JPMorgan Downgrades Teva, 2nd Time in 2 Months

Teva Pharmaceutical’s woes have registered with Wall Street, as JPMorgan announced a downgrade from “neutral” to “underweight,” just two months after downgrading it to “neutral” from “overweight,” Globes reported.

“We are downgrading Teva shares to ‘underweight’ from ‘neutral’ following the departure of CEO Jeremy Levin and the myriad of uncertainties facing the company. Teva is in a very challenging position, seeking to largely rebuild its pipeline and transition its business model at the same time its largest franchise (Copaxone) faces significant headwinds. With the unexpected departure of the company’s CEO following a disagreement with Teva’s board, we see added turmoil that has the potential to further delay Teva’s business recovery. Even at current depressed levels, we see far more compelling opportunities elsewhere in the space, and along these lines, recommend investors reduce positions in Teva shares,” says analyst Chris Schott.

Schott estimates that Copaxone, Teva’s flagship drug for the treatment of multiple sclerosis, will account for over 60% of the company profits in 2013, and that the increase in this reliance as May 2014, when generics could potentially launch in the U.S., is “particularly concerning.”

The latest downgrade follows downgrades by Goldman Sachs and Morgan Stanley.

In addition, Teva might soon face a class action suit by its shareholders as a U.S. law firm specializing in cases of improper and illegal conduct by companies, announced an investigation: “We are investigating possible violations of federal securities laws by officers and directors of Teva,” says Wohl & Fruchter LLP, a New York law firm.

It did not explain the reason for its suspicions about wrongdoing, but it gave a timeline of events at Teva since Dr. Jeremy Levin was appointed CEO in January 2012 until the announcement of his departure last week.

This article appeared in print on page 7 of the November 5th, 2013 edition of Hamodia.