By Avishai Ovadya
Thursday , May 4, 2000 Sun-Thu at 18:00 (GMT+3)
Teva's Q1 financial statements didn't exactly contain interesting news. In addition to being the world's biggest generic drug manufacturer, Teva has also carved out a place for itself in the ethical drug market with its anti-multiple sclerosis Copaxone drug. The company continues to grow and its profits are meeting analysts' forecasts.
The interesting news came from Teva's competitors in the anti-multiple sclerosis drug market: Chiron and Biogen. Chiron, manufacturer of Betaseron, announced it had failed to develop a version for treating advanced-stage multiple sclerosis. Following the announcement, Chiron's shares fell 18%. Last month Biogen published a particularly poor financial statement, showing that the sales of Avonex, Copaxone's competitor, had slowed down. Since then, Biogen's share plummeted 22%. The share has already lost 60% of the record posted two months ago. Teva's share, on the other hand, is performing pretty well, compared to its competitors and to the market as a whole. The share, which emerged relatively unscathed from the Wall Street tumble, is trading at $40 - 12% higher than its price at the beginning of the year. The current share price reflects a company value of $5 billion.
As in recent quarters, Teva's Q1 2000 financial statements did not disappoint investors. Teva CFO Dan Susskind sounded satisfied as well: "The market expected us to make $0.29 per share, but we made $0.30 per share. It goes without saying that one cent above expectations is better than one cent below them".
Teva's pharmaceutical sales were $289.2 million - up 19% from the corresponding quarter last year. Pharmaceutical sales in North America were $152 million - 43% higher than the corresponding quarter last year. However, part of the increase is attributable to the consolidation of Teva's results with those of Copley, which merged with Teva in Q4 1999.
It seems that the good news have to do with Copaxone, whose sales amounted to $49.2 million - 55% up from the corresponding period last year. Competitors seem to have run into difficulties. Avonex manufacturer Biogen reported an unexpected fall in Q1 2000 sales, compared to Q4 1999, and Betaseron maker Chiron is losing its market share.
"Yes. Teva's Copaxone's sales are increasing. IMS figures show that Q1 sales made Copaxone the second best sold drug among the three drugs sold on the US anti-multiple sclerosis market. According to the new figures, Teva's market share is more than 25%. Copaxone's growth is the fastest among all the players. A Salomon Smith Barney analyst says that Teva should be credited with two-thirds of overall growth in the market, with credit for the remaining third going to the other companies.
"It should be borne in mind that Q4 sales are usually bigger than those of the Q1 that follows it. There are several reasons for this. It has to do with internal considerations, such as medical representatives' bonuses and even income tax (patients sometimes prefer buying the drugs towards the end of the year for tax reasons)."
Despite the improvement in Copaxone's performance in the US, it seems that it is not yet particularly successful in the rest of the world.
"Copaxone has not penetrated Europe yet. Most of the relevant authorities have yet to approve it. At the same time, we're selling in Germany under a special arrangement, but we're talking about small quantities for certain customers. The drug is selling well in countries where approval was received, such as Russia and other East European countries."
And when are you expected to receive approval in other places?
"The authorities have already received all the necessary material, and approvals are already due. But we got our fingers burnt predicting the timing of approval, and we have no intention of making another prediction. It may be that approval is being issued right now, even as we speak, but then it may take more time".
Published by Israel's Business Arena on 4 May, 2000