Teva Pharmaceutical meets forecasts, but 2023 outlook disappoints
JERUSALEM, Feb 8 (Reuters) - Teva Pharmaceutical Industries (TEVA.TA), the world's largest generic drugmaker, met fourth-quarter profit estimates, but its shares fell after its forecast of a largely flat year in 2023 disappointed investors.
For 2023, Teva forecast adjusted earnings per share of $2.25-$2.55 and revenue of $14.8-$15.4 billion, compared with adjusted EPS of $2.52 and revenue of $14.9 billion in 2022. Analysts had expected non-GAAP EPS of $2.52 and revenue of $15.2 billion.
As a result, Teva's New York-listed shares were down 6.1% to $10.23 at midday, but remained up 12% so far in 2023.
Richard Francis, who took over as chief executive officer at the start of the year, told analysts on a conference call that its pipeline of biosimilars, as well as its branded drugs Austedo and Ajovy and complex generics, makes it poised for growth.
"I do believe in the biosimilar opportunity in the market and I think it's significant," Francis said on Wednesday, noting he expects Teva to launch a biosimilar of arthritis treatment Humira in July, pending U.S. regulatory approval.
Biosimilars are complex molecules cultivated inside living cells, making it impossible to manufacture exact copies, as is the case with conventional pharmaceuticals made from chemical compounds.
Israel-based Teva was also reviewing its strategy, which would likely be announced later this year, he said.
"It's quite simple. The goal of the strategy is growth - long-term, consistent growth and increased margins as well, and subsequently increases in shareholder value," Francis later told Reuters.
The company is trying to bounce back from a rough few years in which it lost exclusivity to its blockbuster multiple sclerosis drug Copaxone, had to cope with a drop in generic prices in the United States and fought a spate of lawsuits alleging the company helped fuel the U.S. opioid epidemic.
In the October-December period, Teva said it earned 71 cents per diluted share excluding one-time items, in line with analysts' forecasts, down from 77 cents a share a year earlier. Hurt by a stronger dollar, revenue fell 5% to $3.89 billion compared with estimates of $3.93 billion, according to I/B/E/S data from Refinitiv.
Its net debt fell to $18.4 billion from $20.9 billion at the end of 2021 and from $34 billion in 2017.
Debt has hindered Teva's ability to make mergers and acquisitions, but Francis said this won't be the case forever and deals could still be made that are "less capital intensive. We need to pursue those".
North American sales of generic products fell 10% in the fourth quarter but the group's branded Huntington's disease treatment Austedo gained 22% to $344 million, while migraine product Ajovy rose 41% to $75 million.
Teva expects Austedo sales to reach $1.2 billion in 2023, up from $971 last year, and Ajovy to grow to $400 million from $377 million.
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