Teva writes off $468m, appoints new CFO

Eli Kalif  / Photo: PR

Eli Kalif replaces Mike McClellan as Teva beat the analysts on revenue but missed on profit in the third quarter.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has announced its financial results for the third quarter of 2019 and appointed a new CFO. Teva has written off $468 million, mainly for opioid settlements.

The new CFO is Eli Kalif, who was most recently SVP, Finance at Flex Ltd. (NASDAQ: FLEX), a global technology design and manufacturing service provider with extensive operations that include 85 production sites in 30 countries. He replaces Mike McClellan who resigned to be closer to his family in the US.

Teva's revenue in the third quarter of 2019 was $4.264 billion, down 6%, or 5% in local currency terms, compared with the third quarter of 2018. The decrease was mainly due to generic competition to Copaxone, a decline in revenues from Bendeka / Treanda and other specialty products in the US, as well as a decline in revenue in Russia and Japan, partially offset by higher revenue from Austedo, Ajovy and Qvar in the US. Nevertheless, revenue was $30 million above the analysts' consensus.

GAAP net loss was $314 million in the third quarter of 2019, compared with net loss of $273 million in the third quarter of 2018. Non-GAAP net profit was $637 ($0.58 per share) compared with $694 million ($0.68 per share) in the third quarter of 2018. The decrease in non-GAAP net profit and EPS in the third quarter of 2019 is mainly due to higher tax expenses and lower operating profit, partially offset by lower finance expenses. The non-GAAP EPS was $0.01 below the analysts' consensus.

<p>Teva has narrowed its annual revenue guidance, in effect raising it, from $17-17.4 billion to $17.2-17.4 billion, and its cash flow for operations guidance from $3.8-4.2 billion to $4-4.2 billion. Its guidance for EBITDA is now $4.5-4.8 billion instead of $4.4-4.8 billion, and for earnings per share it is $2.3-2.5 instead of $2.2-2.5. Free cash flow is forecast to be $1.7 billion instead of $1.6 billion.

<p>A further positive development is that Teva unit Teva Pharmaceuticals USA, Inc., and South Korean company Celltrion Healthcare, Co., Ltd. (KRX KOSDAQ:091990) have announced that Truxima injection is the first biosimilar to Rituxan (rituximab) for the treatment of adult patients with non-Hodgkin’s Lymphoma and Chronic Lymphocytic Leukemia to be available in the US.

Teva president and CEO Kåre Schultz said, "During the third quarter, we continued to make significant progress in achieving our 2019 goals. Free cash flow was especially strong in the quarter, totaling $550 million. Our North American generics business continued its steady trend, achieving sales of $914 million, supported by 39 new product launches in the first nine months of 2019, including generic EpiPen Jr. Among our branded products, Austedo continues to demonstrate consistent growth, and Ajovy maintained its US market share and is being introduced in the EU."

He added: "We remain on track to achieve our two-year restructuring target of a $3 billion spend base reduction. Looking ahead, we are committed to driving long-term shareholder value by maximizing profits from existing core businesses, increasing sales of new brands and products, executing our biosimilar/biologics strategy, delivering manufacturing efficiencies, and generating strong free cash flow for debt repayment."

Revenue from Copaxone in the US fell 41% in the third quarter to $271 million from $463 million in the corresponding quarter of 2018. Sales of Austedo in the third quarter were $105 million compared with $62 million in the corresponding quarter and sales of Ajovy, approved by the FDA last September were $25 million.

Published by Globes, Israel business news - en.globes.co.il - on November 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019 .

Eli Kalif  / Photo: PR
Eli Kalif / Photo: PR
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