Viatris Beats on Q3 Earnings and Revenues, Lowers Profit Guidance

Amicus Therapeutics FOLD reported third-quarter 2024 adjusted earnings of 10 cents per share, beating the Zacks Consensus Estimate of 8 cents. The company had incurred a loss of 1 cent per share in the year-ago quarter.

The year-over-year improvement can be attributed to higher revenues from Galafold (migalastat) sales and incremental revenues from the sale of the newly approved combo drug, Pombiliti + Opfolda.

Revenues in the third quarter totaled $141.5 million, up 37% year over year on a reported basis and 36% on constant-currency (cc) basis. The figure beat the Zacks Consensus Estimate of $134 million. The top line comprised sales of Galafold, which is approved for Fabry disease and Pombiliti + Opfolda.

The FDA approved Pombiliti + Opfolda, a two-component therapy for treating late-onset Pompe disease, in September 2023.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Despite the better-than-expected results, shares of Amicus were down 4.3% on Nov. 6 following the announcement of the news. The stock has plunged 20.8% so far this year compared with the industry’s decline of 2.5%.

Teva Pharmaceutical Industries TEVA reported third-quarter 2024 adjusted earnings of 69 cents per share, which beat the Zacks Consensus Estimate of 65 cents. Adjusted earnings rose 15% year over year.

Revenues for the third quarter came in at $4.33 billion, which beat the Zacks Consensus Estimate of $4.08 billion. Total revenues rose 13% on a reported basis and 15% on a constant currency basis.

Sales growth was mainly driven by higher revenues from generic products globally and strong growth from branded drugs, Austedo, Ajovy and Uzedy. Sales of certain product rights in Europe and International Markets segments also contributed to sales growth.

Generic Drugs Drive Sales in TEVA’s United States Unit

Sales in the United States segment (previously the North America segment) were $2.22 billion, up 17% year over year, driven by higher sales of generic products and branded drugs Austedo and Uzedy, partially offset by lower sales of other branded products Copaxone and Bendeka/Treanda. The segment’s revenues beat the Zacks Consensus Estimate of $2.07 billion as well as our model estimate of $2.0 billion.

Generic/biosimilar product revenues rose 30% from the year-ago period to $1.09 billion in the United States segment due to increased revenues from a generic version of Revlimid and the launch of a generic version of Novo Nordisk’s NVO Victoza (in late June). Generic revenues beat the Zacks Consensus Estimate of $955 million as well as our model estimate of $876 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 will launch the biosimilar in February 2025. Last month, 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 $435 million in the United States, up 28% year over year. Sales were mainly driven by volume growth as prescription trends continued to grow. Austedo sales missed the Zacks Consensus Estimate of $437 million but beat our model estimate of $430.8 million.

Ajovy recorded sales of $58 million for the quarter, up 4% year over year, driven by volume growth. Ajovy sales beat the Zacks Consensus Estimate of $56 million as well as our model estimate of $57.0 million.

Ajovy’s market share in the United States increased in terms of the total number of prescriptions from 24.9% in the year-ago quarter to 29.1% in the reported quarter.

For the first time, Teva separately announced sales of Uzedy (risperidone), a long-acting subcutaneous atypical antipsychotic injection for the treatment of schizophrenia, in the United States. The product, which was launched in May 2023, generated sales of $35 million in the third quarter compared with $2 million in the year-ago quarter.

Copaxone recorded sales of $69.0 million in the United States, down 30% year over year, due to generic erosion and increased competition. Copaxone sales beat the Zacks Consensus Estimate of $49.9 million as well as our model estimate of $50.8 million.

Combined sales of Bendeka and Treanda declined 28% from the year-ago quarter to $40 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 3% year over year in the quarter to $380 million due to volume growth.

TEVA’s Europe and International Markets Segment Performance

The Europe segment recorded revenues of $1.27 billion, up 10% year over year on a reported basis. Sales were up 11% on a constant currency basis, mainly driven by higher revenues from generic products and Ajovy and sales of certain product rights. Europe revenues beat the Zacks Consensus Estimate of $1.18 billion as well as our model estimate of $1.11 billion.

