Debt-laden Teva weighs $2B women’s health sale
In the wake of CEO Erez Vigodman’s departure, Teva execs have been reviewing the company’s business. And when it comes to what belongs on the chopping block, they may have reached their first conclusion.
The company is weighing a sale of its women’s health unit, according to a Bloomberg report seen by Israeli newspaper Globes. The generics giant has brought on Morgan Stanley to help it find a buyer, and it’s looking to start the sale process early next month, the news service said. Such a transaction could drum up about $2 billion, which could take a bite out of Teva’s hefty debt load.
A Teva spokeswoman said the company does not comment on market rumors.
Teva picked up the division from Merck KGaA’s Merck Serono for €265 million in 2010. But a few years ago, the company put the kibosh on R&D there to channel funds toward other projects, Globes notes.
Teva announced it was launching a review back in February, alongside the news of Vigodman’s exit. Analysts quickly started debating whether the company should split up, stoked by interim CEO Yitzhak Peterburg’s promise that “we are here to fix what is not working” and “we will leave no stone unturned.”
Some industry-watchers, though, have wondered why Teva would embark on a review before landing a new chief exec—and argued that the order of operations might deter worthy candidates.
“What does this say about how much strategic input a new CEO will have? More to the point, how is this going to help recruit a top global executive?” RBC Capital Markets analyst Randall Stanicky wrote to investors at the time “To us this is a concern that Teva’s ‘search’ will ultimately revert to a local executive who is not a known leader in global pharma,” he added.
He’s not the only one who’s concerned. Longtime activist Benny Landa is once again lobbying for more global pharma experience in Teva’s ranks, and he’s pressing for “a person who has managed a pharma company or was in a very senior position in a pharma company,” he told Globes.
Meanwhile, Teva may have its hands full outside of the divestment arena if rumors of mass layoffs hold any stock. Last month, local media reports listed the potential carnage at 6,000 jobs—a headcount target the drugmaker denied.