Israeli drug giant Teva Pharmaceutical Industries on Thursday reported a third-quarter loss as it proceeds with an aggressive cost-cutting program and adjusts to declines in key product categories.
But Teva shares surged after the company gave an upbeat outlook, citing stabilization in its core generics business, the launch of new products and progress with its restructuring program.
Teva posted a loss of $273 million, or 27 cents a share, compared with earnings of $530 million, or 52 cents a share, in the same period the previous year. Revenue fell 19% from $5.617 billion to $4.529 billion.
Nonetheless, Chief Executive Kare Schultz said in a statement he was "very satisfied with our progress and we are meeting all our key targets."
Teva, the world's top generic drugmaker, has been hit hard by price pressure and competition in its core generic business, the loss of patent protection on its blockbuster multiple sclerosis drug Copaxone and a more than $30 billion debt load stemming from its acquisition of the generics business of Allergan.
The struggling company announced plans last December to cut 14,000 jobs, over 25% of its global workforce.
In an interview, Schultz said the company has reduced its debt from $35 billion to $27.6 billion since he joined the company a year ago. He also said the company is well on its way to meeting its goals for cutting its workforce and reducing costs.
As part of its restructuring, the company has already eliminated 9,000 of the 14,000 jobs it promised to cut by the end of 2019. It also has cut costs this year by $1.8 billion, more than half of the savings it has targeted by the end of next year.
"In the big picture we are on track, if anything ahead of schedule," Schultz said.
With prices crumbling in the key U.S. generics market, Teva has been eliminating unprofitable drugs from its portfolio and focusing on money-making medicines instead.
It said it sees both the generics market and Copaxone sales stabilizing, albeit at lower levels than in the past.
Teva has introduced two new drugs to the market. Austedo, a treatment for movement disorders, hit the market last year and chalked up some $62 million in sales in the third quarter, compared with $6 million a year earlier.
Ajovy, a migraine treatment, reached the U.S. market in September and has a bright future, Schultz said.
"We are very optimistic about that product," he said. "We've only been in the U.S. marketplace for four weeks, but we've seen very strong patient uptake."
Teva recently suffered a setback when pharmacy benefit manager Express Scripts said it would not cover Ajovy.
However, Schultz said the company was in negotiations with major market players, including Express Scripts, and he hopes to reach agreements by the first quarter of 2019.
