Teva CEO Carr Schultz: Expects to reach operating profitability rate of 30% by 2027

Teva pharmaceutical company held a press conference Sunday at its new headquarters in Tel Aviv, where it presented its goals for the coming years, which it provided with the publication of the latest reports. In 2027, Teva expects to reach an operating profitability rate of 30%, a debt-to-EBITDA ratio of 2, a cash-to-earnings ratio of 80%, and to return to growth, after several years of revenue erosion.
Carr Schultz, Teva's president and CEO, presented Teva's progress since 2017, when he took office. "In 2017, we set goals. One of them was business optimization. 80 production sites - we have reduced to 53 today and the number will continue to decrease in another 10. The reason this is important is because a lot of products are produced, but the more production sites there are, the more expenses there are. The basis was the many purchases made with the flow straw from Copaxon. If you don't do full integration there are too many sites. The optimization will continue, nothing dramatic, it's not about a re-organization."
Another thing, Schultz added, "In 2017 I wasn't aware of the power of this, it's the legal issues. I didn't know that the opioid story would become so challenging. The good thing is that we reached an agreement in principle. The next thing - we had a terrible debt of 34 billion dollars. Today the interest rates Olat, when they took it, it was at 2-3% interest rates, today our debt is at 8-9% interest rates. We were very successful in avoiding the debt trap."
According to him, "Another good story is the reduction of the cost base. Unfortunately, this also included a significant reduction in the workforce, which today numbers approximately 28,000. The result of all these processes is that, despite the loss of revenue from Copaxon, we were able to generate a flow that was used to reduce the debt. With the help of efficiency, we increased Return the operating profitability, next year we will reach 28%".
Schultz also spoke about the generics market, saying that "We are the leaders in generics and are working to be the leaders in biogenerics. Over 95% of the drugs in the world are no longer on patent. Without generics, the medical system does not work. We saw in Corona, people went into intensive care. If we could not produce the The drugs, along with other manufacturers, the health systems in the world would not be able to treat many corona patients. At Teva, we have three main areas: generics, biosimilars and specialty drugs. We have an exciting pipeline."
"Sometimes they tell me that generics is a bad business. But this is one of the most stable businesses that exist. I admit that if you look at our stock it doesn't show, but why is the business stable? New products will hit the market, and products come off patent, so there will always be an influx of products that are off patent Theirs is over. In the next 5 years, we are talking about drugs amounting to 188 billion dollars."
Schulz added that about 20 years ago, more and more biological drugs were developed, so in the coming years many biological drugs will lose patent protection. According to him, until 2027 the generic market is expected to grow by about 4.1% on an annual average, while the biosimilar market - by 16.8%. "The biosimilar market is a market with fewer projects, but larger ones. You have to do the entire development process and do an experiment, so it's more expensive. We know how to do it. We've invested about a billion dollars in our biological production capabilities." According to him, also in the field of original medicines "we are doing a lot of exciting things".
Shultz referred to the activity in Israel and said that "our key products Copaxone and Azylact came from development in Israel. There are places in Israel with high-level innovation. We hope to find the "new Copaxone" here. We have a product at an early stage in the oncology field, which is being developed with the Weizmann Institute."
 Schultz also spoke about the financial goals for the coming years. According to him, "Until 2027, the profit rates will continue to improve, the debt will continue to decrease by 10-12 billion dollars, and the new figure is revenue growth. We will not make large purchases, but we will make licensing agreements for products, including products in advanced stages. In total, we have created a base sustainable towards a return to growth. Of course we are not satisfied with the current level of the stock, but we estimate that we are in a good position to continue. We are convinced that the "fine" on our value due to the legal proceedings will eventually disappear."
To a question about the legal proceedings in the field of marketing opioid painkillers, an issue that has been clouding Teva's stock for several years, Schulz replied that an agreement in principle was recently signed to end the affair. According to Schultz, there are several steps towards the final completion of the agreement and he estimates that the first payment will be transferred during the next year.
Schultz presented the company's goals for 2027, but his contract with Teva is expected to end (if not extended) in November 2023. When asked if he would be at the company in 2027 to reach these goals, Schultz replied: "The goals are set based on a strategy developed by the management and the board of directors. Every year we have a strategy meeting, and this year we set long-term goals, it's not just about me but the entire management. The goals will remain in effect until 2