Teva finishes difficult year on a losing note

JERUSALEM - Teva Pharmaceuticals, with U.S. headquarters in North Wales, Pennsylvania, reported an operating loss for 2017 of $17.5 billion. The loss was primarily due to a goodwill impairment charge of $17.1 billion mainly with respect to the company’s U.S. generics reporting unit.

Teva stated that 2017 brought significant adverse challenges in the U.S. generics market and the economic environment. According to the company, these challenges included additional pricing pressure in the U.S. generics market as a result of customer consolidation into larger buying groups capable of extracting greater price reductions as well as pricing challenges due to government regulation.

The company also cited accelerated FDA approval of additional generic versions of off-patent medicines, resulting in increased competition.

Teva also experienced delays in new launches of certain of generic products and changes to the traditional distribution model.  They also said the recently-enacted U.S. tax reform legislation is expected to limit the company’s ability to achieve targeted tax efficiencies compared to prior estimates.

Kåre Schultz, Teva’s President and CEO, said, “2017 was a challenging year for Teva. Starting 2018 we are focused on meeting our financial obligations and ensuring a much more solid and sustainable business model going forward. We are making strong progress on the restructuring plan, and I am optimistic about the progress made and remain confident in our ability to deliver on our targets in the coming year.”

In December 2017 Teva announced a restructuring plan that included the elimination of 25 percent of its workforce.

Revenues in 2017 were $22.4 billion, an increase of 2 percent compared to 2016, primarily due to an increase in  the generic medicines segment from the inclusion of Actavis Generics for the full year of 2017. Fourth quarter 2017 revenues were $5.5 billion, down 16 percent compared to fourth quarter 2016.

For 2018, the company expects revenues to be $18.3 billion to $18.8 billion. Non-GAAP operating income are expected to be $4.0 billion to $4.3 billion and EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is estimated at $4.7 billion to $5.0 billion. Non-GAAP earnings per share are projected to be $2.25 to $2.50.

Teva Pharmaceutical Industries Ltd. (TEVA :NYSE) was established in 1901. The global headquarters is based in Israel. Teva develops, produces and markets affordable generic drugs as well as innovative and specialty pharmaceuticals and active pharmaceutical ingredients.

Today they have a portfolio of more than 1,800  drugs, and produce approximately 120 billion tablets and capsules a year at 87 manufacturing facilities.

Teva ranks among the leading pharmaceutical companies in the world and is active in 80 countries. They have approximately 57,000 employees around the world.

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