Biotech Values

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Teva laying off 1,000 from Croatia and Florida firms

http://www.haaretz.com/hasen/spages/1063189.html

By Yoram Gabison February 11, 2009

Teva Pharmaceutical Industries will fire more than 1,000 employees from its companies in Croatia and the United States, both bought together with acquisitions carried out in recent years that made Israeli company the biggest manufacturer of generic drugs in the world.

Pliva has been the weak link in the Barr Pharmaceuticals group that Teva Pharmaceutical Industries bought in December 2008. Now the limping Croatian drug company has begun to streamline as it integrates into the global group.

Less than two months after Teva bought a controlling interest in Barr for $7.5 million, before write-downs, the Israeli company is taking steps to improve Pliva's profitability toward the average in the Teva group. And so, 790 of Pliva's workers, 26%, will be sent home in the next year, according to the Croatian Times.
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Teva will give dismissed Pliva workers with more than 25 years on the job severance compensation of 50,000 euros. Workers with less time on the job will get compensation of 41,000 euros. Pliva workers who reached retirement age will get 270,000 euros.

The dismissal of a quarter of Pliva's staff follows negotiations with labor unions in Croatia.

At the same time, Teva plans to use surplus production capacity at Pliva to make raw materials and drugs in tablet form. Pliva says Teva will increase its production by 30%, apparently without need for fresh investments, merely using existing manufacturing means.

For the first nine months of 2008 Pliva reported losing $18 million on turnover of $565 million.

In the same period of 2007 it had netted $148 million on turnover of $685 million.

In previous years, Pliva had been highly successful profitwise thanks to a unique blockbuster antibiotic it had developed, Azythromycin, which it marketed in collaboration with Pfizer. But the end of patent coverage did nothing good for the Croatian company's figures, and acquisitions in Germany, Poland and Russia didn't help.

A day after announcing the layoffs agreement regarding Pliva, Teva also advised the Florida statehouse that it plans to shut down its plant in the city of Doral and gradually fire all 300 workers there from June 2009 to October 2010.

Altogether in the two moves, Teva will be letting 1,090 people go.

Teva obtained the Doral plant when buying Ivax Corp. in January 2006 for $7.4 billion.