Bruised but not Broken, Teva Pharmaceuticals (NYSE:TEVA) is proving that its turnaround plan is working. The generic drug giant cut costs and offset generic drug competition for Copaxone with new product launches. Value investors should once again watch Teva.
In Q3, Teva reported revenue of $4.53 billion. GAAP loss was $0.27 a share. Free cash flow was a positive $700 million. The company cut its spending base levels to $1.8 billion, partly due to divestitures and headcount reductions of 9,100 staff. Net debt fell $0.8 billion to $27.6 billion. This is a big number but Teva had debt of $31.5 billion at the end of 2017.
Teva’s pipeline is a bright spot. AJOVY will launch in 1H/2019 in EMA. It was launched in the U.S. Fasinumab, a co-development with Regeneron (NASDAQ:REGN), is undergoing long-term phase 3 trial. Teva also received FDA approval of Gx EpiPen, which has an auto-injector.
Outlook
U.S. Generics, U.S. Specialty, Canada and Anda should collectively make $9 billion in revenue for 2018. And AJOVY, a drug for helping patients prevent migraines, should also do well on the market. There are limited treatment options for migraines, so Teva’s launch to market will give it a strong lead. YTD, AJOVY Rx’s grew to 4,439 and 6,100 annualized.
Takeaway
Teva’s revenue declined in the quarter as the company sold off businesses. But cost cuts and new product launches will reinvigorate its share price.
