Teva Pharmaceuticals saw shares rise during Thursday's session after announcing its growth strategy. Richard Francis, president and CEO of Teva Pharmaceuticals, joined Cheddar News to discuss its pipeline of products that the company expects to help revenue. 

<div class="block">Teva Pharmaceuticals saw shares rise during Thursday&#39;s session after announcing its growth strategy. Richard Francis, president and CEO of Teva Pharmaceuticals, joined Cheddar News to discuss its pipeline of products that the company expects to help revenue. </div>

Closing Bell

Teva Pharmaceutical CEO Richard Francis on Company's Growth Plans

About 200 million people worldwide take medication from Teva Pharmaceuticals each day and joining me now to talk about the company and where it's headed is the president and CEO of Teva Richard, Francis Richard. Thanks for joining. Wonderful to be here. Thank you for having me. Big announcement for the company today. Of course, announcing a new pivot to growth strategy. What growth is the company forecasting and how is going to get there? Great question. We're forecasting mid single digit growth out until 27 2027. And the way we're going to get there is focused on four pillars of our strategy. One is to drive and maximize the products we currently have in innovation, which is the A V innovative products and then we're going to bring our pipeline through. We have a very exciting pipeline we just announced today, which is not the Bell, which is consisted of about five assets which we're very excited about. And then the third pillar, which is how you introduced us is our generics business. And we're going to make that business a powerhouse making it more profitable. A bit more streamlined to make sure it can be successful and grow going forward. And the final pillar is to make sure we focus our our capital and our resource allocation around those growth engines rather than having them diversify throughout the business. So I'm sure generics, even though it's one piece of the pie will continue to be the main revenue revenue driver for your company. Is that the case, it will be continued to be the main revenue driver, but it probably won't be continued to be the main profit driver. So innovative business will double by 2027. So you know, generics will still be eight billion, a $15 billion company. So I think that will start to equal out on profit. And our innovative business will be about 20 to 25% of our business by 2027 continue to grow. So become a bit more balanced, I would say going forward what's in the pipeline in the innovative business in the innovative business. We have quite a few things, it's quite exciting. So I won't go over all of them. But I think there's a couple that we talked about a lot today with investors and analysts. And one of those is a treatment for schizophrenia, which is a condition that 2.5 million Americans suffer from and most of them on oral therapies, which as you can imagine affects compliance and adherence, which if you don't take your pills, then the disease, you have a relapse and a breakthrough. So we're going to launch a long acting therapy, which allows somebody to take the medication every 1 to 2 months. So I think that is something which is in phase three. And if that comes through, I think that creates a real advantage for the patient suffering from schizophrenia. That's one and the second one is an asset called T one A and that's a bit of the talk of the town because you probably remember a few weeks ago, Merck bought a company called Prometheus and they bought that company for 11 billion for their T One A asset. And we have a home grown tier one, a asset. So everybody is asking us about why we think that could be best in class, which we think it will be. So there has been a decent amount of consolidation even in a high interest rate environment in the health care space, a space certainly receiving a lot of focus from investors and Americans. Everyone around the world right now is deal making part of this growth strategy. Do you anticipate to be making deals in order to grow? So we have, and what I forecast this morning this afternoon was we will do some deals, but there will be relatively small deals because we still have a considerable amount of debt from our last deal. And so we need to pay down that. So our balance sheet gets a bit more favorable and then we'll be able to do larger deals in the short term. We will be more in licensing in a product, so relatively small deals but no significant ma or anything like that. Let's talk about cost cutting because I know profitability obviously is a focus for you as well. Companies across the board obviously looking for ways to save money in this environment. How do you see Teva saving money and what are those moves that could come? So the way we see it about saving money is or more in driving efficiencies, one is we still have over 50 manufacturing sites. So we want to consolidate those manufacturing sites down and that will drive efficiencies and cost savings. That's one area we're concentrating on the other is as we grow our business because we're going to start to grow our business now going forward, we're just not going to allow costs to increase. So all our costs as a percentage of revenue, we want to hold firm because now we're back into a growth trajectory. It's less about driving costs down but reallocating them. So we keep the cost the same. That's our plan. Is it the expectation that some of that consolidation will include job cuts? No, as I said, with actually within outside of the manufacturing, which we're consolidating, we're actually hiring people in the United States. I was just at a meeting where we've hired a number of people in our commercial because we're launching drug So we're actually in some aspects of the business, we're hiring in R and D in New Jersey, we're hiring people because we're investing more in our innovative pipeline. So I think for us, it's less about job cuts and more about adding resource and capability. Richard Artificial Intelligence is the talk of the town. Certainly this year many companies trying to utilize technology to their benefit. How is Teva intending to utilize A? So I think we see it as in two areas, the A I can help us just in operational efficiencies and effectiveness. So more machine learning about understanding about forecast planning for our complex manufacturing network, etcetera. On the R and D side, I think it's starting to get quite interesting that we think we can start to work with companies and develop antibodies and various other parts are modalities using A I learning to stop some of the traditional work we do in the lab that takes us 2 to 3 years. We think we can narrow that down through A I into maybe a year to 18 months. So I think on the research side, we see some advantages but that's still got to play out. I mean, this is early days, certainly early days, Richard Francis Ceo of Teva Pharmaceuticals down here on the floor of the New York Stock Exchange, Richard, thank you.