2024-04-12 18:24:00
The pharmaceutical giant Teva Teva (US) -4.43% Close: 0 Open: 13.67 High: 13.67 Low: 13.07 Turnover:– Page Quote News Graphs Company profile Recommendations Additional articles on the subject: Trading with falling prices, when according to reports in the networks it is an overreaction to the possible attack From Iran.
The networks in Israel are buzzing, when the news broadcasts do not stop publishing about the possible Iranian response, how it is expected to show and what its consequences might be. The IDF is on high alert and the pressure gauge continues to rise. It seems, at least according to initial reports, that this pressure also affects the pharmaceutical giant.
However, the reason is unclear. The company, at least in terms of production, is in Israel with a lower presence than before with 10-15% of the production volume. The more significant part is in research and development. Undoubtedly, plans for the longer term may delay, but not hurt sales to the extent that should cause concerns among investors. At least not yet. It is possible that the fear is more than what will happen if Iran crosses the threshold that Israel will define as excessive.
If such a thing happens, Israel will actually get the credit for attacking Iran directly and this, at least according to the many commentators, may lead to an expansion of the war and a direct war against the head of the snake. In such a case, the Arab world and other countries may boycott or fear doing business with Teva, which is defined as Israeli.
It is not clear whether the Teva share is really responding to the Iranian threat or if it is for another reason that has not yet been announced to the general public. In any case, the pharmaceutical giant has recently been on a positive trend and has already increased by 26% since the beginning of the year and 41% in the last year as a whole. The company laid off thousands of employees in recent years as part of its efficiency plan, until it finally managed to turn a profit. And recently, for the first time in years, Teva returned to recruiting workers in Israel.
For the first time since 2016, Teva increased its workforce, which reflects a revival in the company’s growth and an optimistic outlook for the future. By the end of 2023, Teva’s global number of employees was 36,472, an increase of 1,347 or 3.8% from a year earlier. The growth is not only evidence of the company’s operational expansion but also the first signal of positive signs from the company’s return to growth plan. In Israel, the number of Teva employees grew by 4.5% to 3,385, or an increase of 145 employees.
In addition, Teva and its partner in the development of biological generic drugs – the Icelandic company Alutec recently received approval from the FDA (US Food and Drug Administration) to market Simlandi in the US, a biosimilar generic drug of the drug Humira, whose sales amount to 11 billion dollars a year. Yumira Developed by Abbvie is intended for the treatment of rheumatoid arthritis, rheumatoid arthritis, Crohn’s disease and other inflammations.
The latest reports
Just before the publication of the reports, Teva announced its intention to split its raw materials activity (API) in order to flood value. Teva has 4,300 employees in the field and the value of the activity may be worth several billions. The split is expected to be complete in the first half of 2025 and will allow Teva to maximize and diversify its sources of income while focusing the capital invested in the growth of the activity channels. Teva may sell this activity in the future and perform a spin-off for its shareholders (as a dividend distribution in kind) – split its stock and give the shareholders also shares of the new company.
In its results for the fourth quarter and for 2023, Teva reported a profit per share of $1 on revenues of $4.5 billion – the profit was above the analysts’ forecasts for a profit of $0.77 per share, and the revenues were above the expectation of $4.01 billion. These results are mainly due to one-time income of $500 million as a result of the deal with Snoopy.
Adjusted EBITDA totaled $1.66 billion compared to $1.24 billion in the corresponding quarter, an increase of 34%. About an hour before the publication of the reports, Teva announced its intention to split the API activity and bring about an overflow of value.
For 2024, Teva expects revenues of between 15.7-16.3 billion dollars, above analysts’ expectations of 15.57 billion dollars. The profit per share is expected to be between 2.2-2.5 dollars, compared to the analysts’ expectations of 2.42 dollars per share. The profit is slightly below consensus expectations. In addition, it expects Non-GAAP operating profit of between 4-5 billion dollars, adjusted EBITDA of between 4.5-5 billion dollars and free cash flow of between 1.7-2 billion dollars.
“The year 2023 was a year of significant progress for Teva, a year in which we gained momentum in our ‘returning to the path of growth’ strategy, our innovative key products grew, we accelerated the development of products that are in advanced stages of development, and we returned the generics business to growth,” said Richard Francis, CEO of Teva. “In 2024, we will continue to focus on our main growth engines, while also continuing to focus on complex and high-value generic drugs, with new launches and expectations of reaching exciting clinical milestones for products that are in advanced development stages.”
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