WEBVTT - Teva CEO Talks Drug Pricing, Generics, Supply Shortages

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. I am here with

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<v Speaker 1>Teva Pharmaceutical CEO Richard Francis joining me right now. Nice

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<v Speaker 1>to see you in person.

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<v Speaker 2>Crazy to be here, Katie. Thanks for having me.

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<v Speaker 1>So let's talk about the past year that you've had.

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<v Speaker 1>Because you take a look at your share performance, shares

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<v Speaker 1>up one hundred and eleven percent last year alone, that

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<v Speaker 1>is your second best performance on record. How do you

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<v Speaker 1>plan to keep that momentum going in twenty twenty five.

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<v Speaker 3>Well, so, thank you, thank of Mohamminson, Thank you for

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<v Speaker 3>recognizing that, and maybe could I just take a book

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<v Speaker 3>of bask in the fact that the team have achieved that.

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<v Speaker 3>And I'm really proud of the team at Teva because

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<v Speaker 3>we've had some tough times and to come back with

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<v Speaker 3>that share growth happens because we've done a lot of

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<v Speaker 3>things well, and I think it's primarily been driven by

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<v Speaker 3>the fact that we've moved our innovative portfolio forward and

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<v Speaker 3>we've sold that particularly well, commercialized it really well in

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<v Speaker 3>the United States. Oesteto jaceti in a jovi and those

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<v Speaker 3>who performed tremendously well raised our consensus twice in the

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<v Speaker 3>year because of their performance. And then towards the end

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<v Speaker 3>of the year, our pipeline started to mature and we

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<v Speaker 3>saw some great data on our till one A and

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<v Speaker 3>that was sort of, you know, I think, really surprised everybody.

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<v Speaker 3>And so with all that, we had a great twenty

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<v Speaker 3>four and in a way to be a little bit boring,

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<v Speaker 3>it's going to be more of the same in twenty five.

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<v Speaker 3>We're going to keep driving a stead of keep driving

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<v Speaker 3>your steady, keep driving your Jovi, and bring that pipeline

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<v Speaker 3>through because now people are really excited about the innovative

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<v Speaker 3>aspects of TABA and our pipeline and still do that

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<v Speaker 3>and on our generics and BIA similars, keep driving that.

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<v Speaker 3>That's being a consistent driver for us and throwing off

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<v Speaker 3>cash that allows us to invest in innovative business which

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<v Speaker 3>is creating so much excitement.

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<v Speaker 1>Well, in your case, more of the same is good.

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<v Speaker 1>I'm sure your shareholders would be happy to see a

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<v Speaker 1>repeat performance there. But I want to talk a little

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<v Speaker 1>bit about generic drugs and particularly prices, because prices for

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<v Speaker 1>generics still going down in the US, and I believe

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<v Speaker 1>you said on your latest earnings call that you expect

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<v Speaker 1>generic prices to be push down further in twenty twenty five.

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<v Speaker 1>So against that backdrop, I mean, how do you sustain

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<v Speaker 1>the generics business in that deflationary environment.

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<v Speaker 3>Well, I think for Generics you've got to have a

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<v Speaker 3>few things. You've got to be global in scale and

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<v Speaker 3>we are. You've got to have a really deep pipeline

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<v Speaker 3>which we do, a great manufacturing capability, which we do,

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<v Speaker 3>and then a go to market model which.

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<v Speaker 2>We have that global reach.

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<v Speaker 3>We have to did all of those three three things

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<v Speaker 3>really consistently. I do think, you know, they comes to

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<v Speaker 3>a point where as much as we can offset those

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<v Speaker 3>price decreases and keep growing the company, I do think

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<v Speaker 3>healthcare systems in the United States and Europe need to

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<v Speaker 3>understand are they paying the right amount for what are

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<v Speaker 3>high quality medicines. I think TeV supplies roughly one in

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<v Speaker 3>ten one in twelve.

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<v Speaker 2>Scripts in the United States.

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<v Speaker 3>Every ten or twelve scripts is a TeV script, and

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<v Speaker 3>I'm very proud of that because we help affordable medicines.

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<v Speaker 3>People have access to affordable medicines. But despite our efficiency

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<v Speaker 3>and our scale, then I do think potentially we have

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<v Speaker 3>to think about that if we want to have that

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<v Speaker 3>level of service and not to have any issues supply.

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<v Speaker 1>Well, let's get into some supply questions here. I want

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<v Speaker 1>to talk about Adderall because you have both brand name

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<v Speaker 1>and generic Adderall in a shortage since twenty twenty two,

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<v Speaker 1>which of course you manufacture. What more can be done

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<v Speaker 1>to end the shortage and what role do you think

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<v Speaker 1>that the government and other companies should be playing here.

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<v Speaker 3>Yeah, I think this is an interesting one because there's

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<v Speaker 3>been a sort of dramatic increase in the prescriptions of

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<v Speaker 3>this product, and so because of the type of product

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<v Speaker 3>it is, we're given a quota by the government and

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<v Speaker 3>what we can make, and so we make that amount

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<v Speaker 3>and we max out on that amount because it's a

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<v Speaker 3>restricted substance, and so it's quite a complex supply chain.

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<v Speaker 3>I think part of it is about assessing is this

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<v Speaker 3>this about supply or is this about prescriptions? And is

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<v Speaker 3>this about overprescribing? And I think that's the area that

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<v Speaker 3>needs to be looked at. But we're maxed out on

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<v Speaker 3>what we're being asked to do, and we're committed to

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<v Speaker 3>do that.

