Ops control & StrategyTeva Pharmaceutical

SURYA TEJA ROKKAM- B01

GANESH V-B35

V MURALI- D42

Company Overview
Established in 1901, based on Israel, the worlds generic leader
Net Revenues- USD 20.3 billion; Generics-50%, Specialty-42%
It is followed by Actavis at ~$13 billion, Sandoz at ~$9.6 billion, and Mylan at ~$7 billion
A business strategy of balanced therapeutic offerings: from specialty to generic to API and
OTC (JV with P&G)
Industry and market leadership through strategic acquisitions and partnerships
Global facilities and supply chain 60 countries; Strong presence in EU and USA
Worldwide Centers of Excellence; Copaxone is the worlds largest selling Multiple Sclerosis
drug

Vision, Mission & values

Vision:
Being the most indispensable medicines company for the world, executing on
our obligation to our patients, customers, shareholders and employees.
Guiding values:
Integrity: We do whats right.
Respect: We value each other.
Collaboration: We succeed by working together.
Excellence: We have a passion to make a difference.
Leadership: We lead the way.

Strategic Overview

Where to
Compete

How to
Compete
?

Pharmaceutica
l Industry;
Generic to
specialty

Horizontal
Integration

60 countries
worldwide
primarily US &
Europe

R&D-Specialty
drugs; SCM &
distribution

API
Broadest global portfolio in API
Standalone business unit of Teva Pharmaceutical Industries, tapi supplies
high quality APIs to nearly 1,000 customers in over 100 countries. It has 19
state of the art mfg facilities.
large-scale ongoing investment in R&D enables timely introduction of new
products to market, generating a steady flow of APIs on average 15 new
products annually.

Order winners
Specialized in CNS & Respiratory:
World-leading position in innovative treatments for disorders of the central nervous system
(CNS), including neurological and neurodegenerative diseases, oncology etc.

Uncompromising Quality:
Every stage of the development, production and marketing of our medicines: from the supply
of materials through manufacturing and approval by the strictest authorities in the world.
With a global presence, timely, reliable and cost-effective distribution is critical to our
customers ability to provide their end consumers with safe and effective products at the right
time.
High-volume, technologically-advanced distribution facilities.

Price:
Worlds leading generics; Teva produces 73 billion tablets a year in 73 pharmaceutical and API
facilities around the world. They are tailored to the needs of local patients, physicians and
consumers across the world

Specialty segment
Tevas Specialty Medicines- 2.1% growth YoY.
CNS ~65% , Oncology ~14%, Respiratory ~11%, and womens health at ~6% of
revenues
USA ~71% to the segmental revenues, followed by Europe at 22% and rest-of-theworld (or ROW) marketsat 6% in 2014.

Tevas evolving Business model

Volume driven to Value driven
Leveraging its generics and specialty capabilities to develop complex products

Teva-Competitive advantage
Broadest product portfolio, API leadership
Commitment to global generics leadership
Built on their capabilities of Innovation, R&D
Value Chain

Increase Value

Research &
Development

Creates branded drugs

for Central nervous
system

Production & Ops

Products with great

quality

Supply Chain

Decrease Cost

Exploiting economies of
scale in generics (M&A)
Excellence in supplying
API

Current Strategy
Generics Segment
Cost reduction Shifting 60% of its production capacity to low-cost
countries ($6$7 per 1,000 tablets).
Value-driven growth in European business
Developing Complex generics & Biosimilars such as thin films and
patches, vaginal rings, injectables, and inhalators that have high entry
barriers.
Specialty Medicines segment
Narrowing focus on therapeutic area CNS and respiratory.
Development of new products- Teva has 15 NTE products in its pipeline.
Maintaining Copaxone franchise - Switching patients to Copaxone
40mg/mL, a new version of Copaxone 20mg/mL

Focus areas in 2016

Teva continues to focus on achieving continued long-term growth. Here are some of
the ways Teva plans to do this:
net cost savings of $500 million
improve operating profitability by 400 bps (basis points)
actively pursue acquisition of complex generics and specialty products to boost
growth
significantly increase research and development (or R&D) budget for the US market
maintain Copaxone franchise and manage the life cycle of key specialty products
Key specialty products in 2015- US $5,600$6,140 million.
Product launches
To launch around 30 new products in Generic Medicines segment including an ABrated generic EpiPen, generating revenues of more than $0.6 billion.
In its Specialty Medicines segment, Teva is expected to launch seven new products
estimated to generate revenues of around $0.4$0.5 billion in 2015.

