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Teva Pharmaceutical Expected to Report Robust Revenue in 2016

Margaret Patrick - Author
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Aug. 18 2020, Updated 5:16 a.m. ET

Robust revenue growth

Teva Pharmaceutical Industries (TEVA) expects to earn revenues of about $21.6 billion–$21.9 billion in 2016. This projection also includes revenues from Allergan, its generics business, in the second half of 2016.

On August 2, 2016, Teva Pharmaceutical announced the completion of its acquisition of Allergan. To know more about the acquisition, please refer to Can Allergan Generics Boost Teva Pharmaceutical’s 2016 Revenues?

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Revenue projections

Wall Street analysts have projected that Teva Pharmaceutical could report revenues worth $22.4 billion in 2016, which is a year-over-year rise of about 14.2%. Peers such as Pfizer (PFE), Johnson & Johnson (JNJ), and Mylan (MYL) are expected to earn $52.9 billion, $72.1 billion, and $11.1 billion, respectively.

Allergan is expected to strengthen Teva Pharmaceutical’s product portfolio as well as its research pipeline. Allergan has also expanded Teva’s operational network and increased its presence across multiple international markets.

The Teva-Allergan deal has made the combined company a leading player in the generics pharmaceutical industry. The combined company can explore multiple cross-selling opportunities for its consolidated customer base.

If Teva Pharmaceutical manages to effectively realize synergies from the Teva-Allergan deal, it may boost the company’s share price. This development may also prove beneficial for the VanEck Vectors Pharmaceutical ETF (PPH) since Teva makes up about 3.7% of PPH’s total portfolio holdings.

Teva Pharmaceutical completed multiple acquisitions in 2015 and 2016 on a year-to-date basis. The company now plans to focus on organic growth and extracting synergies from completed transactions for a few quarters. It also plans to leverage the Allergan generics business and introduce cost efficiencies across the entire company. Those moves are expected to help Teva generate cash flow and reduce its outstanding debt.

In the next part of this series, we’ll explore how Teva Pharmaceutical expects to manage mid-single-digit growth for its generics business despite the tough pricing environment in the United States.

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