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Teva Reports First Quarter 2014 Results

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) today reported results for the quarter ended March 31, 2014.

“We are pleased with the quarter’s results. Patients benefitted from several significant generic and specialty medicine launches, most notably our Copaxone ® 40mg in the U.S. Our global generics business delivered increased profitability, and our U.S. generics revenues were up 17% year-over-year,” stated Erez Vigodman, President and CEO of Teva.

Mr. Vigodman continued, “We are intensely focused on solidifying the foundation of Teva, maintaining the Copaxone ® franchise, driving sustainable organic growth, and positioning Teva for long-term value creation. During 2014, we will deliver significant savings as part of our cost reduction program, accelerate the transformation of our operations network, strengthen our global leadership in generics and continue to increase confidence in Teva.”

 

Generic Medicine Segment

 
  Generics
Three Months Ended March 31,   Percentage Change
2014   2013 2014 - 2013
U.S.$ in millions / % of Segment Revenues
   
Revenues $ 2,398 100 % $ 2,328 100 % 3 %
Gross Profit 1,042 43 % 951 41 % 10 %
R&D Expenses 124 5 % 108 5 % 15 %
S&M Expenses 419 17 % 461 20 % (9 %)
Segment Profitability* 499 21 % 382 16 % 31 %

 

* Segment profitability consists of gross profit, less S&M and R&D expenses related to the segment.Segment profitability does not include G&A expenses, amortization and certain other items.We recently changed the classification of certain of our products. The data presented have beenconformed to reflect the revised classification for all periods.

Generic medicine revenues in the first quarter of 2014 amounted to $2.4 billion (including API sales of $179 million), an increase of 3% compared to $2.3 billion in the first quarter of 2013. In local currency terms, sales increased 4%.

Generic revenues consisted of:

  • U.S. revenues of $1.0 billion, an increase of 17% compared to the first quarter of 2013. The increase resulted mainly from the exclusive launch of capecitabine (Xeloda ®), the launch of tolterodine tartrate (Detrol ®) and higher sales of budesonide inhalation (Pulmicort ®) as well as products that were sold in 2014 and not sold in the first quarter of 2013, the largest of which were niacin ER (Niaspan ®) and tobramycin (Tobi ®). These increases were partially offset by declines in other products due to loss of exclusivity or additional competition, the most significant of which were amphetamine salts (Adderall ®), fenofibrate (Tricor ®) and clonidine patch (Catapres TTS ®).
  • European revenues of $818 million, a decrease of 4%, or 7% in local currency terms, compared to the first quarter of 2013. The decrease in revenues was due to lower sales of API to third parties and of generic medicine in certain markets, as we pursue our strategy of profitable and sustainable business in the region, and take a selective approach to the tender market. Results in central and eastern Europe were affected by the mild winter season.
  • ROW revenues of $532 million, a decrease of 9%, but an increase of 1% in local currency terms, compared to the first quarter of 2013. The increase in local currency terms was driven by higher sales in Latin America and Canada, largely offset by a decline in Russia, which was affected by the mild winter season. Our ROW markets were impacted significantly by the weakening of various local currencies compared to the U.S. dollar.

API sales to third parties in the first quarter of 2014 amounted to $179 million, a decrease of 7% in both dollar and local currency terms, compared to the first quarter of 2013. The decrease resulted from production issues and management changes in our API organization.

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