Despite finishing strong across both its innovative and generic businesses in 2024, Teva’s cautious approach to the new year appears to have investors spooked.
Teva on Wednesday reported that full-year 2024 revenues climbed 6% in constant currencies to $16.54 billion. The company credited much of that growth to higher generic sales around the world plus the continued strength of branded drugs Austedo, Uzedy and Ajovy.
As for 2025, Teva expects to generate sales between $16.8 billion and $17.4 billion. Austedo has been tapped to do much of the heavy lifting over the course of the year, with Teva laying out expectations for the Huntington’s and tardive dyskinesia drug to bring home sales between $1.9 billion and $2.05 billion.
Teva's 2025 adjusted earnings per share is expected to land between $2.35 and $2.65, the company revealed Wednesday. Analysts had expected adjusted EPS to come in at $2.78 for the year, according to reports.
That underwhelming profit guidance likely explains the current performance of Teva’s stock price, which plunged about 13% in the wake of the Wednesday earnings release.
Teva’s CEO Richard Francis, who’s been leading the company’s turnaround since his arrival in early 2023, helped provide some color on the guidance during a conference call with analysts.
“I do just want to point out that Uzedy does fall into the Medicare Part D redesign immediately, so we took that hit straight away on January 1,” Francis said of Teva’s long-acting schizophrenia injectable. “We still see the opportunity to drive strong growth of the product from a prescription point of view, but we have to let that play out.”
Under 2022’s Inflation Reduction Act (IRA), a redesign of the Medicare Part D prescription drug program took hold at the start of the year. Under the revised program, patients enrolled in Medicare can now choose to pay capped monthly installments rather than covering their prescription costs upfront at the pharmacy.
Meanwhile, “this IRA redesign doesn’t just touch Uzedy, it actually hits Austedo,” Francis added.
The CEO also said that declining sales of older innovative medicines, plus foreign exchange hits and heavier investments moving forward, should partially explain Teva’s guidance for the year.
“As a percentage of revenue, we are actually improving our investment in our [operating expenses], and therefore we don’t see much flow through to the [earnings],” Eli Kalif, Teva’s chief financial officer, added.
Overall, 2024 marked Teva’s second consecutive year of growth since Francis took the reins at the once-ailing generic and innovative medicines hybrid. Much of Teva’s recent success can be attributed to the company’s Pivot to Growth strategy, which is now preparing to enter its second phase in 2025.
The past two years were primarily about returning to sales growth. Now, from 2025 through 2027, Teva aims to accelerate (PDF) that momentum through a mix of innovative drug launches, biosimilars growth, generics optimization and business development activity, the company said in its earnings presentation. If all goes to plan, Teva will enter the final phase of its plan—centered on sustaining growth—in 2028.
Taking a look at the performance of Teva’s branded stars, Austedo sales climbed 36% in 2024 to nearly $1.7 billion. Meanwhile, migraine med Ajovy jumped 18% to $507 million while schizophrenia drug Uzedy pulled down $117 million for the year.
Despite Teva’s increasing focus on innovative drugs, the company’s generic and biosimilar offerings have garnered momentum as well.
Among core generics, sales grew 11% globally in 2024, which Teva’s CEO credited to improvements in launch efficiency and supply chain management. Between 2025 and 2027, Teva plans to launch seven biosimilars in the U.S. and four in Europe, Francis added.
Elsewhere, Teva also managed to return its API business to revenue growth of 3% in 2024. A year ago, Teva said it planned to divest the business.