Teva’s copycat meds have been in the spotlight this week, with the Israeli drugmaker finally sealing its $40.5 billion deal for Allergan’s generics unit. But it was the blockbuster Copaxone franchise that helped Q2 sales come in ahead of expectations.
Thursday, the Petah Tikvah-based company announced revenues of $5.04 billion that beat out Wall Street’s $4.92 billion expectations--and it had the multiple sclerosis med to thank. Despite generic competition from Novartis' Sandoz, Copaxone generated $1.14 billion for the quarter to top forecasts of $1 billion. A January price increase of 7.9%--as well as lower sales through Medicaid, leading to lower rebates--spurred its performance, Credit Suisse analyst Vamil Divan wrote in a note to clients.
Non-GAAP EPS checked in at $1.25, a shade above analysts’ $1.21 predictions.
Generics outside the U.S. and Europe also topped estimates by about $213 million to reach $742 million, offsetting a “weakness” in U.S. generics that came from a lack of new launches, Evercore ISI analyst Umer Raffat wrote in a research note.
Teva, though, can expect more launches going forward now that it’s swallowed the generics portfolio of Allergan, one of its main competitors. After a year of antitrust delays, FTC-mandated selloffs and investor fretting, the pair got the job done Tuesday.
It followed up the next day with an agreement to buy out Allergan’s Anda distribution business for $500, which has a strong focus on generics.
But Teva isn’t not planning on walking away from the dealmaking table. As execs told investors on the quarterly conference call, the Allergan close will give the company more than $25 billion of free cash flow through 2019--$5 million of which will be for dividend distribution. The rest, though will be set aside for paying down debt and pursuing “attractive” specialty deals, they noted.
“The strategy and vision” for the company are “much broader” than just generics, CEO Erez Vigodman told Bloomberg earlier this week. And while the deal delays have meant that 2016 hasn’t been an “easy year” for Teva so far, “we are ready to go now,” he said.
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