Teva's second-quarter profit drops as generic drug sales decline

Teva announced Thursday that second-quarter net income reached $254 million, down from $539 million in the year-ago period, as the company took a $572-million asset write-down mainly related to its cardiovascular drug Revascor and the recent sales suspension of the migraine patch Zecuity. Sales in the three-month period rose 1 percent year-over-year to $5 billion, topping analyst estimates of $4.9 billion.

The company noted that quarterly sales of generic drugs slipped 7 percent to $2.3 billion, led by a 33-percent decline in the US to $892 million. Teva indicated that sales were hampered by the loss of exclusivity for generic versions of Otsuka's Abilify and AstraZeneca's Nexium and Pulmicort.

Meanwhile, revenue from specialty medicines climbed 9 percent to $2.3 billion, including an 8-percent increase for Copaxone to $1.1 billion. Teva attributed the increase in specialty drug revenue to higher sales of central nervous system, respiratory, cancer and women's health products.

CEO Erez Vigodman said "we are pleased with our performance this quarter and the steps we are taking to transform our business." Earlier this week, Teva completed the $40.5-billion purchase of Allergan's global generic drugs business, Actavis Generics, whilst also agreeing to buy the company's Anda distribution business for $500 million.

"Going forward we are focused on the integration of Actavis Generics, delivering on our operational and financial targets and on the ongoing development and commercialisation of the more than 35 innovative products in our pipeline," Vigodman stated. For the full year, Teva said it anticipates per-share earnings in the range of $5.20 to $5.40, on $22 billion to $22.5 billion in revenue. Analysts estimate earnings of $5.30 per share, with sales of around $22.3 billion.

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