Teva plunges as outlook cut for third time

Teva Pharmaceutical's outlook worsened after the world's biggest maker of copycat drugs cut its annual profit target for a third time, prompting the stock to slide to its lowest in 17 years a day after chief executive Kare Schultz took the helm.

The company slashed its profit forecast for the year on Thursday as a key competitor began selling a cheaper version of its bestselling drug Copaxone, while its generic drugs faced intensifying competition and declining prices in the US, their largest market.

Investors recoiled after the company pared its dividend, signaled it may sell new shares, and lowered the goal for paying down some of its $34.7 billion in debt this year.

Shareholders responded by wiping out $3 billion in market value, highlighting the challenges that Mr Schultz (56) takes on as he wrestles with liabilities that have mushroomed to almost three times its equity value while reigniting profitability at Teva.

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In recent months, the company has been shedding assets, closing factories and firing employees following an ill-timed $40.5 billion bet on the generics industry.

Shares of Teva plummeted as much as 22.6 per cent in New York to its lowest since May 2000, after already having dropped over 61 per cent this year. The move on Thursday reduced its market value to about $11 billion. The company’s bonds also fell to the lowest in months. – Bloomberg