Question

Please provide a detailed analysis on Teva Pharmaceuticals Pvt. Ltd. in Isreal.

Introduction

Target market

Economic trends

Target Audience

SWOT Analysis

Challanges

Main issues Recommendation to overcome the issues

Answer 1

Teva Pharmaceuticals Pvt. Ltd., Israel

INTRODUCTION

Teva Pharmaceuticals is the world’s largest generic drug maker. It operates in North America, Latin America, Europe, Asia, Israel. In 1901, it was started as a small wholesale drug business in Jerusalem. In 1951, Teva has started trading on Tel Aviv stock exchange, Israel. In 1989, Teva expanded its activities in the field of medical devices by acquiring the Baxter-owned Israeli company Travenol which is merged with Migada Ltd. to become Teva Medical. Teva is number one generics worldwide and recently in 2017, the company produced 88 million capsules and tablets. Teva is a place where great ideas flourish. They design accessible and high quality treatment solutions that integrate with patient and make life better.

TARGET MARKET

With a targeted portfolio and an increased focus on integration efforts after the inorganic moves in Mexico, Japan, and the Allergan (AGN) Generics markets, the company expects to continue its trend of double-digit growth in these markets. They are expanded business Teva Pharmaceutical’s geographical presence by adding nine new markets like: The Russia Strategy- Pharmaceutical has created a strong portfolio of about 300 products and has been extensively developing its research pipeline. Currently, it’s the third-ranking generic player in Russia. The Japan Strategy- Teva Pharmaceutical entered into a partnership with Takeda Pharmaceutical (TKPYY) to form a joint venture called Teva Takeda Yakuhin on April 1, 2016 and is the third-ranking generic player in the Japanese market. The Latin America Strategy - It is the top-ranking generic company in Chile, the third-ranking generic company in Peru, and the ninth-ranking generic player in Argentina.

ECONOMIC TRENDS

Teva (TEVA.N), the world’s largest generic drugmaker, accounts for as much as 3 percent of Israeli economic output, according to economists. Teva, along with Israel Chemicals (ICL) (ICL.TA) and Intel’s (INTC.O) Israel plants, accounts for close to half of industrial exports. Israel’s economy is poised to grow around 3 percent this year and economists had expected a faster rate of at least 3.5 percent in 2018. Over the first 11 months of 2017, pharmaceutical exports — which are mostly Teva — rose to $6.8 billion from $6.3 billion in the same period in 2016, although monthly pharmaceutical exports have slipped by 40 percent since peaking in August. Exports make up more than 30 percent of Israel’s economic growth, but industrial exports excluding diamonds — $44 billion in 2016 — have shrunk to around 16 percent of that.

SWOT ANALYSIS

1. Strengths- Teva has presence in 60 countries & employs over 46,000 well trained people. It has broadest portfolio of over 1300 molecules in generics. It holds patent for world’s largest selling multiple sclerosis drug Copaxone and it is one of the 15 largest pharmaceutical companies worldwide.
2. Weaknesses- There is a discontinued production of major anesthetic drugs and it gets sustantial revenue from outside U.S which is subjected to macro-economic fluctuations.
3. Opportunities- There was a consolidation of Taiyo acquisition and patents of major drugs are on the verge of expiry.
4. Threats- There is a  disruption of global supply chain due to changing environment and more resourceful companies are entering generics market.

CHALLENGES

1. The company has been under immense pressure in the past year, triggered by a number of systematic as well as unsystematic risks. In December 2017, Teva Pharmaceutical Industries (TEVA) announced a restructuring plan to recuperate sales and its stock has had a bull.
2. Teva Pharmaceutical undertook a massive acquisition of Allergan’s generics business. However, the company’s financials deteriorated after the acquisition. With its current restructuring plan, the company is now focused on reducing the debt on its balance sheet and has suspended further dividend payments and investments in acquisitions.
3. With the recent launch of Mylan’s generic version of Copaxone, Teva expects a significant impact on its leading multiple sclerosis drug.
4. In fiscal 3Q17, Teva Pharmaceutical witnessed a lower-than-expected contribution from new product launches and made a downward revision to its fiscal 2017 sales contribution from new product launches during the earnings release.