Teva Pharmaceutical Industries Ltd., is changing "very fast," chief financial officer Eyal Desheh said at Tuesday's J.P. Morgan Healthcare Conference in San Francisco, by adding more branded products to diversify the portfolio of products. It might look for partnerships and small corporate purchases, but nothing on the order of the $6.8 billion takeover of Cephalon, whose headquarters is in Frazer.
Teva is based in Israel but has a big operation in North Wales and is building a new facility in Northeast Philadelphia.
Desheh said that Teva is projecting sales of $22 billion for 2012. Of those sales projections, 55 percent would from the generic category, while 37 percent would come from branded drugs. Over-the-counter products fill about five percent and that is the fastest-growing area.
"The size of the two big pieces are getting closer," Desheh said.
Bill Marth, who leads the Americas division for Teva from the facility in North Wales, said the trick is executing as best as possible on generics and branded drugs as the company menu expands. About 25 percent of Teva's business is in the U.S. generic market and it used to be larger.
"Many people continue to think of us as a U.S. generic company, but we're a global diversified business," Marth said at the investor conference, adding that Teva does about $12 billion in generic sales.
Despite the diversification into branded and over-the-counter medicines, two things will keep U.S. generics operations an important area of interest: the changes brought on by the Affordable Care Act and the expiration of Pfizer's patent on Lipitor.
One aspect of the the Affordable Care Act is to give basic health insurance coverage to many people who had none.
"We see a wave of volume coming, with Obamacare and the health insurance exchanges," Marth said. "We see a movement with 20 or 30 million covered lives, which is a big difference."
Marth says those insurance plans will want patients to use generic drugs about 80 percent of the time.
The other prominent possibility is selling the generic version of the world's best selling drug, Lipitor. Teva and the Ranbaxy are the only companies with an FDA-approved formula for a generic version of Lipitor. (Watson is selling a Pfizer-made version.) Ranbaxy can sell its generic version already because it was the first to file its generic application, so it will have independent generic exclusivity for 180 days. Marth said generics already control 70 percent of the market for atorvastatin, which is the chemical name.
"We know we'll really have a good market on day 181," Marth said.