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<v Speaker 2>So I think it's a big and more complex story.

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<v Speaker 1>Two questions there, I guess, would do you expect that

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<v Speaker 1>you know that ceiling on what you can make to

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<v Speaker 1>move higher. And then what is your opinion. Do you

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<v Speaker 1>think that this is an issue of supply or over

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<v Speaker 1>a prescription.

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<v Speaker 2>That's a really good question.

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<v Speaker 3>I mean, I think it's one where when I look

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<v Speaker 3>at it comparative to other markets than the usage and

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<v Speaker 3>the supply is a lot higher in the United States,

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<v Speaker 3>so you don't often see discrepancies on the geographics called

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<v Speaker 3>scale like that. So I think it's probably something as

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<v Speaker 3>people investigate it, and I think the government should look

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<v Speaker 3>into it, and the FDA, I think it may be

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<v Speaker 3>is a bit of both, but I think the supply

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<v Speaker 3>is probably where it should.

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<v Speaker 2>Be, maybe needs a bit more.

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<v Speaker 3>I think the prescriptions is really accelerated dramatically, and we've

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<v Speaker 3>got to ask why is that a change in the

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<v Speaker 3>incidents the epidemiology.

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<v Speaker 2>I'm not so sure.

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<v Speaker 1>Yeah, that's a big question when it comes to over

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<v Speaker 1>prescribing that I won't ask you that particularly, but I

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<v Speaker 1>do want to talk about GLP ones because you came

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<v Speaker 1>out with your first generic GLP one drug. It's a

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<v Speaker 1>copy of one of Novo Nordist's lineup. What are your

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<v Speaker 1>plans for selling generics of the more popular GLP ones

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<v Speaker 1>that are out there.

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<v Speaker 2>So we plan to do it.

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<v Speaker 3>So we have that one Victor's that that came out

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<v Speaker 3>last year, and this year we planned to launch sex Enders.

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<v Speaker 3>That's another GLP one And our aim is to know

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<v Speaker 3>as a global generics company, any product that loses its

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<v Speaker 3>patterned we sort of have in our line of sight,

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<v Speaker 3>and obviously the bigger ones we definitely have in our

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<v Speaker 3>line of sight. So all those GLP onees and those

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<v Speaker 3>emerging other modalities in.

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<v Speaker 2>Obesity we would target.

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<v Speaker 3>But we always think about capital allocation because as much

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<v Speaker 3>as we're a nine billion dollar generics business, but also

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<v Speaker 3>one of the fastest growing innovative companies, and so capital

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<v Speaker 3>allocation is very important. So we're still put in the

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<v Speaker 3>majority of our capital into our innovative business because we

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<v Speaker 3>have such a deep pipeline and such an exciting pipeline

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<v Speaker 3>that we want to make sure that's properly resourced.

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<v Speaker 1>Well to that point of capital allocation. Let's talk about

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<v Speaker 1>the M and A outlook here, because we're at the

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<v Speaker 1>JP Morgan Healthcare Conference. We are being hit over the

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<v Speaker 1>head with deal announcements and you're expected to see a

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<v Speaker 1>more friendly regulatory environment, at least in the United States

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<v Speaker 1>under the second Trump administration. What is your strategy when

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<v Speaker 1>it comes to M and A right now?

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<v Speaker 2>Yes, So we're sort of one.

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<v Speaker 3>Our balance sheet allows us to do a certain amount,

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<v Speaker 3>so I don't think this years go big. We're probably

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<v Speaker 3>going to en license a lot of well looked at

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<v Speaker 3>in licensed products. But the thing we have is because

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<v Speaker 3>we have this pipeline that I keep talking about in

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<v Speaker 3>late stage. We have a product dary in ASPA in

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<v Speaker 3>phase three, we have a lands of Being in phase

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<v Speaker 3>three for schizophrenia, and we have the TIL one A

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<v Speaker 3>which everything's excited about at the end of last year

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<v Speaker 3>phase two and now.

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<v Speaker 2>Moving into phase three.

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<v Speaker 3>So we have a lot of growth drivers coming forward

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<v Speaker 3>in Teva. So and then we have other products that

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<v Speaker 3>we've moved into phase two and resolvement for MSA.

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<v Speaker 2>A read disease. So we're quite on our pipeline.

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<v Speaker 3>So when we think about BD or M and A,

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<v Speaker 3>we've got to think carefully because we can get a

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<v Speaker 3>lot of capital to our own pipeline and I think

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<v Speaker 3>give a good return for our shareholders.

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<v Speaker 2>And so when we look outside, we're just going to

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<v Speaker 2>be mindful.

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<v Speaker 3>Is it worth bringing that in or do we have

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<v Speaker 3>a pipeline and that's the challenge we always have in

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<v Speaker 3>our industry, but I think we're in a particular privileged

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<v Speaker 3>position with Tever because.

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<v Speaker 2>Of the pipeline.

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<v Speaker 3>We have to do some more in licensing than Big

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<v Speaker 3>M and A.

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<v Speaker 1>All right, well, that's a good place to leave it. Richard,

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<v Speaker 1>really appreciate you taking the time.

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<v Speaker 2>Thanks Katie. Pleasure to be here.