Teva Pharmaceutical's Sales Slump 18%

By Donato Paolo Mancini

The world's largest maker of generic drugs, Teva Pharmaceutical Industries Ltd., is struggling to get healthy.

Teva posted an 18% decline in second-quarter sales on Thursday, with continued weakness in some of the Israeli company's most important drug categories.

Generic-drug sales in North America fell again, and are down 34% since their recent peak in late 2016. Teva said such sales fell to $947 million in the April through June period, the sixth straight quarter of decline. The U.S. market represents 90% of such sales.

Chief Executive Kåre Schultz also said in an interview that the market-share erosion of the company's blockbuster multiple-sclerosis drug Copaxone wasn't over. "When a product goes off-patent you never recover," he said.

Copaxone enjoyed a roughly 30% market share a year ago. That fell to less than 20% in the second quarter of this year. Teva forecasts not only fewer Copaxone sales, but also that competition from generic rivals will force it to cut the price of its drug.

The company's American depositary receipts fell sharply in New York, trading 9.3% lower after the company stuck to a full-year target of $18.5 billion to $19 billion in sales. Analysts had bet the sales forecast would improve. "The expectations were that they would give a much higher guidance," Bernstein Research analyst Ronny Gal said.

Mr. Schultz became CEO last year, as U.S. generic-drug prices were plummeting and Teva faced increased competition for some of its most popular drugs. Late last year, he announced plans to cut $3 billion in costs by shedding 25% of the company's work force, or about 14,000 employees, and closfactories and research centers.

The scale of the challenge became clear in February, when Teva shocked investors with a weak outlook for 2018. It also took a $17 billion charge against the value of its U.S. generics business.

Mr. Schultz said Thursday that the turnaround plan was on track. The company said it had cut $1.1 billion in costs and would reach a mid-term goal of $1.5 billion in lower costs by year-end. Tension over the job cuts in Israel, where the company plans to shed 1,700 of 6,800 positions, has eased, he said.

Teva's recovery is still being held back by a small delay in getting regulators in the U.S to approve its experimental migraine drug, fremanezumab. The company has been counting on the drug to boost sales. Teva once hoped to get the regulator's clearance to start sales in June. Mr. Schultz said U.S. approval is now likely to come in September, followed by Europe next year.

"The way we recover is Ajovy," Mr. Schultz said, using the brand name for fremanezumab.

(END) Dow Jones Newswires

August 02, 2018 13:01 ET (17:01 GMT)

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