The deceleration Teva Pharmaceuticals’ (NYSE:TEVA) revenues should not worry investors. The company continues to face product selling pressure as generics for Copaxone take its market share. At close to its yearly lows, what will it take for Teva to rebound on the stock market?
Teva reported Copaxone sales falling 56% Y/Y, to $208 million. The Generics unit also faced an 11% Y/Y revenue drop, to $966 million. For the first quarter, Teva lost $105 million, or $0.10 a share.
Teva forecast revenue of $17 billion - $17.4 billion in 2019. Non-GAAP EPS will be in the range of $2.20 - $2.50. The $3 billion cost base reduction, a two-year plan, is a key deliverable. The company ended the quarter with $26.7 billion. It needs to work through the debt reduction to align the asset size against the slowing business.
Teva already reduced its spending to $2.5 billion over the last four quarters (compared to 2017), to $13.8 billion. By cutting 10,400 staff since the start of the restructuring plan, Teva will start to show free cash flow growth in the years ahead.
Catalysts
Ajovy prescriptions continue to grow, with Q1/2019 net sales at $20 million. Expect growth in the 8% range quarterly. But for Teva stock to recover, the company needs to offset the ongoing decline in Copaxone sales. That will take some time to happen.
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