Bloomberg News

Teva Jumps as New Drugs Bolster Outlook: Israel Overnight

April 03, 2012

Teva Pharmaceutical Industries Ltd. (TEVA) extended its best start to a year since 2010 as exclusive rights to sell two medications boosted prospects U.S. sales for the world’s largest maker of generic drugs will recover in 2012.

Shares of Petach Tikva, Israel-based Teva rose 1.2 percent to $45.58 in New York yesterday, the highest level since Feb. 3. Teva climbed 0.4 percent at the 4:30 p.m. close in Tel Aviv, gaining for a ninth day, the longest winning streak since 2001. The Bloomberg Israel-US Equity Index (ISRA25BN) of the most-traded Israeli stocks in New York climbed 0.5 percent to 90.28, the highest level since Oct. 28.

Teva introduced generic versions of two blood pressure medications yesterday, according to a company statement. The drugmaker has 180 days to sell the drugs exclusively, which may add as much as 8 cents a share to company profit this year, according to Clal Finance Brokerage Ltd. Revenue from sales of generic drugs in the U.S. fell 32 percent last year as Teva debuted fewer “significant” generics, according to a Feb. 15 statement.

“2011 was very odd, because it was supposed to be a good year in the U.S. business, and it ended up being a lousy year,” Gilad Alper, a senior analyst at Excellence Nessuah Investment House Ltd. in Ramat Gan, Israel, said by phone yesterday. “Certainly the company is executing better in the U.S.” this year.

Teva expects most of its new generic drugs to face “robust competition” this year, William Marth, president of the company’s Americas unit, said on a Feb. 15 conference call with analysts, according to a transcript.

‘More Profitable’

Yesterday’s exclusivity announcement is a positive sign after Marth’s comments, Jonathan Kreizman, an analyst at Clal Finance, said yesterday.

“An exclusive launch is by far more profitable than a general generic launch, which is launched by several other players simultaneously,” Kreizman said. “That usually results in a very sharp decrease in the drug’s price and a much less strong impact on profitability.”

Teva jumped (TEVA:US) 12 percent in the three months through March 30, outperforming an 11 percent advance in the Bloomberg Israel- US Equity Index for a third straight quarter.

The company reported adjusted earnings per share of $4.97 for last year on $18.3 billion of revenue, and said this year’s per-share profit will be $5.48 to $5.68 a share for sales of about $22 billion. U.S. generic drug revenue declined 32 percent to $4 billion in 2011, due to “fewer significant launches” and lower revenue from existing products, according to a Feb. 15 statement from Teva.

Sanofi Drugs

The TA-25 Index (TA-25) in Tel Aviv gained 1 percent today and the Nasdaq Composite Index (CCMP) advanced 0.9 percent yesterday, snapping a four-day decline.

Israel, whose population of 7.8 million is similar in size to Switzerland’s, has about 60 companies traded on the Nasdaq Stock Market, the most of any country outside the U.S. after China. The nation is also home to more startup companies per capita than the U.S.

The exclusive release of generic versions of Paris-based Sanofi’s medications for high blood pressure, Avapro and Avalide, may add 5 cents to 8 cents to earnings per-share, Kreizman said. Avapro had annual U.S. sales of $464 million and Avalide had sales of $124 million, Teva said in yesterday’s statement.

In a March 30 statement, Teva said it introduced a generic version of the narcolepsy drug Provigil, made by its Cephalon Inc. unit. Four days earlier, the company said it was introducing a generic version of AstraZeneca Plc’s Seroquel, used for treating schizophrenia and bipolar disorder. The same day, Teva said it received approval from the U.S. Food and Drug Administration to sell a nasal spray that treats allergy symptoms.

Lost Copaxone Sales

The new drug pipeline comes as Teva hunts for new revenue to replace sales expected to be lost when patents expire on Copaxone, the multiple sclerosis treatment that accounted for $3.6 billion of company revenue last year.

Syneron Medical Ltd. (ELOS:US), an Israeli developer of aesthetic medical devices, rose 2.1 percent to $10.95 in New York yesterday. The company was the third-biggest gainer on the Bloomberg Israel-US gauge yesterday after MagicJack VocalTec Ltd. and Retalix Ltd.

Anthony Vendetti and Bryan Brokmeier, analysts at Maxim Group LLC, said Syneron is their top pick (ELOS:US) in the sector, as new products for “body sculpting” and “body contouring” will help drive growth this year, according to a research note dated March 30.

Nice Systems Ltd. (NICE), a Ra’anana, Israel-based maker of digital surveillance and monitoring systems, advanced 1.9 percent in Tel Aviv today to 148 shekels, or the equivalent $39.76, after climbing (NICE:US) 1.2 percent to $39.78 in the U.S. yesterday.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net;


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Companies Mentioned

  • TEVA
    (Teva Pharmaceutical Industries Ltd)
    • $55.05 USD
    • 0.10
    • 0.18%
  • ELOS
    (Syneron Medical Ltd)
    • $10.05 USD
    • -0.01
    • -0.1%
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