UPDATE: Teva Reports 3Q Growth; Expects Further Growth
02 Novembre 2010 - 4:03PM
Dow Jones News
Teva Pharmaceutical Industries Ltd. (TEVA) reported strong
profit and revenue growth, driven by sales of flagship multiple
sclerosis drug Copaxone and its generic operations, especially in
North America.
Teva also said the integration of its $5 billion acquisition of
German generic-drug company Ratiopharm is proceeding well and will
begin boosting profits in the first quarter of next year.
"We are confident that we'll be able to achieve our objective of
$400 million in synergies," Chief Executive Shlomo Yanai said
Tuesday. "We are already seeing synergies."
The Israeli manufacturer dominates the generic-drug industry, as
the branded pharmaceutical sector is under pressure from looming
patent expirations in coming years. The company's earnings beat
analyst expectations, while revenue was below projections.
"Revenue came in light but was offset by stronger-than-expected
gross margin that was likely boosted by several recent exclusive
launches," Goldman Sachs analyst Randall Stanicky said. Adjusted
gross margin rose to 62.5% from 58.2% a year ago.
American depositary shares of Teva recently gained 11 cents to
$51.35.
Teva reported third-quarter earnings rose 62% to $1.1 billion,
or $1.15 a share. Excluding items, earnings per share were $1.30,
beating analyst expectations of $1.27, as measured by Thomson
Reuters.
Sales rose 20% to $4.25 billion, despite a $122 million hit as
some European currencies weakened against the dollar. Analysts
projected sales of $4.37 billion.
In the latest quarter, Teva's sales in North America rose 22% to
$2.72 billion, accounting for 64% of total sales during the
quarter. Generic sales in the region rose 34% to $1.6 billion,
driven by the July 1 launch of a generic version of Pfizer Inc.'s
(PFE) antidepressant Effexor. Teva has six months of exclusivity in
selling the product.
In branded sales, global in-market Copaxone sales rose 4% in the
second quarter to $808 million. Global sales of neurological
treatment Azilect rose 28% to $81 million.
The company is developing a new formulation of Copaxone that
will require lower-volume injections. After discussions with the
U.S. Food and Drug Administration, the company determined that
clinical data will be required to establish the drug's
effectiveness. It submitted the data and said the FDA may reset its
Jan. 1 decision deadline in order to review the information.
"I wouldn't be shocked if it took them more time to look at this
data," William Marth, head of Teva's Americas division, said on a
conference call.
The company is currently battling challenges from other generic
companies to make a copycat version of Copaxone. A trial on the
issue isn't likely until 2012.
The drug also is facing an increasingly competitive MS market,
but company officials said they continue to expect revenue growth
for Copaxone in 2011.
Teva said it recently met with the FDA about its effort to sell
a generic version of Sanofi-Aventis SA's (SAN.FR, SNY) blood
thinner Lovenox. The agency confirmed that Teva's product
demonstrates "chemical sameness" and data about its immune response
are under review. The company didn't provide a timeline for a
decision.
"I'd be deeply disappointed if we didn't get the approval this
year," Marth said, noting the uncertainty of the situation.
In July, the company said the FDA decision on its application
could be just a month away. That was shortly after the agency
approved a version developed by Momenta Pharmaceuticals Inc. (MNTA)
and Novartis AG's (NOVN.VX, NVS) generic drug unit Sandoz,
following years of review.
Looking forward, Teva, backed its expectations for 2010 adjusted
earnings of $4.50 to $4.60 a share, compared with analysts'
expectations of $4.50 a share, according to Thomson Reuters.
The earnings will be reduced by 3 cents a share from the
Ratiopharm deal, but the company expects the acquisition to begin
boosting profits in the first quarter of next year. The company's
previous guidance didn't include the Ratiopharm deal, which closed
in August.
The company expects 2010 revenue of $16.4 billion, in line with
Wall Street expectations.
Teva declared a quarterly dividend of 0.70 shekel a share, or
about 19.3 cents.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com
-By Sten Stovall, Dow Jones Newswires; +44 207 842 9292;
sten.stovall@dowjones.com
(Steve McGrath contributed to this story)