IBI: Solid quarter already priced in for Teva

IBI analyst Natali Gotlieb sees women's health issues being a source of revenue growth.

IBI analyst Natali Gotlieb expects solid results from Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) when the generic pharmaceuticals giant reports its second quarter results.

At the same time the analyst sees the positives already priced into Teva's share, and maintains her "Neutral" recommendation with a $51 target price.

Gotlieb sees women's health issues being a source of revenue growth. Teva acquired the business when it bought Barr. Teva has reported patent agreements with Bayer Healthcare Pharmaceuticals on its YAZ oral contraceptive and with Johnson and Johnson unit Ortho McNeil on its Ortho Tri Cyclen Lo contraceptive.

Gotlieb expects Copaxone sales in the US to grow 40% compared with the corresponding quarter of 2008, to0 $460 million, and expects sales in Europe to reach $258 million.

Gotlieb is somewhat disappointed with pending US legislation on biogenerics, which was to be a growth engine for Teva. She notes that by 2015, $80 billion worth of products will lose patent-protection. The number of competitors will probably be small in comparison with the generics industry, because of the need for investment in R&D, clinical trials, and investment in marketing. Teva positioned itself well in the sector, by acquiring CoGenesys and a biosimilar drugs joint venture with Swiss pharmaceutical group Lonza.

However, a US Senate committee has supported a proposal to award biological drug developers a 12-year exclusivity term. This proposal could be adopted as part of the impending healthcare reform in the US. A period of exclusivity as long as this will make generic competition very difficult.

Shares in Teva closed on Friday at $50.35, giving a market cap of $42.95 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on July 27, 2009

© Copyright of Globes Publisher Itonut (1983) Ltd. 2009

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