Teva's revenue forecast for 2020 comes in below estimates, with Copaxone sales seen falling to $1.2 billion

Headline results for the fourth quarter:

Revenue

$4.5 billion (forecasts of $4.4 billion)

Versus $4.4 billion

Profit

$110 million

Versus loss of $2.9 billion

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"In 2019, we made great strides towards positioning Teva for renewed growth by completing our two-year restructuring plan, reducing our cost base by more than $3 billion, and reducing our net debt by more than $9 billion," remarked CEO Kåre Schultz. He added "our key growth products met major milestones in 2019, including the launch of Ajovy in Europe, continued strong growth for Austedo, and the successful launch of our first biosimilar Truxima in North America."

The Israeli drugmaker indicated that a framework for a US settlement on opioids is continuing to be examined, with Schultz saying "we are still cautiously optimistic it can happen before the New York state trial, which is meant to start in March."

Teva also disclosed that it was forced to revise its revenues for 2017 and 2018 down by $533 million and $583 million, respectively, due to an "immaterial error" in distribution figures.

Other results:

  • North America: $2.4 billion, up 6%, above forecasts of $2.1 billion, mainly due to the launch of Rituxan biosimilar Truxima, as well as higher revenues from respiratory products and Austeda, which were partly offset by lower Copaxone sales
    • Generic drug sales: $1.1 billion, up 3%, with price and volume erosion due to competition countering gains from new product launches, including Truxima
    • Copaxone: $264 million, down 26%, hit by generic competition
    • Bendeka/Treanda: $125 million, down 11%, mainly due to the 2018 launch of Eagle Pharmaceuticals' ready-to-dilute bendamustine formulation Belrapzo
    • Austedo: $136 million, up 98%, lifted by higher volumes
    • QVAR: $67 million, up 604%, with higher net price and an increase in volume bolstering sales
    • Ajovy: $25 million, up from $3 million in the prior year, with Teva noting that the migraine drug's "exit market share in the US in terms of total number of prescriptions during 2019 was 17%"
  • Europe: $1.2 billion, down 2%, as generic product launches partially offset declines in Copaxone sales and the loss of exclusivity for some oncology products
    • Generic drug sales: $871 million, up 3%, boosted by new product launches
    • Copaxone: $106 million, down 10%, primarily as a result of price cuts due to the entry of competing products
    • Respiratory products: $86 million, down 4%, hit by lower sales in the UK
  • International markets: $578 million, down 3%
    • Generic drug sales: $489 million, down 2%, due to lower sales in Japan resulting from regulatory price cuts and generic competition to off-patented products
    • Copaxone: $17 million, down 14%
  • Full-year revenue: $16.9 billion, versus $18.3 billion in the prior year
  • Full-year loss: $999 million, versus loss of $2.2 billion in the prior year

Looking ahead:

Teva expects revenue this year of between $16.6 billion and $17 billion, while earnings per share are predicted to be in the range of $2.30 to $2.55. Analysts project annual sales of $17.4 billion, with earnings of $2.49 a share.

The company anticipates global sales of Copaxone will reach approximately $1.2 billion in 2020, down from $1.5 billion last year, as a result of "continued generic erosion." However, Schultz said "in 2020, we expect to see continued growth for Ajovy, Austedo and our biosimilars." Revenue from Austedo in the US is forecast to be around $650 million, versus $412 million in 2019, while global sales of Ajovy are expected to be about $250 million, up from $96 million last year.

The CEO noted that Teva also plans to "further transform our manufacturing network," as it looks to cut more debt, and "enhance our biopharmaceutical offerings."

What analysts said:

SVB Leerink analyst Ami Fadia indicated that revenue at the end of 2019 was strong, adding "we view the top-line 2020 guidance as achievable with potential for further cost savings impacting the bottom line."

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