wolfstreet.com / by Wolf Richter •
Effects of competition after government cracks down on price fixing?
Shares of Teva (TEVA), the largest generic drug manufacturer in the world, plunged 13% on Friday, to $20.60, after having already plunged 24% on Thursday, after having reported that second quarter revenue and profits had been beaten down by a 6% decline in generic drug prices. Since July 2015, shares have plunged 70%.
Though revenues rose, Teva booked a net loss of $6.0 billion in the quarter. It listed a slew of special items, including a $6.1 billion write-off “related to the US generics reporting unit.”
It announced that it would slash its dividend by 75%, lay off 7,000 employees globally, including in Israel where it is headquartered, pull out from 45 countries, and close 15 plants. It is grappling with a generics market where competition started to push down prices in 2015. “Negative net pricing” is what the company calls this.