Teva said Tuesday that third-quarter revenue climbed 15 percent year-over-year to $5.6 billion, falling short of analyst expectations of $5.7 billion. The drugmaker noted that revenue was boosted by the recent acquisition of the Actavis generics business from Allergan, which added $887 million to sales. Teva posted net income of $412 million for the three-month period, up from $103 million in the same quarter of 2015.
"This has been a year of transition for Teva, underscored this quarter by the close of our strategic acquisition of Actavis generics, which had significant contribution to our results," remarked CEO Erez Vigodman.
In the quarter, sales of generic drugs jumped 32 percent to $2.9 billion, while revenue from specialty medicines slipped 6 percent to $2 billion, including a 78-percent decline in sales of Nuvigil to $21 million. Meanwhile, Teva noted that sales of Copaxone declined 2 percent year-over-year to $1.1 billion. The company said that sales of the multiple sclerosis drug in the US were flat at $874 million, while revenue outside of the country fell by 10 percent to $187 million.
Last year, Novartis and Momenta Pharmaceuticals launched a generic version of Copaxone under the name Glatopa after a US appeals court invalidated a patent covering Teva's product. Meanwhile, in August, the US Patent Office invalidated two patents covering Teva's thrice-weekly formulation of Copaxone, while the office later ruled that a third patent protecting the therapy was not valid.
Teva noted that R&D costs jumped 84 percent in the quarter to $663 million, primarily due to the $250 million paid to Regeneron Pharmaceuticals as part of a licensing deal to develop and commercialise the nerve growth factor antibody fasinumab.
For the full year, Teva indicated that it now expects sales to be in the range of $21.6 billion to $21.9 billion, down from guidance in August of $22 billion to $22.5 billion. Meanwhile, annual earnings per share are now forecast to be between $5.10 and $5.20, cut from an earlier estimate of $5.20 to $5.40. Analysts predict revenue of $22.1 billion and earnings of $5.16 per share.
Teva also disclosed that it is in advanced negotiations discussions with the US Department of Justice and the US Securities and Exchange Commission to settle potential violations of foreign corruption laws. The potential settlement, for which it has set aside $520 million, relates to conduct in Russia, Mexico and Ukraine from 2007 to 2013. The drugmaker indicated that in response to the probe it has ended "problematic" business relationships, withdrawn from some countries, fired some employees and overhauled the management of several subsidiaries.
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