Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) share price was down sharply today after the company published its 2011 guidance. Teva expects 2011 revenue of between $18.5-19 billion and net profit of $4.9-5.2 per share. This is lower than analysts consensus of $5.3 per share on revenue of $19 billion.
The company's share price was down 4.3% to NIS 192.10 on the TASE today, and fell 5.9% to $51.73 in morning trading on Nasdaq, giving a market cap of $46.38 billion.
Even talk of another $5 billion acquisition by president and CEO Shlomo Yanai did not boost the company. He says that another acquisition on the scale of Ratiopharm - $5 billion - is possible now that Teva has completed the integration of the German company.
At today's press conference, following the publication of Teva's financial report for the fourth quarter and full year of 2010, in which the company missed its earnings per share targets,Yanai said, "As for acquisitions, one of our possible growth engines - a third of growth - we have already completed the commercial integration of Ratiopharm's operations, which gives us the assurance to make similar moves in the future."
Yanai added, "The acquisition of Ratiopharm put us in first place in market share in the main European markets. This is an important point business-wise. Market leadership makes it possible to increase operations and consolidate them. We will achieve our vision in Europe and use it as a growth engine in the coming years."
Yanai dismissed concerns about challenges to Copaxone, Teva's treatment for multiple sclerosis. "Even with the regulatory difficulties, the product is profitable and great, but that won't last forever. Just like any product, its time will end, but it will still be with us for many more years. Some investors' concerns on this point have already evaporated when taking our results into consideration.
"Copaxone's market share for new prescriptions for which the treatment is recommended is greater than old prescriptions, which also testifies to the product's power. Copaxone is growing faster than the market. Although we raised prices, that was only in the US. Prices are only going down in our other markets. It is important to note that Teva is not the price leader; it does not set prices in the market, and it does not try to influence them. We are not the most expensive in the market, but we monitor the other prices."
Yanai also downplayed the undershooting of the analysts' earnings per share consensus for the fourth quarter, saying that the company met its targets. "Our results are above the midline of our strategic plan from January 2010. The year was used to create a springboard for meeting the target ($15 billion in annual sales by 2015)
"We will continue to do more. We don’t rest on our laurels. Bluntly, after last year, we are on the right path to reach our target, and we'll take Teva to its worthy place."
Published by Globes [online], Israel business news - www.globes-online.com - on February 8, 2011
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