Teva's Copaxone finally succumbs to copycats, putting a drag on 2015 sales

Teva's ($TEVA) been facing generic competition for lead drug Copaxone since Novartis' ($NVS) Sandoz launched a copy of the multiple sclerosis blockbuster last June. And that competition has started taking its toll, dragging sales below expectations in 2015.

The therapy turned in $960 million last year, Teva said on Thursday, recording a 14% decline and falling short of the billion-dollar haul analysts expected to see. While the company has converted 78% of U.S. patients to a longer-lasting, patent-protected version of the drug, lower volumes still put a 9% hit on revenue there.

But it isn't just Copaxone that has suffered. In Q4, Teva's generic sales dove 9% to $2.26 billion, helping hold overall revenue down to $4.88 billion. Without the impact of foreign exchange rates, the drop was less severe, though, totaling just 1%. Non-GAAP EPS came in at $1.28

Teva is counting on some recent deals to pad those numbers in the future. In November, it unveiled a new generics joint venture with Takeda aimed at the Japanese market, and the month prior, it announced a deal for Mexican generics maker Rimsa that it said would help expand its Latin American footprint.

It also expects a major jolt once it finalizes its deal for Allergan's ($AGN) generics business, which it agreed last summer to buy for $40.5 billion. But that event may not happen as soon as the Israeli drugmaker expected, execs said in the earnings statement.

"We continue to work toward satisfying all conditions in order to complete the acquisition by the end of the first quarter of 2016; however, it is possible that closing may be slightly delayed," they noted.

Teva CEO Erez Vigodman

CEO Erez Vigodman has said that 2016 will revolve around integrating the unit, which will solidify Teva's place atop the generics playing field. Teva has internally announced the top three layers of its generics leadership team, he said at the J.P. Morgan Healthcare Conference, and it's "working very closely" with the FTC to identify the products it'll need to jettison if it wants to snag the antitrust clearance needed to seal the deal.

Next year could be a different situation, he's hinted, saying that 2017 could see the company move to the next chapter in its "grand story." That could include a hefty specialty buy, which would help fill the gaps as Copaxone wanes.

Meanwhile, on Thursday execs provided guidance for the current quarter, when they expect to rake in between $4.7 billion and $4.9 billion in sales with EPS in the $1.16 to $1.20 range.

- read Teva's release

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