Mylan Overtakes Teva in Market Cap

Teva headquarters in Petach Tikvah. (Tomer Neuberg/Flash90)

Capping the many woes of Teva Pharmaceutical Industries, the company relinquished its title of world’s leading generic drug maker to Mylan, Globes reported on Thursday.

Teva’s share price fell another 2.2 percent Wednesday on Wall Street, reaching its lowest level in 19 years, while the share price of Mylan, its rival, has been rising. And now Mylan’s market cap has surpassed Teva’s. At the close of Wednesday’s trading on Wall Street, Teva’s market cap was $8.9 billion ($8.18 per share, 88 percent below the share’s peak in July 2015, whereas Mylan’s cap was $9.3 billion, $385 million higher.

Mylan’s achievement was mitigated by both companies’ loss of value in recent years, observed Globes: “When Teva attempted a hostile takeover of Mylan four years ago, Mylan’s value in the deal was assessed at $40 billion, while its market cap at the time was over $30 billion. Teva’s market cap was then $55 billion, meaning that the two companies’ investors have lost many billions in value in the years since then.”

Teva gave up on acquiring Mylan, and in 2015 announced its acquisition of Actavis, the generics division of Allergan, for nearly $40 billion. That buyout placed a heavy burden of debt on the company, leading to replacement of the management team and an economizing campaign initiated by the incumbent CEO Kare Schultz, who laid off 10,000 employees worldwide.

More recently, Teva has lost ground in the market over concerns about a multi-billion- dollar price-fixing settlement and allegations it took part in the opioid scandal. The result was a 43 percent plunge in Teva’s share price in recent weeks.

Mylan, on the other hand, seems to have taken over first place in generics almost by default, as its slide was less than Teva’s.

Last month, its share plunged 24 percent in a single day after the company published weak reports and disappointed analysts’ forecasts, among other things because of the decline in generic drug prices in recent years.