18. Teva Pharmaceutical Industries

Teva plant
Teva expects its homegrown assets Ajovy and Austedo to pull around $950 million and $300 million in 2021, respectively. (Teva Pharmaceutical)

2020 revenue:
$16.66 billion
2019 revenue:  $16.89 billion
Headquarters: Petah Tikva, Israel

Teva started 2020 on much the same note it ended 2019—grappling with ongoing legal woes tied to generic price-fixing and opioid litigation. Those lawsuits were still hanging over the Israeli drugmaker's head at the start of the year, but with new drugs gaining steam, Teva managed to stay afloat despite the pandemic. 

Teva racked up $16.7 billion in 2020 revenues, narrowly missing the $16.8 billion it posted in 2019. The company attributed the shortfall to the ongoing decline of its multiple sclerosis blockbuster Copaxone, plus revenue dips from certain oncology and respiratory products. Not surprisingly, COVID-19 took a bite out of sales, too.

The pandemic wasn't all bad for Teva. The company benefited from stockpiling of its generic and over-the-counter products, which amounted to $100 million in sales during the first quarter. 

In March, Teva, Mylan and Novartis followed Bayer with pledges to supply the U.S. with hydroxychloroquine, the now debunked COVID-19 treatment. Teva, for its part, signed up to deliver 16 million doses to hospitals around the country.

By April, Teva reported a significant increase in demand for its azithromycin blister packs and 30-count bottles. At the time, the antibiotic was being touted by then-President Donald Trump, in combination with the antimalarial hydroxychloroquine, as a possible "game changer" in COVID-19.

Teva didn't make the same pandemic bet that many other drugmakers did in 2020, instead choosing to focus on expansion plans for two of its homegrown assets. With its cost-cutting spree in the rearview mirror, Teva homed in on its migraine med Ajovy and its Huntington's therapy Austedo as potential sales drivers for the year. In February the company forecast 2020 sales for the drugs at $250 million and $650 million, respectively. 

Ajovy's star began to rise in January when the FDA cleared an autoinjector to deliver the drug, helping to level the playing field against Amgen's rival Aimovig and Eli Lilly's competitor Emgality. With that device approval in hand, Teva reported a whopping 50% jump in North American Ajovy sales in the second quarter.

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Altogether, Teva's migraine med generated $183 million in 2020, below the company's consensus-busting estimates. Sales could hit $300 million in 2021, Teva predicted in its full-year earnings statement.

Austedo pulled in $638 million for the full year, barely missing Teva's revenue projection. The drug could reach sales of $950 million in 2021, edging it ever closer to blockbuster territory. However, Teva's plans to expand the drug suffered a setback last February after Austedo flunked a phase 2/3 and a separate phase 3 study in pediatric patients with Tourette syndrome. 

Beyond that pair of assets, Teva laid plans for the U.S. launch of three of its so-called Digihalers in 2020, including its Pro-Air Digihaler for rescue treatment and the AirDuo Digihaler for combination maintenance, as well its more recently approved ArmonAir Digihaler monotherapy maintenance treatment. 

The company launched the Pro-Air device in July, while AirDuo and ArmonAir rolled out stateside in September. The company will need those cutting-edge smart inhalers to ward off generic competition, too. After a series of misses, Catalent and Perrigo in February scored FDA approvals for their copycat version of Teva's tricky-to-make ProAir HFA inhaler for chronic obstructive pulmonary disease and asthma.

Meanwhile, the company's legal troubles continued in 2020, even as the company banked on COVID-19 to buy it some time.

Last January Teva agreed to pay $54 million to settle a years-old whistleblower lawsuit that alleged it paid doctors as speaker consultants at "sham" events to prescribe its multiple sclerosis med Copaxone and its Parkinson's disease drug Azilect. 

That wasn't the only legal Sword of Damocles hanging over its head as Teva flipped the calendar on a new year. In November, Teva and a group of generic drugmakers were reportedly working on a deal to end a year-long federal price-fixing probe. Prosecutors had already picked up a guilty plea from a Novartis exec and were allegedly targeting senior leaders at Teva, too. 

And a month before that, Teva sought to close thousands of opioid lawsuits when it offered a settlement that would include $250 million in cash payments and $23 billion in buprenorphine naloxone, an opioid addiction treatment. But the deal received pushback from state attorneys general and failed to muster buy-in from local plaintiffs. 

RELATED: Teva's long-acting schizophrenia drug hits goal in phase 3

Teva was granted some relief in March when a bellwether New York opioid trial in which it was a defendant was indefinitely postponed due to COVID-19. By May, the drugmaker had reportedly bailed on settlement talks in the unrelated and ongoing price-fixing probe, banking on its role in the U.S. pandemic response to provide some wiggle room. 

Teva's gamble didn't pay off, and it now finds itself facing conspiracy charges and, potentially, a bigger penalty in the future. Federal prosecutors in August charged Teva with conspiring to fix prices for multiple generic medicines between 2013 and 2015—part of an industrywide scheme to overcharge consumers by more than $350 million, the U.S. Department of Justice (DOJ) said at the time. 

In September, Teva CEO Kåre Schultz joined former Celgene chief Mark Alles and Bristol Myers helmsman Giovanni Caforio to testify before the House's oversight committee on pricing and competition in the drug industry. Around the same time, the House committee unveiled a 55-page report exposing Teva's history of price hikes for Copaxone, its efforts to fight potential pricing reform and its designs to fend off competition. 

After launching Copaxone in 1997, Teva raised the drug's price 27 times to nearly $70,000 per year, the congressional report found. To put that into perspective, a patient on Medicare in 2019 would have paid median annual out-of-pocket costs of $6,672, despite the launch of a Mylan generic in the fall of 2017.

That wasn't the end of Teva's legal woes in 2020. In October, the U.S. Federal Circuit Court of Appeals overturned a 2017 decision, putting Teva back on the hook to pay GlaxoSmithKline $235 million for infringing patent rights for the heart med Coreg.

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Teva launched its Coreg copycat all the way back in 2007, and for years, it was forced to market the drug for just two out of Coreg’s three approved indications. But in 2011, the FDA told Teva to add the branded product's third use—congestive heart failure—to its generic label. The problem, according to GSK, was that its patent for congestive heart failure didn’t expire until 2015, and it alleged Teva pressed doctors to prescribe the drug in congestive heart failure before the expiration. Teva denies that allegation. 

The decision raised flags about the continued use of so-called "skinny labels"—a common generic carve-out of a branded drug’s off-patent indications. “This decision dramatically changes the risk exposure for generic manufacturers that have a drug on the market with a skinny label," a team from the Wilson Elser Moskowitz Edelman & Dicker law firm wrote in a National Law Review in December 2020. "The Federal Circuit has paved the way for a potential finding of induced infringement against every skinny-label drug."

The legal back and forth is now tentatively back in Teva's favor after the company, joined by eight other generic drug makers, filed amicus briefs in February asking for the full Federal Circuit Court to review the decision. The court agreed to. 

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2019 signaled the end of Teva's $3 billion slimdown, but the company also took steps to trim the fat in 2020. Over the summer, Takeda and Teva's Japanese joint venture agreed to offload the bulk of its generics portfolio and a manufacturing site to Nichi-Iko Pharmaceutical in a bid to refine its focus on a smaller core of specialty drugs and targeted generics.

Meanwhile, Teva in August said it would cut 350 positions at its active pharmaceuticals ingredient (API) plant in Neot-Havav, Israel, as part of a "global optimization plan" to streamline site operations through February 2022.

18. Teva Pharmaceutical Industries