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Teva’s first quarter profit up despite flat European sales

Cephalon purchase boosts US performance

Teva has reported an increase of 39 per cent in its non-GAAP income to $1.3bn for the first quarter of 2012.

This was despite a slight decrease in sales in Europe of 2 per cent compared to the first three months of 2011, with the generics company seeing revenues drop slightly from $1.34bn to $1.32bn.

The flat European performance was due to ongoing economic issues across the continent and healthcare reforms in key markets, which led to fewer sales the company's generic products according to Teva.

Revenues for the company's generics division were down 15 per cent in Europe, although branded sales managed to climb 43 per cent, due mainly to the company's acquisition of Cephalon and its portfolio of mainly neurodegenerative products.

The effects of this purchase were felt more strongly in the US, however, where revenues of branded products climbed 60 per cent to $1.50bn, overtaking Teva's generics business in the country.

The launch of seven new generic products in the regions also helped the performance of its US generics division though, with sales increasing 29 per cent to $1.22bn.

Total US sales for Teva were up 46 per cent to reach $2.75bn.

The Israel-based company also saw growth in the rest of the world, leading to total revenues of $5.10bn for the quarter – a year-on-year increase of 25 per cent.

This contributed to the company's strong profit showing, which excluded such one-off items as the amortisation of intangible assets, restructuring charges and legal settlements.

If included, Teva's income would still have increased significantly, however, with the company having a GAAP net income of $859m for the first quarter of 2012 compared to $761m during 2011.

Shlomo Yanai, who is soon to step down as president and CEO of Teva, said: “2012 is off to a good start for Teva. We enjoyed a quarter of strong growth for our branded products, in our US generics business, and in the developing markets Teva operates in. All of these served to offset weaker generics sales in Europe, which resulted primarily from the macro-economic conditions in that region.”

The company's ambitions to increase its presence in the branded drugs sector was reflected in an increase of R&D spending of over $50m, as well as the recent appointment of its first president of global R&D.

10th May 2012

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