Shares of Teva Pharmaceutical Industries Ltd. surged on the Tel Aviv Stock Exchange on Thursday after the company reported better than expected first quarter 2020 financial results, which were affected by a rise in demand for generic and over the counter drugs and respiratory products.
The shares were trading 13% higher at 2:26 p.m. in Tel Aviv, capping a 29% decline in the past 12 months.
“Our very strong results during the first quarter of 2020 were impacted by greater demand in our major markets for generic and over the counter (OTC) products and respiratory products,” Kåre Schultz, Teva’s President and CEO, said in a statement on Thursday, as the firm reported a 5 percent rise in revenues in the first quarter of the year compared to the same period a year earlier.
“Stronger revenues across these categories, along with growth in our operating and net profit, contributed to strong free cash flow and a further reduction in our net debt,” Schultz said.
Revenues for the quarter totaled around $4.4 billion, compared to analyst expectations of $4.15 billion, according to the Calcalist financial website. The firm earned $835 million in the quarter, or 76 cents per diluted share, compared to $654 million and 60 cents in the first quarter of 2019. Analysts had forecast profit of 59 cents a share for the first quarter of the year, Calcalist said.
Teva said it posted higher profit in Europe, North America and other international markets. Hedging activities and lower operating expenses, stemming from the coronavirus pandemic, also helped boost profit.
Revenues in North America, including the US and Canada, totaled $2.08 billion in the first quarter of 2020, a 2% increase compared to the first quarter of 2019.
In this market the company’s drugs Ajovy, to treat migraine in adults, and Austedo, a proprietary drug for movement disorders like Huntington disease and tardive dyskinesia, saw sales jump respectively by 44% and 64%, whereas the drug-maker’s flagship Copaxone drug for multiple sclerosis saw sales slide by 5% to $198 million compared to the first quarter of 2019, mainly due to generic competition in the United States.
Revenues from Europe in the first quarter of 2020 were $1.4 billion, an increase of 11% compared to the first quarter of 2019.
“In local currency terms, revenues increased by 13%, mainly due to higher demand for certain products resulting from the impact of the COVID-19 pandemic on purchasing patterns as well as continuing growth in generics and new generic product launches,” the statement said. This was “partially offset by price declines for oncology products as a result of generic competition and a decline in Copaxone revenues.”
Sales of Copaxone in Europe declined by 4%; the sale of generic products jumped 12%, and respiratory products by 16%.
Ajovy revenues in Europe in the first quarter of 2020 were $4 million. Teva started sales of the migraine drug in certain European markets in May 2019 and the firm said it is “moving forward” with plans to launch in other European countries.
As of March 31, 2020, the company’s debt was $26,103 million, compared to $26,908 million as of December 31, 2019, the statement said.