Teva is said to ramp up sales with Medis, respiratory units

Teva Pharmaceutical Industries Ltd. is ramping up asset sales as the troubled Israeli drug maker works to preserve its credit rating and cut debt, people familiar with the matter said.

The company is considering a disposal of Medis, an Icelandic unit that develops generics for other companies, a representative for Teva said, confirming Bloomberg's earlier report. The company is also weighing a sale of some of its respiratory treatment assets, the people said, asking not to be identified because deliberations are private. Teva hasn't made a final decision about the assets and considerations are at an early stage, they said.

Medis, which draws on Teva's development and manufacturing capabilities to offer a portfolio of products and intellectual property to other drug makers, could be valued at $500 million to $1 billion, depending on which assets are included, the people said. The respiratory business could fetch anywhere between $500 million and $2 billion, depending on the treatments included and the value given to drugs still in development, they said.

The assets could attract bidders in the pharmaceutical industry as well as private equity firms, the people said. Teva declined to comment further on the potential disposals.

Teva, working to pare about $35 billion in debt after an ill-timed acquisition of Allergan PLC's generics division, is selling off assets. Plans to divest Medis and its respiratory products would follow other pending disposals including its women's health business and European oncology and pain treatments. The cancer and pain treatments have drawn interest from drugmakers such as Fresenius SE, Mylan NV, Novartis AG, people familiar with the matter have said. Women's health has also attracted drugmakers and private equity firms, the people said.

Teva's shares rose as much as 1.5 percent to 6,750 liras in Tel Aviv on Wednesday, reversing earlier declines. The stock has dropped 52 percent this year.
Asset sales will help generate at least $2 billion, exceeding Teva's initial target of $1 billion, interim chief executive officer Yitzhak Peterburg said on Aug. 3 after the company pared its profit forecast for the year and slashed its dividend by 75 percent. The asset sales are likely to be completed by the end of the year, and the company is also looking at other "noncore" operations, he said at the time.

That same day, Moody's Investors Service said the company's debt reduction has been slower than expected, and cut Teva's credit grade to one level above junk. The company's ratings will remain under pressure in the next 12 to 18 months, Moody's said.

Founded in 1985, Medis has partnerships with drugmakers in more than 140 countries, according to its website. It provides European licenses, produces generic pharmaceutical treatments for human use and has a portfolio of specialist oncology products that's expected to grow over the next few years.