More From Nicole Sario
Pharmaceutical Segment Is Johnson & Johnson’s Savior in 1Q15
Johnson & Johnson’s (JNJ) pharmaceutical segment reported revenue growth of 3.0% in 1Q15 due to strong growth in cardiovascular-metabolism, oncology, and immunology.
Key Factors That Impact Johnson & Johnson’s Forward Valuation
Two factors expected to impact Johnson & Johnson’s forward valuation are increasing competition for Olysio and further decline in international revenues.
The Many Reasons Mylan Is So Keen to Acquire Perrigo
On April 21, 2015, Teva (TEVA) launched a proposal to acquire Mylan for $82 a share in a 50% cash, 50% stock deal worth $43 billion. Mylan rejected the offer.
Central Nervous System Is Key to Teva’s Specialty Medicines
Revenues for Teva’s (TEVA) Specialty Medicines segment grew by 2.1% to $8,560 million in 2014, from $8,388 million in 2013.
ETFs Capitalize on the Generic Industry’s Growth
ETFs are the investment funds—like index funds and mutual funds—that track an index, a commodity, or a basket of assets. ETFs are publicly traded on an exchange.
Johnson & Johnson Posts Earnings, Lowers EPS Guidance on April 14
Johnson & Johnson (JNJ) posted its 1Q15 earnings on April 14. It beat Wall Street EPS estimates of $1.53 marginally, posting $1.56 EPS.
Why Novartis’s Operating Margins Expanded in 1Q15
Novartis (NVS) reported adjusted operating margins of 30.6% in 1Q15, up by 0.8% from 1Q14. The currency had a negative impact of 0.9%.
Why Teva’s Generic Medicines Profitability Improved in 1Q15
Teva’s increased profitability for its generic medicines was partially offset by decreased profitability of its specialty medicines, which were down by 13% in 1Q15 from 1Q14.
Why Teva’s Specialty Medicines Performance Declined in 1Q15
Teva’s new drug application for ProAir RespiClick was approved, with an expected launch of 2Q15. ProAir is the first breath-actuated dry-powder inhaler used to treat acute asthma symptoms.
Mylan Reports 1Q15 Earnings Per Share Growth of 6%
With the acquisition of Abbott Laboratories’ (ABT) non-US developed markets specialty and branded generics business, Mylan relocated its headquarters to the Netherlands.
Why Teva’s 1Q15 Revenues Declined Marginally
In 1Q15, Teva beat Wall Street analysts’ revenue estimates of $4.81 billion, posting revenues of $4.98 million, an increase of ~3.5%.
Teva’s Adjusted Earnings Per Share Improved 11% in 1Q15
Teva beat Wall Street adjusted EPS estimates of $1.25 by a wide margin, posting $1.36 EPS. This represents a growth of ~9%.
Strength of the US Dollar Takes a Toll on Novartis Revenues
Novartis (NVS) missed analysts’ revenue estimates in 1Q15 by 4.5%. Lower international revenue due to a strong US dollar led to a 10% decline in revenue.
Teva 1Q15 Earnings Preview: Profitability Drivers
Teva plans to reduce the cost per tablet unit from $15 to $10. It’s shifting manufacturing operations to low-cost areas to improve product profitability.
Teva Earnings Preview: Auspex Acquisition to Support Growth
Acquisition rationale On March 30, 2015, Teva Pharmaceutical Industries (TEVA) announced its agreement to acquire Auspex Pharmaceuticals (ASPX) for $3.2 billion in enterprise value, a 42.4% premium to the company’s closing share price of $70.91 on March 27, 2015. This step will support the company’s near- and mid-term growth. Teva share price moved up a marginal […]
Does Johnson & Johnson Have a Plan for Huge Cash Reserve?
Johnson & Johnson (JNJ) has a huge cash reserve amounting to ~$15 billion in 4Q14. The company might use the cash for merger and acquisition (or M&A).
Mylan–Perrigo Merger: Expanding into Over-the-Counter Drugs
Pharmaceutical company Mylan’s (MYL) intention to acquire Perrigo became public on April 6, 2015. The acquisition would permit Mylan to expand into the over-the-counter drugs segment.
Teva: Top Generics Pharmaceutical Company Worldwide
Teva Pharmaceutical Industries Ltd. (TEVA) is a leader in the global generics pharmaceutical industry on the basis of revenues of ~$20 billion in 2014.
What Are Teva’s Long-Term Prospects?
Teva’s long-term prospects seem bright due to a focused product pipeline in its specialty and generics segments.
Teva’s Debt Levels – Best among Competitors
In terms of debt-to-EBITDA, Teva is well placed at 2.0x–2.5x to maintain a low credit risk. This will allow Teva to use debt for acquisitions and growth.
Why a Change in Strategy Will Improve Teva’s Profitability
Teva’s strategy includes driving organic growth, focusing on key growth markets, and maintaining the Copaxone franchise and other specialty products.
Teva’s Risk Exposure in a Dynamic Environment
Teva operates in a dynamic environment with a number of risks that could have a material adverse effect on the company.
Why Teva’s Business Model Is Progressively Evolving
Teva intends to target a minimum annual profit of $4.3 billion, or $5 EPS, through 2016. To achieve this, Teva is reorienting its business model.
