A day after surprising the capital market by raising its forecast of earnings, earnings per share and available cash flow for 2019 - Teva is taking advantage of the positive momentum in its shares and bonds: Teva (9.3 + 9.8%) will issue a bond to help it repay its bonds in 2021 And date the average duration of its financial debt in a way that eases the cash flow it is under.
The volume of private placement that Teva will make - in Euro denominated bonds and denominated dollars - is $ 1.5 billion. The issue will be exempt from listing under US Securities Law, but Teva estimates that it will list the new series of bonds for trading at a later stage. Of 2.2% and are repayable in 2021 as well as purchase of bonds bearing 3.65% and repayable in 2021 for a total amount of up to $ 1.5 billion minus accrued and unpaid interest but including premium for the purchase offer.
Teva's current clearing schedule reveals that 2021 is a particularly challenging year for it because it is expected to repay $ 4.1 billion in debt this year. Given that the company expects its available cash flow to be $ 1.7-2.0 billion in 2019 and the fact that it has $ 1.2 billion in cash USD and must repay $ 3.1 billion over the next 12 months - it is clear that Teva must renew its commitments.
Teva concludes quarter: Israeli pharma company signs July-September revenues of $ 4.264 billion, down 6% year-over-year, mainly due to increased generic competition for Copaxone. The company met analysts' expectations of $ 4.227 billion at the top of the report.
On the bottom line, Teva posted a net profit of $ 637 million or 59 cents a share, compared to $ 694 million or 68 cents a share in the same quarter, as in analysts' forecasts.
Teva managed to provide one positive surprise in the form of a free cash flow of half a billion dollars. "We are on track to achieve the biennial target of $ 3 billion in spending," said Teva CEO Cor Schultz with the release of the reports.
The decline in natural performance is as a result of the decline in Copaxone sales, primarily in the US market - where sales fell 41% compared to the corresponding quarter to $ 271 million. In Europe, Copaxone sales also fell, by 14%, to $ 106 million.
Parallel to the release of the reports, Teva announced the appointment of Eli Calif to the CFO of the company in place of Michael McLellan, who announced his retirement three months ago.
New York's Teva stock fell 48% from the beginning of the year, but climbed 20% in the past month, following reports from the company about a compromise in the painkiller affair - under which it will pay $ 23 billion in drugs, over a 10-year period. The cash payment under the arrangement is expected to be about $ 250 million.
Although the final settlement has not yet been signed, Teva has recorded a provision of $ 468 million for the legal expenses that it will have to bear under the arrangement. Total provisions and write-offs reached $ 1 billion and included further goodwill write-offs for the purchase of Actavis and streamlining expenses. The current provision for painkillers claims is further down to the $ 646 million provision made by Teva in the second quarter of this year. Taking into account all the provisions and write-offs, Teva shows a loss of 29 cents per share.
Teva slightly improved its annual outlook for 2019 - the company now expects $ 17.4-17.2 billion in revenue this year, operating income of $ 4 to 4.2 billion (compared with the previous range of $ 3.8 to $ 4 billion) and free cash flow of 1.7 to $ 2 billion. During the third quarter, Teva reduced its debt by $ 1.8 billion to $ 26.9 billion, compared to $ 28.7 billion at the end of the previous quarter.
While most of Teva's drugs suffer from sales decline, the few that show improvement are Ostado and Ajobi, but still in very low absolute numbers. Ostado sales jumped 71% in the US to $ 107 million, while Ajobi, the company's big pledge for migraine care, generated only $ 25 million in revenue. That's a disappointing number, since in the previous quarter, the drug that was supposed to capture a 23 percent revenue share Schultz noted with the release of the reports that the drug manages to maintain market share relative to competitors.