Teva credits strategies for rise in profits

Teva Pharmaceutical Industries Ltd. said Thursday its third-quarter profit rose compared with the same period last year in large part because it stopped trying to sell generic medicine in markets where the profit was too small, cut expenses, and converted patients to a new version of its multiple sclerosis medication.

Teva's net income rose from $711 million in the third quarter of 2013 to $876 million in the same period this year.

Sales for the third quarter were almost flat, decreasing from $5.059 billion in 2013 to $5.058 billion in the third quarter this year.

"Generic profitability improved substantially," CEO Erez Vigodman said in a conference call with financial analysts.

Teva is based in Israel but has operations in New Jersey and Pennsylvania, with its Americas headquarters in North Wales, Montgomery County.

Two years ago, Teva promised investors it would cut $2 billion in annual expenses by 2017, though more recently the company said less would reach the bottom line because of reinvestment in research and development. Vigodman said the company was on track for a net saving of $650 million in 2014.

In 2013, then-CEO Jeremy Levin said he wondered whether Teva's 74 facilities were too many, but he ran into problems with the board and was ousted. Vigodman, who replaced Levin, and other Teva officials say they are closing facilities and reviewing others. Teva is also trying to cut its $10 billion annual spending on all sorts of supplies.

In May 2013, Teva said it would close its manufacturing plant in Sellersville, Bucks County, by 2017. The Sellersville plant had 406 employees as of Dec. 31, and some of the production is being shifted to a factory in Virginia. In August, Teva told the 14 employees at its Kutztown warehouse the facility would be closed and they could apply for positions elsewhere in the company. At the same time, Teva said it was adding six positions to its warehouse in New Britain, Bucks County, to accommodate increased activity.

Teva is the world leader in generic medicine, but its branded-drug division produces nearly as much revenue, from the MS drug Copaxone.

Copaxone generated $1.107 billion in the third quarter compared with $1.052 billion in the same period of 2013. Teva has tried to switch patients to a newer formulation of the drug while fending off generic competitors who want to sell their versions.