Teva begins paying down debt with $1.1B deal
- Shortly after naming a new CEO, Israeli drugmaker Teva Pharmaceuticals Industries Ltd. announced it will make a sale to help pay down debt, one small step towards addressing the roughly $34 billion in long-term debt on its books.
- The Isreali company will sell the copper intrauterine device (IUD) Paragard to women’s health company Cooper Surgical, Inc. for $1.1 billion in cash. The product brought in $168 million in revenues over the last 12 months.
- The deal, which is expected to close later this year, will include the sale of a Teva manufacturing facility in Buffalo, NY, which exclusively manufactures Paragard.
With competition facing its best-selling multiple sclerosis drug Copaxone (glatiramer) and plenty of turmoil among its management ranks, Teva has been looking to sell off non-core assets in hopes of bringing down the large pile of debt — most of which was accrued in the acquisition of the Actavis generics unit from Allergan for $41 billion last year.
The company hopes to sell off at least $2 billion in assets before the end of 2017, and the sale of Paragard is a good start to that.
"With the divestiture of Paragard, and planned divestiture of other global Women’s Health products and the Oncology and Pain business in Europe, Teva is reinforcing its strategic focus on CNS and Respiratory as its core global therapeutic areas of focus within Global Specialty Medicines," the company wrote in a statement on Sept. 11. "In these areas Teva maintains a strong pipeline and portfolio globally, and will continue to invest in creating long term value."
The announcement of the sale came the same day Teva finally named a new CEO. The Israeli drugmaker has been on the hunt to fill the top spot since the beginning of 2017, when the latest in a string of CEOs stepped down. Lundbeck CEO and former Novo Nordisk veteran Kåre Schultz will be taking over as just the second non-Israeli born person to hold the position at the company, which has been known for choosing home countrymen to lead.
Teva is far from the only company in the industry looking to divest. Most notably, AstraZeneca has been selling compounds, units and anything not nailed down in an effort to monetize older or flailing products as it tries to breathe new life into its business.
- Teva Pharmaceuticals Press release
Follow Lisa LaMotta on Twitter