From Apples to Apple Pie at Teva

It's often difficult to compare generic-drug makers on a year-over-year basis. Their revenues go on roller-coaster rides with exclusive sales that make apples-to-apples comparisons difficult. For Teva Pharmaceuticals' (Nasdaq: TEVA  ) most recent quarter, it was more like comparing simple little apples with a big apple pie.

Year-over-year revenues for the third quarter rose only 4%, but the third quarter of last year was dominated by exclusive sales of generic versions of Merck's (NYSE: MRK  ) Zocor, Pfizer's (NYSE: PFE  ) Zoloft, Wyeth's (NYSE: WYE  ) Effexor, and Bristol-Myers Squibb's (NYSE: BMY  ) Pravachol. If you subtract out the $400 million bonus from the three largest products in the comparable 2006 quarter, sales climbed a much more impressive 25%.

That increase was driven by the launch of more than 25 new products this year, as well as a 24% year-over-year increase in Teva's branded multiple sclerosis (MS) drug Copaxone. The drug, which is marketed with Sanofi-Aventis (NYSE: SNY  ) , has quietly become the U.S. market leader for treating MS, with competitors having demonstrated that the drug is more efficient than high-dose interferons in head-to-head trials.

The increase in branded sales is having a nice positive effect on gross margins, although they still dropped year over year because of the loss of the exclusive sales. Add to that an increase in selling, general, and administrative expenses as the branded sales require a larger sales force, and net income dropped 13% year over year. Not great, but at least the company saw it coming.

While this quarter didn't contain any major contribution from drugs from the coveted six-month exclusive sales period, Teva appears to have a few more apple-pie quarters in its future. The company believes that it has 43 first-to-file Abbreviated New Drug Applications (ANDAs) pending with the FDA. That should be enough for one serious bake sale.

More generic Foolishness:

Read/Post Comments (0) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 539511, ~/Articles/ArticleHandler.aspx, 10/25/2016 12:03:42 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,181.32 -41.71 -0.23%
S&P 500 2,144.91 -6.42 -0.30%
NASD 5,288.88 -20.95 -0.39%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 11:48 AM
TEVA $44.04 Up +0.54 +1.24%
Teva Pharmaceutica… CAPS Rating: ****
BMY $49.95 Up +0.72 +1.46%
Bristol-Myers Squi… CAPS Rating: ****
MRK $61.86 Up +1.11 +1.83%
Merck and Co. CAPS Rating: ****
PFE $32.32 Up +0.19 +0.59%
Pfizer CAPS Rating: ****
SNY $37.36 Down -0.40 -1.06%
Sanofi CAPS Rating: *****
WYE.DL $0.00 Down +0.00 +0.00%
Wyeth CAPS Rating: ***