Question:
What is happening to Teva Pharmaceutical Industries, Ltd. ADR (NASDAQ: TEVA)?
Answer:
Teva, a global pharmaceutical company that develops, produces and markets generic drugs, is down near 10% year-to-date, and down 4% for the one-year period. It is down 23% from its high, which to us indicates a buying opportunity. It has been down in part because exchange rates impacted sales by $122 million on a year-over-year basis and speculation for a generic competitor to Copaxone, its branded drug treatment for multiple sclerosis. However, the company reported $1.30 in earnings per share for the third quarter, beating expectations by four cents. Revenue increased 20% year over year, but that was generally in line with expectations. We believe the poor stock price performance is due to the uncertainty of potential increases in government regulations.
We like Teva as a holding because it is a solid company with more than 200 generic applications in the pipeline. Teva’s management has also stated it feels the threat of a generic Copaxone is low because the company is developing a new formulation of the drug. The company recently submitted new clinical data to the the U.S. Food and Drug Administration. This will likely trigger an extension of the review period, and may provide Teva with a three-year exclusivity period for the product.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
