The Teva Turnaround: Steering a Company Comeback
CEO Richard Francis reflects on Teva’s return to growth during his tenure, and what’s next for the drugmaker in its quest to recapture the heights of old.
When I met with Richard Francis on a recent blustery morning at Teva’s US headquarters in New Jersey, the CEO of the longtime Big Pharma generics power, and of late, innovation hybrid, was on his way next to a meeting with the board of directors.
It was only a little more than two years ago, in late 2022, when that same board tapped the UK native to lead the organization at a pivotal point in its history (Francis officially assumed the CEO role on Jan. 1, 2023). Teva, at the time, was transitioning from a five-year stretch essentially operating in “survival” mode, as Francis describes it, focused predominantly on cost-cutting and paying down debt, amid fallout from litigation and an ill-fated acquisition that preceded (the Israeli-based company’s total debt was $35.8 billion in 2016).
This post-period, which began with a restructuring, including massive cuts to headcount, culminated in a sixth consecutive year of declining revenue at the end of 2022. During the stretch, Teva was also navigating macro challenges such as increased generics competition, pricing pressures, and the loss of exclusivity for key products (Copaxone, Teva’s first flagship innovative drug, being one).
With former CEO Kåre Schultz set to retire and the board seeking the right person to shepherd Teva into its next phase—a hopeful return to top-line growth—Francis was up to the task. He wasn’t drawn to the role for the prestige of becoming a Big Pharma CEO, per se, “as much as that is an honor,” he tells Pharm Exec. It was more so, as Francis reflects, because he believed, after weighing the risks and opportunity, that Teva, a company today of 37,000 employees with operations in more than 33 countries, had the capabilities in place to pull off a comeback.
“When I met the board, I told them, ‘if you want someone to help give it a go and get the company back to growth and where it belongs, I’m willing to do that—but it’s got to be an all-in mentality,’” says Francis, who was coming off a three-year run as CEO of a pair of gene therapy-focused startups, which proceeded five years spent as the CEO of Teva generics rival Sandoz. Before Sandoz, he served 13 years in leadership positions at Biogen, notably during the latter’s early competition with Teva’s Copaxone, then a blockbuster seller for multiple sclerosis.
“They were absolutely committed to that,” continues Francis regarding the board’s response. “You don’t turn a big organization like this around without everybody deciding they want to do it and everybody moving in one direction. When I look back at what’s been achieved [since], I find that really satisfying. There’s always reasons people don’t quite believe it can happen, but I think this organization was ready for change. It’s a proud organization; it wanted to get back on the front foot.”
Now responsible for steering those efforts, Francis hit the ground running, noting that for the process to be successful, it required a “huge prioritization” across the business. Over the course of his first 10 weeks, Francis and the leadership group conducted a detailed and honest appraisal of all things Teva, conceiving and constructing the steps and machinations of what would become the drugmaker’s “Pivot to Growth” strategy, which it officially unveiled that spring (more on the campaign’s uniquely simple formula later).
“There was no, ‘let’s just gently move in this direction,’ because I don’t think time was on our side; and once you decide what direction to go, then, to me, it’s just about execution,” says Francis. “For our executive team, who have been here for many years, to basically critique what’s happened and to come up with a strategy of what we need to do, that requires huge strength of leadership. In many cases, when a new CEO comes in, you want to defend where you’ve been and what you’ve done. The team didn’t do that here, which is remarkable. I don’t think I’ve ever seen that.”
Following the 10 weeks, the group presented its findings and strategies for growth. A prevailing theme was the need to make tough decisions and bold bets, including carving new paths in capital allocation. One example was the immediate trimming of the company’s generics pipeline portfolio, an initiative it had already begun.
Also underway, on the flipside, was the decision to ramp up investment in one of Teva’s stable of innovative products, Austedo (deutetrabenazine), a treatment for tardive dyskinesia and chorea associated with Huntington’s disease. In 2023, Austedo sales would jump 28%, to $1.2 billion, and last year, its revenue spiked 36%, eclipsing $1.6 billion to beat expectations, according to Teva full-year 2024 financial results released last month (Austedo projects to hit $2.5 billion by 2027).
