Teva's third-quarter profit jumped 23 percent year-over-year to $876 million, while sales were flat at $5.1 billion, broadly in line with analyst estimates, the company reported Thursday. CEO Erez Vigodman remarked "we delivered improvement in profitability in all businesses, particularly in global generics, which saw profitability increase by 40 percent."
In the quarter, sales of generic drugs slipped 2 percent to $2.4 billion, with revenue from specialty medicines climbing 5 percent to $2.2 billion. Teva noted that sales of Copaxone lifted 5 percent versus the year-ago period to $1.1 billion, with the higher dose of the multiple sclerosis therapy, which was approved by the FDA in January, now representing 55 percent of total prescriptions in the US.
"Copaxone prescription volume has proven to be resilient in the face of new competition as well as its own switch campaign," commented Canaccord Genuity analyst Corey Davis. The analyst noted that although the pace at which Teva is moving patients to the new formulation of Copaxone has slowed, the drugmaker remains "well on pace" to reach its goal of 65 percent by the end of 2014.
Meanwhile, Vigodman said that the company is "optimistic" it will prevail in a US Supreme Court case appealing a lower court ruling that invalidated a patent on the once-daily version of Copaxone. The executive indicated that a decision is expected later this year or in the first quarter of 2015. Earlier this month, Supreme Court justices expressed divergent views of the appeal, specifically regarding whether the appeals court should have deferred to a lower court's reading of the patent.
Vigodman noted that Teva is "well positioned to achieve our goals for 2014." The company said that it expects full-year earnings per share in the range of $5.00 to $5.10, lifting the lower end of the guidance from $4.90. The drugmaker added that annual sales are now forecast to be between $20 billion and $20.3 billion, narrowed from an earlier estimate of between $19.9 billion and $20.8 billion. Analysts predict earnings of $4.95 per share on revenues of $20.4 billion.
Teva also announced an increase of its share repurchase programme to $3 billion, with plans to begin repurchasing stock immediately. Commenting on the results, BMO Capital Markets analyst David Maris said "this was an excellent quarter for Teva and the increased buyback is a positive bonus. Maris added "meeting and exceeding financial goals is what will drive Teva's stock for the remainder of the year and 2015."
Earlier this month, Teva disclosed plans to discontinue R&D in areas outside its core focus of central nervous system and respiratory diseases (for related analysis, see ViewPoints: Teva sharpens focus, but stays on the sidelines). Vigodman commented "our pipeline is poised to deliver significant long-term value and we will continue the efforts to further deepen and develop it." The executive noted that the company isn’t ruling out "transformational" acquisitions, while pursuing pipeline deals and opportunities to expand in emerging markets.
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