"We expect another mediocre quarter for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA)," says Clal Finance Brokerage. Teva is due to publish its financial report for the second quarter of 2011 on July 27. Clal Finance predicts that the company will post a net profit of $1.08 billion on $4.24 billion revenue.
Clal Finance's forecast is below the market average of a net profit of $1.09 billion on $4.25 billion revenue.
Clal Finance reiterated its "Outperform" recommendation for Teva with a target price of $58, compared with yesterday's closing price on Nasdaq of $47.30, after falling 1.4%, giving a market cap of $44.5 billion. The share price fell 0.7% by mid-afternoon on the TASE today to NIS 163.60.
"We believe that the pressure on Teva's share will increase until the company provides the market information about launches that will help it meet the forecasts' mid-range of $5.05 per share," says Clal Finance.
Clal Finance forecasts 15% revenue growth for Teva in 2011 over 2010.
Clal Finance predicts that sales of Teva's multiple sclerosis drug Copaxone will rise 19% to $925 million in the second quarter from the corresponding quarter. "Copaxone sales will continue to stagnate, due to generic activity," it says, adding, "In the near future, the development of oral multiple sclerosis treatments will draw the most attention - sales progress for Gilenya (made by Novartis AG (NYSE:NVS; LSE: NOV; SWX: NOVZ)) and the results of the Phase III clinical trials of BG-12 (made by Biogen Idec Inc (Nasdaq: BIIB)), Laquinimod (made by Teva), and Teriflunomide (made by Sanofi Aventis SA (NYSE: SNY; Euronext: SAN)), which are due to be published in the coming months."
Clal Finance says, "It is hard to see where the change in Teva's business this year will come from with a wild card launch," adding that it might help India's Ranbaxy Laboratories Ltd. (BSE: Ranbaxy) develop generic Lipitor. However, Clal Finance says, "This seems less likely in view of the growing signs that FDA's audit of Ranbaxy will end successfully."
Clal Finance says that another opportunity for Teva is a launch of generic Lovenox, for which Teva has been waiting for US Food and Drug Administration (FDA) approval for over a year.
Published by Globes [online], Israel business news - www.globes-online.com - on July 19, 2011
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