Generic product revenues in Europe rose 8% in constant currency terms to $973 million. Copaxone sales declined 5% to $53 million. Revenues from Ajovy sales increased 36% on a constant currency basis to $56 million.

In the International Markets segment, sales rose 4% year over year to $613 million. In constant currency terms, sales increased 18% from a year ago, driven mainly by higher generic revenues, partially offset by regulatory price reductions and generic competition to off-patented products in Japan. International Markets revenues missed the Zacks Consensus Estimate of $615 million as well as our model estimate of $659.4 million.

The Other segment (comprising the sales of active pharmaceutical ingredients to third parties and certain contract manufacturing services) recorded revenues of $229 million, up 6% year over year on a reported basis and 5% on a constant currency basis.

TEVA’s Margin Discussion

Adjusted gross margin was 53.7% for the quarter, up 20 basis points (bps) year over year, mainly driven by a favorable product mix (higher revenue from Austedo), partially offset by currency headwinds.

Adjusted research & development expenses declined 5% year over year to $240 million. Selling and marketing expenditure rose 9% from the year-ago level to $626 million. General and administrative expenses increased 11% from the prior-year level to $298 million.

Adjusted operating income rose 19.0% year over year in the reported quarter to $1.21 billion. Adjusted operating margin rose 150 bps to 28.0% in the quarter due to lower operating costs.

TEVA Slightly Raises Guidance for 2024

Teva slightly raised its revenue guidance from a range of $16-$16.4 billion to $16.1-$16.5 billion.

Teva maintained its guidance for Austedo sales of approximately $1.6 billion and Ajovy sales of approximately $500 million in 2024. Teva raised its Copaxone revenue guidance to approximately $500 million from the previous expectation of approximately $450 million, reflecting lower-than-expected erosion from competing therapies. The revenue guidance for Uzedy was raised from approximately $80 million to approximately $100 million, reflecting solid growing demand for the product.

Teva raised the lower end of its adjusted EPS guidance from a range of $2.30-$2.50 per share to $2.40-$2.50 per share.

The company now expects adjusted operating income in the band of $4.2-$4.5 billion compared with the previously expected range of $4.1-$4.5 billion. Teva expects its adjusted EBITDA in the band of $4.7-$5 billion compared with the previous guidance of $4.6-$5 billion.

Adjusted gross margin is expected to be between 53% and 54% in 2024. Operating costs are expected to be approximately 27% to 27.5% of revenues.

Adjusted tax rate is expected in the range of 14-17%. 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.

Our Take on TEVA’s Q3 Results

Teva’s third-quarter results were strong as it beat estimates for earnings as well as sales. Teva’s generics business sales increased 17% in the quarter, driven by growth across all regions. Ajovy registered growth of 21% globally, driven by improving market share in all regions. Austedo sales rose 28%. The company also slightly raised the lower end of its earnings and sales guidance. However, despite the earnings beat and guidance increase, the stock was down more than 7% on Wednesday as investors were probably not impressed with the guidance increase.

Year to date, shares of TEVA have risen 66.9% against the industry’s decline of 5.3%.

Teva faces challenges like competitive pressure on some key branded drugs and a high debt load. However, its newer drugs, Austedo and Ajovy, as well as a stable generics business are reviving top-line growth. With the nationwide settlement for the costly opioid litigations, new product launches, stability of the generics segment with contribution from biosimilars and a robust biosimilar and branded pipeline, the path for Teva’s long-term growth is becoming clearer. Teva is saving costs and improving margins through the optimization of operations for efficiency while also lowering the debt on its balance sheet.

Teva plans to separate its API unit into a standalone business unit. The divestment is expected to be completed in the first half of 2025.

TEVA’s Zacks Rank

Teva currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Teva Pharmaceutical Industries Ltd. Price and Consensus

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

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Qiagen (QGEN) came out with quarterly earnings of $0.57 per share, beating the Zacks Consensus Estimate of $0.54 per share. This compares to earnings of $0.52 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 5.56%. A quarter ago, it was expected that this diagnostic products maker would post earnings of $0.52 per share when it actually produced earnings of $0.55, delivering a surprise of 5.77%.

