Teva shares continue to surge, climb to highest mark in more than five years on Q1 results
Teva shares continue to surge, climb to highest mark in more than five years on Q1 results
AUSTEDO continues to be Teva's main growth engine and its flagship drug, with annual growth of 67% in sales
Teva recorded revenues of $3.8 billion in the first quarter of 2024, a growth of 5% compared to the corresponding quarter and slightly above analysts' expectations. At the same time, adjusted earnings stood at 48 cents per share, slightly below market expectations. According to the full accounting rules (GAAP), Teva recorded a quarterly loss of 12 cents per share. Teva reaffirmed the annual forecast and at the same time published positive results in one of the stages of the advanced clinical trials of the drug olanzapine LAI for the treatment of schizophrenia.
Teva shares climbed by 14% on Wednesday, and are up by almost 50% since the start of the year. The latest surge gives Teva its highest market cap in more than five years.
Although Teva managed to improve the gross profit rate from 43.2% to 46.4% of the revenues, thanks to a change in the product mix and efficiency, the adjusted operating loss jumped to $218 million, against a loss of $13 million a year ago. The deepening of the loss results from an increase in marketing and sales expenses on the one hand and on the other hand, the continuation of the restructuring process. As part of the return to growth strategy, Teva increased marketing expenses by 11% to $600 million, with the main effort focused on the original drugs AUSTEDO and the new UZEDY.
Most of the write-offs and reductions recorded by Teva in the last quarter are legal costs of $106 million, most of them related to the settlement in the painkillers case, alongside a goodwill reduction of $679 million related to the reclassification of business activity. Without the accounting and non-recurring items, Teva recorded an operating profit of $892 million, which reflects an improvement compared to the corresponding period. In the bottom line, Teva recorded a loss of $139 million, which was lower than the loss of $220 million in the corresponding period. This is mainly due to a slight decrease in interest costs on the reduced debt as well as tax credits it received for past losses.
AUSTEDO continues to be Teva's main growth engine and its flagship drug, with annual sales growth of 67%. Accordingly, the company reaffirmed the forecast for annual sales of $1.5 billion in this drug alone. According to the forecast, the company's annual revenues should be in the range of $15.7-16.3 billion.
