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14 February 2019Asia

Tough year ahead as generics take bite out of market: Teva

Israel-based Teva has predicted 2019 will be a tough year, with lower revenue and profit, as the company faces generic competition for two of its top-selling drugs.

Yesterday, February 13, Teva released its  full-year 2018 results, reporting that revenues hit $18.9 billion, compared with $22.4 billion in 2017.

The 16% decrease in revenue between 2017 and 2018 was driven by generic competition to its multiple sclerosis drug Copaxone (glatiramer acetate), a decline in revenues in Teva’s North American generics business and a loss of revenue following the divestment of products.

The patents covering Copaxone, a blockbuster brand-name drug developed by Teva, have expired or been invalidated and competitors including Mylan and Novartis have moved into the market.

Teva, which specialises in generic drugs, has predicted that its revenue will fall again in 2019, to between $17 billion and $17.4 billion.

"Looking ahead, we continue to expect that 2019 will be the trough for our business, a year in which we will experience similar challenges to those of 2018,” said Kåre Schultz, Teva’s president and CEO.

The continued generic erosion of Copaxone is predicted to cut $900 million from 2018's sales figures of $2.4 billion. Teva’s North America generics segment is also expected to experience a slight decline because of competition, but the generic maker said this will be offset by new launches.

Revenues from Teva’s branded respiratory drug ProAir (albuterol sulfate) in North America dropped, decreasing by 56% to $45 million in the fourth quarter of 2018, compared with $102 million in the fourth quarter of 2017. Year-on-year sales of ProAir fell by 21%, to $397 million.

This was mainly due to higher sales reserves recorded in the fourth quarter of 2018 in anticipation of generic competition.

Teva said that it expects “significant erosion” to ProAir revenues to continue in 2019 because of generic competition.

Looking ahead, the company will focus on increasing sales of its brand drugs Ajovy (fremanezumab), a migraine drug launched in September 2018, and Austedo (deutetrabenazine), a treatment option for chorea associated with Huntington’s disease.

“A lot of new prescribers are coming every month, and we expect to grow the prescriber base on a steady basis over the coming years. So Ajovy is very important for our future growth, and we are very optimistic about the outlook,” said Schultz in a conference call.

Sales of Ajovy, which reached  $3 million in 2018, are expected to increase to $150 million in the US, with sales in Austedo expected to increase $150 million to $350 million in 2019.

“Throughout the year, we will continue to execute against our restructuring plan goals, including the optimisation of our global portfolio and network, as we focus our efforts on generating cash to reduce the company's debt,” added Schultz.

In November last year, Teva  announced a series of organisational and leadership changes as it sought to address external pressures and internal inefficiencies.

Teva’s former generic research and development (R&D) and speciality R&D organisations were combined into one group, which has overall responsibility for all R&D activities (generic, speciality and biologics).

In 2018, Teva’s R&D expenses amounted to $1.2 billion, a decrease of 32% compared to 2017. According to the company, the decrease resulted primarily from pipeline optimisation, phase 3 studies that have ended and related headcount reductions.

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Big Pharma
28 November 2017   Israel-headquartered Teva has announced a series of organisational and leadership changes as it seeks to address external pressures and internal inefficiencies.

More on this story

Big Pharma
28 November 2017   Israel-headquartered Teva has announced a series of organisational and leadership changes as it seeks to address external pressures and internal inefficiencies.

More on this story

Big Pharma
28 November 2017   Israel-headquartered Teva has announced a series of organisational and leadership changes as it seeks to address external pressures and internal inefficiencies.