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Actionable news in TEVA: TEVA PHARMACEUTICAL INDUSTRIES LIMITED AMERICAN DEPOSITARY SHARES,

Ouch! Teva Needs An IV, Stat

The Israel-based maker of generic and specialty drugs reported third-quarter earnings per share of $1.00, but analysts were looking for $1.04. To blame: higher selling costs despite lower taxes. Worse, the company slashed fourth-quarter guidance for sales and per-share profits due to competition and price erosion in the U.S. generics business.

Credit Suisse analysts Vamil Divan, Michael V. Morabito, Barbara Kotei and Duaa Mohamed, who have a $14 price target, note Teva reduced expectations for sales from new generic launches in the U.S. to roughly $400 million for the year. From CS:

"Positive points of the quarter: Respiratory sales (specifically ProAir) were strong this quarter, as was Copaxone, although that is obviously less important now given the entry of an initial Copaxone 40mg/mL generic. Lower R&D, S&M and G&A contributed an extra 10 cents to the bottom line, based on our estimates.
Negative points of the quarter: Generic sales were lighter than expected, both in the U.S. and outside of the U.S. over-the-counter sales were also ~$60 million light. The gross margin for the quarter was significantly lower than we had forecast (53% vs. Credit Suisse at 56.1%)."

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