Dive Brief:
- While speaking to analysts in NY, Teva CEO Erez Vigodman outlined the company's growth strategy for next year: reducing expenses, lowering production costs, and a placing a renewed focus on M&A's.
- In 2014, cash flow at Teva reached $4.5 billion. But the patent expiry of its top-selling drug, Copaxone, for multiple sclerosis, is a major threat to the company's ability to generate profits.
- During 2014, Teva succeeded in switching 60% of Copaxone patients to a newer version of the drug in the U.S. In addition, the new version of Copaxone was recently approved in the EU, which will allow the company to move into that market as well.
Dive Insight:
Erez Vigodman's discussion with analysts was frank, restrained, and optimistic all at the same time. While acknowledging the challenge of several patent expirations on the horizon, Vigodman outlined the company's plans to cut costs and reduce production expenses, with the goal of improving operating profits in the generics division by 2% in 2015—after a 4% reduction this year.
The real target discussed was a stock price of $57—a 40% increase—by 2017.