The share price of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has fallen 7% in two days on the New York Stock Exchange, after the company presented its new strategy. Analysts say that while the plan presented by Teva president and CEO Jeremy Levin clarifies the long term, they are disappointed about the uncertainty for the coming years and by the amount of dividends. Some analysts also expressed disappointment that Teva's executives barely mentioned drugs in the company's development pipeline, especially CT-011 for the treatment of cancer.
At the analysts and investors' conference in New York on Tuesday, Levin spoke about streamlining and savings of up to $2 billion over the coming years, the company's refocusing on core activities through 2017, and organic growth. Teva will distribute dividends of 20-25% of profits, resulting in a current dividend yield that is 35% lower than the average dividend yield of big pharma companies (about 4%).
But what will happen until 2017, and how will Teva deal with the competition expected for Copaxone when its patents expire in 2015? "The company laid out a promising vision for the long-term but it might have been less clear for some how they’re going to boost growth in the next few years,” said Edward Jones & Co analyst Judson Clark told "Bloomberg". He gives Teva a "Buy" recommendation. “In the shorter term, some investors may be concerned that there isn’t a visible catalyst or any one drug that can easily replace Copaxone," Clark said.
Published by Globes [online], Israel business news - www.globes-online.com - on December 13, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012