Pharma Stock Roundup: SNY and RHHBY's Q4 Earnings & More

The European Medicines Agency's Committee for Medicinal Products for Human Use adopted a positive opinion for AstraZeneca and Daiichi Sankyo's breast cancer treatment Datroway, according to a Friday release.

Datroway is indicated for the treatment of adult patients with unresectable or metastatic hormone receptor-positive, HER2-negative breast cancer.

The European Commission approved US investor Clayton, Dubilier & Rice's acquisition of French pharmaceutical company Sanofi's consumer health business Opella Healthcare.

The European Union regulator said Friday the transaction is not expected to raise competition concerns due to the companies' limited market position after the merger.

Teva Pharmaceutical Industries TEVA reported fourth-quarter 2024 adjusted earnings of 71 cents per share, which beat the Zacks Consensus Estimate of 70 cents. Adjusted earnings declined 29% year over year.

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Revenues for the fourth quarter were $4.23 billion, beating the Zacks Consensus Estimate of $4.10 billion. However, total revenues declined 5% from the year-ago quarter on both reported and constant currency basis. The decline is mainly due to the absence of the one-time $500 million upfront payment received in the prior-year quarter from partner Sanofi SNY for the collaboration agreement for its anti-TL1A asset, duvakitug. The decline was partially offset by higher revenues from generic products globally and strong growth from branded drugs, Austedo, Ajovy and Uzedy, along with the sale of certain product rights.

Teva Pharmaceutical Industries Ltd. Price, Consensus and EPS Surprise

Teva Pharmaceutical Industries Ltd. price-consensus-eps-surprise-chart | Teva Pharmaceutical Industries Ltd. Quote

Poor Generics Sales Hurt TEVA’s United States Unit

Sales in the United States segment (previously the North America segment) were $1.98 billion, down 13% year over year. The decline was primarily due to the upfront payment from Sanofi as discussed above, partially offset by higher revenues from Austedo, Uzedy and product rights sales. The segment’s revenues missed the Zacks Consensus Estimate of $2.01 billion as well as our model estimate of $2.03 billion.

Generic/biosimilar product revenues rose 1% from the year-ago period to $674 million in the United States, driven mainly by the launch of a generic version of Novo Nordisk’s diabetes drug, Victoza (in late June), and higher revenues from a generic version of Roche’s Rituxan. The sales growth was partially offset by lower revenues from generic versions of Revlimid and ProAir. Generic revenues missed the Zacks Consensus Estimate of $840 million as well as our model estimate of $893.5 million.

Teva has a decent pipeline of biosimilars, with some being developed in partnership with Alvotech. A biosimilar version of AbbVie’s ABBV Humira called Simlandi was approved in February 2024 and launched in May. Selarsdi, a biosimilar version of J&J’s JNJ Stelara, was approved in April 2024, and per a settlement with J&J, Teva is expected to launch the biosimilar in the first quarter of 2025. In October 2024, the FDA accepted Teva’s application seeking approval for TVB-009P, a biosimilar candidate to Amgen’s bone drug, Prolia (denosumab). The FDA’s decision is expected in the second half of 2025.

Huntington's disease drug, Austedo, recorded sales of $518 million in the United States, up 27% year over year. Sales were mainly driven by volume growth as prescription trends continued to grow. Austedo sales beat the Zacks Consensus Estimate of $484 million and our model estimate of $476.5 million.

Ajovy recorded sales of $63 million for the quarter, up 11% year over year, driven by volume growth. Ajovy sales beat the Zacks Consensus Estimate of $60 million as well as our model estimate of $59.1 million.

Ajovy’s market share in the United States increased in terms of the total number of prescriptions from 25.7% in the year-ago quarter to 29.6% in the reported quarter.

Uzedy (risperidone), a long-acting subcutaneous atypical antipsychotic injection for the treatment of schizophrenia, generated sales of $43 million in the fourth quarter compared with $9 million in the year-ago quarter.

Copaxone recorded sales of $63 million in the United States, down 13% year over year due to generic erosion and increased competition. Copaxone sales beat the Zacks Consensus Estimate of $53 million as well as our model estimate of $55.5 million.

Combined sales of Bendeka and Treanda declined 21% from the year-ago quarter to $41 million. Sales of Bendeka and Treanda were hurt by generic erosion. Teva lost orphan drug exclusivity for bendamustine products in December 2022.

Distribution revenues generated by Anda rose 2% year over year in the quarter to $402 million due to volume growth.

