Teva Expects Its First Growth Year Since 2017 — But There’s A Caveat

Teva Pharmaceutical (TEVA) expects 2023 sales to grow for the first time in six years, but its outlook comes with one notable caveat. It’s why Teva stock slipped Wednesday.


For the full year, the generic drugs maker expects $14.8 billion to $15.4 billion in sales. At the midpoint, sales would grow just 1.8%, but that follows years of declines. Still, that forecast figures that Teva and its partner Alvotech (ALVO) will launch a biosimilar knockoff of AbbVie‘s (ABBV) Humira.

The last year Teva’s sales grew was in 2017, when they increased roughly 2%. Further, the midpoint of the sales outlook for Teva was near analysts’ call for $15.19 billion. Yet the earnings outlook for $2.25-$2.55 per share was light at the midpoint. The Street projected $2.52 a share.

“Important consideration: manufacturing partner, Alvotech, needs to get through a Food and Drug Administration inspection,” Evercore ISI analyst Umer Raffat said in a note to clients. “This is what held back their biosimilar filing previously.”

In morning trading on today’s stock market, Teva stock toppled 5.7% to 10.28.

Teva Stock: Fourth-Quarter Metrics Miss

The fourth-quarter results also pockmarked Teva stock.

Sales declined 5% to $3.88 billion and were just below expectations for $3.89 billion. Adjusted earnings came in at 71 cents per share, down 7.8% and light by a penny, according to FactSet.

Generic products and Copaxone weighed on Teva’s sales. Overall, revenue from generic drugs toppled 6.2% to almost $2.28 billion. Sales of multiple sclerosis treatment Copaxone plunged more than 37% to $169 million.

Austedo continues to offer a silver lining for Teva stock investors. The drug treats tardive dyskinesia, an involuntary movement disorder. Austedo only sells in the North America unit. Sales climbed 22% to $344 million. Meanwhile, sales of migraine drug Ajovy surged 43% to $123 million.

Long-Term Growth Seen On Austedo

“Management believes ‘significant potential for long-term growth’ on Austedo’s current $1 billion — this is good to see,” Evercore’s Raffat said.

Last year, Austedo generated $963 million in sales, up 20%. This year, Teva calls for about $1.2 billion in sales from that drug. It also expects $500 million from Copaxone and another $400 million from Ajovy. Last year, Ajovy sales popped 24% to $218 million.

Teva stock has been making something of a comeback with a Relative Strength Rating of 89, according to IBD Digital. This puts shares in the top 11% of all stocks when it comes to 12-month performance.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.


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