After CEO departure, Teva reports slight revenue gain and profit helped by fewer legal bills

A day after surprising markets with the resignation of chief executive Jeremy Levin, Teva Pharmaceutical Industries reported Thursday a 2 percent revenue increase and a $711 million profit in the third-quarter of 2013, with the profit attributable to a big drop in money set aside for legal settlements.

Teva is based in Israel, but has several operations in Philadelphia suburbs and employs about 2,300 people in Pennsylvania.

Teva is the world's leading seller of generic drugs and the company attributed the revenue gains to improvements in U.S. generic sales. Still, the branded-drug Copaxone, which is used to treat multiple sclerosis, remains the company's single largest revenue generator with $1.01 billion in third quarter sales, a 1 percent increase. The challenge is that Copaxone might have generic competition as soon as May.

Teva said that its third quarter revenue increased from $4.972 billion in 2012 to $5.059 billion in the same period of 2013. Teva had a third-quarter loss of $79 million in 2012 and that turned to a $711 million profit in 2013.

On the income statement, the costs of legal settlements, impairments and restructuring went from $1.131 billion in the third quarter of 2012 to $213 million in the same period of 2013. That $918 million difference helped create the quarterly profit this year.

“ Teva’s leadership and Board of Directors remain committed to executing on our strategy and diligently implementing changes which we believe will ensure the growth of our business,” Acting CEO Eyal Desheh said in a statement. “During the quarter we had six successful generic product launches in the U.S. alone, and are pleased that our generic business continues to benefit from a long-term, sustainable and profitable growth. We are also satisfied with the performance of our Global Specialty Medicines business and OTC joint venture."

Teva's press release with numbers is here.

Levin was hired Jan. 1, 2012 and started later in the spring, so he was only CEO for about 18 months. He was hired to reorganize the company and boost the stock price that had fallen since 2010. He announced a plan to cut annual costs from $1.5 billion to $2 billion by 2017. But with markets anxious to see such savings translate to bottom-line profits, Levin announced a second cut on Oct. 10, including eliminating 10 percent of the worldwide workforce. Given his background with brand-name drugs while at Bristol-Myers Squibb, Levin seemed intent on strengthening the higher-profit band-name drug part of the business.

Strategy is one thing, but implementation is another.

"Since Dr. Levin's arrival, he and the board have been fully aligned on the strategy," Teva board chairman and South Philadelphia native Dr. Phillip Frost said Wednesday. "However, we have had different views on how to carry out that strategy."

Financial markets hammered Teva's stock on Wednesday, with the price of American Depository Receipts falling 8.09 percent.

"You don't have to be a financial genius to see that the market was unhappy," Desheh said Thursday morning in a conference call with analysts. Desheh was CFO until taking the interim CEO job.