Teva Slips Despite Solid Numbers

The big generic-drug company hits targets.
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Teva

(TEVA) - Get Report

, the world's largest generic drug maker, matched Wall Street's first-quarter estimates Tuesday.

The company also reaffirmed full-year earnings guidance that was in line with analysts' expectations.

Teva earned $259.1 million, or 38 cents a share, on revenue of $1.3 billion for the three months ended March 31. The consensus of analysts polled by Thomson First Call expected a profit of $257.6 million, or 38 cents, on revenue of $1.31 billion.

For the same period last year, Teva lost $428 million, or 72 cents a share, on revenue of $1.05 billion. However, that result was affected by a $583.6 million charge related to an acquisition. Excluding this charge and other one-time items, Teva earned $204.8 million, or 31 cents a share.

Israel Makov, the chief executive, said the quarter's results were "excellent" despite what he called "market fluctuations, such as fewer generic opportunities this year in the U.S." He anticipates a "significantly greater number of product opportunities in 2006 and beyond."

Makov reaffirmed full-year EPS guidance of $1.56 to $1.63. The Thomson First Call consensus is $1.62.

The company said that a "technical error" in an application to the Food and Drug Administration will delay FDA consideration of Agilect, a proprietary drug for treating Parkinson's disease. The FDA had been scheduled to act on the application May 4; company officials said they expect a decision within three months. They said the delay is unrelated to safety and efficacy, and they added that they have submitted data to address the error.

Agilect was launched in Israel in March, and it will be introduced to European countries later this year.

Agilect is an example of Teva's effort to expand its product arsenal beyond lower-margin generic drugs. The best example of this strategy is the multiple sclerosis drug Copaxone, whose first-quarter worldwide sales rose 23% to $256 million.

In the U.S., first-quarter Copaxone sales rose 18% to $163 million. Makov said that in March, Copaxone became the U.S. leader among MS drugs in terms of new prescriptions and total prescriptions, according to monthly figures compiled by the medical data firm IMS Health.

Teva's stock dropped 95 cents, or 3.1%, to $30.19, in early trading.