We can’t stop talking about Teva Pharmaceutical Industries (TEVA). We’ve made several references to the name in the last year and most recently in the article titled “Biotech M&A: Teva Pharmaceuticals may be looking for a Deal.” Here is the latest on the biotech giant:
1. New CEO Jeremy Levin held his first public conference in May stating a tough European healthcare reform environment and lowered 2012 guidance. Mr. Levin pulled long-term guidance making expectations more realistic for the street and the investors. Going forward, his plan is to implement the new commercial model in the U.S. and EU aimed at improving both inventory and prioritizing launches. He clearly stated that a more detailed update on his initiatives will be provided year-end.
2. A significant overhang on the stock has been the Copaxone court ruling. A favorable court ruling on Friday, June 22nd was a huge relief among investors, legal consultants and sell side analysts. Although a positive outcome was largely expected, there are plenty of investors who thought a Zero trade in the stock was a smart trade. So its established, no generic competition for Copaxone until mid-2014. In addition, the NY district court held Teva’s 2015 manufacturing patent. So all is fine and dandy!
3. The street is still curious on the updates expected from Jeremy Levin at the Analyst meeting this Fall.
Business Section: Investing Ideas
Is it time for investors to look at the fundamentals of the stock? Maybe the focus will once again be the company’s ability to generate strong cash flow, a list of 27 late-stage candidates in its R&D pipeline, and an expectation to meet its new and improved 2012 guidance of sales of $20-21B which includes $3.8 billion for Copaxone. The lowered guidance includes a forecast of $600M in negative currency effects and $400M in effects from healthcare reform. Additionally, U.S. estimates for revenue came down $500M.
Since hitting a multi-year high in March 2010, the stock has declined 40% in value. Some of the reasons for this performance have been stated for you above. Could this be a good entry point for the stock with a more realistic CEO, a positive court ruling and its great fundamentals and technicals versus the other giants Novartis (NVS), Eli Lilly (LLY) and Mylan (MYL)?
Use the Compar-O-Matic to compare changes in quarterly sales for the firms mentioned above.
Press “play” to see changes in market cap over the past two years:
Use Turbo Chart to compare the performance of Teva against Eli Lilly and Novartis
Well written.