Teva Pharmaceuticals said on Wednesday it was looking for a buyer for its Medis business as it sells assets to pare down its debt burden.
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Teva, which last week reported a drop in second-quarter results and cut its outlook and dividend, acquired Iceland-based Medis as part of its $40.5 billion acquisition of Actavis Generics last year.
“Teva is looking at every opportunity to focus our business and streamline operations, processes and structure,” Teva said in an emailed statement to Reuters. "As part of this process, a decision has been made to initiate the potential divestiture for our Medis business.”
Bloomberg News, citing people familiar with the matter, reported that Medis would be valued at $500 million to $1 billion. It said Teva may also sell its respiratory treatments unit for as much as $2 billion. Teva said it would not comment on market rumors.
Saddled with more than $32 billion in debt, much of it stemming from financing the purchase of Actavis, Teva is seeking to raise cash and has said it will sell its women’s health and European oncology and pain businesses. Proceeds from those and additional asset sales would be at least $2 billion and would go toward paying down debt, interim CEO Yitzhak Peterburg noted.
“It’s a relatively fast process. They are under pressure to make it happen,” said a banker close to a potential buyer.
Meanwhile, the beleaguered company – Israel’s largest by market capitalization – got some rare good news on Wednesday when competitor Mylan announced it would delay launching its generic version of Teva’s Copaxone multiple sclerosis treatment until next year.
“Given the region’s ongoing challenges and the uncertain U.S. regulatory environment, we have elected to defer all major U.S. launches from our full year 2017 financial guidance to 2018, including generic Advair and generic Copaxone,” said CEO Heather Bresch.
Copaxone, Teva’s best-selling drug, accounted for 23% of its revenue and an even bigger share of profits. But the drug is contending with generic competition for its 20-miligram version and faces the same problem for its 40-mg dosage.