Teva Pharmaceutical Industries (NYSE:TEVA) reported its results from the end of 2019 on Wednesday, and the big story was the headwinds it faced. Generic competition for Copaxone, declining generic drug prices, and a big debt load continued to pester the giant drugmaker, but it looks like all three of those issues are receding.
The worst is over
In 2019, total revenue declined 8% to $16.9 billion, but rising sales of some newer drugs more than offset the falling sales of Copaxone during the last three months of the year.
Fourth-quarter sales of Austedo, a treatment that prevents involuntary muscle movement, rose 98% to $136 million. Sales of Ajovy, a new monthly injection for the prevention of migraine headaches, reached $25 million, and could climb much higher if it becomes popular among the millions of Americans who suffer from those debilitating headaches at least a few times each month.
As a result, fourth-quarter sales rose 1% to $4.5 billion, and revenues will probably continue rising as Copaxone's slide flattens out in 2020. The aging multiple sclerosis treatment was responsible for just 11% of Teva's North American revenue during the last three months of 2019.
Paying down debt
This year, Teva Pharmaceuticals expects revenue to remain flat or dip slightly to a range between $16.6 billion and $17 billion. Global Copaxone sales that reached $1.5 billion in 2019 are expected to slip to $1.2 billion in 2020.
On the bottom line, the company thinks free cash flow could decline slightly and land in the $1.8 billion to $2.2 billion range. That's would still be enough to allow it to put another big dent in its debt, which finished 2019 at 5.3 times earnings before interest, taxes, depreciation, and amortization (EBITDA). In 2020, Teva expects to bring its debt load below 5.0 times EBITDA.