TEL AVIV (Reuters) - Israel-based Teva Pharmaceutical Industries (TEVA.TA) reported a smaller-than-expected fall in first-quarter profit on Thursday, with sales boosted by its $40.5 billion acquisition last year of generics drug business Actavis.
Teva was left without a permanent chief executive in February after Erez Vigodman stepped down, leaving new management to try to restore confidence in the world’s biggest generic drugmaker after a series of missteps. Its chief financial officer (CFO) Eyal Desheh also said he was resigning at the end of June.
Teva on Thursday named Michael McClellan as interim CFO, effective July 1. For the last two years he has been CFO of Teva’s speciality medicines division and before that he was the U.S. CFO at French rival Sanofi (SASY.PA).
Chairman Sol Barer said a number of “excellent candidates” had been interviewed for the CEO post. “The board will take the time it needs to find the best candidate but I am pleased with progress we have made,” he told a conference call.
When asked whether Teva might waive its requirement for the CEO to be based in Israel, he said: “We are looking around the world for the best candidate. We are committed once we find that candidate to do what it takes to bring that candidate to Teva.”
First-quarter earnings per share (EPS) slipped to $1.06 excluding exceptional items from $1.20 a year earlier, but revenue was up 17 percent at $5.63 billion. Analysts had on average forecast underlying earnings of $1.03 on revenue of $5.68 billion, according to Thomson Reuters I/B/E/S Estimates.
Teva’s shares were up 3.4 percent at 114.10 shekels in late Tel Aviv trading.
Global sales of Teva’s best-selling multiple sclerosis drugCopaxone fell 4 percent in the quarter to $970 million.
“Given the absence of a generic competitor it’s surprising that Copaxone didn’t beat expectations,” Goldman Sachs analyst Jami Rubin said. Analysts were expecting $985 million in sales. Teva reaffirmed its 2017 forecast for EPS of $4.90-$5.30 on revenue of $23.8-$24.5 billion.
The company said it expected synergies and cost reduction benefits related to Actavis to total $1.5 billion by the end of 2017, up $200 million from its previous forecast.
“While we have several challenges facing us, including the U.S. generics market dynamics and greater instability in the Venezuela market, we are very confident that the global business we have built will allow Teva to thrive in the future,” interim CEO Yitzhak Peterburg said.
Changes in exchange rates for the Venezuelan bolivar and inflation-driven price increases in Venezuela cut revenue by $217 million. Peterburg said the situation in Venezuela continued to deteriorate, which could hit Teva’s production capabilities.
The company is looking to sell its women’s health business and its oncology and pain business in Europe to pay down debt.
Teva will pay an unchanged quarterly dividend of 34 cents per ordinary share and $17.50 per mandatory convertible preferred share.
Additional reporting by Steven Scheer; Editing by Mark Potter