Teva announced Thursday that third-quarter sales rose 2 percent versus the year-ago period to $5.1 billion, beating analysts' estimates of $5 billion, boosted by increased revenue from generic medicines in the US. Eyal Desheh, who was appointed interim CEO following the resignation of Jeremy Levin, remarked that "during the quarter we had six successful generic product launches in the US alone, and are pleased that our generic business continues to benefit from a long-term, sustainable and profitable growth." Net income for the quarter reached $711 million, compared to a loss of $79 million in the same period of 2012.
Leader & Co. analyst Sabina Podval remarked "at this point all eyes are on management changes and what that means for the future of the company." Teva said Wednesday that its board of directors has formed a committee to search for a permanent successor to Levin, who reportedly stepped down following differences with chairman Phillip Frost (for related analysis, see ViewPoints: Could departure of Teva's Levin come at a worse time?). Some analysts have raised concerns that the rift between Levin and Frost may make it hard for Teva to find a suitable candidate for a new CEO. However, board member Amir Elstein suggested that Desheh may get the job.
In the quarter, sales of generic drugs were flat year-over-year at $2.5 billion, which included a 6-percent rise in US revenue to $1.1 billion, due in part to launches of generic versions of AbbVie's Niaspan and Merck & Co.'s Temodar. Meanwhile, European generic drug revenues fell 1 percent to $812 million, and sales in the rest of the world decreased 11 percent year-over-year to $533 million, due primarily to foreign currency effects, mainly in Japan and certain Latin American markets, which were partially offset by higher sales in Russia.
For the three-month period, sales of specialty drugs climbed 3 percent year-over-year to $2.1 billion. This included a 3-percent increase in US sales to $1.5 billion, as European revenues rose by 12 percent to $426 million. Sales in the rest of the world fell 17 percent to $144 million. The increase in specialty medicines was primarily due to higher sales of women’s health, oncology and respiratory medicines, as well as Azilect, which increased 21 percent year-over-year to $93 million, partially offset by lower revenues from Nuvigul, which fell 7 percent to $87 million, and Provigil, which dropped 58 percent to $22 million.
The company noted that sales of Copaxone in the quarter rose 1 percent to $1.1 billion, lifted by price increases in the US, where revenue increased 3 percent to $798 million. Analysts expect revenue from the injectable multiple sclerosis therapy, which makes up about 20 percent of Teva's sales and around 50 percent of profit, to fall over the next five years as patients move to oral drugs. Copaxone also faces potential generic competition as early as next year following a US court decision in July (for related analysis, see Physician Views Poll Results – Generic Copaxone may struggle to gain market share in light of Teva's new formulation and oral switching trends). Podval commented "the fact that they are so dependent on Copaxone to hit the mark on earnings as the rest of the business struggles makes it scary. What happens the day after the drug goes generic?" Meanwhile, Treanda revenues increased 15 percent to $184 million in the quarter.
For the full year, Teva said that sales will be between $19.7 billion and $20.3 billion, revised from an earlier estimate of 19.5 billion to $20.5 billion. In addition, earnings are predicted to be in the range of $4.95 per share to $5.05 per share, narrowed from a previous prediction of $4.85 per share to $5.15 per share. Analysts expect the company to report revenues of $20.1 billion, with earnings per share of $5.00.
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