Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) stock rose Tuesday after the Israeli drugmaker reported better-than-expected third-quarter earnings and raised its full-year outlook.
The company reported adjusted earnings of 86 cents per share, beating the analyst estimate of 73 cents.
Revenue fell 2% year over year to $4.395 billion but topped Wall Street’s estimate of $4.291 billion. Lower sales of generic drugs, particularly lenalidomide capsules, weighed on revenue.
Teva’s adjusted gross margin rose 345 basis points to 58.7%, its highest quarterly level in a decade, excluding a development milestone payment received in late 2025.
Adjusted operating income reached $1.39 billion, with an operating margin of 31.7%.
The company generated $241 million in operating cash flow and $495 million in free cash flow. Cash and cash equivalents totaled $4.085 billion at quarter-end.
Key Branded Drugs Deliver 33% Growth
Teva’s three key branded drugs, Austedo, Ajovy and Uzedy, generated approximately $1.1 billion in combined revenue, up 33% year over year in local currency.
The strong performance helped offset weakness in the company’s generics business.
Generics Decline As Biosimilars Gain Momentum
Global generics revenue fell 16% in local currency, mainly due to lower U.S. sales of lenalidomide, a generic version of Revlimid.
New generic launches and biosimilar growth partly offset the decline.
Excluding lenalidomide, global generics revenue rose 1%. European sales increased 7%, while U.S. and emerging-market sales fell 3% and 4%, respectively.
Teva expects its biosimilars business to generate more than $800 million in 2026, reaching its original 2027 goal a year early.
The company expects generics revenue to remain flat or rise slightly in 2026. Management expects the global generics business to grow 1% to 2% annually over the long term.
Samsung Bioepis Deal Expands U.S. Portfolio
Teva and Samsung Bioepis announced an agreement Tuesday to commercialize two FDA-approved immunology biosimilars in the U.S.
Teva will gain U.S. commercialization rights to etanercept-ykro, a biosimilar to Enbrel, at closing. Rights to infliximab-abda, a Remicade biosimilar, will transfer in the third quarter of 2027.
Teva Raises 2026 Outlook
Teva raised its 2026 adjusted earnings forecast to $1.92-$2.11 per share from $1.91-$2.11. Analysts expect $1.98 per share.
The company increased its revenue forecast to $16.7 billion-$17 billion from $16.5 billion-$16.85 billion. Wall Street expects $16.651 billion.
Teva also raised its 2026 Austedo revenue forecast to $2.55 billion-$2.65 billion from $2.45 billion-$2.6 billion.
The company increased its Ajovy sales forecast to $930 million-$960 million from $850 million-$870 million.
It also raised its Uzedy outlook to $290 million-$310 million from $270 million-$290 million.
Following the launch of Weltruza, Teva sees combined peak sales potential of $1.5 billion to $2 billion for Weltruza and Uzedy.
Medicare Pricing Pressure Looms Over Austedo
During Tuesday’s earnings call, CEO Richard Francis acknowledged the expected impact of Medicare drug price negotiations under the Inflation Reduction Act (IRA) on Austedo in 2027.
However, Francis expressed confidence that strong underlying demand would help offset the pricing pressure. He expects Austedo to generate approximately $2.5 billion in revenue in 2027 and exceed $3 billion in peak annual sales.
Teva also expects Austedo’s fourth-quarter 2026 revenue to decline year over year due to changes in purchasing patterns and pricing ahead of the IRA’s January implementation.
TEVA Price Action: Teva Pharmaceutical shares were up 3.37% at $42.07 at the time of publication on Tuesday. The stock is trading near its 52-week high of $42.59, according to Benzinga Pro data.
Photo via Shutterstock
Recent Comments