More broadly, executives, in that initial review, put forth measures to reduce or stabilize investment in the US market, eye revenue jumps and channels in Europe and other regions, and aggressively refocus and target its overall drug pipeline, with an emphasis on boosting innovation, including reshuffling its so-called big-value vs. small-value patented product pursuits.
“I think that was the moment where I saw the power of the organization, but I also saw the struggle—because of the fact we’re going to have to stop doing this on scale, and this has to do well to compensate for that,” says Francis, in illustrating the stakes now set in motion. “It’s not a dollar here or a dollar there; it’s tens of millions go down here, tens of millions go up here. That was done really quickly, and credit to the team for having the appetite to do that.”
The comeback trail
Flashing to the present, Francis is quick to credit those early decisions and actions for establishing core principles and workstreams that are standard practice today. One of those is executing a “clear north-star strategy,” as he describes it, but “not a tagline; I’ve lived through many of the taglines.”
To that end, Francis, who travels frequently to Teva’s US headquarters in Parsippany, NJ, and the global home base in Tel Aviv, as well as various other locations as needed, says he regularly meets with senior leadership to measure and map out key performance indicators for the next four to eight quarters, and even further out—“These are our priorities, this is what success looks like, and this is what we’re going to have to do every quarter until we get it.”
After all, Teva’s road to recapturing the heights of 10-plus years ago is still in the journey stage. The organization’s gross debt at the end of 2023 was $19.83 billion, a 44.6% reduction from that figure in 2016. Total debt dropped to $17.8 billion in 2024, according to Teva’s latest earnings report, which also made mention of improved debt ratings by the big three credit rating agencies.
Meanwhile, the company has strung together eight consecutive quarters of growth. For full-year 2023, Teva boosted its global revenues by 6%, totaling $15.8 billion, a solid showing and “modest surprise,” as Francis called it, less than a year into formulating its new strategic vision. Sales in 2024 rose by 4%, to $16.5 billion, though investor sentiment this time around was different. The reception was due to Teva’s cautionary earnings per share outlook for 2025 that it also reported. On Jan. 29, the guidance came in under Wall Street estimates, resulting in a Teva stock drop of about 13%. Francis, in published comments to analysts at the time, contended that Teva, in certain respects, is a casualty of its own success—with growth expectations now built off a higher base.
Other factors he attributed for the lower profit guidance included the immediate hit this year to Teva’s schizophrenia drug, Uzedy, from the Medicare Part D redesign under the Inflation Reduction Act; falling sales of older innovative drugs; foreign exchange impacts; and heavier R&D investments.
Teva’s sales guidance, on the other hand, topped forecasts for 2025. The company expects to generate revenues between $16.8 billion to $17.4 billion this year, powered by the continued gains of branded medicines Austedo, Uzedy, and Ajovy, the latter a migraine prevention treatment, which increased sales by 18% in 2024, to $507 million. Teva’s generics business is growing as well, with spikes in 2024 of 15% in the US, 6% in Europe, and 15% in international markets compared to the previous year.
Stacking wins
Despite the mixed guidance for 2025, Teva’s stat sheet over the past 20-plus months (since unveiling its new strategy) is proof positive of a comeback. A big Liverpool F.C. fan, Francis often equates his leadership and business philosophy with sports. Perhaps cliché, he admits, but tapping such parallels and lessons, he adds, has helped him set a clear mindset and tone for the organization during his tenure right from the jump.
“I said, ‘look guys, we’ve been playing not to lose at Teva just to survive. No more,” Francis, 56, told Pharm Exec. “We will lose many times. But we’re going to play to win every single day. I think that released a lot of people in this organization to think differently, because Teva has always been a company that plays to win. They just had to go on the defense for a bit and hold the line.”
Notable wins in 2023 included the approval and launch of the aforementioned Uzedy, an extended-release injectable suspension unique in the schizophrenia setting. The drug was the first approved therapy based on the proprietary technology designed by Teva partner Medincell. Dubbed “BEPO,” the platform controls the delivery of a drug at a therapeutic level for several days, weeks, or even months from the subcutaneous or local injection of a deposit of just a few millimeters.
