Teva Pharmaceuticals (TEVA 0.10%) started off 2021 with a bang. Its shares soared more than 30% during the first few weeks of the year. Since then, though, Teva has given up most of those gains.
The company had an opportunity for a catalyst when Teva announced its first-quarter results before the market opened on Wednesday. However, those results didn't spark a rebound: The pharmaceutical stock slipped almost 3% in early trading. Here are the highlights from Teva's Q1 update.
By the numbers
Teva reported revenue in the first quarter of $3.98 billion, a 9% year-over-year decline. This result narrowly missed the average analysts' revenue estimate of $4.02 billion.
The company announced Q1 net income of $77 million, or $0.07 per share, based on generally accepted accounting principles (GAAP). In the prior-year period, Teva posted GAAP earnings of $69 million, or $0.06 per share.
On a non-GAAP (adjusted) basis, Teva's net income in the first quarter came in at $699 million, or $0.63 per share. This reflected a sharp decrease from adjusted earnings of $835 million, or $0.76 per share, posted in the prior-year period. However, it topped the consensus Wall Street adjusted earnings estimate of $0.59 per share.
Behind the numbers
There were several culprits behind Teva's revenue decline in the first quarter. Revenue for generic products in Europe fell 16% year over year in large part due to customers stocking up in the first quarter of 2020 because of the COVID-19 pandemic. Sales of multiple sclerosis drug Copaxone slid in both Europe and North America with increased competition from generic rivals.
Teva's cancer drug Bendeka/Treanda also faced headwinds. North American sales for the drug in Q1 plunged 14% to $91 million due to increased competition.
The company had a few bright spots, though. Rare disease drug Austedo generated sales of $146 million in the first quarter, a 20% year-over-year jump. Sales of migraine drug Ajovy rose 8% year over year to $31 million. That gain is especially notable considering that Amgen reported a 7% sales decline for its migraine drug, Aimovig, in its Q1 update.
Teva kept its spending under control, though. Total operating expenses were essentially flat year over year at $1.13 billion. The company recorded much larger intangible asset impairment charges in the prior-year period, though, which boosted year-over-year GAAP earnings comparisons.
Teva confirmed its previous guidance of net revenue for full-year 2021 between $16.4 billion and $16.8 billion. It also continues to anticipate earnings per share of between $2.50 and $2.70.
The easing of COVID-19 concerns could enable Teva to promote Ajovy and Austedo to physicians more effectively by allowing increased contact with physicians. As more restrictions are lifted, sales for some of the company's other products could also increase.