Teva’s woes continue, as shares sink to 17-year low on Q3 results
Spare a thought for Kare Schultz, he agreed to take on the position of CEO at Teva at the start of September and, reportedly, arrived for his first day of work at the company yesterday.
What happened on his second day? Well, third quarter results were posted and the trapdoor was pulled out from under the company’s share price, dropping 17% on the announcement.
It’s a tough second day in the office and one that highlights the magnitude of Schutlz’s task to get the company back on an even keel. He will undoubtedly have looked on with serious concern as it was announced a month ago that Mylan had approval to market its generic for Copaxone.
The FDA’s decision made an immediate impact on sales of Teva’s key drug, with the drug’s sales down by 7% over last year’s figures. Compounding Copaxone’s inevitable downturn, generics sales continued to suffer from a difficult market – with profits down from $982 million at the same time last year, to $619 million this quarter.
Overall, revenue was up by 1% to $5.6 billion but the company lowered its full-year forecasts from between $22.8 billion and $23.2 billion to $22.2 billion to $22.3 billion.
The less than positive outlook reflected in these figures resulted in a share price crash, which saw value reduced to a level last seen in 2000.
Of immediate concern for the company is to raise enough capital to pay down its debt obligations. It has already managed to secure a good portion of this from the sale of its women’s health business for $2.5 billion; however, it is also looking to rid itself of its European cancer and pain-treatment divisions – potentially bringing it a further $1 billion.
Much of Teva’s woes have come about as a result of its decision to purchase Allergan’s generics division for a figure then worth $40 billion. Not long after, the generics market began to suffer a serious downturn and one that has taken the world’s largest generics company with it.
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