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Teva Pharmaceutical Posts 6 Percent Rise in Third-Quarter Profit, Revenue

Posted on: Tuesday, 8 November 2005, 18:00 CST

By Linda Loyd, The Philadelphia Inquirer

Nov. 9--Teva Pharmaceutical Industries Ltd., one of the world's largest generic drug makers, reported yesterday a 6 percent increase in both third-quarter profit and revenue, boosted by sales of its Copaxone multiple sclerosis treatment and higher European sales.

Teva, which has its North American headquarters in North Wales, said net income rose to $267.1 million, or 40 cents a share, from $251.5 million, or 37 cents a share in the same quarter last year. Revenue rose 6 percent to $1.32 billion.

Analysts had expected earnings on average of 38 cents a share on sales of $1.29 billion, according Thomson Financial.

The quarter saw "strong performances from all of our business units, record-breaking sales of Copaxone, and the highly successful launch of fexofenadine, generic Allegra," said chief executive officer Israel Makov. "We are especially excited about our acquisition of Ivax, which is proceeding very much on track."

In July, Teva announced it was buying rival Ivax Corp., based in Miami for $7.4 billion, which would make Teva the world's biggest generic drug maker. Shareholders of both companies overwhelmingly approved the transaction, which is expected to close later this year or early next year.

Teva employs 1,035 in the Philadelphia area at its North Wales headquarters and at a manufacturing plant in Sellersville.

Although 2005 has been a lean year for the launch of new U.S. generic medicines because fewer big brand-name drugs lost patent exclusivity, Teva was helped by higher sales of Copaxone and higher overall pharmaceutical sales in Canada. Those sales partially offset lower U.S. generic sales, which slipped to $707.5 million from $718.6 million in the same quarter last year.

Global sales of Copaxone increased 27 percent over a year ago to $307 million, and U.S. sales increased 27 percent to $206 million in the third quarter. According to IMS Health Inc., which tracks prescription trends, Copaxone continued to lead the U.S. market for multiple sclerosis drugs in both total and new prescriptions.

Standard & Poor's equity analyst Phillip Seligman said in a note to clients that Teva is "poised for large earnings gains starting in 2006." In September, Teva and Barr Pharmaceuticals Inc. announced they would begin selling a generic form of Sanofi-Aventis SA's Allegra allergy tablets without waiting for approval from a U.S. court.

Teva now has a 71 percent share of the generic Allegra prescriptions, said analyst Corey Davis, of J.P. Morgan Securities Inc.

Teva has 145 drug applications pending with the Food and Drug Administration, representing $97 billion in brand-name drug sales. The company said it is the first to file with FDA on 39 of these products. Companies which are the first to file for a generic version can win an exclusive 180-day period to sell their product before other competitors can enter the market with even lower-priced versions.

Teva's board on Monday declared a cash dividend for the third quarter of 0.30 shekel, or 6 cents based on the exchange rate, per American Depositary Receipt, to be paid on Nov. 30.

Among the drugs Teva is preparing to copy are versions of a popular antidepressant made by Wyeth. In June, Teva can begin selling a generic form of Effexor, and in July 2010 it can sell a version of the extended-release Effexor XR, under terms of a settled patent lawsuit.

Wyeth said in a Securities and Exchange Commission filing last week that it would allow Teva to sell generic Effexor in return for a share of Teva's profits. Effexor sales were $115 million last year.

Seligman of S&P said in a note yesterday that he is encouraged by Teva's expanding product pipeline, and "revenue synergies" from buying Sicor Inc. in 2004. He sees as other positives for Teva the Medicare drug benefit, pending expiration of more big drug patents, and the purchase of Ivax.

Shares of the Israel-based company closed up 64 cents, or 1.67 percent, to $38.99.

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TEVA, IVX, RX, SNY, SAN, JPM, WYE, SCRI,

Source: The Philadelphia Inquirer

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