Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) share price was down over 11% in premarket trading on Wall street after the company today reported results for the year and the quarter ended December 31, 2018 and provided a bleak forecast for 2019.
Teva revenue in 2018 was $18.854 billion, down 16% from 2017, mainly due to generic competition to Copaxone, a decline in US generics revenue and loss of revenue following the divestment of products and discontinuation of activities. Revenue was slightly above the analysts' expectations. Teva expects revenue to fall further to $17 - 17.4 billion in 2019 with non-GAAP EPS expected to be $2.20-2.50.
GAAP net loss in 2018 was $2.399 billion ($2.35 per share) compared with a GAAP net loss of $16.525 billion ($16.26 per share) in 2017. Non-GAAP net profit in 2018 was $2.985 billion ($2.92 per share), slightly below the analysts' expectations, compared with $4.075 billion ($4.01 per share) in 2017.
On December 31 2018, Teva's debt was $28.916 billion, compared with $32,475 billion on December 31 2017. The decrease was mainly due to senior notes and term loans repaid at maturity or prepaid with cash generated during the year.
Revenue in the fourth quarter of 2018 was $4.559 billion, slightly above the analysts' predictions down 16% compared with the fourth quarter of 2017.
GAAP net loss in the fourth quarter of 2018 was $2.940 billion ($2.85 per share) compared with a GAAP net loss of $11.6 billion ($11.41 per share) in the fourth quarter of 2017. Non-GAAP net profit in the fourth quarter of 2018 was $543 million ($0.53 per share), slightly below analysts' expectations) compared with $949 million ($0.93 per share) in the fourth quarter of 2017.
Teva president and CEO Kåre Schultz said, "2018 was the first year of our restructuring plan and we have met or exceeded all of our key financial targets for the year. The full year yielded a cost base reduction of $2.2 billion, exceeding our 2018 target, and we are well on track to deliver the total $3.0 billion reduction in 2019 as compared to the 2017 spend base. AJOVY is performing very well since its September launch in the US with growing demand for the first and only anti-CGRP treatment with both quarterly and monthly dosing for the preventive treatment of migraine in adults. We will focus our investments on growing AJOVY and continuing our success with AUSTEDO, with both franchises positioned to be important growth drivers for Teva.
He added, "Looking ahead, we continue to expect that 2019 will be the trough for our business, a year in which we will experience similar challenges to those of 2018 including the continued erosion of Copaxone in the US and Europe as well as the introduction of generics in the ProAir market. Throughout the year, we will continue to execute against our restructuring plan goals, including the optimization of our global portfolio and network, as we focus our efforts on generating cash to reduce the company's debt."
Copaxone revenue in North America in the fourth quarter of 2018 fell 44% to $356 million, as generic rivals bit into the sales of the multiple sclerosis treatment. Copaxone revenue in Europe in the fourth quarter of 2018 fell 24% to $118 million. Teva expects 2018 global Copaxone sales of $2.4 billion to fall to just $1.5 billion in 2019.
Revenue from migraine treatment Ajovy, which won FDA approval in September, was just $3 million in 2018 but is expected to grow to $150 million this year. Revenue in the US from Huntington's disease chorea treatment Austedo was $204 million in 2018 and is expected to rise to $350 million in 2019.
Published by Globes, Israel business news - en.globes.co.il - on February 13, 2019
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