Teva Pharmaceutical Industries Ltd. warned of the rapid deterioration of its U.S. generics business, prompting the Israel-based drugmaker to look at cutting costs and considering divestitures.
The maker of generic and specialty drugs Thursday reported a second-quarter loss, and the company took a $6.1 billion impairment charge based on its evaluation of the U.S. market.
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Shares fell 19% to $25.32 in morning trading.
The drugmaker cut its dividend 75% from the previous quarter to 8.5 cents and lowered its full-year forecasts on revenue, research and development spending and earnings. Teva now expects to generate revenue of $22.8 billion to $23.2 billion this year, compared with its earlier forecast of $23.8 billion to $24.5 billion.
"All of us at Teva understand the frustration and disappointment of our shareholders in light of these results," said Dr. Yitzhak Peterburg, interim president and chief executive, in prepared remarks.
Dr. Peterburg blamed price and volume declines on increased competition following increased generic drug approvals from the U.S. Food and Drug Administration. Some new product launches have been delayed or also face more competition, he said.
Revenue from Teva's top-selling specialty drug Copaxone fell 10% to $1.02 billion. The sales drop was more dramatic for other medicines, with revenue for Parkinson's treatment Azilect down 69%.
Allergan PLC received 100 million shares of Teva, then valued at 5.4 billion, last August after it sold its generics business. In May, Allergan wrote down its stake by $1.98 billion.
In all for the second quarter, Teva reported a loss of $6.04 billion, or $5.94 a share, compared with a profit of $188 million, or 20 cents a share, a year earlier. Revenue rose 13% to $5.69 billion.
On an adjusted basis, the company earned $1.02 a share, compared with $1.25 a share a year ago. Analysts polled by Thomson Reuters were expecting earnings of $1.06 a share.
(END) Dow Jones Newswires
August 03, 2017 11:26 ET (15:26 GMT)