Over the last four quarters, the company has surpassed consensus EPS estimates three times.

Qiagen, which belongs to the Zacks Medical - Biomedical and Genetics industry, posted revenues of $501.87 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 2.31%. This compares to year-ago revenues of $475.89 million. The company has topped consensus revenue estimates four times over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Qiagen shares have lost about 1.8% since the beginning of the year versus the S&P 500's gain of 21.2%.

What's Next for Qiagen?

While Qiagen has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release, the estimate revisions trend for Qiagen: unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.59 on $522.77 million in revenues for the coming quarter and $2.15 on $1.97 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical - Biomedical and Genetics is currently in the top 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

One other stock from the same industry, Lexicon Pharmaceuticals (LXRX), is yet to report results for the quarter ended September 2024. The results are expected to be released on November 12.

This drugmaker is expected to post quarterly loss of $0.17 per share in its upcoming report, which represents a year-over-year change of +19.1%. The consensus EPS estimate for the quarter has been revised 4.6% higher over the last 30 days to the current level.

Lexicon Pharmaceuticals' revenues are expected to be $3.14 million, up 1859.4% from the year-ago quarter.

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Teva Pharmaceutical Industries Ltd reported third-quarter 2024 sales of $4.33 billion on Wednesday. It beat the consensus of $4.12 billion.

Revenues increased 13% year-over-year and 15% on constant currency. This was mainly due to higher revenues from generic products in all segments (i.e., Austedo in the U.S. segment), and the sale of product rights in Europe and International Markets segments.

Also Read: Amicus Therapeutics Settles Patent Lawsuit Teva Pharmaceuticals Over Generic Version Of Its Rare Genetic Disorder Drug

Generics business grows across all regions — increased by 30% in the U.S., 8% in Europe, and 13% in International Markets, in local currency terms compared to Q3 2023.

Generic products revenues in the U.S. segment (including biosimilars) were $1.09 billion, up 30% year over year, the majority of which was driven by higher revenues from lenalidomide capsules (the generic version of Bristol Myers Squibb & Co’s Revlimid), and the remaining, primarily by the launch of liraglutide injection 1.8mg — an authorized generic of Novo Nordisk A/S’ Victoza — and higher revenues from epinephrine injectable solution (the generic equivalent of EpiPen and EpiPen Jr).

• Austedo U.S. revenues increased 28% to $435 million. Ajovy's global revenues increased by 21% to $137 million.
• Uzedy’s U.S. revenues of $35 million.
• Teva says its intention to divest Teva API is on track, targeting completion in the first half of 2025.
• Adjusted EPS of 69 cents, higher than 60 cents a year ago, beating the consensus of 66 cents.
• Adjusted gross profit margin was 53.7% in the third quarter of 2024, compared to 53.5% in the third quarter of 2023.
• Adjusted operating margin reached 28%, down from 26.5% a year ago.
• Adjusted EBITDA was $1.34 billion in the third quarter of 2024, an increase of 17%.

Outlook: Teva expects fiscal year 2024 revenues of $16.1 billion-$16.5 billion versus prior guidance of $16.0 billion—$16.4 billion and consensus of $16.256 billion.

The generic pharma player expects 2024 adjusted EPS of $2.40-$2.50 versus prior guidance of $2.30-$2.50 and consensus of $2.45.

The company raised 2024 Uzedy sales guidance from around $80 million to approximately $100 million.

Price Action: Teva stock is up 1.76% at $19.10 during the premarket session at last check Wednesday.

Read Next:

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Dr. Reddy's Laboratories Limited RDY reported second-quarter fiscal 2025 earnings of 18 cents per American Depositary Share (ADS), which missed the Zacks Consensus Estimate of 19 cents per ADS. The company reported earnings of 21 cents per ADS in the year-ago quarter.

