TEL AVIV (Reuters) - Israel’s heavily indebted Teva Pharmaceutical Industries (TEVA.TA) raised its financial outlook for 2018 on Thursday after reporting a smaller than expected drop in first-quarter net profit and revenue.
Teva also said that while it does not expect to receive approval for its migraine treatment fremanezumab by mid-June, as had been hoped, it does foresee the key drug gaining approval in time for launch before the end of 2018 — which would be sooner than a 2019 launch projected by some analysts.
It expects an FDA pre-approval inspection at its manufacturing partner Celltrion (068270.KS) to take place in the coming months.
Teva’s struggles are similar to those of other major generic drugmakers facing price erosion, increased competition and a consolidated customer base, particularly in the United States.
The world’s largest generic drugmaker had been counting on its branded migraine treatment to haul it out of the doldrums. However, U.S. regulatory concerns about the manufacturing process are likely to put Teva behind two of its rivals — Amgen (AMGN.O) and Eli Lilly (LLY.N) — in the race to market for a new migraine treatment.
“Whether it will be us or Lilly who is second or third I think is probably going to be a close race. It’s hard to say right now,” Teva CEO Kare Schultz told Reuters.
But this will have no major impact on pricing and fremanezumab will likely have a list price of around $10,000 a year, similar to competitors, he said.
The three products have similar efficacy but fremanezumab could be more convenient for some patients, Schultz said.
“We do have one key benefit and that is the fact that our product will most likely be approved for one quarterly injection,” he said on a call with analysts.
Teva also plans to have a monthly version of fremanezumab.
It expects to also market at a later stage pens for self-injection but Schultz could not say when.
Teva earned 94 cents per share excluding one-off items in the first three months of the year, down from $1.06 a year ago. Revenue fell 10 percent to $5.1 billion.
Analysts had forecast Teva (TEVA.N) would earn 67 cents a share excluding one-offs on revenue of $4.8 billion, according to Thomson Reuters I/B/E/S.
“The beat was mainly driven by strong branded performance,” Leerink analyst Ami Fadia said in a note.
For the full year it raised its outlook for adjusted earnings per share (EPS) to $2.40-$2.65 from $2.25-$2.50. Revenue expectations were raised to between $18.5 billion and $19 billion, up from $18.3 billion to $18.8 billion. Analysts have forecast EPS of $2.47 on revenue of $18.7 billion.
First-quarter sales of its branded multiple sclerosis drug Copaxone, which opened up to generic competition last year, fell 40 percent in North America, where its total generic product sales declined by 23 percent.
Teva expects full-year Copaxone sales of $1.8 billion. In the U.S. generics market, Teva is seeing some stabilization of prices after they dropped in 2017, Schultz said.
In late 2017 Teva announced a restructuring to combine its generic and speciality medicine businesses, cut more than a quarter of its workforce and announced the closure or sale of 10 of its factories.
While Teva plans to stop making certain generic drugs, Schultz said the company was working with customers to ensure there are no shortages. Many are products that have been on the market for a while and have multiple suppliers.
The moves are designed to strip out $3 billion of costs by the end of 2019. Last year’s costs stood at about $16.1 billion.
Teva had been saddled with about $35 billion in debt since acquiring Allergan’s (AGN.N) Actavis generic drug business for $40.5 billion in 2016. Gross debt stood at $30.8 billion as of March 31.
Schultz ruled out an equity offering.
Teva’s New York-listed shares, which fell by 50 percent last year while the INDXX global generics and new pharma index .IGNRXT gained 17.5 percent, were up 1.1 percent at $18.80.
Additional reporting by Ari Rabinovitch; Editing by David Goodman and Adrian Croft