Teva Hits Highest Since 2018 as 3Q Revenue Beats Estimates

Описание: Teva Pharmaceutical CEO Richard Francis speaks about 3Q earnings on Bloomberg BusinessWeek with Bloomberg's Katie Greifeld and Emily Graffeo.  He also talked about Teva's inroads in the weight loss drug market, saying that the company sees 'significant opportunity' even in a competitive space.

Teva Pharmaceuticals Inc. surged after sales of branded medications topped expectations, showing that its strategy to expand into that drug category is working. 
Total revenue last quarter of $4.48 billion beat consensus, driven by a 33% gain for a group of drugs that includes Austedo. Global sales of generics — Teva’s core business — also topped estimates. 
Teva’s US depository receipts jumped 20% Wednesday, the most since December. They had dropped 7% this year through Tuesday’s close.
The Tel Aviv, Israel-based company has pushed into branded medications that have been drivers of the company’s growth in recent years. Still, the generics business makes up the majority of Teva’s revenue. 
Sale Process
The company announced it has renewed the sale process for its active ingredients business after talks with an unnamed buyer fell through.
In an interview, Chief Executive Officer Richard Francis said that the Trump administration’s antipathy toward medicines manufactured in India and China is changing how Teva thinks about its active ingredient unit. The business, which is the second-largest raw material maker in the world, is largely concentrated outside of those countries, according to company spokesperson Kelley Dougherty.
“That allows us to, when we divest it and sell it, to get better terms,” Francis said. “The geopolitical situation has changed.”
Francis also said Teva wants to focus on finding a good buyer, since it will keep purchasing ingredients from them for many years.
Austedo, used to treat involuntary movement disorders, generated $618 million in sales, beating estimates. The company raised its full-year outlook to a range of $2.05 billion to $2.15 billion. 
Teva and the Centers for Medicare and Medicaid Services have negotiated a new price for the drug under the Inflation Reduction Act. The US government will announce the new price later this month and come into effect in 2027.
The company’s comments on price negotiations for Austedo could “shift sentiment in the stock” after investors have feared potential outcomes, Mizuho analyst Jared Holz wrote in a note to clients.
The company was anticipating high tariffs on pharmaceutical companies earlier this year, including on generics. Francis has said that manufacturing in the US would make the drugs more expensive. 
The Trump administration has since walked back its stance and said generics companies would be excluded from high levies, a welcome reprieve for Teva. President Donald Trump is looking to cut deals with other pharmaceutical companies through the TrumpRX direct-to-consumer website, which plans to extend prices in the US that are comparable to drug costs offered abroad.   


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