By Tova Cohen and Steven Scheer
TEL AVIV (Reuters) - Israel-based Teva Pharmaceutical Industries Ltd on Thursday forecast a sharp rise in revenue next year from its new migraine drug Ajovy and reported a slightly smaller-than-expected drop in first-quarter profit.
The world's largest generic drugmaker is counting on Ajovy and Huntington's treatment Austedo to help 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.
Chief Executive 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. Teva has already cut its workforce by 10,400 and Schultz expects to cut several thousand more jobs this year.
"Our focus is on stabilizing our global generics business and ensuring the success of our long-term organic growth drivers, especially Ajovy and Austedo," Schultz said.
Austedo's sales more than doubled to $74 million and are expected to reach $350 million for the full year.
Launched in September, Ajovy had U.S. sales of $20 million in the first quarter. The drug to prevent often debilitating migraine headaches is on track to meet the company's 2019 target of $150 million and substantially more in 2020, Schultz said.
Eli Lilly and Co and Amgen Inc also began selling 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 had 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.
First-quarter sales of Amgen’s market leader Aimovig were also well short of expectations at $59 million compared with $83.3 million projected by analysts.
About two thirds of Ajovy patients are covered by insurance and discussions are ongoing with insurers not yet providing coverage, Teva said.
Its strategy is to make the drug available to all patients with a prescription 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.
MARKET SHARE GAINS FOR AJOVY, GENERIC EPIPEN
About 36,000 patients receive Ajovy, which is winning about 28 percent to 30 percent of new prescriptions.
"I still think we will get 25 to 30 percent of the market," Schultz told Reuters.
Teva said it expects its generic version of Mylan's life-saving EpiPen emergency allergy treatment to have around a 20 percent market share by the end of the second quarter and could approach 50 percent market share by the end of the year.
Teva's generic EpiPen has accounted for only a small portion of the drug's market since its launch last year. It had around 6 percent of the market as of April 19, according to a research note from Leerink citing IQVIA data on prescription volume.
Teva said it earned 60 cents per 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, according to IBES data from Refinitiv.
Teva's generics business is stabilizing 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 for adjusted earnings of $2.20 to $2.50 per share 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 percent at $14.92 in afternoon trade.
(Reporting by Tova Cohen and Steven Scheer; additional reporting by Michael Erman in New York; Editing by David Goodman and Bill Berkrot)