Teva Pharmaceutical Industries is ready to return to making acquisitions, it said on Thursday, after a year of focusing on costs under its new CEO.
The world’s largest generic drugmaker brought in turnaround specialist Erez Vigodman last February to cut costs and improve profit that had been squeezed by rising competition.
Vigodman’s focus last year was getting Teva’s house in order, he said in a conference call after reporting fourth-quarter profit that met analysts’ expectations and reaffirming its 2015 earnings forecast.
“In 2015 we are reorienting towards inorganic moves,” he said, noting that the company is interested in growth markets, hard-to-produce products, complex generics and speciality branded products. Vigodman reduced Teva’s debt by about $2 billion last year.
However, as he was speaking Teva lost a major acquisition opportunity as drugmaker Pfizer said it would buy Hospira for about $15 billion to boost its portfolio of generic injectable drugs and biosimilars, or copies of biotech drugs.
Meantime, Teva, Israel’s biggest company, plans to launch seven products in 2015 generating $400 million of new revenue and will submit four products for regulatory approval, he added.
The company posted fourth-quarter earnings of $1.31 per diluted share, excluding one-time items, down from $1.42 a year earlier. Revenue fell to $5.17 billion from $5.43 billion. The results were in line with forecasts to earn $1.31 a share on revenue of $5.16 billion, according to a poll of analysts by Thomson Reuters I/B/E/S.
Shares of Teva rose 0.8% to 222.40 shekels ($57.68) in Tel Aviv Stock Exchange trading. In New York they were performing better, up 1.7% to $57.44 mid-afternoon local time.
Global sales of its best-selling multiple sclerosis drug Copaxone, which accounts for about 20% of sales and half of profit, fell 2% to $1.1 billion.
Wells Fargo analyst Michael Faerm said it was a mixed quarter with a strong gross margin and better than expected Copaxone revenue. However, he said that weaker generics revenue outside of Europe and the United States, plus higher than expected expenses, “are of some concern and should be monitored going forward.”
Though the U.S. Supreme Court ruled in December that Teva can still benefit from patent protection for Copaxone until September 2015, the injectable drug faces competition from oral treatments as well as cheaper generics in the coming years.
Two teams are developing generic forms of Copaxone — one involving Novartis’s Sandoz unit and Momenta Pharmaceuticals, the other involving Mylan and Natco Pharma. Vigodman said on Thursday there might not be any generic Copaxone competition in 2015 but he is working on the assumption there might be.
Teva reiterated its December forecast for 2015 diluted earnings per share, excluding one-off items, of $5 to $5.30 on revenue of $19 billion to $19.4 billion.
In related news, Teva said that Phillip Frost had resigned from its board effective Wednesday. Frost became ensnared in the controversy over Teva’s poorly executive business strategy over the previous decade and the hasty departure of Vigodman’s predecessor, Jeremy Levin.
Frost served as chairman for the four years to December 2014 and as vice chairman for the previous four years.
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