Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



A Generic Double Whammy

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Teva Pharmaceuticals (NYSE: TEVA  ) saw revenue fall 8% in the fourth quarter from a generic double whammy.

Its narcolepsy drug Provigil saw generic competition from Par Pharmaceutical and Mylan, causing sales of the branded drug to drop to $25 million in the fourth quarter from $350 million in the year-ago quarter .

And year-over-year comparison of sales from Teva's generic drugs were hurt by last year's stellar quarter when it benefited from U.S. launches of generic versions of Eli Lilly's (NYSE: LLY  ) Zyprexa and Pfizer's (NYSE: PFE  ) Lipitor. Generic sales in the U.S. were down 17% year over year.

Note that decreasing sales of generic versions of Zyprexa and Lipitor doesn't actually help Lilly and Pfizer. Teva's lower sales are due to increases in the number of companies selling the generics, which hurts Lilly and Pfizer as well.

Speaking of competition, investors should be worried about Teva's multiple sclerosis drug Copaxone. The drug, which made up 20% of Teva's revenue and a larger percentage of the company's earnings, will likely see competition from Biogen Idec's (NASDAQ: BIIB  ) oral multiple sclerosis drug Tecfidera. The Food and Drug Administration is expected to approve the drug shortly.

Teva plans to submit an application with the FDA to establish a recommended dose of three times per week for Copaxone. While three injections is less than seven, it's still more than zero, the number of injections required for oral Tecfidera.

It seems inevitable that Biogen will cut into Copaxone sales, although don't expect a mad exodus from Copaxone when Tecfidera is launched. Like many new drugs that just offer incremental increases, doctors will likely try it on a few patients before making it a staple in their medicine bag.

It's hard to get excited about a ho-hum quarter and the potential for declining sales of its most important branded drug. About the only thing keeping investors interest right now is that the company increased its dividend by 15%. At 3.2% yield, investors are at least getting paid a little to be patient and wait out any downturn.

While you can certainly make huge gains in pharmaceutical stocks like Teva, the best investing approach is to choose great companies and stick with them for the long term. In our free report "3 Stocks That Will Help You Retire Rich," we name stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (0) | Recommend This Article (2)

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: 2245621, ~/Articles/ArticleHandler.aspx, 9/29/2016 1:01:32 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 18,238.40 -100.84 -0.55%
S&P 500 2,154.79 -16.58 -0.76%
NASD 5,282.71 -35.84 -0.67%

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

9/29/2016 12:46 PM
TEVA $46.18 Down -2.50 -5.14%
Teva Pharmaceutica… CAPS Rating: ****
BIIB $308.03 Down -2.52 -0.81%
Biogen CAPS Rating: *****
LLY $79.89 Down -0.82 -1.02%
Eli Lilly and Co. CAPS Rating: ***
MYL $37.90 Down -2.32 -5.77%
Mylan CAPS Rating: ***
PFE $33.69 Down -0.30 -0.88%
Pfizer CAPS Rating: ****
PRX.DL2 $0.00 Down +0.00 +0.00%
Par Pharmaceutical… CAPS Rating: ***