Teva takes $215M hit from currency effects, but CEO says business is stable otherwise

Even as Teva CEO Kåre Schultz works to usher the company through a mass of opioid litigation and a heavy debt load, he’s now facing a new challenge.  

In the third quarter, Teva said the strengthening of the U.S. dollar hit its revenues by $215 million and its income by $53 million, net of the company’s hedging efforts.  

On a conference call with analysts, Chief Financial Officer Eli Kalif said Teva generates 47% of its revenues outside of the U.S. Since the U.S. dollar has strengthened against most currencies in recent months, the company takes a hit when it translates its sales into dollars for financial reporting purposes, he added. 

Meanwhile, high levels of inflation have resulted in “significant economic volatility,” Kalif said. The company is working to mitigate these factors, but it still had to lower its guidance after the third quarter.

Teva now expects to generate $14.8 billion to $15.4 billion in 2022 revenues, down from a prior range of $15 billion to $15.6 billion. The company expects currency factors to continue to play into its business going forward, Kalif said.

Overall, Teva reported $3.95 billion in third-quarter revenues, down 8% from the same period a year ago. The company’s sales slipped 2% at constant exchange rates, which it attributed to a revenue decrease for generic products in North America plus sales decreases for branded meds Copaxone, which is facing generic pressures, as well as Bendeka and Treanda. 

Meanwhile, higher sales for tardive dyskinesia med Austedo partially offset that decline. The drug is on the ascent and tracking toward $1 billion in 2022 sales. During the third quarter, sales reached $260 million, a 30% increase year over year. 

Elsewhere, Teva’s migraine prevention drug Ajovy has been picking up market share in certain markets and reached $93 million in sales last quarter. The company projects $400 million for the drug in 2022.

Summing it all up, Schultz said that going forward, “gains on Austedo and Ajovy will be bigger than the losses in Copaxone." He noted that the business is going in the “right direction" and is "stable."

Still, Teva missed analysts' revenue estimates of $3.8 billion in the third quarter, Globes reports. Its earnings per share of $0.59 missed estimates of $0.62, according to the publication.

On the pipeline front, Teva is advancing several late-stage biosimilars to AbbVie’s mega blockbuster Humira, Johnson & Johnson’s big-selling Stelara and Roche’s eye drug Lucentis. All three could score regulatory approvals in the U.S. next year if things go according to Teva's plans. 

Separate from the company's earnings report Thursday, New York's attorney general Letitia James revealed that the drugmaker will pay the state up to $523 million as part of a larger, multibillion-dollar settlement by the drugmaker.