Teva Rises to 6-Month High on Ranbaxy Market Share, New CEO
January 05, 2012, 3:16 PM ESTBy Gwen Ackerman and Zachary Tracer
(Updates with analyst comments from third paragraph.)
Jan. 4 (Bloomberg) -- Teva Pharmaceutical Industries Ltd. climbed to the highest in almost six months on reports Ranbaxy Laboratories Ltd. gained Lipitor market share and analysts applauded the company’s choice of new chief executive officer.
Teva, the world’s largest generic drugmaker, advanced 3.3 percent to 166 shekels, or the equivalent of $43.16, at 12:56 p.m. in Tel Aviv, the highest since July 14. The U.S.-traded shares led the gains of Israeli stocks traded in New York yesterday, surging 6.8 percent to $43.10. The Bloomberg Israel- US 25 Index of the largest Israeli companies traded in New York gained 4.5 percent, the most since Aug. 9.
Ranbaxy’s weekly prescription market share rose to 26 percent in its third week of marketing the generic version of the Lipitor cholesterol pill, Uriel Goren, head of international clients desk at DS Securities & Investments Ltd., said in an e- mailed note today.
“This together with the new appointment of CEO was viewed positively yesterday by investors in the U.S.,” Goren said.
Jeremy Levin, formerly senior vice president for strategy at Bristol-Myers Squibb Co., will take over as president and CEO in May, Teva said Jan. 2. He has the ability to “refocus and revitalize” the Petach Tikva, Israel-based company, according to RBC Capital Markets LLC.
“We expect that Dr. Levin will focus the company towards the areas of greatest opportunities in the future, regardless of whether these exist in the generics or branded business,” analyst Shibani Malhotra wrote in an e-mailed report today.
Diversification
On a conference call with analysts Jan. 3, Levin declined to discuss strategy changes and said he will take a “deep dive” into Teva’s drugs and research pipeline.
Levin may help Teva find new sources of revenue to replace sales lost as the company’s best-selling medicine, the multiple sclerosis treatment Copaxone, faces increasing competition, said Randall Stanicky, an analyst at Canaccord Genuity who rates the shares “buy.”
“This marks a shift in the industry, moving to a more diversified business model which incorporates a greater share of more innovative and branded products,” Stanicky said. It “may also lead people to rethink the valuation gap that Teva is trading at to big pharma.”
At Bristol-Myers, Levin helped oversee partnerships and acquisitions to replace revenue expected to be lost when the blood thinner Plavix, Bristol-Myers’ top-selling drug, faces generic competition this year.
--Editors: Susan Lerner, Daliah Merzaban
To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net; Zachary Tracer in New York at ztracer1@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net
