Teva’s Profit and Revenue Decline, Weak Results in North America

Israeli pharmaceutical company Teva, the world’s leading manufacturer of generic drugs, reported on Thursday a decline in profit and revenue in the first quarter, with weak results in the North American region being a significant burden.

Teva’s earnings per share, excluding one-time items, fell by 11.3 percent in the first quarter to 94 cents per share. Revenue dropped by 10 percent to $5.1 billion.

At the same time, sales revenue from the key branded multiple sclerosis drug Copaxone, which has faced generic competition since last year, plummeted by 40 percent in the North American region. Additionally, Teva’s total revenue from the sale of generic drugs in that region fell by 23 percent.

>>>Teva announced the departure of three board members

– The year 2018 has started solidly. Our restructuring program is progressing well, and we are on track to achieve our target of reducing costs by $1.5 billion this year and by $3 billion by the end of 2019, stated CEO Kare Schultz in a press release.

The restructuring announced at the end of last year involves linking the business of generic and specialty drugs, laying off more than a quarter of the workforce, and closing or selling 10 factories.

Since the acquisition of Allergan’s generic drug business Actavis for $40.5 billion, Teva has also been burdened by high debt, which has been reduced from $35 billion to $30.8 billion at the end of March.

>>>Warren Buffett’s investment fund bought a stake in Teva

They also calculated that their business would be boosted by a new migraine drug, but U.S. regulators are concerned about the manufacturing process, which is likely to put the Israeli company at a disadvantage in the race for the new drug compared to competitors Amgen and Eli Lilly, Reuters notes.

Their forecast for adjusted annual earnings per share in 2018 has been raised to $2.4 to $2.65 per share, compared to the previously forecasted $2.25 to $2.5 per share.

They have also raised their revenue forecast to $18.5 to $19 billion, compared to the previously forecasted $18.3 to $18.8 billion.