Teva swings to profit in first quarter
(API) business is on track to become a $1 billion enterprise this
year, although growth in the first quarter of this year was almost
entirely from in-house sales, reports Phil Taylor.
The Israeli company, currently jostling with Sandoz for the top slot in the global generics sector, reported a healthy 24 per cent rise in first-quarter revenues and a return to profit yesterday.
Revenues totaled $1.3 billion and were driven by a healthy 23 per cent increase in the sales of Teva's multiple sclerosis drug Copaxone (glatiramer acetate), which amounted to $256 million and made it the market leader for new and total prescriptions for MS in the US, according to the firm. Copaxone, along with other drugs such as the beta interferons, has benefited from the withdrawal of Tysabri (natalizumab), Biogen Idec's MS treatment, earlier this year
Total API sales, including internal sales to Teva's pharmaceutical businesses, reached $254 million in the first quarter, an increase of 24 per cent year-on-year. API sales to third parties were flat compared to the first quarter of 2004 at $118 million. The company's CEO, Israel Makov, told a conference call that all of the growth is attributable to internal sales, and reflects an expansion of the vertical integration of APIs into the pharmaceutical businesses of Teva.
Third-party sales were impacted by the relatively small number of new product launches in the US, he said.
Teva now claims the broadest portfolio of APIs in the industry with 200 compounds, one third of which will be launched by 2007, said Makov. It plans to expand the portfolio by 15-20 products each year.
Also contributing to the sales growth were a number of new generics, notably a version of Merck & Co's osteoporosis drug Fosamax (alendronate) that has been introduced first in the UK. Overall, Teva's pharmaceutical sales rose 27 per cent to $1.18 billion in the quarter. while the veterinary business was flat at $5.2 million.
Net profit came in at $259 million, or $0.38 per share, reversing a net loss of $428 million reported in the first quarter of 2004 caused by costs related to its acquisition of US generics house Sicor.
Teva said its growth rate has dropped somewhat compared to the 30 per cent hike in 2003 and 46 per cent last year, but Makov said this was due to a fall in the number of drugs coming off patent in the US in 2005. He suggested that the number of expirations would pick up once again in 2006, and said Teva has a major opportunity in the US with the launch of generic Pravachol (pravastatin) - the cholesterol-lowerer originated by Bristol-Myers Squibb.
