Teva Shares Drop After Profit, Forecast Miss Estimates
Teva Shares Drop, Fourth-Quarter Profit Misses Estimates
Ahikam Seri/Bloomberg
The headquarters of Teva Pharmaceutical Industries Ltd. in Petah Tikva, Israel.
The headquarters of Teva Pharmaceutical Industries Ltd. in Petah Tikva, Israel. Photographer: Ahikam Seri/Bloomberg
Teva Pharmaceutical Industries Ltd. fell the most in more than six months in New York trading after the Israeli drugmaker’s fourth-quarter earnings and forecast for this year missed analysts’ estimates.
Earnings this year will be $4.90 to $5.20 a share, Chief Executive Officer Shlomo Yanai told analysts on a conference call, less than the $5.29 average of 23 estimates compiled by Bloomberg. The Petah Tikva, Israel-based company reported profit for the quarter of $1.25 a share, missing the average estimate of $1.28 a share from 21 analysts surveyed in the past month.
Earnings excluding some costs climbed to $1.14 billion from $847 million a year earlier, driven by sales of the Copaxone multiple sclerosis medicine. Teva raised the price of the drug by 10 percent twice last year and increased it 15 percent last month. About 21 percent of Teva’s sales for the quarter came from the injectable drug, which faces new competition after U.S. authorities approved the first MS pill, Novartis AG’s Gilenya, in September.
“Everything was weak outside of Copaxone,” said Gilad Alper, a Tel Aviv-based analyst for Meitav Ltd. who rates the shares “market perform.” The forecast “will disappoint the market,” he said.
Teva’s American depositary receipts, each representing one ordinary share, fell $2.96, or 5.4 percent, to $52.02 at 4 p.m. New York time in Nasdaq Stock Market composite trading.
Generic-Drug Sales
The world’s biggest maker of copied drugs, Teva reported a 5 percent decline in U.S. generic-drug sales to $1.29 billion. This may be viewed as “serious” by investors, Alper said.
Teva predicted “continuous profitable growth” this year. The company sees more uncertainty in the U.S. generic-drug market than in any other market because delaying the introduction of a single product may have a significant impact on sales, Yanai said during a press conference in Tel Aviv.
“We gave a range, and we were inside that range,” Yanai said of expectations for earnings. “The idea that we should be accurate within a hair’s breadth is exaggerated.”
Sales rose 16 percent to $4.42 billion, missing the average analyst estimate of $4.65 billion. A stronger dollar compared with European currencies cut sales by about $140 million, reducing operating income by about $51 million.
Ratiopharm Purchase
Boosted by the acquisition in March of Germany’s Ratiopharm GmbH, sales in Europe rose 43 percent to $1.3 billion, while revenue in North America increased 7 percent to $2.49 billion. Manufacturing problems at an Irvine, California, plant cost the company about $170 million in operating profit, Chief Financial Officer Eyal Desheh said on the conference call.
The company’s reported profit doesn’t meet generally accepted accounting principles because it excludes costs linked to acquisitions such as the Ratiopharm deal. On a net income basis, Teva earned $771 million in the quarter, more than double the $379 million in the year-ago period.
A strong shekel hurt Teva’s European sales, Desheh said in the press conference.
Copaxone revenue increased 26 percent in the quarter to $938 million.
Copaxone sales were “amazing,” said Natali Gotlieb, a Tel Aviv-based analyst for Israel Brokerage & Investments who has a “buy” rating on the shares. “Maybe they want to squeeze the lemon, to gain as much as they can before any other competition will arise for Copaxone.”
The most recent Copaxone price increase in January is likely to drive earnings this year, Gotlieb said. Copaxone has gone from being the cheapest in its category of MS drugs to the most expensive, she said, though it remains less costly than the Novartis pill Gilenya and Tysabri, a treatment by Biogen Idec Inc. and Elan Corp. often used to treat people with more severe forms of the neurological disease.
To contact the reporters on this story: Naomi Kresge in Frankfurt at nkresge@bloomberg.net; Jonathan Ferziger in Tel Aviv at jferziger@bloomberg.net
To contact the editors responsible for this story: Phil Serafino at pserafino@bloomberg.net; Andrew J. Barden at barden@bloomberg.net
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