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Teva to sell API business to focus on growth

Published Feb 12, 2024 07:45AM ET
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TEL AVIV - Teva Pharmaceutical Industries (NYSE:TEVA) Ltd. (NYSE and TASE: TEVA), a global pharmaceutical leader, announced its intention to divest its active-pharmaceutical ingredient (API) division, TAPI. The move is part of Teva's "Pivot to Growth" strategy, which aims to concentrate on core business areas and reallocate capital towards innovation and growth engines. The divestiture is expected to enhance TAPI's position as a global leader in the API market, which is valued at $85B.

TAPI, recognized as a leader in the small-molecule API industry, employs roughly 4,300 people worldwide. The divestiture is anticipated to allow Teva to better focus on distinct markets and drive growth through its leading product offerings. It is also expected to provide additional value to Teva’s shareholders and stakeholders by enabling Teva to invest more in its growth drivers and accelerate its innovative and biosimilar pipeline.

Richard Francis, President and CEO of Teva, stated that the divestiture will increase focus on Teva's core business and position its generics portfolio for future growth. R. Ananth, CEO of TAPI, expressed that operating independently would allow TAPI to capture more growth opportunities and continue to support generics and innovators globally, including Teva.

The completion of the divestiture is targeted for the first half of 2025, contingent upon reaching agreeable transaction terms with a prospective buyer, satisfying closing conditions, and obtaining approval from Teva’s Board of Directors. However, Teva notes that there is no certainty regarding the final timing or structure of the divestiture, or if it will occur at all.

TAPI serves over 1,000 clients worldwide, offering a portfolio of 350 products across various therapeutic areas. Its operations are crucial for delivering high-quality medications, supported by a sophisticated supply chain and a commitment to regulatory and quality excellence.

Teva, with a history of over 120 years, continues to push scientific innovation and deliver quality medicines. The company employs around 37,000 people across 58 markets, dedicated to improving the health outcomes of millions of patients.

This news article is based on a press release statement from Teva Pharmaceutical Industries Limited.

InvestingPro Insights

In light of Teva Pharmaceutical Industries Ltd.'s strategic move to divest its API division, TAPI, current and potential investors might find the following InvestingPro metrics and tips valuable. With a market capitalization of $13.19 billion, Teva is positioned as a prominent player in the pharmaceutical industry. Despite not being profitable over the last twelve months, analysts are optimistic about Teva's future, expecting net income growth this year and predicting the company will return to profitability. This is underscored by the fact that three analysts have revised their earnings upwards for the upcoming period.

InvestingPro data highlights that Teva has been trading near its 52-week high, with the price at 96.07% of this peak. The company has also experienced a strong return over the last three months, with a 36.71% price total return, reflecting a large price uptick over the last six months. These metrics may signal investor confidence in Teva's growth trajectory and restructuring efforts.

For those looking to dive deeper into Teva's financial health and future prospects, InvestingPro offers additional insights. Subscribers can access a wealth of InvestingPro Tips, including Teva's high shareholder yield and more comprehensive analysis on the company’s financials. Currently, there are 9 additional tips available for Teva on InvestingPro, which can be accessed with a subscription now on a special New Year sale with a discount of up to 50%. Use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription.

As Teva streamlines its operations and focuses on its core business, these insights can help investors make informed decisions about their investments in the pharmaceutical sector.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Teva to sell API business to focus on growth

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