TEVA’s Europe and International Markets Segment Performance

The Europe segment recorded revenues of $1.35 billion, up 1% year over year on a reported basis. Sales were down 2% on a constant currency basis, mainly due to higher sales of certain product rights in the year-ago quarter. Europe revenues beat the Zacks Consensus Estimate of $1.26 billion as well as our model estimate of $1.18 billion.

Generic product revenues in Europe rose 5% in constant currency terms to $979 million. Copaxone sales declined 11% to $50 million. Revenues from Ajovy sales increased 28% on a constant currency basis to $58 million.

In the International Markets segment, sales rose 10% year over year to $661 million. In constant currency terms, sales increased 17% from a year ago, driven mainly by revenues from the sale of certain product rights and higher generic revenues, partially offset by regulatory price reductions and generic competition to off-patented products in Japan. International Markets revenues beat the Zacks Consensus Estimate of $604 million as well as our model estimate of $615.9 million.

The Other segment (comprising the sales of active pharmaceutical ingredients to third parties and certain contract manufacturing services) recorded revenues of $241 million, down 2% year over year on both reported and constant currency basis.

TEVA’s Margin Discussion

Adjusted gross margin was 54.8% for the quarter, down 340 basis points (bps) year over year. The decline is mainly due to the upfront payment received in 2023 for the duvakitug collaboration with Sanofi as well as lower revenues from Copaxone, partially offset by higher revenues from Austedo and certain other product rights.

Adjusted research & development expenses increased 9% year over year to $248 million. Selling and marketing expenditure rose 7% from the year-ago level to $650 million. General and administrative expenses increased 4% from the prior-year level to $302 million.

Adjusted operating income fell 24% year over year in the reported quarter to $1.17 billion. Adjusted operating margin declined 710 bps to 27.6% in the quarter due to increased operating costs and lower adjusted gross margin.

FY24 Results

Revenues in 2024 were clocked at $16.54 billion, representing a 4% year-over-year increase on a reported basis and a 6% increase on a constant currency basis compared with 2023 results. Sales beat the guided range of $16.1-$16.5 billion.

Adjusted diluted earnings per share (EPS) for the full year was $2.49, which was within the guidance range of $2.40-$2.50 per share.

TEVA’s Guidance for 2025

Rolling into 2025, Teva expects total revenues in 2025 to be in the range of $16.8–$17.4 billion. The Zacks Consensus Estimate for total sales in 2025 is $16.94 billion.

Teva expects Austedo sales to be in the $1.90-$2.05 billion band and Ajovy sales of approximately $600 million in 2025. TEVA anticipates Copaxone revenues in 2025 to be approximately $370 million. The revenue guidance for Uzedy is approximately $160 million in 2025, reflecting solid growing demand for the product.

Teva expects adjusted EPS to be in the range of $2.35-$2.65 per share in 2025. The guidance range was lower than the Zacks Consensus Estimate of $2.76 per share. The adjusted tax rate is expected to be in the range of 15-18%.

The company expects adjusted operating income in the band of $4.1-$4.6 billion in 2025. Teva expects adjusted EBITDA in the range of $4.5-$5 billion. Free cash flow is expected to be in the range of $1.7-$2.1 billion, while capital expenditures are expected to be approximately $500 million.

Teva’s shares lost 13.9% on Wednesday, despite fourth-quarter earnings and revenues beat, as the sales and profit guidance for 2025 was below expectations.

In the past three months, shares of TEVA have gained 0.5% compared with the industry’s growth of 1%.

European equities traded in the US as American depositary receipts were up sharply late Thursday morning, rising 1.25% to 1,372.71 on the S&P Europe Select ADR Index.

From continental Europe, the gainers were led by telecommunications company Nokia and biopharmaceutical company Genfit , which climbed 7.3% and 4.1% respectively. They were followed by pharmaceutical company Sanofi and electronics conglomerate Philips , which were up 3.4% and 2.6% respectively.

The decliners from continental Europe were led by biotech firm Evaxion Biotech E and accommodations booking company trivago , which fell 27.7% and 2.5% respectively. They were followed by biopharmaceutical company DBV Technologies and medical device maker EDAP , which were down 1.5% each.

From the UK and Ireland, the gainers were led by biopharmaceutical company Verona Pharma and Prudential , which rose 4.1% and 3.5% respectively. They were followed by educational publisher Pearson and oil and gas company Shell , which increased 3.2% and 3% respectively.

The decliners from the UK and Ireland were led by biotech firm Trinity Biotech and biopharmaceutical company NuCana , which dropped 13.3% and 5.3% respectively. They were followed by biopharmaceutical company Mereo BioPharma Group , which lost 2.2%.