Key launches last year included Teva’s generic version of Victoza (liraglutide), becoming the first-ever generic GLP-1 agonist; Austedo XR, approved by the FDA last spring as a one-pill, once-daily option; and two products as part of Teva’s partnership with Iceland biotech Alvotech: Simlandi, a biosimilar to Humira and the third-ever approved as “interchangeable” with the AbbVie originator; and Selarsdi, a biosimilar to Johnson & Johnson’s longtime blockbuster Stelara in moderate-to-severe plaque psoriasis. Additionally, last month, Teva entered into a license and supply agreement for a proposed generic GLP-1 in the US, Europe, and other countries.
The company currently has 18 biosimilar products in its pipeline. One of those is its candidate to Prolia (denosumab), Amgen’s monoclonal antibody for osteoporosis. Teva’s follow-on version is currently under review by the FDA and the European Medicines Agency.
Teva boasts several hopefuls on the innovative pipeline front. Perhaps the most anticipated is TEV-‘749 (olanzapine), a long-acting injectable (LAI) in Phase III clinical trials for schizophrenia. The drug, Francis points out, could be the first marketed LAI form of olanzapine (first approved in the 1990s; sold by Eli Lilly as Zyprexa) that doesn’t carry a risk of post-injection delirium/sedation syndrome, a rare but serious condition that can occur following the application of an olanzapine LAI. The clinical program for TEV-‘749 recruited nine months ahead of schedule, the company says, and results from a long-term safety study are expected in the first half of this year (In a September 2024 announcement, initial Phase III efficacy, safety, and tolerability data for the drug met its primary endpoint).
Showing promise earlier in development is duvakitug, Teva and Sanofi’s partnered monoclonal antibody targeting tumor necrosis factor-like cytokine 1A for treating moderate-to-severe inflammatory bowel disease. Duvakitug delivered positive Phase II, top-line results in December, meeting its primary endpoints (clinical remission and endoscopic response) in ulcerative colitis and Crohn’s disease, and strengthening future prospects for best-in-class status. When the duvakitug trial data was released on Dec. 17, Teva’s stock jumped 26.5%.
During our conversation, Francis also referenced novel drug candidates such as TEV-’248, its short-acting beta agonist for asthma; TEV-’286, a form of emrusolmin targeting multiple system atrophy; TEV-’408, an anti-interleukin-15 for celiac disease and vitiligo; and TEV-’278, the company’s combined PD1-IL2 agonist in oncology.
In summing up Teva’s product-mix pursuits, Francis returns to a sports analogy, but with a caveat that, he says, he tries hard to convey in his role. Outcomes, in sports or pharma, he believes, shouldn’t be measured solely by extremes—and then the story ends there.
“We always think of success as binary: you succeed or you fail. I don’t think of it like that,” says Francis. “It’s a range: you succeed amazingly, you succeed a bit less amazingly, you succeed a bit less, etc. And, then, eventually, it’s neutral. You haven’t succeeded or failed. ... It’s like a game of football—you get over the loss on Sunday, analyze it Monday and Tuesday, and then get on. We’ve gotten to that point now. People realize that there aren’t consequences for reaching for the stars. Maybe there are consequences if you don’t.”
Fate and family
Francis’s path to pharma, and eventually Teva, may have been written in the stars as well. Although, it didn’t necessarily unfold that way at the start. After graduating from The Manchester Metropolitan University with a BA in economics, Francis worked at the prestigious Lloyd’s of London in oil and gas reinsurance. “It was a good job, I just didn’t feel it in my soul [as a career],” he reflects. “So I thought, what should I do?”
Francis considered the IT arena—after all, it was the mid-1990s and telecommunications was booming and the mobile phone craze was on the cusp. He had friends in IT, too, and “I’d like to think I had a bit of a business brain.” But ultimately, Francis wasn’t swayed in that direction either. It didn’t feel like a fit.
