Over the weekend, Teva revealed plans to finalize its $4.35 billion national opioid settlement by the end of the year and start paying up in 2023, possibly under the helm of a new CEO as Kåre Schultz added he will not renew his CEO contract come November 2023.
During a conference in Tel Aviv, Schultz went over the company’s goals for 2027 and the company’s progress since he took on the CEO role in 2017. He noted “optimization of the business,” which includes shutting production sites to cut expenses. So far, the company has shut down 27 of its 80 production sites, a number that will continue to grow by another 10, Schultz said according to Globes, an Israeli business newspaper. 53 production sites remain currently.
As for the opioid settlement, the CEO “wasn’t aware of how powerful” the legal issues were when he took the job in 2017. The company hopes to finalize its multi-billion-dollar settlement in the U.S. by the end of the month, Schultz said, according to Reuters.
Teva plans to pay the $4.35 billion settlement over 13 years. The company will pay between $300 million and $400 million of the total in the form of medicines, the news service noted.
Schultz also said he is unlikely to extend his employment contract, which will expire on Nov. 1, 2023 but that he would like to remain on the company’s board. Schultz will be 62 when his current contract runs out.
When Teva first revealed its huge opioid settlement in July, the company said it planned to return to growth by 2027. The deal was contingent on AbbVie’s Allergan reaching its own opioid litigation settlement.
In 2016, Teva paid around $40 billion for Allergan’s generics business, which included generic opioids. Allergan since claimed that the deal shifted the opioid liabilities to Teva, which Teva disputed.
For its part, Allergan agreed to fork over more than $2 billion to resolve its own opioid lawsuits.