Teva Pharm sees growth in two main branded drugs in otherwise flat 2021

JERUSALEM (Reuters) - Teva Pharmaceutical Industries on Wednesday said growth this year would be driven by expected sales growth in its two main branded drugs but overall the prospects for 2021 were flat versus 2020.

FILE PHOTO: The logo of Teva Pharmaceutical Industries is seen during a news conference hold by its CEO, Kare Schultz, to discuss the company's 2019 outlooks in Tel Aviv, Israel February 19, 2019. REUTERS/Amir Cohen

This outlook fell short of market expectations, sending shares in the world’s largest generic drugmaker down 9% in morning trade in New York.

“We see a very stable business with gradually improving margins year by year,” Chief Executive Kåre Schultz told Reuters. “We are optimistic that we will have low to mid single digit growth over the coming years.”

Sales growth this year is expected to come from branded drugs Huntington’s disease treatment Austedo and migraine product Ajovy, which together are expected to reach about $1.2 billion, up from $821 million in 2020.

But sales of multiple sclerosis drug Copaxone are expected to drop by $300 million this year to $1.05 billion due to continued competition.

Schultz said Ajovy sales had been disappointing, but last year were held back by patients not seeing doctors as often. Once the pandemic is overcome, he expects a market share of one-third, versus 24% currently.

Teva’s biosimilar Truxima, a treatment for Non-Hodgkin’s Lymphoma, grew to a 24% market share from 6% last year and Schultz expects it to continue to grow.

The company -- which plans to close or divest 11 of its 61 global production sites -- earned 68 cents per diluted share excluding one-time items in the October-December quarter, up from 62 cents a share a year earlier. Revenue was largely unchanged at $4.45 billion.

Analysts had forecast Teva would earn 63 cents a share ex-items on revenue of $4.37 billion, according to I/B/E/S data from Refinitiv.

Revenue in local currency terms fell 1% due to lower revenue from U.S. distribution business Anda, as well as at its multiple sclerosis drug Copaxone and certain oncology products. This was offset by higher sales of U.S. generics drugs, Huntington’s disease treatment Austedo and migraine product Ajovy.

Teva said its North America business showed higher demand for products related to treatment of COVID-19 and its symptoms.

Austedo sales rose 36% to $185 million in the fourth quarter, while sales of Ajovy gained 42% to $36 million. Copaxone, which faces stiff generic competition, fell 19% to $213 million.

Teva projected 2021 adjusted EPS of $2.50-$2.70 and revenue of $16.4-$16.8 billion, compared with adjusted EPS of $2.57 and revenue of $16.7 billion in 2020. Analysts were expecting EPS of $2.64 and revenue of $16.8 billion.

Teva’s net debt fell to $23.7 billion at end 2020 from $24.9 billion a year earlier. Teva expects to pay down another $3.2 billion in 2021.

Schultz also expressed hope that the company would resolve litigation in the United States, one concerning opioid drugs and the other price fixing charges filed by the Department of Justice. He said timing was unclear since “the legal system is not moving in the U.S.”

Reporting by Steven Scheer; editing by Ari Rabinovitch, Jason Neely and Jane Merriman