Weeks into his new job, Kåre Schultz, Teva’s newly appointed president and CEO, implemented his first changes at the troubled drugmaker, announcing a new organization and leadership structure that is aimed at giving the company “more commercial focus” and creating greater value.
Schultz said Teva is already working on a detailed restructuring plan that will be shared in mid-December.
As a result of these changes, Dr. Michael Hayden, head of global R&D, Dr. Rob Koremans, the head of the global specialty medicines, and Dipankar Bhattacharjee, the head of the global generic medicines group will retire from Teva, effective December 31, 2017, Teva said.
Dr. Hafrun Fridriksdottir was appointed executive vice president, Global R&D.
Teva shares, which have tumbled some 60 percent in the past year, were trading 5 percent higher at 10:15 a.m. in New York, after the news.
The new structure aims to streamline operations across regions and functions, “leveraging scale, enhancing agility, extracting efficiencies and providing increased proximity to the markets,” Teva said in a statement. The new structure will be implemented effective immediately.
As part of the restructuring, the commercial business of Teva’s generics and specialty drugs will be integrated into one commercial organization, operating through three regions – North America, Europe and Growth Markets.
Each of the regions will manage the entire portfolios of drugs, including generics, specialty and OTC medications. Some of the former global units will be integrated into the new structure, while others will be made redundant, Teva said.
In addition, all R&D activities — both generic and specialty — will be combined into one global group for better efficiency; and a new Marketing & Portfolio function will oversee the interface between regions, R&D and operations throughout all product life cycle stages.
“Teva is taking decisive and immediate action to address external pressures and internal inefficiencies,” Schultz said in a statement. “Our new company structure will enable stronger alignment and integration between R&D, operations and the commercial regions, allowing us to become a more agile, lean and profitable company.”
“We will focus on driving sustainable value creation,” he added. “The new management team will position Teva for turnaround in the short to medium term. We are already working on a detailed restructuring plan for Teva and will share it in mid-December. It remains our absolute priority to stabilize the company’s operating profit and cash flow in order to improve our financial situation, while being focused on short-term revenue and cash generation.”
Schulz appointed Michael (Mike) McClellan as executive vice president and chief financial officer and announced the members of the new executive management team.
In September, Teva appointed Schultz president and chief executive officer, tasking him with setting out the Israeli firm’s strategy, divesting assets, cutting its debt and restoring investor confidence. He took up his post on November 1.
Last week the Calcalist financial website reported that Teva is expected to fire up to 1,700 workers in the coming months as part of a streamlining plan aimed at countering poor financial results.