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Teva lowers 2015 revenues' forecast
Israeli pharmaceutical giant expects fierce competition, currency fluctuations to hurt sales of generic, branded products.
Teva Pharmaceutical Industries forecast 2015 revenue below analysts' expectations, due to adverse foreign exchange moves and generic competition for its best-selling multiple sclerosis treatment Copaxone.
Teva is the world's biggest maker of generic drugs but its branded MS drug Copaxone is its most lucrative product, accounting for about 20 percent of sales and 50 percent of profit. The injectable drug faces competition from oral treatments as well as cheaper generics in coming years.
Israel-based Teva said on Thursday its 2015 forecast assumes it will face two generic competitors in the United States beginning in September 2015.
Teva Pharmaceuticals factory (Photo: EPA)
"Earlier entry by generics could reduce operating income by $30 million to $50 million per month," it said.
There are two teams developing cheaper generic forms of Copaxone: one involving Novartis AG's Sandoz Inc and Momenta Pharmaceuticals Inc and another involving Mylan Inc and Natco Pharma Ltd.
Teva forecast 2015 diluted earnings per share excluding one-time items of $5.00-$5.30 on revenue of $19.0-$19.4 billion. Analysts currently forecast EPS of $5.06 and revenue of $20.1 billion, according to Thomson Reuters I/B/E/S.
Teva is expected to earn $5.06 a share on revenue of $20.3 billion in 2014.
Foreign exchange fluctuations are expected to cut $700 million from 2015 revenue compared with 2014, while reducing operating income by $60-$70 million, it said.
Profitability of Teva's generics business is expected to grow in 2015 as the company shifts from less profitable markets and benefits from cost cuts.
It expects its generic version of AstraZeneca's Pulmicort treatment for asthma to be hit by additional generic competition in the first half of 2015.
Teva Chief Executive Erez Vigodman said he expects approval for four specialty drug products and five submissions in 2015.
Teva in February brought in turnaround specialist Vigodman to cut costs and improve the generics business, where profits have waned as competition grows and opportunities fade. Teva also said it expects to spend $1 billion to $1.2 billion on share buybacks during 2015.
