Teva Pharmaceuticals (NYSE:TEVA) posted revenue growing 5%. All of its key product lines grew in the quarter. And although the company earned a small $69 million profit, its strong cash flow will let the company pay down its debt.
Teva posted generics revenue up ~5%, Anda sales up 12.4%, Austedo sales up 65%, and Ajovy revenue rose to $65 million. Generics, which accounted for $2.43 billion in sales, is no longer a headwind to the company’s performance.
Teva topped $12 last week because it reaffirmed its outlook for the year. And when the economic uncertainty is very high, management’s clarity on the future is a welcome development. The company will eventually resolve its opioid litigation and work down its debt.
In the first quarter, Teva posted free cash flow of over $550 million. It reduced its debt by $600 million to $24.3 billion.
Ajovy autoinjector launched in April 2020. Plus, the Ajovy launch in the EU, launch of Hermuza biosimilar in the U.S., and continued growth for Austedo should continue in 2020 and beyond.
Headwinds
Teva wrote down $724 million in impairment items. It faced minimal legal costs in Q1 but if opioid litigation continues, investors may grow nervous. If the COVID-19 pandemic taught the world anything, it is that courts will want to settle with the company. Time and energy are better spent working together to fight the virus than to hold Teva back.
