Company Update (NYSE:TEVA): Teva Pharmaceutical Industries Ltd (ADR) Sells Off Last of Specialty Global Women’s Health Portfolio Assets in $1.38 Billion Deal


Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is saying goodbye to its remaining global women’s health business assets in exchange for $1.38 billion. In these two deals, Teva will take sale proceeds coupled with the proceeds from just announced sale of PARAGARD for another whopping $2.48 billion to advance term loan debt repayment.

Under the definitive agreement, CVC Capital Partners Fund VI will acquire a portfolio of products within its global women’s health business across contraception, fertility, menopause and osteoporosis for $703 million in cash. The portfolio of products, which is marketed and sold outside of the U.S., includes Ovaleap, Zoely, Seasonique, Colpotrophine, Actonel and additional products. Combined annual net sales of Ovaleap, Zoely, Seasonique, Colpotrophine, Actonel and additional products within this portfolio for the full year 2016 were $258 million.

Meanwhile, Teva has also entered into a definitive agreement under which Foundation Consumer Healthcare will acquire Plan B One-Step and Teva’s value brands of emergency contraception, Take Action, Aftera, and Next Choice One Dose for $675 million in cash. Combined annual net sales of Plan B One-Step, Take Action, Aftera, and Next Choice One Dose for the full year 2016 were $140 million.

“Today’s announcement, coupled with the recent announcement of the sale of PARAGARD for $1.1 billion, demonstrate Teva’s commitment to delivering on our promise to generate net proceeds of at least $2 billion from the divestiture of non-core assets,” stated Dr. Yitzhak Peterburg, Interim CEO. “With these initial divestitures we have exceeded expectations, leveraging the tremendous value we have built within Teva’s specialty business.”

Peterburg continued, “Teva is extremely pleased to enter into these agreements with CVC Capital Partners and Foundation Consumer Healthcare, which progress our ability to repay term loan debt while also providing a clear path forward for these important products to continue to be available to women throughout the world.”

Completion of the transactions is subject to customary conditions, including antitrust clearance in the U.S. and EU respectively, together with employee consultations. The transactions are expected to close before the end of 2017. Until the transactions are completed, Teva will continue to market the products in the normal course, providing full support to manage the business and to meet the needs of customers and patients.

With the divestiture of Teva’s global women’s health products and the planned divestiture of the Oncology and Pain business in Europe, Teva is reinforcing its strategic focus on CNS and Respiratory as its core global therapeutic areas of focus within Global Specialty Medicines. In these areas Teva maintains a strong pipeline and portfolio globally, and will continue to invest in creating long term value.

Morgan Stanley acted as financial advisor to Teva, Ernst & Young served as accounting advisor and Goodwin Procter is Teva’s legal counsel for these transactions.

Rothschild & Co, Royal Bank of Canada, Jeffries LLC and Barclays acted as financial advisors to CVC Capital Partners and Jones Day as CVC’s legal advisors for the transaction.

Foundation Consumer Healthcare is owned by affiliates of Juggernaut Capital Partners and Kelso & Company. Jeffries LLC, Sawaya Segalas & Co., LLC and Barclays acted as financial advisors to Foundation Consumer Healthcare and Robinson Bradshaw are Foundation Consumer Healthcare’s legal counsel for the transaction. Skadden, Arps, Slate, Meagher & Flom LLP acted as legal adviser to Kelso & Company. (Original Source)

Shares of Teva Pharmaceutical Industries closed on Friday at $18.1, down $0.26 or -1.42%. TEVA has a 1-year high of $51.61 and a 1-year low of $15.22. The stock’s 50-day moving average is $18.61 and its 200-day moving average is $28.46.

On the ratings front, Teva has been the subject of a number of recent research reports. In a report released today, RBC analyst Randall Stanicky maintained a Sell rating on TEVA, with a price target of $15, which reflects a potential downside of -17% from last closing price. Separately, on September 12, Jefferies Co.’s David Steinberg reiterated a Hold rating on the stock and has a price target of $21.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Randall Stanicky and David Steinberg have a yearly average loss of -12.1% and a return of 6.7% respectively. Stanicky has a success rate of 27% and is ranked #4586 out of 4651 analysts, while Steinberg has a success rate of 47% and is ranked #701.

Sentiment on the street is mostly neutral on TEVA stock. Out of 17 analysts who cover the stock, 12 suggest a Hold rating , 3 suggest a Sell and 2 recommend to Buy the stock. The 12-month average price target assigned to the stock is $22.27, which represents a potential upside of 23% from where the stock is currently trading.

Teva Pharmaceutical Industries Ltd. engages in the provision of pharmaceutical services. It operates through the following two segments: Generic and Specialty Medicine. The Generic segment includes chemical and therapeutic equivalents of originator medicines in a variety of dosage forms, including tablets, capsules, injectables, inhalants, liquids, ointments and creams. The Specialty Medicine segment includes several franchises, most significantly core therapeutic areas of CNS medicines.