Teva Shares Rise as Investors Greet Progress in Turnaround

By Denise Roland

Teva Pharmaceutical Industries Ltd swung to a loss in the third quarter as it continued to battle intensifying competition, but raised its full-year guidance as efforts to turn around the world's largest generic drugmaker progress.

The Israeli company, whose drugs account for one in seven prescriptions in the U.S., is being hammered on several fronts. It's grappling with weaker prices for generics in America and lower-price rivals hurting sales of its branded treatments, while also trying to reduce its huge debt pile.

In response, new Chief Executive Kåre Schultz has moved swiftly to cut costs by laying off more than a quarter of Teva's workforce, about 14,000 employees, and shut factories and research centers.

However, such efforts couldn't stop the company on Thursday reporting a net loss of $273 million for the three months ending Sept. 30, compared with a $530 million profit in the same period last year. Revenue fell 19% to $4.5 billion.

Nevertheless, investors welcomed the earnings -- which beat forecasts on some measures -- and the company's brightened outlook. It now expected adjusted full-year earnings a share of $2.80 to $2.95, compared with earlier guidance of $2.55 to $2.80. It also affirmed its revenue guidance of up to $19 billion.

Teva traded up more than 6% after the release.

Mr. Schultz said he was "very satisfied" with the company's progress and that it was on track to meet its cost-savings goal. He wants to cut $3 billion from the company's $16 billion cost base by the end of 2019.

However, the results also underscore the challenge facing the company.

Teva said revenue at its generic-drugs business fell 25% to $922 million, its seventh straight quarterly decline. Generic drug prices are being hurt because of a wave of consolidation among pharmacy chains and a higher number of copycat drugs on the market.

It also said its smaller brand-name drug arm is struggling as cut-price rivals eat into sales of its best-selling multiple sclerosis treatment Copaxone. North American sales of Copaxone fell 43% to $463 million in the quarter.

And, the company still has $29.5 billion of debt -- accrued through an acquisition spree under former CEO Erez Vigodman -- albeit down from $35 billion a year ago.

Teva is counting on new drug launches to boost sales and earnings, but it has also suffered a setback here. Its recently-approved migraine prevention drug Ajovy last month lost out to rivals for a coveted spot on the preferred drug list of Express Scripts Holding Co., one of the largest prescription drug managers in the U.S. Nevertheless, Mr. Schultz said there were positive signs since the drug launched four week ago.

Write to Denise Roland at Denise.Roland@wsj.com

(END) Dow Jones Newswires

November 01, 2018 10:04 ET (14:04 GMT)

Teva Pharmaceutical Indu... (NYSE:TEVA)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024