Teva Abandons Search to Make Covid-19 Vaccine for Partners

(Bloomberg) -- Teva Pharmaceutical Industries Ltd. has stopped searching for opportunities to produce Covid-19 vaccines for a developer partner, according to the generic drug giant’s chief executive officer, who said the vaccine makers have already secured needed manufacturing capacity.

Chief Executive Officer Kare Schultz said in February that Teva was in discussions with top-tier shot makers about helping with production and distribution. Those talks ended after the companies clinched other manufacturing agreements and determined they had sufficient capacity to meet targets, he said Wednesday.

“We really wanted to help if we could,” Schultz told Bloomberg in an interview. “The companies with vaccines that we were in contact with, they went for classic contract manufacturers, or they went with big pharma companies for partnerships.”

Vaccine production has been in the spotlight as India suffers a Covid surge that’s bludgeoned the country’s health-care system and created shortages of inoculations, along with other medical equipment. BioNTech SE, the vaccine partner of Pfizer Inc., is looking at establishing production sites in Africa and South America, Chief Executive Officer Ugur Sahin said at a briefing with members of Germany’s foreign press association.

Pfizer and BioNTech recently raised their production target to as many as 2.5 billion doses of their two-shot regimen this year. Moderna Inc. aims to scale up to 1 billion doses of its two-shot vaccine, while Johnson & Johnson seeks to hit 1 billion doses of its single-shot immunization before the end of the year. AstraZeneca Plc has the highest 2021 target, aiming to produce up to 3 billion. All turned to external manufacturers to help meet those production goals.

“The big ones have all sorted this out,” Schultz said.

Meanwhile, much of the world remains without access to vaccines, with Africa furthest behind. Globally, countries with the highest incomes are getting vaccinated about 25 times faster than those with the lowest, Bloomberg’s Vaccine Tracker shows.

Earnings Report

Schultz spoke after Teva reported first quarter earnings that beat Wall Street expectations as new generic products contributed to an 11% increase in sales in North America.

Adjusted earnings were 63 cents a share, compared to the average of 59 cents a share estimated by analysts. Overall revenue of $4 billion matched analysts’ average estimate. The American depositary receipts fell as much as 1.9% as of 11:54 a.m. in New York.

Schultz said he expects prescription trends to normalize globally in the first quarter of 2022.

“My current estimates are for the U.S. in the third quarter, Europe, third quarter, maybe fourth quarter; it’s too early to say how successful vaccinations there will be,” he said. “Southeast Asia and Latin America could be later.”

Teva’s legal problems -- possible settlements for the company’s role in the U.S. opioid epidemic and an alleged generic drug price-fixing ring -- have frustrated Schultz’s efforts to turn around the debt-saddled company. Still, the CEO said he was “optimistic” that a settlement is within sight.

Teva’s debt fell to $25 billion. Paying down loans has been Schultz’s foremost imperative since taking over in late 2017, but the company still has work to do to reach his 2023 debt ratio target of 3 times earnings before interest, taxes, depreciation, and amortization.

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