Teva beats Street profit forecasts by 10%

Drugmaker reports second-quarter earnings of 68 cents per share, against mean estimate of 62 cents
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Israeli drugmaker

Teva Pharmaceuticals

(Nasdaq, TASE:TEVA) beat second-quarter 2002 profit forecasts by 10%, reporting earnings of $91.9 million, up 43% from the second quarter of 2001.

Fueled by sales of proprietary multiple sclerosis treatment Copaxone and several generic drugs, Teva's earnings worked out to 68 cents per share, compared with $64.5 million, or 47 cents per share, a year earlier.

Analysts' estimates had ranged from 60 cents to 65 cents per share, with the mean estimate of 62 cents, according to Thomson First Call,

Reuters

notes.

Sales rose 11.4% from the parallel quarter to $572 million, compared with $513.6 million in the year-ago quarter.

The company's gross profit margin was 43.2%, boosted by rising prices because of the shekel's devaluation against the euro and dollar.

The Israeli drugmaker's gross spending on R&D rose 13% from the corresponding quarter of 2001, while net R&D costs rose 36%. The technical reason is that the Danish company Lundbeck stopped financing a share of R&D costs pertaining to oral Copaxone, after clinical trials in the United States proved inconclusive.

Teva's operating profit came to $111.6 million, up a steep 28% from $86.9 million in the parallel quarter.

The net received a boost from a 50% drop in financing costs against the parallel quarter to $4 million.

Cash flow from regular activities was $130 million, in line with the $273 million Teva reported for the whole year of 2001.

Copaxone, a hit in Europe

For the first six months of 2002, Teva reported sales of $1.17 billion, 11% more than in the corresponding half of 2001. It netted $177 million, up 49% from the parallel.

Drug sales in North America increased by 14% in the second quarter, mainly thanks to new generic drugs launched in the United States market. The most prominent additions were Torsemide, used to treat hypertension and oedema, and Tramadol, an analgesic.

Copaxone sales also picked up. In terms of sales to market, Copaxone - Teva's treatment for RR multiple sclerosis increased 38% in the second quarter against the parallel. European sales of Copaxone soared by about 60% to $130 million.

Altogether, North American second-quarter sales increased by 10% to $356 million, while European sales soared 29% to $141 million. But sales to the rest of the world sank by 9% to $75 million.

Sales of chemical products, including internal sales, rose 10% against the corresponding quarter. Chemical product sales to external customers dropped by $3 million against the parallel.

Teva has 62 requests in the pipeline awaiting U.S. Food and Drug Administration approvals. Fourteen of them have won tentative approval. In terms of the original drugs, the 62 generate sales exceeding $23 billion a year.

During the first half Teva received approvals for 11 products, of which 10 have been launched. It also received eight tentative approvals in that time.

Teva today announced a dividend of 9.1 cents per share. The date of record will be August 21, 2002 and the payment date will be September 5, 2002. Tax at a rate of 19% will be deducted at source, Teva said.