ISRAEL — Pharmaceutical giant Teva is reportedly exploring the possibility of selling its active pharmaceutical ingredients (APIs) business as part of a broader strategic realignment.
The company’s new CEO, Richard Francis, is leading the overhaul of Teva, and sources suggest that the API unit could be valued at approximately US$2 billion. Teva has engaged advisors to assess potential interest from buyers for the business unit.
Teva’s API business encompasses more than 400 APIs used in drugs and employs over 5,000 staff. In response to rumors of a potential sale, a Teva spokesperson stated that the company regularly reviews its businesses and views the API business as strong and capable of contributing to its broader growth strategy.
The spokesperson further emphasized that there are no plans for a complete separation, as Teva recognizes significant potential and high profits in the API business.
The company’s recent strategy emphasized a return to growth with a focus on branded and innovative drugs.
During the strategy presentation, CEO Richard Francis acknowledged Teva’s API business, stating, “I have discovered that Teva has a wonderful API business and that the market is growing. We will create a business unit that does not only focus on Teva in order to give it the ability to grow.”
Since assuming leadership from former CEO Kåre Schultz at the end of the previous year, Richard Francis has unveiled a new vision aimed at revitalizing Teva and driving growth.
The company plans to optimize its businesses and portfolio while reallocating resources to support expansion. As part of this strategy, Teva intends to establish a standalone unit dedicated to APIs.
Analysts from Morgan Stanley noted that Teva anticipates above-market growth of 6% to 7% in the wider industry for its API business.
They also suggested that operating the API business as a separate entity within Teva, with a dedicated management team, could unlock additional value.
API production at Teva extends beyond in-house manufacturing, as the company also serves third-party clients.
With API manufacturing sites and a product range of over 350 items, Teva remains committed to the growth and contribution of its active pharmaceutical ingredients business.
The company stated, “We believe that Teva Active Pharmaceutical Ingredients (TAPI) is a strong business with amazing capabilities and that it can grow and in that way it can contribute to the strategy that was recently announced.
“As part of routine business management, we regularly examine businesses and opportunities.”
For all the latest healthcare industry news from Africa and the World, subscribe to our NEWSLETTER, and YouTube Channel, follow us on Twitter and LinkedIn, and like us on Facebook.
