Teva is confident in the next phase of its “pivot to growth” strategy — even in the face of upcoming selections for the next round of Medicare negotiations.
CEO Richard Francis announced the company’s sixth consecutive quarter of growth on Wednesday. He said the company will continue to rely on one of its leading growth drivers, the Huntington’s disease treatment Austedo, which is expected to reach $2.5 billion in revenue by 2027.
While multiple analysts questioned what would happen if Austedo is selected for the next round of Medicare negotiations under the Inflation Reduction Act, Francis said on Teva’s second-quarter earnings call that the company has already factored the possibility into those goals.
“We’re going to learn a lot in the next few weeks and we’re going to learn a lot in the next six months,” Francis said on the call. “But I feel confident because of the fact that we took it into account right at the start.”
CMS will kick off the next round of negotiations early next year, with plans to announce a new group of selected drugs by Feb. 1. Negotiated prices for that group would go into effect in 2027.
“As that becomes even clearer and more accurate, we’ll come back to you,” Francis said.
He emphasized that Teva has a pipeline to lean on that is “maturing very quickly,” including its long-acting injectable formulation of the schizophrenia treatment olanzapine and its dual-action asthma rescue inhaler ICS/SABA. Teva read out positive Phase 3 results for olanzapine earlier this year, and expects Phase 3 results for ICS/SABA in 2026.
The company’s migraine medicine Ajovy and schizophrenia treatment Uzedy will also be important to its growth plans. Ajovy generated $115 million in second-quarter sales, while Uzedy launched in May and is “gaining momentum,” Francis said.
Teva will soon move into the next phase of its “pivot to growth” strategy, which has involved manufacturing site closures, a shift away from some lower-margin generics, and plans to sell off its API unit in the first half of 2025. Francis told Endpoints News that the company is “in the thick of” that process with its API unit, but declined to provide further detail.
The company’s stock $TEVA was up 8% on Wednesday afternoon.
Teva landed in hot water with the FTC earlier this month, when the agency launched a civil investigation into a group of drug patents it said are improperly listed in an FDA database. Without going into much detail, Francis told Endpoints that Teva stands behind its patents, and has no intention to pull them from the database, also known as the Orange Book. An FTC warning letter in April targeted several patents covering Teva’s AirDuo and ArmonAir inhalers.