Teva Pharmaceutical Industries Ltd (ADR) Could Bear the Brunt of Downside

Guggenheim's Rohit Vanjani already is bracing for a roughly 50% share loss year-over-year for the Israeli pharma giant by 3Q:18.

Should Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) be quaking with new Copaxone generics rivalry heating up the biotech ring?

Guggenheim analyst Rohit Vanjani weighs in sidelined after yesterday’s reveal that Momenta’s third-party contracted manufacturing partner just gained a regulatory clearance win from the FDA.

Now that Momenta has garnered a positive resolution of a FDA reinspection surveying its generic Copaxone 40mg facility, the analyst notes the company bets its Copaxone 40mg ANDA review can get the wheels in motion once again. Momenta’s McPherson facility has been granted a VAI classification, which means by Vanjani’s understanding: yes, there could still linger “objectionable concerns;” but none of them passed the “threshold of regulatory significance.” In other words, by next McPherson facility inspection, Vanjani deems it “likely” for the agency to confirm any conditions or practices that prove to be questionable.

“The facility approval clears the way for Momenta’s and its partner’s, Sandoz’s, approval of their generic version of Copaxone 40mg. While Sandoz on its earnings call on 1/24/18 conservatively guided to a 2H18 launch, Momenta had always believed that a reinspection and clearance of the site by 1Q18 could mean a launch for gCopaxone in 1H18,” explains the analyst.

Vanjani concludes, “We already believe that we are adequately accounting for a potential MNTA entry into the Copaxone 40mg market by modeling a ~50% share loss for TEVA by 3Q18 (from 3Q17). We note, however, that one variable still to be determined is the pricing for MNTA’s product. If MNTA aggressively prices its Copaxone version, that could mean downside for […] TEVA.”

As such, the analyst reiterates a Neutral rating on TEVA stock without listing a price target. (To watch Vanjani’s track record, click here)

TipRanks paints a cautious picture on this beleaguered Israeli pharma giant. Out of 21 analysts polled in the last 3 months, Wall Street is split- with 4 bulls betting on Teva’s comeback, 13 on the sidelines, undecided, and 4 bears not swayed by recovery opportunity. With a loss potential of nearly 10%, the stock’s consensus target price stands at $18.64.

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