Teva Q3 profit, revenue top estimates
Day after its chief executive ousted by board, Israeli drug maker reports flat earnings that beat analysts' estimates by a cent. Market sees MA Industries CEO Erez Vigodman as front runner for CEO position
Teva, the world's largest generic drug maker and Israel's biggest company, earned $1.27 per share excluding one-time items in the third quarter, compared with $1.28 a year earlier while adjusted net income was unchanged at $1.1 billion. Revenue edged up 2% to $5.1 billion.
Teva was forecast to earn $1.26 a share excluding items on revenue of $5 billion, according to Thomson Reuters I/B/E/S.
Global sales of its best-selling multiple sclerosis drug Copaxone, which account for about 20% of sales and 50% of profit, rose 1% to $1.05 billion. The injectable drug faces competition from oral treatments as well as cheaper generics in the coming years.
Teva on Wednesday said CEO Jeremy Levin was leaving and that Chief Financial Officer Eyal Desheh would stand in on an interim basis effective immediately.
Levin took the helm of Teva in May 2012, promising to reshape the company by developing its own medicines amid increasing competition in the generics market, and to divest businesses in non-core areas.
Though the company said Levin resigned, he told Israel's Channel 10 on Wednesday night he did not want to leave Teva.
Earlier this month, Teva said it would cut 5,000 jobs – 10% of its workforce – accelerating a cost-cutting plan as it prepares for lower-priced competition to Copaxone.
'Teva not a takeover candidate'
Phillip Frost, Teva's Florida-based chairman and biggest shareholder, said Levin and the board had different views on the best way to carry out the company's strategy.
"Our board and leadership team are fully committed to the implementation of Teva's strategy, including the development of new compounds, making strategic acquisitions, forming joint ventures and planned acceleration of the company's cost reduction program," Desheh said.
Israeli market players and the media have touted Erez Vigodman, CEO of Israel's MA Industries, the world's biggest maker of generic crop protection products, as the front-runner to replace Levin.
Levin's predecessor at Teva, Shlomo Yanai, had been CEO of MA before moving to Teva and was replaced by Vigodman. Under Vigodman, control of MA was sold to China National Chemical Corp in 2011.
"They will take Vigodman to dismantle Teva," said Ori Hershkovitz, managing partner at Sphera Global Healthcare Fund. "But they need to downsize before they can sell it."
Frost said on Wednesday that Teva was not seeking to be bought when asked whether it might be an acquisition target.
Jason Kolbert, managing director at Maxim Group, said he did not believe Teva was a takeover candidate.
"Teva is a generic powerhouse. It doesn't make sense for the company to break up," he said.
Kolbert said the only way to turn Teva around post-Copaxone was with another high-margin product, which he believes Teva has in a treatment developed by Mesoblast.
Teva, Mesoblast's development and commercial partner, on Wednesday received clearance from the US Food and Drug Administration to conduct advanced clinical trials in patients with chronic congestive heart failure.
Teva's US sales rose 4% in the quarter to $2.7 billion due to six generic product launches as well as an increase in its specialty medicines business.
Teva declared a quarterly dividend of NIS 1.15 (33 cents) a share, unchanged from the previous two quarters.
