Teva Pharmaceutical Adjusted Profit Tops Estimates
Teva Pharmaceutical Industries, the world's biggest generic drugmaker, posted adjusted quarterly profit that beat expectations as strong U.S. revenue offset lower European generic sales.
"We remain on track to reach our financial goals for the year," Jeremy Levin, who took over in May as president and CEO of Israel's largest company, said on a call with analysts.
Chief Financial Officer Eyal Desheh said an eagerly anticipated long-term plan to reshape the company would be unveiled on Dec. 11 in New York.
"We have taken a very deep look at how we spend money," he said.
Levin has said that some businesses could be divested and more emphasis placed on expanding Teva's branded drug activities.
"We have identified key assets in our R&D programme. We will increase our focus on CNS (central nervous system) and respiratory," Levin said on Thursday. "We will manage our R&D costs in a disciplined manner."
Teva owes much of its growth in recent years to several multibillion-dollar acquisitions, including last year's $6.5 billion purchase of U.S. specialty drugmaker Cephalon.
Teva earned $1.28 per share, excluding one-time items, in the third quarter, compared with $1.25 a year earlier. Revenue rose 14% to $5.0 billion. The company was forecast to earn $1.25 a share excluding items on revenue of $5.07 billion, according to Thomson Reuters I/B/E/S.
Canaccord Genuity analyst Randall Stanicky said expectations for the quarter were low.
"Teva continues to track towards its 2012 targets both on the top and bottom line in the midst of ... strategy review, which is what we believe most were looking for out of the quarter," said Stanicky, who rates the shares "buy".
Teva tightened its 2012 outlook and now expects revenue of between $20.1 and $20.7 billion and earnings per share excluding one-off items of $5.32 to $5.38. The company had previously forecast revenue of $20-$21 billion and EPS excluding items of $5.30-$5.40.
Levin, who came from Bristol-Myers Squibb, said the outlook for 2013 would be revealed no later than Dec. 11.
Including one-time items Teva lost 9 cents a share due to two significant charges: a $670 million provision for a possible loss relating to pending patent litigation and a $481 million impairment mostly related to research and development acquired from Cephalon.
U.S. sales, which comprise 52% of total sales, rose 33% to $2.6 billion driven by the inclusion of Cephalon as well as strong revenue of branded and generic medicines. The company launched nine new generic products in the quarter.
Sales rose 1% to $1.4 billion in Europe, where the inclusion of Cephalon and stronger revenue from branded drugs was offset by negative foreign currency effects and lower generic sales because of the economic downturn and healthcare reforms in key markets. These conditions increased generic penetration while lowering prices of generic medicines.
Copaxone, the leading multiple sclerosis treatment, posted a 13% rise in sales to $1.05 billion. But the drug, which is injected, faces competition from oral treatments that are either already available or expected to hit the market in coming years.
Teva declared a quarterly dividend of 1.0 shekel (25.7 cents) a share, identical to the second quarter.