Teva Stock: Teva Guides To Its First Year Of Growth Since 2017, But There’s A Caveat

Teva Pharmaceutical (TEVA) expects 2023 sales to grow for the first time in six years, but its outlook comes with one notable caveat. It’s why Teva stock slipped Wednesday.

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For the full year, the generic drugs maker expects $14.8 billion to $15.4 billion in sales. At the midpoint, sales would grow just 1.8%, but that follows years of declines. Still, that forecast figures that Teva and its partner Alvotech (ALVO) will launch a biosimilar knockoff of AbbVie‘s (ABBV) Humira.

The last year Teva’s sales grew was in 2017, when they increased roughly 2%. Further, the midpoint of the sales outlook for Teva was near analysts’ call for $15.19 billion. Yet the earnings outlook for $2.25-$2.55 per share was light at the midpoint. The Street projected $2.52 a share.

“Important consideration: manufacturing partner, Alvotech, needs to get through a Food and Drug Administration inspection,” Evercore ISI analyst Umer Raffat said in a note to clients. “This is what held back their biosimilar filing previously.”

In morning trading on today’s stock market, Teva stock toppled 5.7% to 10.28.

Teva Stock: Fourth-Quarter Metrics Miss

The fourth-quarter results also pockmarked Teva stock.

Sales declined 5% to $3.88 billion and were just below expectations for $3.89 billion. Adjusted earnings came in at 71 cents per share, down 7.8% and light by a penny, according to FactSet.

Generic products and Copaxone weighed on Teva’s sales. Overall, revenue from generic drugs toppled 6.2% to almost $2.28 billion. Sales of multiple sclerosis treatment Copaxone plunged more than 37% to $169 million.

Austedo continues to offer a silver lining for Teva stock investors. The drug treats tardive dyskinesia, an involuntary movement disorder. Austedo only sells in the North America unit. Sales climbed 22% to $344 million. Meanwhile, sales of migraine drug Ajovy surged 43% to $123 million.

Long-Term Growth Seen On Austedo

“Management believes ‘significant potential for long-term growth’ on Austedo’s current $1 billion — this is good to see,” Evercore’s Raffat said.

Last year, Austedo generated $963 million in sales, up 20%. This year, Teva calls for about $1.2 billion in sales from that drug. It also expects $500 million from Copaxone and another $400 million from Ajovy. Last year, Ajovy sales popped 24% to $218 million.

Teva stock has been making something of a comeback with a Relative Strength Rating of 89, according to IBD Digital. This puts shares in the top 11% of all stocks when it comes to 12-month performance.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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