Generic and biosimilar drugs are often preferred over brand-name drugs due to their lower price. Generics are exact copies of branded equivalents, while biosimilars are “similar” and often require clinical trials. Health insurance companies, Congress and patients love generics. This is a growing industry in the medical sector as drug patents typically expire 20 years after they are filed. The Trump administration is expected to simplify the work of the US Food and Drug Administration (FDA), which could lead to faster approval. Here are two generic drug stocks that will continue to rise in 2025.
Teva Pharmaceuticals: king of the generics mountain
Teva Pharmaceutical Industries today
Teva Pharmaceutical Industries
(As of 4:10 p.m. ET)
- 52 week range
- $9.35
▼
$19.31
- Target price
- $19.67
With a portfolio of more than 500 generics, Teva Pharmaceutical Industries Ltd. New York Stock Exchange: TEVA is the world’s largest manufacturer of generic drugs. The company’s generic drug revenue grew 17% year over year, lowering the industry’s compound annual growth rate (CAGR) by 5.4%, according to KPMG estimates. Teva is also developing private-label drugs, including AUSTEDO for movement disorders, AJOVY for migraines and UZEDY for schizophrenia, which are driving their growth. Teva makes a generic version of metformin, the world’s most widely used drug to treat type 2 diabetes, as a first-line treatment for lowering blood sugar.
Third quarter results were solid
In its third-quarter 2024 earnings report, Teva reported 66 cents per share, beating consensus estimates by 3 cents. Revenue rose 13% year over year to $4.33 billion, easily beating analysts’ consensus estimate of $4.14 billion. The company generated $693 million from operations and $922 million in free cash flow.
Teva Pharmaceutical Industries Limited (TEVA) price chart for Wednesday, November 27, 2024.
Teva’s generic and brand-name drug business grows at double digits
The generics business grew 30% YoY in the US, 8% in Europe and 13% in international markets. The company’s AUSTEDO brand revenue grew 28% year-on-year to $435 million. Teva confirms 2024 revenue forecast of $1.6 billion. AJOVY revenue grew 21% year-on-year to $137 million. UZEDY revenue continues to gain momentum, bringing $30 million for the quarter as the company raises its 2024 revenue forecast to 80–100 million dollars. Teva presented its generic version Amgen Inc. NASDAQ:AMGN The osteoporosis drug Prolia has been submitted to the FDA and the European Medicines Agency (EMA) for review.
The market expected more than just operational management
Teva issued current full-year 2024 guidance for earnings per share of $2.40 to $2.45, versus consensus estimates of $2.30 to $2.50. Full-year revenue is expected to be between $16.10 billion and $16.50 billion, versus analyst estimates of $16.27 billion. Adjusted EBITDA is expected to be between $4.7 billion and $5.0 billion. The company expects revenue from COPAXONE to be $500 million in 2024.
Teva Pharmaceuticals CEO Richard Francis commented: “I am confident that with our new accelerated portfolio of innovations, both early and late stage, we are well positioned to provide meaningful access to medicines to the patients who need them, and ensuring the continued growth of our company. shareholders.” He concluded, “With these strong results, we are raising our 2024 financial guidance, including revenue, adjusted EBITDA and non-GAAP earnings per share.” By the way, after this news, Teva shares fell by 12%.
Viatris: Bringing Together Manufacturers to Create a Leading Generic and Brand Name Pharmaceutical Company
Viatris today
(As of 11/27/2024 ET)
- 52 week range
- $9.08
▼
$13.62
- Dividend yield
- 3.63%
- Target price
- $13.33
Formed as a result of the merger of generic drug manufacturer Mylan and Pfizer Inc. New York Stock Exchange: PFE Upjohn’s legacy business in 2020, Viatris Inc. NASDAQ: VTRS is a leading generic, biosimilar and branded pharmaceutical company with a portfolio of more than 1,400 drugs. Its signature drugs include former blockbusters from Pfizer whose patents have already been removed, including the cholesterol drug Lipitor, Viagra, the antidepressant Zoloft, Lyrica, Influvac and Norvasc for hypertension and chest pain. The company has entered into an exclusive licensing agreement with Lexicon Pharmaceuticals Inc. NASDAQ: LXRX for INPEFA (sotagliflozin) in October 2024 to expand its cardiovascular portfolio.
The fall in income is offset by debt reduction and new income growth
Viatris reported third-quarter 2024 earnings per share of 75 cents, beating analysts’ estimates by 7 cents. Revenue fell 4.8% YoY to $3.75 billion, easily beating the consensus estimate of $3.72 billion. Revenue from the traditional blockbuster drug portfolio continues to decline as expected, but the number of new drugs is growing in emerging markets, including Europe and China. In the generics segment, adjusted for asset sales, growth was 4% compared to branded drugs growth of 2% YoY.
Viatris Inc. price chart (VTRS) on Wednesday, November 27, 2024
Viatris is paying down its debt from $17 billion at the start of 2024 to a projected $14 billion by the end of the year. The company plans to return 50% of free cash flow to shareholders and use 50% for share repurchases upon achieving an EBITDA range of 2.8x to 3.2x.
The company will launch EFFEXOR for anxiety and INPEFA for heart failure, which are highly anticipated growth drivers. Revenue forecast for new products was raised from $500 million to $600 million by the end of the year. Shares rose 13% the day after the earnings report.
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