Teva stock flirted with a breakout Wednesday after generic drugs helped the Big Pharma behemoth beat June-quarter expectations and hike its outlook for the year.
The company raised the low end of its adjusted earnings outlook by a dime and now expects to earn $2.30 to $2.50 per share on $16 billion to $16.4 billion in sales. At the midpoint, the sales outlook is $200 million higher than the guidance Teva Pharmaceutical issued three months ago. The sales estimate beat expectations, though the earnings guide was light at the middle.
This is the third time in his tenure, which began in early 2023, that Teva has raised its guidance, Chief Executive Richard Francis told Investor's Business Daily.
On today's stock market, Teva stock rose 6.2% to 17.43. Shares are forming a flat base with a buy point at 17.69, according to MarketSurge.
Teva Stock: Top 5% Performance
Overall, Teva earned an adjusted 61 cents per share on $4.16 billion in second-quarter sales. Profit climbed nearly 9% and beat forecasts for 54 cents. Sales jumped 7% — or 11% in constant currency — to top the average estimate of analysts' polled by FactSet for $3.99 billion.
Revenue from generic drugs advanced more than 9% to $2.48 billion. The best growth came from the North America segment where sales popped 16% to $1.02 billion. Austedo, which only sells in the North America business, brought in $407 million in sales, surging 32% year over year. That easily topped forecasts for $375.1 million.
Notably, sales of migraine prevention drug Ajovy fell 20% in North America. But international sales helped offset that. Across all geographies, sales of the shot climbed 10.5% to $116 million. Francis, the CEO, said Ajovy is still competing well in the U.S., but growth among injectable drugs in its class is now struggling following the launch of oral medications.
A New Day At Teva Pharma
Teva was once known as a generic medicine powerhouse. However, Francis says investors are now coming around to Teva's expertise in developing new, innovative drugs.
The company recently accelerated its timeline for a drug that blocks TL1A, a protein that shows up in patients with immunological diseases. Teva now expects to have the top-line results from a study of its anti-TL1A drug, developed with Sanofi, in the fourth quarter. Teva is also testing new drugs for cancer, asthma and schizophrenia.
"I think we've really changed the perception of Teva — we continue to change it," Francis told IBD. "We are a pharmaceutical company that has a world-class generics business, that has a world-class emerging innovative business."
Teva stock has accelerated 67% this year, as of early Wednesday. Shares have a strong IBD Digital Relative Strength Rating of 95. This means shares rank in the leasing 5% of all stocks when it comes to 12-month performance.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
