Copaxone competition and generic price erosion hits Teva’s Q3
Teva Pharmaceutical Industries shared its third quarter 2017 financials last week, and reported an 8% year-on-year decrease in revenues from its generics medicines to $3bn (€2.6bn).
This has been caused by elevated levels of price erosions for Teva’s base business, which has risen to be 10% in the third quarter from 6% in the second, CEO of Generics Dipankar Bhattacharjee said in a conference call.
“This is primarily driven by two factors. The first is that the increasing FDA approvals that are happening for products for which already generics players exist in the market, so the new players try and drive some gains in market share based on volumes, based on lower prices,” he told investors.
“And the second is that the consolidation of customers into three GPOs [group-purchasing organisations], which now account for more than 85% of Generics purchases in the US market… have created additional pricing pressure.”
Teva also suffered in its specialty product business, with generic competition hitting sales of its top-selling MS drug Copaxone (glatiramer acetate injection). The product has face generic competition in its 20 mg/mL version since Sandoz launched Glatopa in July 2015, and last month the US FDA approved a second generic, along with a 40mg/L version marketed by Mylan.
US revenues were therefore down 8% year-on-year, with Copaxone clocking in sales of $802m.
“Erosion accelerated significantly last month following a competitor's approval and the launch of a generic Copaxone 40 milligram in the US,” Teva’s interim CEO Yitzhak Peterburg said on the call. And while he added Teva has been preparing for this transition through investment in geographical product and pipeline diversification, he noted such investment will “take time to bear fruit.”
Meanwhile on its own financial call, chief commercial officer Anthony Mauro said Mylan is “beginning to reap the rewards of long-term and significant investments” in its generic Copaxone.
“We are particularly pleased with our prescription uptake to date for the 40-milligram strength. For the week ending October 27, our share of new prescriptions was 16.2%, and total prescriptions was approximately 8%.”
The two negative events has led to Teva lowering its 2017 guidance. The firm now expects full year revenues of $22.2bn to $22.3bn, EPS between $3.77 and $3.87, and cash flow of $3.15bn to $3.3bn.
