TEL AVIV (TheStreet) -- Shares of Israel's Teva Pharmaceuticals (TEVA), the world's largest maker of generic drugs, have fallen about 5% so far this week as investors may fear that the company will lose exclusivity to sell its multiple-sclerosis drug, Copaxone, which accounts for 20% of Teva's sales and 50% of its profits.
Some shareholders may be wondering if Teva's stock will rebound. A big clue came in the company's latest earnings report.
When Teva reported its second-quarter financial results on July 31, it raised its earnings estimates for the year to $4.50 to $4.80 per share if other drug companies are able to launch generic versions of Copaxone and $4.90 to $5.10 if Copaxone maintains its exclusivity. Before, the estimates were for earnings of $4.20 to $4.54 per share with generic competition and $4.80 to $5.10 without it.
In the second quarter, Teva's sales of generic drugs rose 4.5% and the profit margin in the segment rose to 21.2% from 15.6% in the year-earlier quarter. Profit and revenue growth in the segment could partly offset stagnation in Teva's specialty-medicine segment, which had a profit margin of 52.8% in the second quarter and accounted for two-thirds of the company's total operating profit.
Overall, Teva's earnings during the second quarter rose to $1.23 per share, a penny above analysts' estimates and 3 cents higher than a year before. Revenue rose 2% to $5.05 billion.
Shares of Teva closed Thursday at $51.64. They have risen 29% so far this year, compared with a 3.3% gain for the Standard & Poor's 500 Index.