Teva Pharmaceutical Industries Ltd’s (ADR) (TEVA) AUSTEDO Wins Key FDA Approval To Corner TD Market

TEVA's Brand Drug Portfolio and Pipeline Are Undervalued, Says Analyst


Analyst Louise Chen of Cantor is out with a cautiously optimistic report on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) after the pharmaceutical giant announced FDA approval of its new drug AUSTEDO. The drug treats tardive dyskinesia (TD) a disorder that results in involuntary, repetitive body movements. Considering that Teva is currently the only company to carry an approved treatment for TD, the company has for the time being cornered a market. Investors have already responded positively to the news, sending shares rising over 4% within one hour of the opening bell this morning.

The analyst notes, “USTEDO has the potential to reduce the severity of the abnormal involuntary movements of tardive dyskinesia (TD). The NDA for AUSTEDO was based on results from two Phase III studies, ARM-TD (Aim to Reduce Movements in Tardive Dyskinesia) and AIM-TD (Addressing Involuntary Movements in Tardive Dyskinesia). TD is a movement disorder characterized by repetitive and uncontrollable movements of the tongue, lips, face, trunk and extremities. The often debilitating disorder affects about 500,000 people in the U.S. and is usually a result of treatment with widely used medications for psychiatric conditions such as schizophrenia and bipolar disorder or gastrointestinal conditions. We think AUSTEDO’s dosing flexibility and direct treatment of TD without disrupting ongoing treatment for the underlying condition will increase the market opportunity for AUSTEDO.”

Seeing a potential light at the end of the tunnel, Chen opines that “TEVA’s brand drug portfolio and pipeline are underappreciated, but the company may not get the credit it deserves for these assets until it finds a new CEO and/or generic drug pricing improves.”

As such, the analyst is maintaining a Neutral rating on TEVA stock with a price target of $27.00 representing a 67% rise over current trading levels. (To watch Chen’s track record, click here)

TipRanks analytics exhibit Teva as a Hold. Out of 15 analysts polled by TipRanks in the last 3 months, 3 are bearish, while 12 are sidelined on TEVA stock. With an upside potential of 64%, the stock’s consensus target price stands at $26.65.

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