Copaxone, a Significant Growth Driver for Teva
Copaxone 20mg/mL is the major growth driver for Teva Pharmaceutical Industries Ltd. (TEVA). In 2014, Copaxone accounted for 21% of Teva’s revenues.
Teva’s Generics Medicines Segment Is Geographically Diversified
Teva (TEVA) has diversified its generics business. In 2014, it generated 45% in the United States, 32% in Europe, and 23% in the rest of the world.
Actavis’s Investment Grade Ratings
Moody’s and Fitch maintained their investment grade ratings for Actavis, with respective ratings of Baa3 and BBB-.
Actavis’s Expanding Gross and Operating Margins
Actavis’s gross margins improved from 44% in 2011 to 52% in 2014, due to improved gross margins for the North American Generics and International segments.
Actavis Expanding Footprint in International Generics Market
Actavis plans to acquire Auden Mckenzie, focusing on the development, licensing, and marketing of niche generic medicines and proprietary brands in the UK.
Actavis Focuses on Complex Generics and Para IV Filings
In January 2015, Actavis launched a generic specialty injectable portfolio, containing ~20 products across its therapeutic segments in the US.
How Actavis Generics Drive Revenues
As of fiscal 2014, Actavis marketed approximately 550 generic products globally, including around 250 generic products in the US portfolio.
How Actavis and Allergan Merger May Boost Branded Business
Actavis intends to invest ~$1.7 billion in R&D annually. It expects to add ~15 projects in near- and mid-term development to the company’s product pipeline.
North American Brands’s Position of Strength
The top 10 products across Actavis’s therapeutic segments accounted for approximately 70% of net revenues of segmental revenues in fiscal 2014.
3 Key Therapeutic Segments Drive Branded Revenues
Actavis’s North American Brands segment revenue increased significantly by 336% year-over-year to $4,631.4 million in 2014 from $1,062.5 million in 2013.
How Actavis Organizes Its Business
Anda, Inc. is the fourth-largest generics distributor in the US, accounting for about 13% of total net revenues in fiscal 2014 and 14% in fiscal 2013.
How Actavis Has Emerged through Mergers and Acquisitions
In October 2012, Actavis completed the acquisition of Actavis Group. In 2013, the company’s revenues outside the US increased to 29% from 16% in 2012.
Actavis: A Diversified, Fully Integrated Specialty Company
In 2014, Actavis generated revenue of $13,062.3 million, employed 21,600 workers, and had more than 30 manufacturing and distribution facilities worldwide.
What Drives Generic Pharmaceuticals’ Valuation?
Valuation reflects the market’s perceptions of the industry’s growth prospects. The major value drivers for valuation are ROIC and the growth rate.
What Helps a Generic Company Boost Its Profitability?
Leading companies are taking various steps—like cost optimization, business rationalization, outsourcing, and acquisitions—to manage costs and boost profitability.
Generic Companies Are Fighting for Market Share
The generic pharmaceutical industry is characterized by low concentration. The top ten global generic companies hold less than 50% of the market share.
What’s Supporting Continued Growth in the Generics Market?
The global generics market was valued at $168 billion in 2013. From 2013 to 2018, it’s expected to grow at a CAGR of 11% to reach $283 billion.
Complex Generics Are Attractive Due to High Margins
Complex generics are large and complex formulations or active ingredients used to treat chronic and life threatening diseases like cancer, Hepatitis C, and HIV.
Specialty Generics: Why Are They Getting More Attention?
There are two categories of specialty generics – NTE (New Therapeutic Entities) and Complex Generics. In this part of the series, we’ll discuss NTE.
Affordable Pricing Is Driving the Generic Drug Market
Generic drugs are cheaper. They have a less expensive and time consuming development and approval process. This encourages other players to enter the market.
Is a Para IV Filing Rewarding for a Generic Company?
A generic company is rewarded for a Para IV filing. The first applicant to submit a substantially completed ANDA is given marketing exclusivity for 180 days.
Regulations Are Instrumental in the Marketing Authorization Process
To overcome the issues of the costly and time consuming marketing authorization process, the Hatch-Waxman Act introduced the ANDA process to make approvals efficient.
Why Is the Generics Industry Controlled by Regulations?
The generics pharmaceutical industry is highly regulated. The drug approval process and the regulatory bodies governing them differ from market to market.
Generics Are Climbing up the Value Chain
Severe cost pressure can lead to the commoditization of generics. it’s important to adjust the value chain to achieve higher efficiencies, flexibility, and reliability.
What Two Factors Are Driving the US Generics Market?
The US generics industry is fragmented. The top five companies accounted for 44.4% of the market share of unbranded generics in 2013, according to IMS Health.
Why the Generic Industry’s Classification Is Still Evolving
The generics industry primarily caters to several large diseases in primary care. Healthcare is organized into three categories—primary, secondary, and tertiary.
Are Generics the Only Affordable Drugs?
Drugs are used to treat, cure, or prevent diseases. The drug market is broadly categorized into prescription drugs and OTC (over-the-counter) drugs.
What Investors Need to Know about Branded and Generic Drugs
The prescription drug market is divided into two categories—branded or generic drugs. Branded drugs are patented drugs. Generics are off-patented drugs.