Teva knocked as competition fears grow for MS drug

Teva Pharmaceuticals, the world’s largest maker of generic drugs, has cut its sales and profit expectations for 2017 as it braces for more pricing and competition pressure on its best-selling drug — the multiple sclerosis treatment Copaxone.

The Israeli group said net revenue for full-year 2017 would now be $23.8bn-$24.5bn, compared with the $25.2bn-$26.2bn range it gave in July.

Expectations for earnings per share have also been sharply dialled back to $4.90-$5.30, down from its previous forecast of $6-$6.50.

Teva’s New York-listed American depositary receipts (ADRs) fell 7.5 per cent on Friday to $35.10.

The stock has shed more than 44 per cent over the past 12 months amid mounting concerns over the future of Copaxone, which accounted for about 20 per cent of group revenues last year.

Teva lost three patent challenges that protected the drug from copycat versions during the summer and the company warned on Friday that the entry of two generic competitors in the US in February could reduce revenues by $1bn-$1.2bn, and hurt adjusted profit by 65 cents to 80 cents.

“2016 was a transition year for Teva,” said Erez Vigodman, Teva’s president and chief executive. “The entire healthcare sector has faced significant headwinds and we have not been immune.”

“[In a] best case [scenario], investors will come away from 2017 looking at Teva as a year of transition as Copaxone likely sunsets either ’17 or early ’18,” said analysts at Leerink.

The decline in Teva shares came as US stocks advanced on the back of a solid jobs report.

At the close of trade in New York on Friday, the S&P 500 was up 0.4 per cent to 2,276.9. The Dow Jones Industrial Average continued to flirt with the 20,000 level, rising 0.3 per cent to 19,963.8. Meanwhile, the Nasdaq Composite gained 0.6 per cent to 5,521.1.

Elsewhere, Gap shares climbed 0.4 per cent to $23.34 after the retailer — known for stores including Old Navy, Banana Republic and its eponymous brand — posted better than expected like-for-like sales during the holiday period and lifted its earnings guidance.

The San Francisco-based retailer said same-store sales, a key industry metric, climbed 2 per cent over November and December, which Sabrina Simmons, chief financial officer, attributed to “improved momentum over the holiday season”.

In December alone, comparable sales rose 4 per cent, topping analysts’ estimates for 1.7 per cent growth. However, Gap has benefited from easier comparisons as its total same-store sales were down 5 per cent in December 2015.

Old Navy, the retailer’s largest division, posted a 12 per cent gain in comparable-store sales, eclipsing estimates for a 2.3 per cent gain.

Sales at the Gap brand rose 1 per cent, despite expectations for a 3.9 per cent decline. Only Banana Republic posted a disappointing result with sales falling 7 per cent against expectations for a 5.3 per cent drop, as it has struggled with a string of fashion misses.

The improvement in sales prompted Gap to guide for full-year adjusted earnings “modestly above the high end of our previous adjusted guidance range of $1.92”.

However, JCPenney shares dropped 3.7 per cent to $7.57 after the company became the latest department store chain to post downbeat holiday results, following weak numbers from Macy’s, Kohl’s and Sears.

JCPenney said like-for-like sales during the nine-week period in November and December fell 0.8 per cent from a year ago.