He then shifted his attention more seriously to another option that had been percolating: pharmaceuticals. The attraction, for him, appeared easier than the others to embrace—and more intrinsic, for two reasons, one practical and one personal. First was the basic concept of health—you’re sick or you’re not, you go to your doctor, learn about a drug, are prescribed a drug—those were fundamentals he could wrap his business brain around, particularly in the sense of product understanding.
The second driver was Francis’s experience with family illness; two of his grandparents had cancer. Ultimately, it would be the emotions and frustration he felt watching a treatment fail for a loved one—and the influencing factors related to access—that ended up solidifying his decision to enter the pharma industry.
“That made it really personal to me,” says Francis. “It was, okay, if I’m going to do something, one, I think [the pharma industry] is going to be around forever because, unfortunately, people aren’t going to live forever; they will get ill. So there’s a job here that I can probably commit myself to for life. And, two, as much as maybe we don’t have that reputation [in pharma], if anybody asked me what I do, I can really say I’m helping people have a better life. I truly believe that. I still believe it today.”
Francis’s first job in the industry was as a general practitioner sales rep for then-Wyeth Pharmaceuticals in the UK. While taking a two-week training on Wyeth’s oncology portfolio in Gosport, on England’s south coast, he was able to visit his grandmother every night in nearby Portsmouth, where she was living at the time in palliative care for terminal cancer. Those moments still vivid in his memory today, Francis was grateful he had that opportunity.
“That’s when innovation and access became super key to me,” he says. “Because what I subsequently found out, my grandmother could have been treated with another drug. But in the UK at the time, we didn’t have access to it. I realized innovation is great, but it’s only good if you get access to it.”
Fate interceded as well for Francis during those early days when he met Terry Cockle while at Wyeth, a person he credits as a critical mentor during his baptism into the pharma business and commercial world.
“If I hadn’t met him, I think I would have crashed and burned pretty quickly,” Francis tells Pharm Exec. “Terry took me under his wing. I was a sales rep, hospital rep, sales manager. I did the whole thing.”
In 1998, Francis would go on to Sanofi as a marketing manager based in the UK. Three years later, he hooked up with Biogen, with his first role as international marketing manager, based in Paris. That launched his 13-year run at the biotech giant, finishing as president and senior vice president, Biogen US, in Boston. From there, Francis rose to the CEO ranks, starting with Sandoz.
A purposeful ‘Pivot’
As alluded to earlier, Teva’s Pivot to Growth Strategy, first launched in May 2023, is the company’s formal framework for guiding the trajectory of the business through the rest of the decade. The strategy is being rolled out in three phases—the first was a return to growth (2023-2024), the second is hopeful accelerated growth (2025-2027), and the third will be a focus on sustained growth (2028 and beyond). It was built on the foundation of four main pillars, which Francis detailed during the recent sit-down.
The first one is “deliver on growth engines.” Namely, Austedo, Ajovy, Uzedy, and Teva’s late-stage biosimilars pipeline. The second is “step up innovation.” The pipeline assets noted earlier in disease areas such as neuroscience, immunology, and immuno-oncology are examples of progress in that area.
“When I got here, everybody said Teva is a generics company. I said, I don’t think it is,” notes Francis. “When I looked under the hood, I saw this innovation—some launched, some in the pipeline—and then I saw this world-class generics business. I said, this is a pharma company that does both.”
The third pillar is “create a sustainable generics powerhouse.” Part of that, as mentioned, has been shrinking the scope of coverage, broadly, for drugs that come off patent, which was at 100%, and, in turn, focus more on high-value targets (i.e., complex generics, LAIs, drug-device combos).
“We realized we were trying to launch too many generic products,” says Francis.
Lastly, is “focus the business”—allocate resources on areas with the greatest potential for growth and patient impact. A key such initiative is Teva’s decision to divest TAPI, its active pharmaceutical ingredient business, the second-largest in the world, according to Francis, with about 4,300 employees and 350 products. Teva is currently engaged with potential buyers.
Michael Christel is the group managing editor of Pharmaceutical Executive, Pharmaceutical Commerce, and Applied Clinical Trials. He can be reached at mchristel@mjhlifesciences.com.
