Teva Downplays Downsizing, Claims Media Distortion

YERUSHALAYIM -
A view of the Israeli company, TEVA Pharmaceutical Industries, in Yerushalayim. (Yonatan Sindel/Flash90)
A view of the Israeli company, TEVA Pharmaceutical Industries, in Yerushalayim. (Yonatan Sindel/Flash90)

Teva Pharmaceutical Industries blasted the Israeli media on Monday for misreporting and overstating the negative impact of its global restructuring plan, Globes reported.

The company said reports that coming layoffs at Teva would begin next month were erroneous, ignoring an official announcement that they would not start until next year.

Teva also flatly denied press reports that it intends to transfer production lines from Israel to the Far East.

“We firmly deny the details that appear in the report,” Teva said. “The company has announced a streamlining program, but it is only at the initial planning stage. We find it regrettable that the media should choose to publish information that misleads the public.”

Teva Pharmaceutical Industries director Chaim Hurvitz, the son of the company’s late founder Eli Hurvitz, told Globes that the picture for Israel is not as bleak as portrayed in the media.

“I think that the drama will be less than depicted,” said Hurvitz. “We have almost 8,000 employees (in Israel) and 5% of them, 400 employees, retire every year. It’s enough for us not to hire in one year, and we’ve solved the matter.”

Hurvitz maintained that massive firings were not inevitable. “There are places where this will be inevitable, but in most places it will be possible to slide over this, and stretch it over time. This is especially true at production sites. We’re not going to close plants, but we’ll organize production lines more efficiently.”

Teva attributes the streamlining to almost 1 billion in expected tax increases and the income loss resulting from the patent expiration of its multiple sclerosis drug Copaxone, which will give a leg up to competitors.

Experts say Copaxone accounts for 30% to 50% of the company’s net profit, and none of the various 30 products in the pipeline are likely to make up for it.

But Hurvitz downplayed the Copaxone effect, pointing out that generic versions will not reach the market before 2015. He also cautioned that it’s a complex product, hard to replicate, which means that generic competition might not materialize at all.

Hurvitz rejected the notion that Teva is in crisis, and dismissed forecasts of single-digit growth for Teva’s generic business, saying, “It’s utter nonsense. Look at the demographics. The world’s population is aging, and they’ll need generic drugs. This market will have double-digit growth.”