Bernstein Research analyst Ronny Gal told clients that Teva leaders perhaps will invest more in developing current pharmaceutical assets, coordinate European efforts and put more emphasis in emerging markets.
Gal sent a note to clients after meeting with Teva chief executive officer Jeremy Levin and newly-appointed chief of research and development Michael Hayden at the Teva headquarters in Israel.
Levin was named CEO in January, took over in May and has publicly that he will have a grand plan in December 2012, so, as Gal noted, they were careful with specifics.
Regarding its branded marketing efforts, Gal wrote that, "Levin diagnosed Teva's branded effort so far to be well organized in the U.S. but less coherent in Europe, with insufficient development in emerging markets. The company will now consolidate the branded commercial organization as a single organization, hire talent to the global organization and put significantly more emphasis on emerging markets."
Regarding branded R&D, Gal wrote, "The diagnosis is that Teva has under-invested in its current assets. Some of
the current products have not been tested in additional indications of where they can be used and novel compounds have not been rigorously tested before making go-or-no-go decisions. The focus is now on doing more 'industrial strength' science."
Like workers most places, Philadelphia-area Teva employees have to be considering the security of their jobs, especially as Teva's stock price has lagged and it is still digesting the 2011 acquisition of Frazer-based Cephalon.
Gal wrote, "Although not specifically stated, we do not expect a massive cost cutting of the type that we have seen
in some of the big pharma organizations."
However......"Teva has some duplications left over from the acquisition process that created the company. These will be cut. However, it has also significant areas of under-investment where the new management will invest. The net result may or may
not be lower cost base, but it is certainly not the top of the agenda."
But Gal warned stock owners/buyers about being overly excited about December's roll out of the long-term plan.
"This will likely take a while, no magic on the strategy day," Gal wrote.