Teva Pharmaceutical Industries Ltd (ADR) (TEVA) is an Israel-based pharmaceutical firm. It’s the largest generics producer in the world.
But generics is only part of the game with Teva Pharmaceutical. It also has some major drugs in its pipeline that will turn this quiet giant into a big pharma star.
In recent months, many good things have been going on with Teva Pharmaceutical. Granted, year-to-date the stock has slid 19% and it still sits near the bottom of that move. But TEVA is restructuring its operations for the new world of healthcare.
It is becoming an integrated pharmaceutical firm that incorporates generics production to license drugs from smaller biotechs to develop drugs. This three-pronged approach allows it to limit the risks that any one sector may present, while giving Teva Pharmaceutical the best opportunity to profit in the marketplace.
Where TEVA Stock Is Finding Growth
In the blockbuster drug category, there are a couple things in the works for Teva Pharmaceutical. First, it has a drug, deutetrabenazine, in the pipeline for Huntington’s Disease. Part of TEVA stock’s setback has been the news that the FDA wants some extra information before allowing it to move forward.
But the good news is, the FDA isn’t asking for new trials, simply blood information on the subjects already enrolled.
There’s a big difference.
What’s more, Teva Pharmaceutical is only being asked to deliver the same information the FDA requested from other similar drugs before approval. This is more a timing issue than it is a survival issue.
The hope with deutetrabenazine is that HD is the front door for TEVA’s larger ambitions with the drug. The drug dampens the involuntary jerking motions (chorea) in patients. Wisely, Teva Pharmaceutical chose to make its attempt to get approval for HD since there are few drugs on the market that target chorea and it’s a relatively small population.
That allows TEVA to meet ‘the gold standard’ in testing — being as good or better than the current treatments — with relative ease, since few drugs exist specifically for chorea.
If and when Teva Pharmaceutical is approved, it can then look to secondary conditions and expand the drug’s market. This is the whole strategy. If it can get into all the markets it wants to, TEVA expects this to be a $1 billion a year drug.
On the generics side, TEVA announced it was buying Allergan plc Ordinary Shares‘ (AGN) generic drug business, Actavis, for $40 billion. It’s likely AGN was happy to sell so that it can clean up its holdings as it seeks approval of the massive $160 billion Pfizer Inc. (PFE) — AGN deal.
Teva Pharmaceutical gets a great library of generics that will be a big boost to that division.
On the licensing side, TEVA just got a favorable ruling on its patent contentions for Bendeka and Treanda, both from Eagle Pharmaceuticals Inc (EGRX). Both treat blood cancers and generic manufacturers were looking to break the patent protection so they could produce the drugs.
All this bodes very well for Teva Pharmaceutical in coming quarters. Use this opportunity to get this great growth stock at a very reasonable price.
Richard Band’s Profitable Investing advisory service helps retirement savers outperform the market without losing a minute of sleep along the way. His straightforward style and low-risk value approach has won seven Best Financial Advisory awards from the Newsletter and Electronic Publishers Foundation.
