Israel-based Teva Pharmaceutical Industries Ltd., the world's largest generics drug maker, reported its third-quarter profit fell 13% as a sharp decline in its U.S. generic-drug sales weighed down overall revenue growth.
The company also lowered the top end of its forecast range for full-year earnings.
Teva Chief Executive Shlomo Yanai said the company's U.S. generics business "continued to struggle" in the third quarter because it didn't have as many big product launches as it did last year.
He also told analysts on a conference call that U.S. regulatory clearance of a new product, which he didn't identify, has been held up.[From the questions on Teva’s CC, it sounded as though some analysts initially thought the unidentified product was Lovenox; however, when an analyst asked later in the CC about Lovenox, Bill Marth merely said there was no update.]
Teva's reduced forecast for 2011 reflects its recent acquisition of Cephalon as well as the uncertainty of the timing of launching the undisclosed product. The company said it will post earnings at the low end of its new 2011 forecast range if it's unable to launch the product in the fourth quarter.
For the third quarter, Teva's profit fell to $916 million, or $1.03 a share, from $1.05 billion, or $1.15, a year earlier. Excluding items such as restructuring and impairment, earnings fell to $1.25 a share from $1.30. Net sales rose 2.2% to $4.34 billion.
Analysts' mean estimates were for earnings of $1.22 a share and revenue of $4.52 billion, according to Thomson Reuters. Gross margin fell to 51.7% from 58%.
Revenue in North America, which represents 50% of the top line, fell 20%. Generic and other sales in the U.S. tumbled 48%. The current quarter lacked significant new launches such as last year's rollout of generic versions of Pfizer Inc.'s antidepressant Effexor XR.
The company hopes the U.S. generics business picks up with the recent launch of a generic version of Eli Lilly & Co.'s Zyprexa antipsychotic.
Third-quarter sales in Europe, however, surged 34%, or grew 24% in local currencies.
Teva also reported a 26% increase in sales of multiple-sclerosis drug Copaxone, to $1 billion[of which $752M was in the US (#msg-68583537)]. Copaxone is the leading edge of Teva's expansion into branded, patent-protected drugs.
However, its plans to bring a new MS treatment to market, the experimental drug laquinimod, are on hold. Teva said Wednesday it has decided it would premature to file for U.S. regulatory approval of the drug at this time, after consulting with the Food and Drug Administration. A study of the drug released in the summer had disappointing results.
For the full year 2011, Teva now sees earnings of $4.92 to $5.02 a share, on sales between $18.3 billion and $18.6 billion, compared with its previous forecast of $4.90 to $5.20 a share on sales of $18.5 billion to $19 billion.‹
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