Mylan may have toppled list prices on its generic Copaxone, but Teva isn’t worried. After far surpassing quarterly expectations for the multiple sclerosis blockbuster in the second quarter, the Israeli drugmaker says it’s still on track to rake in significant sales this year.
The way Brendan O'Grady, the company’s commercial head in North America, sees it, “the market has somewhat overreacted to the WAC price drop by Mylan” that took the company’s knockoff down to $1,950 from $5,000, he said on Teva’s Thursday earnings conference call. For Teva, more price competition is “not something that was completely unexpected.”
And while some analysts have predicted that Mylan’s move could pressure Teva to sink its own prices and appease clients, $600 million in sales for the second half of the year “is certainly doable, and I think $1.5 billion for the year, we’re on target for that,” O’Grady said.
That yearly sales figure is in reach thanks to a second-quarter showing from Copaxone in which the drug “meaningfully outperformed,” as Credit Suisse analyst Vamil Divan put it in a note to clients. At least for now, Copaxone has “maintained its share in the U.S. in terms of volume,” CEO Kåre Schultz said on the call.
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New neuro drug Austedo did its part, too, posting $44 million in sales to help Teva’s overall top-line tally fall in line with forecasts at $4.7 billion.
But other key Teva products didn’t fare as well. Increased competition to the drugmaker’s generic of Johnson & Johnson’s Concerta hurt sales in its copycat division, and while the pricing pressure that’s been plaguing generics makers industrywide is letting up, that fact wasn’t reflected in Teva’s second-quarter haul.
“We see a … stabilization in the pricing dynamics in the U.S., but it really has not had any major impact in the second quarter,” he said.
Going forward, to get the unit back on track, Teva will be engaging in “active portfolio selection and management,” Schultz said, meaning that “…we’ll be valuing profitability over size.”
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“We need to make sure” that Teva’s first-to-file and first-to-launch products are ones that’ll be moneymakers for the company, he said, adding that, “we won’t be going for everything.”
Analysts, though, still have their concerns about the company’s longer-term revenue outlook, despite an upcoming launch for highly anticipated migraine med fremanezumab.
Teva’s second-quarter performance “will introduce more questions around revenue outlook, high expectations will weigh on stock,” RBC Capital Markets’ Randall Stanicky predicted in his own note to clients.
In the meantime, though, Schultz assured them that Teva’s grand cost-cutting plan—meant to save $3 billion when all is said and done—is “slightly ahead of schedule.” The company saw a “significant spend base reduction of over $1 billion” between the first half of this year and last.
The company upped its earnings per share guidance, too, after beating Wall Street’s 65-cent expectations with 78 cents. The company now expects EPS to check in between $2.55 and $2.80, and improvement on the $2.40 to $2.65 range it previously put forth.