- Israel-based Teva Pharmaceuticals on Monday reported lower first quarter revenue as U.S. sales of generics drugs dropped sharply by 32%, compared to a year ago. Net income, however, increased due to lower expenses.
- Specialty drugs have come to represent a larger share of Teva's revenues, although that trend will reverse if the company's $40.5 billion acquisition of Allergan's generics business clears U.S. regulatory authorities. Teva continues to expect the deal to close in June.
- Overall, global generics revenues declined by 17% while sales of specialty drugs notched a 10% year over year gain.
U.S. generics sales were hurt by the loss of exclusivity for esomeprazole (generic Nexium) and budesonide (generic Pulmicort), which triggered a $427 million drop in sales.
Teva's portfolio of specialty drugs helped offset some of those losses, with double-digit revenue gains in both the U.S. and globally. The multiple sclerosis drug Copaxone is the main bread winner from Teva in this segment. Almost half of the first quarter revenue from specialty drugs came from Copaxone, which has a roughly 30% share of total prescriptions in the U.S.
Although the European Commission has approved Teva's deal for Allergan's generics business, the U.S. Federal Trade Commission is still reviewing the details of the acquisition. The FTC's ongoing review has pushed back the expected close date into June, after Teva initially expected the deal to be completed in the first quarter.
"We are excited to be in the final stages of completing the acquisition of Actavis Generics, which will enable us to further realize the enormous potential in the growing global generics universe," said TEVA CEO Erez Vigodman.
Teva agreed to certain divestitures to get the deal past European regulators and may be forced to do the same in the U.S. If the deal closes as expected, Teva would further cement its position as the leading generics company globally.