Fresh from winding up its $40.5 billion acquisition of Allergan’s generics drug business, Teva Pharmaceuticals on Thursday turned in second-quarter results that beat analysts’ expectations.
- Teva wins U.S. antitrust approval for $41b Allergan purchase
- Teva sells $15 billion in senior notes to help fund Allergan deal
- Teva raises revenue estimates in second quarter
Teva posted earnings of $1.2 billion, or $1.25 a share, excluding one-time items. That was unchanged from $1.2 billion a year earlier, although earning a year ago were $1.43 per share due to a higher share count in the current quarter.
The quarterly net figure was ahead of consensus estimates of $1.18 per share given by analysts surveyed by Zacks Investment Research. Teva said its revenue grew 1% to $5 billion, $200 million more than forecasts. Teva shares were up 0.2% to 205.30 shekels ($53.68) on the Tel Aviv Stock Exchange.
The earnings results came two days after Teva completed its Allergan acquisition and a day after it announced a second purchase, Allergan’s Alda drug-distribution unit, for $500 million. The previous week, Teva raised over $20 billion in debt to help finance the deals.
CEO Erez Vigodman said on Thursday that the company would be taking a breather.
“We are focused on the integration of Actavis Generics, delivering on our operational and financial targets and on the ongoing development and commercialization of the more than 35 innovative products in our pipeline,” Vigodman said. “We plan to use our strong cash flow to pay down debt and continue to invest in attractive specialty products.”
The Allergan deal solidifies Israel-based Teva’s position as the world’s No. 1 maker of generics and marks a major milestone for a company that just three years ago was struggling with a management in disarray and the consequences of acquisitions that went sour.
Revenue from generic drugs fell 7% in the second quarter to $2.3 billion, led by a 33% drop in the United States. But Teva’s best-selling proprietary multiple sclerosis treatment, Copaxone, recorded an 8% rise in sales to $1.1 billion. Overall, specialty drug revenue rose 9%to $2.3 billion.
Copaxone, which Teva said accounts for about a fifth of its revenue and 44% of its profit, is facing competition from generics versions. Sandoz, part of Swiss drug maker Novartis AG, and Momenta Pharmaceuticals last year launched a once-daily 20 milligram version called Glatopa.
Higher Copaxone sales in the quarter were mainly due to lower sales to the U.S. Medicaid program, resulting in lower rebates as well as the impact of a 7.9% price increase in January.
The company reaffirmed it expects 2016 revenue of $22 to $22.5 billion and adjusted earnings per share of $5.20-$5.40.