Teva Pharmaceutical Industries has rejected Israeli Prime Minister Benjamin Netanyahu’s request to keep the company’s manufacturing plant in Jerusalem running, Reuters reported.
The world’s largest generics drug maker said last week it aimed to cut debt by reducing its workforce by more than a quarter, or 14,000 jobs, including 1,700 in Israel, where it will close its manufacturing site in Jerusalem.
Teva has said about 320 workers would lose their jobs in Jerusalem in 2018 and 500 would be laid off in 2019 when the plant shuts.
“Unfortunately, Teva is unable to consent to the request of the prime minister and ministers and avoid the closure of the plant in Jerusalem and the company will continue in the phased closure of the plant by the end of 2019,” Chief Executive Kare Schultz said, following a meeting with Netanyahu and the ministers of finance, economy and labour.
“Without taking drastic steps in the coming weeks and months, the company will be increasingly vulnerable to potential takeover,” Schultz said.
Teva has been weighed down by $35 billion in debt it took on to acquire Allergan’s Actavis generic drug business for $40.5 billion last year, a move that coincided with tumbling US prices for generic drugs and the start of competition to Teva’s blockbuster multiple sclerosis drug Copaxone.
Schultz reiterated his commitment to maintain Teva’s headquarters in Israel.
“I am committed to maintaining a strong presence of R&D, as well as preserving most of our existing manufacturing in Israel in the future,” he said.
Under a two-year plan, Teva aims to reduce costs by $3 billion by the end of 2019, from about $16.1 billion in 2017.