Teva Gets a Downgrade, But Positives Too


Investment house Meitav Dash has downgraded its recommendation for Tev Pharmaceuticals to “market weight,” with a target price of $17, Globes reported on Wednesday.

Teva has registered major revenue losses due to competition with Copaxone from other generic makers. The U.S. market was the biggest weak spot with a 52 percent drop in revenue.

Meitav Dash healthcare analyst Jonathan Kreizman attributed the decline to “more difficult than expected negotiations with insurers last February, in addition to an inventory clear-out, which accounted for half of the decrease, and which is not expected to recur in the second quarter.”

Teva lowered its 2019 guidance by $200 million, taking into account three generic drugs competing with Copaxone. “Copaxone’s market share is just under 70 percent, and Teva expects revenue from it to fall 45 percent in a year. Teva reported $360 million in free cash flow in the quarter, and we predict another weak quarter and a stronger second half,” Kreizman wrote.

But all is not gloom. Kreizman adduced positives as well, giving credit to CEO Kare Schultz for mitigating damage to the company’s share price on the day the first quarter data were released by taking a resolute stand in the opioid scandal.

“Kare declared that Teva was not involved in the campaign in favor of generic opiates, while in the original drugs, all of the marketing actions completely complied with the FDA’s instructions,” Kreizman explained.

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