MorningStar initiates Buy Rating on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)

Equity Analyst Michael Waterhouse of Investment Research Firm Morningstar issued a research report and buy rating on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) titled ”Pricing Concerns in Specialty Pharma Industry Creates Some Buying Opportunities” on September 28 with a $70 price target.

Mr. Waterhouse says ”We still view Allergan as particularly well positioned widemoat company thanks to a diversified portfolio of assets including many cash-pay products, little direct exposure to U.S. government reimbursement, defensible products with adequate line extension and life cycle management opportunities in attractive specialty markets (aesthetics, ophthalmology, gastro, etc), a broad and attractive product pipeline, and relatively healthy balance sheet following the upcoming sale of its generic unit.

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) billts itself as a leading global pharmaceutical company that delivers high-quality, patient-centric healthcare solutions to millions of patients every day.

Headquartered in Israel, Teva is the world’s largest generic medicines producer, leveraging its portfolio of more than 1,000 molecules to produce a wide range of generic products in nearly every therapeutic area. In specialty medicines, Teva has a world-leading position in innovative treatments for disorders of the central nervous system, including pain, as well as a strong portfolio of respiratory products. Teva integrates its generics and specialty capabilities in its global research and development division to create new ways of addressing unmet patient needs by combining drug development capabilities with devices, services and technologies. Teva’s net revenues in 2014 amounted to $20.3 billion.

Michael Waterhouse goes on to say that ”While narrow-moat Valeant’s financial leverage and less compelling internal pipeline creates higher relative risk, the firm’s limited exposure to government insurance and ongoing pipeline expansion through mergers and acquisitions should continue to reward shareholders.

Meanwhile, we view other firms, such as no-moat Mallinckrodt, as particularly risky due to large product concentration, limited product lives with questionable medical benefit, and weak pipelines with little innovative potential to receive favorable pricing terms. Narrow-moat generic drug manufacturers also likely remain relatively immune to recent policy proposals, but generic competitionon Teva’s Copaxone and Mylan’s EpiPen remain significant near-term hurdles for these companies.”

Also on Septembe 28 TEVO announced the approval by the Japanese Ministry of Health, Labour and Welfare (MHLW) of once-daily COPAXONE® (glatiramer acetate injection) 20mg injection for the prevention of relapse of multiple sclerosis . The product will be commercialized in Japan by Takeda Pharmaceutical Company Limited (Takeda).

In Japan, glatiramer acetate was developed as an Unapproved New Drug by Teva Pharmaceutical K.K., a wholly owned subsidiary of Teva, at the request of the MHLW. In March, 2013, Takeda and Teva signed an agreement in which Teva granted Takeda the right to commercialize COPAXONE® in Japan.

Rob Koremans, MD, President and CEO Global Specialty Medicines at Teva said “Strengthening our offering of specialty medicines in Japan is an important goal for Teva. We are proud to work with Takeda in very close cooperation to make this product available to multiple sclerosis patients and the physicians treating them in Japan. The partnership has been a success and we look forward to making additional specialty medicines available to Japanese patients.”


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