Teva to Concentrate on Core Specialty Therapeutics
Teva Pharmaceutical Industries Ltd. (TEVA) announced that it will be primarily focusing on its core therapeutic areas - central nervous system (including multiple sclerosis, neurodegenerative diseases and pain) and respiratory (including asthma and chronic obstructive pulmonary disease).
The company made this announcement after revealing the results of its strategic review, which included an extensive evaluation of Teva’s current and future capabilities to address unmet patient needs, the competitive landscape, barriers to entry and profitability with the purpose of creating a winning strategy to attain global leadership in each of the company's core therapeutic areas.
Teva expects to launch more than 30 products by 2019, which will boost revenues by over $4 billion on a risk-adjusted basis. Teva also said that majority of the product launches (more than 20) will be in the central nervous system and respiratory fields.
As far as other therapeutic areas like women’s health and oncology are concerned, Teva will only focus on market-ready products or late-stage candidates to maximize sustainable profitability. Moreover, the company will continue to look for activities and collaborations with commercial benefits.
Meanwhile, following its strategic review Teva announced that it will be discontinuing or divesting 14 pipeline programs. Teva intends to save over $150 million in 2015 and over $200 million each in 2016 and 2017 as research and development costs. The company plans to utilize these savings in its two core therapeutic areas, which will increase R&D productivity in these areas.
We are encouraged by the company’s strategic updates. Both the central nervous system and respiratory markets are highly lucrative. However, companies like GlaxoSmithKline (GSK) have a strong presence in both these therapeutic areas.
Teva carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the pharmaceutical sector are Actavis (ACT) and Mallinckrodt (MNK). Both stocks carry a Zacks Rank #1 (Strong Buy).
Read the Full Research Report on TEVA
Read the Full Research Report on GSK
Read the Full Research Report on MNK
Read the Full Research Report on ACT
Zacks Investment Research
