leerink's Gerberry wrote that laquinimod would struggle to compete with other new therapies.
- check out Bloomberg's article
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