Teva says Israel-Hamas war not hurting production, eyes growth in 2024
By Steven Scheer
JERUSALEM (Reuters) -Israel-based Teva Pharmaceutical Industries, the world's largest maker of generic drugs, said on Wednesday production in Israel is largely unaffected by the country's month-long war with Hamas as it reported higher third-quarter profits.
Teva's revenue in Israel accounts for about 2% of its global total, while manufacturing in Israel constitutes less than 8% of global production.
Referring to the war that erupted on Oct. 7, when Hamas militants from Gaza burst into Israel, killing some 1,400 people, Chief Executive Richard Francis said "our production remains largely unaffected".
"Gratefully none of our sites have incurred direct damage as a result of the war," he told analysts on a call, referring to rocket attacks from Gaza. "We continue to secure contingency plans to be certain we can maintain our business continuity, while most importantly taking care to ensure that our colleagues are safe."
Francis later told Reuters that nearly 10% of its staff in Israel was called into military reserve duty, a number in line with the rest of the country, with a shift in priorities more toward areas such as production and distribution to compensate.
Teva, Francis said, has not been hit with any boycotts so far like those seen with Coca-Cola and Nestle in Turkey.
Israel's retaliation in the Hamas-run Gaza Strip during which Palestinian health officials say more than 10,000 people have since been killed has led to widespread protests in many countries.
For the July-September quarter, Teva said it earned 60 cents per share excluding one-time items, up from 59 cents a year earlier.
The company has struggled to recover from the loss of exclusivity to its multiple sclerosis drug Copaxone, and to cut $35 billion of debt as it fought a spate of lawsuits alleging it helped fuel the U.S. opioid epidemic.
But Teva has started to show signs of recovery and is betting a trio of branded drugs - Huntington's Disease treatment Austedo, migraine product Ajovy and just launched schizophrenia drug Uzedy - will help the company bounce back. Teva also has a number of biosimilars in its pipeline.
Jefferies analyst Glen Santangelo called the results "strong" and expects Teva's shares "to get a bump."
Teva's New York-listed shares were up 2.9% at $9.30 in afternoon trading.
Revenue rose 7% to $3.9 billion, with Austedo sales up 30% in North America to $339 million. Sales of Ajovy rose 8% and generic medicine sales in North America were up 15%.
"Continued solid performance of Austedo, Ajovy and our generics business delivered growth across all geographies," Francis said. "Based on these strong and consistent results, we are increasing our revenue outlook for 2023 for the second consecutive quarter."
"We're going to move into 2024 with a growth ambition" but how much growth depends on the fourth quarter, Francis added.
Analysts had forecast earnings of 61 cents a share ex-items for Teva on revenue of $3.72 billion, according to LSEG data.
Francis said Teva's net debt has fallen to $17.7 billion, while sales of Austedo are on track to hit $1.2 billion in 2023, with Ajovy reaching $400 million.
For 2023, Teva raised its revenue forecast slightly to $15.1 billion to $15.5 billion from $15.0 billion to $15.4 billion, after 2022 revenue of $14.9 billion.
It maintained its 2023 forecast of adjusted earnings of $2.25 to $2.55 per share, versus $2.52 in 2022.
(Reporting by Steven Scheer; Editing by Sharon Singleton and Bill Berkrot)
