Teva Pharmaceutical Industries' Jerusalem oral solid dosage plant (OSD) is seen December 21, 2011.Ronen Zvulun/Reuters
Teva Pharmaceutical Industries Ltd., whose unsolicited $40.1-billion (U.S.) offer to buy Mylan NV was rejected this week, said first-quarter profit rose 11 per cent on lower costs and a new generic copy of an AstraZeneca PLC drug.
Profit excluding some costs rose to $1.17-billion, or $1.36 a share, from $1.05-billion, or $1.23, a year earlier, the Petach Tikva, Israel-based company said in a statement today. Analysts predicted $1.25, the average of 18 estimates compiled by Bloomberg. The company raised its profit forecast for the year.
Chief Executive Officer Erez Vigodman rattled the pharmaceutical industry last week with the Mylan bid, which would create a giant in generics with more than $27-billion in sales. With Teva's best-selling product, the multiple-sclerosis drug Copaxone, losing patent protection this year, Vigodman has accelerated cost reductions as he looks for deals to replace the revenue Teva may lose.
Mylan rejected the offer, saying it's too low and the companies have conflicting cultures. The purchase would immediately boost Teva's generics division, which had a sales drop in the second half of last year and has lost U.S. market share to lower-cost manufacturers.
Sales fell 0.4 per cent to $4.98-billion, above the average analyst estimate of $4.81-billion. Revenue from generic drugs increased 9 per cent to $2.6-billion, aided by sales of its copy of Nexium, the AstraZeneca antacid treatment. Teva in January received approval to market a generic version of the drug.
Revenue from Copaxone decreased 14 per cent in the quarter to $924-million.
Cheaper Generics Besides the potential of cheaper generics, Copaxone, an injection that brings in about half of Teva's profits, faces competition from newer oral drugs. To hold on to its market share, Teva has converted 67 per cent of U.S. patients to the patented, three-times-a-week formulation that it introduced in the first quarter last year.
The company's Tel Aviv-listed shares rose 0.4 per cent to 239.10 shekels at 1:50 p.m. in Tel Aviv. The more actively traded American depositary receipts have returned 8.6 per cent including dividends this year, trailing the 21 per cent return for the Bloomberg Europe Pharmaceutical Index.
Teva will hold an analyst conference call at 8 a.m. New York time.