You could say Teva investors are pleasantly surprised. The embattled drugmaker’s shares soared 8% in premarket trading Thursday after it unexpectedly raised guidance for the year—a sign that the restructuring and cost-cutting plans laid out in November were working.
And then there’s Copaxone, the blockbuster multiple sclerosis drug facing new competition—and about to come up against long-acting generics. Teva surprised the Street there by managing to hold onto market share.
So, though Teva reported a 10% revenue decline to $5.1 billion, it handily beat analyst estimates of $4.8 billion. Earnings per share came in at 94 cents, far ahead of the consensus 67 cents. It bumped up revenue guidance to $18.5 billion and $19 billion, versus its previous $18.3 billion to $18.8 billion. And it bumped up EPS guidance to $2.40 to 2.65, from $2.25 to 2.50.
The company has embarked on an ambitious plan to cut 14,000 jobs and shutter manufacturing plants, targeting $3 billion in cost savings by the end of next year. Teva is on track to meet that goal, said president and CEO Kåre Schultz.
Generic competition to Copaxone in the U.S. pushed North American sales of that product down 40% to $476 million, but worldwide sales came in at $645 million, about $50 million ahead of what analysts had expected. Competitors haven’t yet stolen volume share from Teva, Schultz said during a conference call with analysts Thursday. And he’s optimistic Teva can hang onto its share despite looming competition from Novartis’s Sandoz unit, which won FDA approval for its copycat of the newest Copaxone, a longer-acting 40mg version, in February.
“We have roughly 85% of the volume in 40mg and we maintain a very high level of access,” he said. But the tradeoff has been on price: The competition forced Teva to offer payer rebates, he explained. “My thinking is we will of course see some further pressure on pricing,” with Sandoz entering the market, Shultz said, “and probably also marginal pressure on the volume for the rest of the year.”
For Teva to fully succeed with its turnaround, it will have to continue to innovate on the branded side of the business, so it was no surprise that much of the earnings call focused on the delayed FDA approval of its migraine drug, fremanezumab. Despite the positive news that Teva now expects its manufacturing partner, Celltrion, to resolve the FDA’s concerns in time for an approval and launch by the end of this year, analysts on the call raised questions about how Teva will compete with the likes of Amgen, Eli Lilly and Allergan—all of which are working on similar products.
Schultz acknowledged during the call that fremanezumab could very well be one of three in-class products hitting the market this year, all of which have similar efficacy. But Teva anticipates being able to offer its product as both a monthly and quarterly injection. “We proved in our clinical trials that [the quarterly dose] is exactly the same efficacy as if you take it once a month. So we think everybody who wants a more convenient way of treating their migraine and achieve the same clinical outcome” will choose fremanezumab, he said.
Meanwhile, Teva continues its ongoing efforts to optimize its generics portfolio. Schultz said during the call that Teva is working with its key customers to adjust pricing and discontinue some low-margin products, while at the same time focusing on new launches that have the potential to boost profitability. Sales in the U.S. generics business fell 23% year-over-year to $1.1 billion during the quarter, driving the company’s worldwide generics sales down 6.5% to $2.6 billion.
Teva had previously forecast $4 billion in U.S. generics sales for the full year, and Schultz said during the earnings call that the company is on track to meet that goal. “We think we have a very strong starting point for stabilizing and expanding profitability in our U.S. generics business,” he said.
When one analyst expressed worries that Teva might struggle to get out of certain contracts with its generics buyers, Schultz responded that the company has no choice. Buyer consolidation forced suppliers like Teva to accept lower and lower prices—a cycle that’s not sustainable, he said. Any company that accepts that “race to the bottom on price” will destroy profitability, he said. “The only way to get out of that negative spiral is, of course, to stop it.”
By Arlene Weintraub
Source: Fierce Pharma
As inflation, high interest rates and a tight investment environment continue to create headaches, 72% of CFOs said economic volatility poses the same or greater risk to their business this year compared to 2023 in a recent survey from BDO — and there are more changes afoot.
McMullen, who’s also currently president of Agilent, is set to abdicate both roles on May 1, according to an announcement the company put out Wednesday afternoon. From there, McMullen will spend a few months serving as an advisor to Agilent and to his successor until his retirement becomes final on Oct. 31.
AstraZeneca has concluded its acquisition of China-based clinical-stage biopharmaceutical company Gracell Biotechnologies for $1.2bn. The acquisition, initially agreed in December 2023, positions Gracell as a wholly owned AstraZeneca subsidiary with operations continuing in the US and China.