Teva stock surged to a five-year high Wednesday after the company beat first-quarter expectations and unveiled promising results from its schizophrenia treatment study.
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Teva Pharmaceutical (TEVA) is trying to develop a monthly shot for schizophrenia treatment. Currently, the antipsychotic known as olanzapine — which Teva also sells — is given as a daily pill or dissolvable tablet. But it can be difficult to patients to keep up with that schedule.
After eight weeks, patients who received Teva’s long-acting olanzapine showed improvements of 9.71 points to 11.27 points vs. a placebo on a 49-point scale measuring symptoms. Importantly, there were no episodes of post-injection delirium/sedation syndrome, or PDSS. Other efforts to develop long-acting olanzapine have fallen flat due to this side effect.
Evercore ISI analyst Umer Raffat says monthly olanzapine could be a $1 billion product for Teva.
“Long-acting antipsychotics are very molecule-specific … and no clear long-acting on olanzapine exists,” he said in a report. “Olanzapine is one of the most prescribed antipsychotics and (has) high effectiveness.”
In morning action on the stock market today, Teva stock surged more than 12% to 15.67. The move put Teva stock at its highest point since April 2019. Shares recently retook their 50-day line, MarketSurge analysis shows.
Teva Stock: First-Quarter Mixed
The first quarter also offered a bright spot for Teva stock.
Teva’s adjusted earnings lagged expectations by 4 cents a share. But at 48 cents a share, earnings climbed 20% year over year. Teva also kept its earnings outlook for the year at $2.20 to $2.50 per share. The midpoint is slightly short of analysts’ forecast for $2.39, according to FactSet.
Sales also edged 4% higher to $3.82 billion, beating expectations for $3.74 billion.
The best growth came from Austedo, which treats movement disorders. Sales skyrocketed 67% in the U.S. to $282 million. But that widely missed expectations for $342.1 million. Teva credited the growth with the launch of its extended-release version in May 2023 as well as expanded access for patients and increased investment to meet demand.
Highly Rated Pharma Stock
Meanwhile, sales of its generic drugs rose more than 6% globally to $2.29 billion. And revenue from migraine prevention drug Ajovy surged almost 20% to $113 million.
Teva also affirmed its full-year view for $15.7 billion to $16.3 billion in sales. The midpoint of the sales guidance is above analysts’ call for $15.8 billion.
Evercore ISI’s Raffat kept his outperform rating on Teva stock.
With “two major clinical readouts this fall on innovative assets, it’s a very different story than a few years ago,” he said.
Notably, Teva stock has a nearly perfect Composite Rating of 98. This means shares rank in the top 2% of all stocks in terms of fundamental and technical measures. Shares also have an IBD Digital Relative Strength Rating of 91, which measures 12-month performance on a 1-99 scale.
More to follow.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
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Jessica Roberts is a seasoned business writer who deciphers the intricacies of the corporate world. With a focus on finance and entrepreneurship, she provides readers with valuable insights into market trends, startup innovations, and economic developments.
