Teva Pharmaceutical (TEVA) - Get Report said this morning that total third-quarter revenue grew from a year ago due to its $40.5 billion acquisition of Allergan's (AGN) - Get Report generics business, Actavis Generics, though sales of specialty medicines were down year over year. (Allergan is a holding in the Action Alerts PLUS charitable trust portfolio.)
Shares were falling roughly 3% to $39.72 in premarket trading on Tuesday.
The Israeli pharmaceutical company reported revenue that rose 15% to $5.56 billion in the most recent period, but missed the FactSet consensus of $5.71 billion.
Sales of generic medicines increased to $2.90 billion from $2.20 billion a year ago, driven by the inclusion of $887 million of the Actavis generics business. Revenue within the specialty medicines segment fell to $2.05 billion from $2.18 billion, as the unit was negatively impacted by a drop in sales within Teva's core therapeutic areas.
Research and development costs surged 84% to $663 million in the quarter, primarily due to the $250 million paid to Regeneron Pharmaceuticals (REGN) - Get Report to develop and commercialize its pain medication fasinumab.
Adjusted earnings of $1.31 per share were down from $1.35 per share a year prior. Analysts were modeling adjusted earnings of $1.28 a share.
For the full year, Teva now expects to report adjusted earnings between $5.10 and $5.20 per share on revenue between $21.6 billion and $21.9 billion. The company had previously anticipated adjusted earnings between $5.20 and $5.40 a share on revenue between $22.0 billion and $22.5 billion.
The FactSet consensus is for adjusted earnings of $5.18 a share on sales of $22.1 billion for fiscal 2016.
"In the face of the industry and company-specific challenges we have been dealing with this year, we remain excited about the future as we strive to create a platform that is unique to the industry, working every day to find the delicate balance between access and innovation and laying the foundation for Teva's continued growth," CEO Erez Vigodman said in a statement.