Teva Pharmaceutical Industries Ltd. stock rose 12% after the company reported stronger-than-expected third-quarter results, buoyed by robust growth in its branded drug portfolio.
The Tel Aviv-based pharmaceutical giant’s shift toward innovative medicines appears to be paying off, even as its core generics business continues to face challenges.
Branded drug portfolio drives earnings beat
Teva posted total quarterly revenue of $4.48 billion, exceeding consensus estimates of $4.34 billion, according to LSEG data.
The outperformance was driven largely by a 33% increase in branded drug sales, led by Austedo, which treats involuntary movement disorders.
Austedo generated $618 million in sales during the quarter, surpassing analyst expectations.
Earnings per diluted share, excluding one-time items, rose to 78 cents, up from 69 cents a year earlier and well above the forecast of 67 cents per share.
The company credited its innovative product lineup, which includes medications for migraines, Huntington’s disease, and schizophrenia, as a key driver of growth.
“Our differentiated innovative portfolio is now a defining strength for Teva,” said Chief Executive Officer Richard Francis in the earnings statement.
He added that the company’s strategy to diversify into branded therapies is solidifying its competitive position in a rapidly evolving pharmaceutical landscape.
While branded products continue to gain traction, Teva’s generics segment, still its largest revenue contributor, fell short of expectations.
The company has been working to stabilize this core business amid pricing pressures and regulatory challenges that have weighed on margins across the generics industry.
Sale of active ingredients unit resumes
In a parallel development, Teva announced it has renewed efforts to sell its active pharmaceutical ingredients (API) division, after previous talks with an unnamed buyer collapsed.
The move aligns with management’s focus on streamlining operations and prioritizing higher-growth areas such as branded pharmaceuticals and specialty drugs.
Teva has also updated its 2025 financial outlook, slightly narrowing its revenue projection to $16.8–$17.0 billion, down from the previous range of $16.8–$17.2 billion.
The company now expects adjusted earnings per share of $2.55–$2.65, compared with the earlier forecast of $2.50–$2.65.
The company’s stock reflected investor optimism following the results.
Teva’s US depository receipts rose 12% in premarket trading, while shares in Tel Aviv gained 11.51% by 3:49 GMT, outperforming the broader index, which was up just 0.56%.
Regulatory developments and policy shifts
Teva’s performance also comes amid evolving US healthcare policy and pricing regulations.
The company confirmed that it has negotiated a new price for Austedo under the Inflation Reduction Act, in coordination with the Centers for Medicare and Medicaid Services (CMS).
The updated pricing is expected to be announced later this month and take effect in 2027.
Earlier this year, Teva had braced for potential cost pressures from proposed tariffs on pharmaceutical companies, including generics producers.
However, the Trump administration reversed course, announcing that generics manufacturers would be excluded from high levies, a move that alleviates a major concern for Teva.
President Donald Trump’s TrumpRX initiative, aimed at offering US consumers drug prices comparable to those abroad, remains a key policy focus and could influence industry dynamics going forward.
Despite the regulatory uncertainties and mixed performance across segments, Teva’s latest results reinforce the company’s strategic shift toward innovation-led growth.
As Francis noted, Teva’s branded medicines have become a “defining strength”, positioning the company to balance profitability with long-term transformation.
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