TEL AVIV (Reuters) – Israel-based Teva Pharmaceutical Industries posted a slightly smaller than expected drop in first-quarter profit and forecast a sharp rise in revenue next year from its new migraine drug Ajovy.
The world’s largest generic drugmaker is counting on Ajovy and Huntington’s treatment Austedo to help to revive its fortunes after restructuring to tackle a debt crisis.
Sales from its blockbuster multiple sclerosis drug Copaxone have been declining in the face of generic competition, which is also hurting sales of respiratory drug ProAir.
Teva has reduced its spending by $2.5 billion since initiating the restructuring last year.
CEO Kare Schultz on Thursday said the company is on track to cut $3 billion in spending by the end of this year while continuing to lower debt. So far Teva has cut its workforce by 10,400 and Schultz expects to cut several thousand more jobs this year.
“Our focus is on stabilising our global generics business and ensuring the success of our long-term organic growth drivers, especially Ajovy and Austedo,” Schultz said.
Launched in September, Ajovy had U.S. sales of $20 million in the first quarter and Teva said it was on track to meet its 2019 target of $150 million and substantially more in 2020, Schultz said.
Eli Lilly and Co and Amgen Inc launched similar new migraine treatments last year, creating fierce early competition and allowing insurers and pharmacy benefit mangers to demand steep discounts to cover them in the United States.
Lilly, which reported results on Tuesday, said its migraine drug Emgality registered sales of about $14 million, half of what analysts were expecting, with revenue limited by a program that allows patients to try newer drugs at little or no cost. Sales of Amgen’s market leader Aimovig were also well short of expectations, with sales of $59 million compared with the $83.3 million projected by analysts.
About two thirds of Ajovy patients are covered by insurance and discussions are continuing with insurers not yet providing coverage, Teva said.
Its strategy is to make sure all patients with a prescription receive the drug, regardless of their insurance, Schultz said. Teva then negotiates with the insurer to obtain payment.
Amgen said that 200,000 U.S. patients have been prescribed Aimovig, with about half of prescriptions being filled free.
About 36,000 patients receive Ajovy, which is winning about 28-30 percent of new prescriptions.
“I still think we will get 25-30 percent of the market,” Schultz told Reuters.
Teva earned 60 cents per diluted share excluding one-off items in the first quarter, down from 94 cents a year earlier. Revenue fell 15 percent to $4.3 billion.
Analysts had forecast earnings of 58 cents a share on revenue of $4.38 billion, I/B/E/S data from Refinitiv showed.
Austedo’s sales more than doubled to $74 million and are expected to hit $350 million in 2019.
Teva’s generics business is stabilising after steep declines the past couple of years.
“We now have five quarters in a row where the North American generics business is around $1 billion in revenue per quarter, and where European revenue is around $900 million,” Schultz said.
Teva reaffirmed its 2019 forecast of adjusted EPS of $2.20-$2.50 on revenue of $17 billion to $17.4 billion. Analysts are forecasting EPS of $2.40 on revenue of $17.29 billion.
Teva’s New York-listed shares were down 2.1 percent at $14.91 in late morning trade.
Reporting by Tova Cohen and Steven Scheer; Additional reporting by Michael Erman in New York; Editing by David Goodman