Why Teva’s Specialty Medicines Performance Declined in 1Q15
Highlights of Teva's 1Q15 Earnings: Raises Financial Outlook for 2015 (Part 3 of 5)
Global sales of Copaxone declined
Teva’s (TEVA) specialty medicines revenues declined 7% to $1,956 million in 1Q15. This was primarily due to a significant decline of 14% in central nervous system (or CNS) revenues. This decline was led by the lower sales of two key drugs—Copaxone declined 14% and Azilect declined 6%.
The US and international revenues of Copaxone declined 10% and 24% in 1Q15, respectively. The US decline was due to inventory issues in connection with the launch of the new version of Copaxone 40mg/mL. According to healthcare data firm IMS Health, Copaxone 40 mg/mL accounted for 66% of total US Copaxone prescriptions in 1Q15.
Copaxone revenues are expected to decline further, due to increasing competition from the launch of its generic version, called Glatopa. Glatopa is co-developed by Sandoz, a unit of Novartis (NVS) and Momenta Pharmaceuticals (MNTA).
The decline was partially offset by the following:
Respiratory revenues increased by 15%.
Women’s health revenues increased by 4%.
Oncology revenues grew ~1%.
The growth in the respiratory business reflected the growth in the sale of newer drugs such as ProAir and Qvar that grew 9% and 38%, respectively. In oncology, Teva’s key product Treanda declined 13% in 1Q15.
What does the specialty pipeline hold?
Teva intends to generate $4.5 billion of additional revenues by 2019 from new product launches, starting in 2014 in the following areas:
respiratory
CNS, including migraine
pain management
In 1Q15, Teva achieved several milestones in the specialty pipeline.
The new drug application (or NDA) for ProAir RespiClick was approved, with an expected 2Q15 launch. ProAir is the first and only breath-actuated dry-powder inhaler used to treat acute asthma symptoms. These inhalers deliver medication in the form of a powder to the lungs.
The biologic license application (or BLA) for Reslizumab IV was submitted. Reslizumab IV is used for the treatment of moderate to severe asthma.
The company received positive Phase IIb results for TEV-48125 to treat chronic and episodic migraines.
In March 2015, Teva and Auspex (ASPX) entered into a definitive merger agreement, in an all-cash transaction with a $3.2 billion enterprise value. In January 2015, Auspex received orphan designation from the FDA for its compound SD-809, which the company is investigating to treat Tourette syndrome in patients up to age 16. The company expects a 2016 launch. Orphan status is granted to a drug when it is able to treat a rare disease or condition.
As an alternative to investing directly in Teva, you might consider pharmaceutical funds such as the iShares US Healthcare ETF (IYH).
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