(Adds 2008, 2009 outlook, more comments)
By Steven Scheer and Tova Cohen
TEL AVIV Feb 12 Teva Pharmaceutical Industries
Ltd TEVA.O (TEVA.TA) reported a more than 20 percent rise in
quarterly net profit to beat expectations on Tuesday and saw
forecast-beating growth in sales and profit in 2008 and 2009.
Teva's results in 2007 were boosted mainly by strong sales
of its generic drugs.
Copaxone, Teva's branded treatment for multiple sclerosis,
posted sales growth of 15 percent in the fourth quarter although
it was largely flat from the prior three months, leading
analysts to believe the drug's growth rate may have peaked.
Still, Copaxone in 2007 became the U.S. leader for treating
MS, overtaking Biogen's Idec Inc's (BIIB.O) Avonex, and Teva
officials expect it to reach No. 1 globally this year.
"As we see the numbers of market share for competitors we
believe that in 2008 we will also become the global leader,"
President and Chief Executive Shlomo Yanai told a news
Israel-based Teva, the world's largest generic drugmaker,
posted fourth-quarter net profit of $570 million, or 69 cents
per share, compared with $460 million, or 56 cents per share, a
Sales for the quarter rose to a record $2.576 billion from
$2.28 billion a year earlier.
Analysts on average expected the company to earn 67 cents
per share on revenue of $2.486 billion, according to Reuters
Its shares were up 0.5 percent in afternoon trading in Tel
Aviv, paring losses of more than 2 percent earlier in the day.
The Nasdaq shares were flat at $46.82.
After posting record revenues of $9.41 billion in 2007, Teva
forecast 2008 revenues of $10.75 billion and adjusted EPS of
between $2.60 and $2.75. Yanai told a conference call that he
expects adjusted EPS to exceed $3.00 in 2009.
Teva had been forecast to post revenues of $10.41 billion in
2008, EPS of $2.73 and EPS excluding items of $2.67, according
to Reuters Estimates. It earned a diluted $2.38 in 2007.
Yanai said the company's outlook includes a planned increase
in research and development costs but does not include any
significant acquisitions the company may make.
"Acquisitions are an important part of our strategy but they
are opportunistic," he said. "There will be acquisitions."
Yisca Erez, an analyst at the Clal Finance Batucha
brokerage, said that on the surface, Teva recorded solid results
in beating revenue and profit expectations in the quarter.
"But if you look deeper we have a few disappointments
especially with Copaxone and with gross profit margins," she
wrote in a report.
Teva recorded a gross profit margin of 52.3 percent in the
fourth quarter, below an expected 53 percent.
Erez and other analysts said Teva's bottom line was further
helped by a lower tax rate in the fourth quarter.
Copaxone sales reached $436 million globally, up 15 percent
from the fourth quarter of 2006 but a bit below the $441 million
made in the third quarter.
"Copaxone is starting to lose its strength in the United
States," Erez said, citing growing competition from Biogen and
Elan Corp's ELN.I Tysabri.
Teva said quarterly sales benefited from the launch of a
generic version of Wyeth's WYE.N Protonix heartburn drug.
"In less then five weeks since its launch our share is 68
percent (of new U.S. prescriptions)," Yanai said.
Teva shipped supplies of generic Protonix from Dec. 21 but
agreed to halt shipments three days under a standstill agreement
with Wyeth in order to negotiate a possible settlement. Teva has
said it had no plans to resume shipments of the copycat drug.
Yanai said this decision was based only on commercial
considerations, not legal. He said that most of the sales of
generic Protonix would be recorded in 2008 but some had been
accounted for in 2007.
The company declared a cash dividend of 0.45 shekel per
share, or 12.4 cents, to be paid on March 6.
Teva noted that as of Feb. 7, it had 160 product
applications awaiting U.S. Food and Drug Administration
approval, in which branded sales a year are about $100 billion.
Teva believes it is the first to file on 49 of the drugs and
said it expects to continue receiving an average of 12 FDA
approvals a year. It added that it has 3,166 applications
pending approval in 30 European countries, providing "the
opportunity to continue its rapid expansion in this region."
(Additional reporting by Yinka Adegoke in New York; Editing by
Quentin Bryar/Elaine Hardcastle)