Teva Pharmaceutical Industries has targeted $2bn in cost savings within the next five years, its CEO has told Wall Street investors.

Jeremy Levin, who took over as chief executive in May, revealed plans to save the money over the next five years in order for it move away from simply manufacturing generic products.

Levin told investors that the company will cut up to $2bn from its expenditure by reducing research and development programmes, reviewing the way it purchases IT and raw materials and selling certain facilities.

“Teva will look like a very different company going forward,” Levin told investors.

Israeli-based Teva is a global leader in the generic market but has plans to develop into a major pharmaceutical company. Levin replaced Shlomo Yanai with the intention of boosting Teva’s revenue streams through a new approach of mergers and acquisitions.

Yet despite recently purchasing Cephalon, along with its branded drugs Provigil and Nuvigil, the company has failed to hit Levin’s revenue target of $20.8bn. Teva now expects revenue for 2012 to be between $19.5 billion and $20.5 billion.

Net revenue was up by a quarter at Teva Pharmaceutical Industries in the first three months of 2012 to more than $5.1 billion.

An increase in sales in the US and Rest of the World saw GAAP income increase to $859 million and non-GAAP net income climb to $1.30bn.

Shlomo Yanai, Teva’s President and CEO, said the company is “off to a good start”.

Teva saw net revenue for generic products increase by 12%, when compared to the same period last year, to $2.6bn and net revenue for its branded products hike by 54% to $2.1bn – mainly due to sales of Cephalon.

In the US, net revenues generated $2.8bn, an increase of 46% compared to Q1 2011, and accounted for 54% of overall sales.

Sales in the Rest of the World were up 21% to $1bn as revenues grew in the region by 23%. But net revenue dipped by 2% in Europe compared to the same quarter of last year due to austerity measures and price reductions.

“We enjoyed a quarter of strong growth for our branded products, in our US generics business, and in the developing markets Teva operates in,” commented Shlomo Yanai. “All of these served to offset weaker generics sales in Europe, which resulted primarily from the macro-economic conditions in that region.”

Merck (MSD outside the US) topped the job-cutting charts in 2011 as the industry witnessed another year of workforce reductions after a series of cost-cutting measures from a number of pharma giants.

Merck revealed plans in July to reduce its workforce by 12,000 to 13,000 following its merger in 2009 and to realign expenses with the expected reduction in revenue when Singulair loses its exclusivity in August, in an attempt to save $1.5billion.

Pfizer followed Merck after it after cut thousands of jobs after planning to close R&D plants in Sandwich, Kent, at a cost of around 2,400 jobs and in Connecticut accounting for a further 1,100 positions. An additional 500 employees in Germany and 220 in Spain have also reportedly been axed.

The world’s largest research-based pharma company aims to cut its R&D budget by $1.5 billion after realigning its investigational priorities and following the loss of exclusivity on its blockbuster drug Lipitor.

Novartis came third when wielding the axe after it revealed plans to reduce its workforce by 2,000 in an attempt to save $200 million a year. Workers were relieved of their duties at sites across Europe and reportedly in New Jersey. However, the company did invest somewhere in the region of $600 on a new R&D facility in Cambridge, Massachusetts.

Abbott Laboratories followed in fourth position after it revealed at the start of last year that it would tackle the challenging regulatory environment by cutting 1,900 employees, or 6% of its staff. Further upheaval is also expected in 2012 when the company completes its breakup of the company into one focused pharmaceutical business and one solely for medical products.

AstraZeneca completed the top-five after it shed more than 1,500 positions in the US and Europe last year as it braced itself for the expiration of patents on brands on Seroquel by reducing its American sales team by nearly a quarter. The London-based company did however increase its presence in the emerging Chinese market.

Teva Pharmaceuticals, Sanofi, Johnson & Johnson, Eisai and Bayer Healthcare completed the top-ten companies for job losses as the industry struggled to compensate for major brand patent expiries, a challenging healthcare environment and a need to align expenses with growth targets.

The President and CEO of Teva Pharmaceutical Industries Shlomo Yanai is to retire from the company in May 2012 and be replaced by the experienced Dr Jeremy Levin.

Dr Levin is a former senior executive at Bristol-Myers Squibb and has more than 25 years in the pharmaceutical industry including spells at Novartis and Cadus Pharmaceuticals.

Phillip Frost, Chairman of the Board of Directors at Teva, says Dr Levin is an “exceptionally talented business leader with a deep understanding of the opportunities and challenges of the pharmaceutical industry”.

Mr Yanai, who has been President and CEO since 1 March 2007, says he plans to move on to a new phase in his career.

During his time in the role Mr Yanai helped lead the company from a mainly generics business to a diversified pharmaceutical company with expected revenue this year of approximately $22 billion.

Teva’s board say they conducted an “extensive search process” to find Mr Yanai’s successor and opted for the “recognised strategic vision and deep knowledge of the pharmaceutical industry” of Dr Levin.

“He brings to Teva a wealth of experience and the hands-on skills required to foster the growth of a global pharmaceutical business,” said Phillip Frost. “As a business leader and as a physician, he is passionately committed to bringing effective treatments to patients, worldwide. His combination of vision, creative energy and an effective team-building management style make him an ideal choice to lead Teva into its next growth phase.”

The new President and CEO said he has watched the progress of the company for a number of years whilst working within the industry. “I have known and admired Teva for many years, not just as a global leader in generic drugs, but as an outstanding innovator in pharmaceutical development and new strategic approaches to serve patients worldwide,” he said. “Demographic trends and economic pressures in developed and emerging markets are intensifying the challenge to provide good medicines at affordable prices. Teva, with its multiple platforms in generics, branded, and OTC drugs, is in an especially good position to meet this challenge. It will be a privilege to work with the talented and dedicated people of Teva to fulfil this mission.”

Between 1,000 and 1,500 jobs are expected to be lost at Teva Pharmaceutical Industries as part of the company’s cost-cutting measures.

Reports from Israel claim the majority of the layoffs will be made in the US and Europe and mainly focused in Teva’s recently acquired Cephalon’s generic business.

The reports say that Teva is hoping to raise $500 million in synergies from its takeover with job losses expected to raise the majority of its target.

Teva has already said it is planning to cut sales, marketing and administrative expenses by $300 million, R&D by between $120 million and $150 million, and production costs by $50 million to $80 million. R&D savings would be achieved by cutting duplicate operations, the company said.

Teva has a history of job losses following takeovers of generic companies. In 2008 it bought US generic specialist Barr and reduced its workforce by 10%, reports say.

A reduction of 1,000 jobs at Cephalon would represent a loss of 27% roles before the takeover. But one company where job losses will be made, the reports say, is at Mepha, the Swiss generics manufacturer Cephalon bought last year. The company had 620 jobs prior to the acquisition.