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Teva to fire 7000 employees after $6 billion loss as stocks plummet

Israeli Teva is already the world's largest manufacturer of generic drugs -- non-branded, cheaper alternatives to branded drugs that have lost their patent
Jack Guez (AFP/File)
Teva down 11 percent on the Tel Aviv Stock Exchange and 10 percent on the New York Stock Exchange

The Israeli Pharmaceutical Company Teva reported its stocks plummeted in the second quarter on Thursday, Globes Israeli financial outlet reported.

The company’s share price is now down 11 percent on the Tel Aviv Stock Exchange and 10 percent on the New York Stock Exchange. The Israel-based pharmaceutical company reported a $6 billion loss, which translates into a loss of $5.94 per share.

The company stated it would be firing 7000 employees worldwide due to the loss.

In a statement in response to the report, Teva stated that it will be adjusting its outlook as stocks plummeted.

"We have lowered our outlook for 2017 Non-GAAP results to revenues of $22.8 - $23.2 billion, from a previously expected range of $23.8 - $24.5 billion. Non-GAAP EPS for 2017 is now expected to be $4.30 - $4.50, based on a weighted average number of shares of 1,076 million, down from a previously expected range of $4.90 - $5.30."

Acting Teva CEO Dr. Yitzhak Peterburg addressed the reports, explaining that the company had not expected such poor results and pointed to the crisis in Venezuela as part of the problem.

"Second quarter results were lower than we anticipated due to the performance of our US generics business and the continued deterioration in Venezuela. These factors also led to a lowering of our outlook for the remainder of the year. All of us at Teva understand the frustration and disappointment of our shareholders in light of these results… In our US generics business, we experienced accelerated price erosion and decreased volume mainly due to customer consolidation, greater competition as a result of an increase in generic drug approvals by the US FDA, and some new product launches that were either delayed or subjected to more competition."

Earlier this month, the pharma giant announced its chief executive officer Erez Vigodman was stepping down after just three years amid reports of a loss of investor confidence.

The surprise move came after the value of Teva Pharmaceutical Industries, the world's largest maker of generic drugs, decreased dramatically over the past year.

Teva appointed its chairman, Yitzhak Peterburg, as interim CEO.

Teva, meanwhile, is among six drug makers named in a civil lawsuit filed earlier this month by twenty American states for allegedly entering into illegal conspiracies to raise prices on two common generic drugs.

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