The bottom line was hit by a one-time acquisition cost and impairment charge on non-current assets.

Revenues grew 17% year over year to $957 million, which outpaced the Zacks Consensus Estimate of $879 million. The year-over-year improvement was primarily driven by growth in global generics revenues.

Shares of Dr. Reddy’s have risen 5% year to date compared with the industry’s 18.4% growth.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

RDY’s Q2 Results in Detail

Dr. Reddy’s reports revenues under three segments — Global Generics, Pharmaceutical Services & Active Ingredients (PSAI) and Others.

Global Generics revenues totaled INR 71.6 billion, up 17% year over year. The increase was primarily driven by improved sales volumes and new product launches.

Dr. Reddy’s launched four new products in the United States during the reported quarter.

As of Sept. 30, 2024, cumulatively, 80 generic filings were pending approval from the FDA (75 abbreviated new drug applications [ANDAs] and five new drug applications). Of these 75 ANDAs, 44 were Para IVs.

PSAI revenues amounted to INR 8,4 billion, up 20% from the year-ago level. The improvement was driven by momentum in base business volumes, growth in services business and revenues from new products.

Revenues in the Others segment totaled INR 0.2 billion, down 74% year overyear.

Gross margin improved to 59.6% from 58.7% in the year-ago quarter due to a favorable product mix and overhead leverage. However, the uptick was partially offset by price erosion in generics markets.

Research and development expenses jumped 33% year over year to $87 million, driven by ongoing development efforts across generics, biosimilars and novel oncology assets.

Selling, general and administrative expenses totaled $275 million, up 22% year over year, primarily owing to investments in business growth and other initiatives. The company also incurred a one-time acquisition related cost on the acquisition of Nicotine Replacement Therapy (‘NRT’) portfolio.

Dr. Reddy's Laboratories Ltd Price, Consensus and EPS Surprise

Dr. Reddy's Laboratories Ltd price-consensus-eps-surprise-chart | Dr. Reddy's Laboratories Ltd Quote

Key Pipeline Updates From RDY

Dr. Reddy’s acquired an NRT portfolio outside the United States and paid GBP 458 million in cash consideration pursuant to an agreement with Haleon plc.

The company entered into a non-exclusive patent licensing agreement with Takeda to commercialize vonoprazan, a novel gastrointestinal drug, in India.

Last month, RDY signed a voluntary licensing agreement with Gilead Sciences GILD to manufacture and commercialize lenacapavir in India and other countries.

GILD’s lenacapavir is indicated for the treatment of human immunodeficiency virus type 1 (HIV-1) infection in heavily treatment-experienced adults with multidrug resistant HIV-1 infection failing their current antiretroviral regimen due to resistance, intolerance, or safety considerations. Additionally, lenacapavir is currently under investigation for the prevention of HIV (PrEP).

Regulatory Updates

Dr. Reddy’s obtained marketing authorization from European Commission for the proposed biosimilar of rituximab following a positive opinion from the CHMP of the European Medicines Agency.

The company also received approval from the FDA for an investigational new drug application for AUR-112, a highly differentiated, potent and selective inhibitor of MALT1 being developed for the treatment of lymphoid malignancies.

The joint venture between Dr Reddy’s and Nestle India was operationalized in August 2024 to undertake the business of nutraceutical products and supplements in India and Nepal. 49% of the shares in the subsidiary have been transferred to Nestlé India.

RDY’s Zacks Rank & Other Stocks to Consider

Dr. Reddy’s currently carries a Zacks Rank #2 (Buy).

A couple of other top-ranked stocks in the same sector are Bausch Health BHC and Teva TEVA, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, the Zacks Consensus Estimate for BHC’s 2024 earnings per share (EPS) has moved north 12 cents to $3.73. During the same period, EPS estimate for 2025 has increased to $4.29 from $4.17.

BHC’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 0.32%.

In the past 30 days, estimates for TEVA’s EPS have moved up a cent to $2.44. TEVA’s earnings beat estimates in three of the trailing four quarters and missed the mark once, delivering an average surprise of 8.62%.

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