Teva's first quarter profit hit by lower Provigil, generic drug sales

Teva's first-quarter profit fell 27 percent year-over-year to $626 million as generic drug revenue declined and sales of Provigil were hit by generic competition. Overall sales in the three-month period slipped 4 percent to $4.9 billion, just beating analyst estimates, with revenue from generic medicines dropping 12 percent to $2.3 billion.

The company noted that sales of generic medicines in the US plunged 27 percent versus the year-ago period to $895 million, which Teva said was mainly due to the absence of royalties related to a generic version of Pfizer's Lipitor under a deal with Ranbaxy. The drugmaker added that revenue also fell in the market as a result of "increased competition" to generic versions of Forest Laboratories' Lexapro and Shire's Adderall XR. In Europe, sales of generic drugs increased 9 percent to $873 million, boosted by higher "generic penetration in France and Italy."

CEO Jeremy Levin remarked that "during the quarter, we were pleased by the overall performance of our specialty products," although sales were flat at $2.1 billion. Three-month sales of Copaxone increased 17 percent to $1.1 billion, primarily due to volume and price increases in the US, where revenues increased 31 percent to $806 million. Meanwhile, revenue from Provigil plunged 92 percent year-over-year to $24 million as a result of generic competition that began in the second quarter of 2012.

At the end of March, Teva submitted an application to the FDA seeking clearance to dose Copaxone three times per week, instead of daily as presently. Levin said Thursday that he expects the agency to act on the filing "in the first quarter next year." The patent on Copaxone expires in 2015, and the multiple sclerosis therapy is facing new competition from oral treatments. Leerink Swann & Co. analyst Marko Kozul suggested that feedback from doctors indicates that some patients are switching from Teva's drug to Biogen Idec's Tecfidera, which was approved by the FDA in March (for related analysis, read Spotlight On: Five key facts about Biogen Idec's Tecfidera and Physician Views Poll Results – Neurologists indicate rapid uptake by year end for Biogen Idec's Tecfidera, boosted by warehousing effect and clean label).

"Over the past year, we have executed on the strategic plan which we articulated in December and with the recent addition of some key leadership appointments, we now have an organisational structure in place which supports our strategic plan," Levin remarked. The CEO previously announced plans to restructure the company, including cost reductions of up to $2 billion over the next 5 years.

Teva previously indicated that it anticipates full-year earnings of $4.85 per share to $5.15 per share on revenue between $19.5 billion and $20.5 billion.

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