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Investors Business Daily
Investors Business Daily

Teva, GSK Put Up Bullish Fourth-Quarter Performances. Here's Where Novartis Fell Short.

Teva stock neared a profit-taking zone Wednesday, while GSK stock — a fellow pharma Goliath — bounded briefly out of a chase zone on strong fourth-quarter performances for both.

The strong showing from Teva Pharmaceutical came on the back of Austedo, a treatment for involuntary movements caused by tardive dyskinesia or Huntington's disease. Austedo sales surged 18% to $408 million, beating forecasts for $401.7 million, according to FactSet.

Meanwhile, sales of GSK's bread-and-butter shingles vaccine, Shingrix, climbed 18% — excluding the impact of exchange rates — to roughly $1.15 billion. That narrowly beat forecasts for $1.11 billion.

The new respiratory syncytial virus vaccine, Arexvy, generated about $673.4 million in sales. It rivals another new RSV vaccine from Pfizer, Abrysvo. Abrysvo sales, on the other hand, were lower at $515 million.

On today's stock market, Teva stock popped 3.2% to 12.10, while GSK stock rose a more moderate 0.9% to 39.44. Novartis, which missed fourth-quarter sales and earnings expectations, saw shares topple 4% to 103.47.

Teva Stock: Benefitting From A One-Time Payment

Teva's total sales increased 15% to $4.46 billion. That beat expectations for $4.03 billion, but included a one-time payment of $500 million tied to its collaboration with Sanofi for an inflammatory bowel disease treatment.

Adjusted profit surged almost 41% to $1 per share, and walloped forecasts for 77 cents.

For the full year, Teva called out strength from Austedo and Ajovy. The latter is a migraine treatment. Austedo sales topped $1.2 billion last year, soaring 28%, while Ajovy sales rose 16% to $435 million. Teva notes its generic drugs business is starting to stabilize.

In the fourth quarter, Ajovy brought in $121 million in sales, declining by about 2% vs. the year-earlier quarter. Sales declined in North America and were flat internationally, but a big increase in Europe helped offset those.

Revenue from generic drugs hit $2.11 billion, down 1.4%. Sales in North America slipped 8%, but the bigger European segment and international sales climbed by long single-digit percentages.

For the year, Teva guided to adjusted income of $2.20 to $2.50 per share and $15.7 billion to $16.3 billion in sales. The midpoint of Teva's earnings guidance was just shy of analysts' consensus estimate for $2.41. But Teva stock analysts projected a lower $15.57 billion in sales.

GSK Stock: Strong Sales For Meningitis Vaccine, Cancer Drugs

GSK's total sales rose 9% on a strict, as-reported basis to about $10.2 billion. GSK stock analysts were expecting a lower $9.6 billion in sales. In constant currency, GSK's sales increased 15%.

The company reported strong sales growth for its meningitis vaccine and cancer drugs — up 20% and 55%, respectively. But revenue from its flu shot plummeted 66% to about $120 million. That missed expectations for $149.7 million.

GSK noted it expected the decline in flu shot sales.

This was "driven by competitive pressure and lower market demand primarily in the U.S. where the fourth-quarter sales decrease was also negatively impacted by quarterly supply phasing and (IRS-related) adjustments," GSK said in its news release.

For 2024, GSK expects sales to increase 5% to 7% and for adjusted earnings to climb 6% to 9%.

In related news, Novartis reported core earnings of $1.53 a share on $11.42 billion in sales, up 8% and 10%, respectively. But the Street projected stronger earnings of $1.65 per share and $11.88 billion in sales.

While Novartis stock fell, Teva stock rose above its chase zone, which runs up from 10.72 to 11.26, according to GSK stock initially bounded above its buy zone, but shares returned to their chase zone above an entry at 38.21 out of a flat base.

Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.

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