Tevas long term prospects

Product pipeline
Focused product pipeline -27 submissions between 2015 and 2019, primarily in
the CNS and respiratory areas.
In its Generic Medicines segment, Teva has 120 registered products with a sales
potential of $86 billion in the US in 2014, awaiting FDA approvals
Complex products
Teva intends to increase the share of complex genericsmore than 50% by 2017.
Development of new specialty products through NTE process, with a focus on
key therapeutic areas Exp revenue $1.0$1.5 billion in 2018 and $3 billion in
2020

New Therapeutic Entities (NTEs)

Teva aims to create novel new treatments and treatment modalities, based on existing molecules. These
potential new medicines are called New Therapeutic Entities (NTEs).
These molecules are reformulated, repurposed or re-engineered to be delivered in a new way to address
specific, unmet patient needs.
It is the first company to specifically focus on creating NTEs on an industrialized scale.
It has built a dedicated team and a specifically-designed process for the generation and assessment of
potential NTE concepts. This recently initiated process has already delivered a range of potential new
treatment options into various stages of development.
NTEs can benefit patients, clinicians and payors. These new drugs can offer improvements such as better
efficacy, increased adherence and improved compliance to treatment.
Additionally, they offer the potential for fewer side effects and better quality of life as compared to the
original formulation.
NTEs may also reduce cost of treatment and financial burden to the healthcare system.
Since NTEs are based on known molecules with proven efficacy, they offer the possibility of getting
improved medicines to patients faster.
They are also likely to have higher development rate success compared to New Chemical Entities (NCEs).

2 Billion $ cost cutting drive

Teva wants to cut annual costs by $2 billion by 2017 through changes to its manufacturing network and
sourcing strategy.
The savings push will see Teva focus on bigger, more efficient plants--while shifting production to lowercost locations.
The center of gravity of Tevas product supply will be moving. It will be supplying more and more of our
products from the most cost-effective locations in its network.
Moving from small facilities to larger, more efficient plants will generate savings of up to $175 million.
To extract maximum value from its remaining production hubs, Teva is accelerating rollout of Lean Six
Sigma concepts at its largest plants.
Shifting production to lower-cost countries is one piece of the plan Teva Pharmaceutical Industries has
laid out to cut $2 billion in costs in the next couple of years. It has just opened a $100 million plant in
Eastern Europe to make drugs for the U.S. and Europe.
The plant in Croatia will expand production at the Pliva subsidiary by 25% to 2 billion tablets and
capsules a year as well as expanding the sterile manufacturing capacity.
Teva opened $110 million sterile injectables plant in Hungary.With 6 production lines, the 15,000-squaremeter facility has the capacity to churn out 160 million to 200 million units of injectable meds annually.

2 Billion $ cost cutting drive

Teva also invested more than $200 million to double capacity inJapan to tap that country's
growing hunger forgeneric drugs.
But the biggest savings will come from overhauling procurement. Teva talked up the benefits of
having its own ingredient plants--which insulate it from turbulence at vendors--but still sources a
lot of raw materials and other goods from external suppliers.
The plan is to make procurement more efficient. The company, which now buys from thousands
of suppliers, will partner with some and eliminate others to driver a harder bargain and lower its
costs of goods.
By centralizing purchasing, Teva thinks it can cut out overlaps while striking better, long-term
deals with vendors. Savings of up to $700 million are expected.
They intend to reduce the logistics costs, in part by reducing the number of warehouses it
operates. The company last year halted the $300 million warehouse and IT center it had
announced for the Philadelphia area.
Teva has been trying for 40.1 Billion $ takeover of Mylan which would give Teva an access to
Mylans global low-cost facilities in countries such as India, Brazil, Hungary and Poland along with
an expertise in Biosimilars and APIs which would be a glad addition to Tevas portfolio

Horizontal Integration
Acquired Company Country ,
Year

Bid Value

Reasons to acquire

Ratiopharm

Germany,
2010

$5 billion

To become largest generics drug

maker in Germany

Cephalon

USA, 2011

$6.8 billion

Pain, sleep and cancer drugs

Taiyo Pharmaceutical Japan, 2011

(57%stake)

$460 million

Geographic expansion in Japan

MicroDose
Therapeutx

USA, 2013

$165 million

To strengthen respiratory
franchise

Nupathe Inc

USA, 2014

$144 million

To expand CNS specialty business

Labrys Biologics Inc

USA, 2014

$825 million

To expand into pain, chronic

migraine drugs

Auspex
Pharmaceuticals

USA, 2015

$3.5 billion

To boost its portfolio of treatments

for CNS

Allergan

USA, 2015

$40.5 billion
(2nd Biggest
deal in
Pharma)

Consolidation of generic drug

market
Cost reduction of $1.4 billion
annually
Enhance capability in producing

Thank You