Teva (NYSE:TEVA) continues to prepare for the introduction of fremanezumab, for the treatment of chronic migraine, despite disappointing results in some recent studies. An FDA decision on fremanezumab was delayed earlier this year, but a go/no-go should happen by September 16, and if it’s approved, it could be a nine-figure drug.
Mizuho analyst Irina Rivkind Koffler attributes recent weakness in TEVA stock to caution in front of the upcoming FDA decision for fremanezumab, and turns more cautious on a timely approval. However, the analyst sees shares as undervalued even if approval is delayed.
As such, Koffler reiterates a Buy rating on Teva shares, with a price target of $28, which implies an upside of 22% from current levels. (To watch Koffler’s track record, click here)
Koffler commented, “The January, 2018 Warning Letter issued to partner Celltrion highlighted deficiencies with visible particle examination and environmental monitoring. These issues were raised again (albeit in a smaller way) in the July 2018 Form 483, which found poor operator qualification to identify glass particles in vials (Observation 2), and deficient procedures in calibrating instruments used to monitor environmental conditions like temperature (Observation 4). In the Warning Letter, the FDA wrote “Until you correct all violations completely and we confirm your compliance with CGMP, FDA may withhold approval of any new applications or supplements listing your firm as a drug manufacturer.” It is not clear to us whether all prior violations have been resolved, and we don’t rule out a re-inspection.”
“Teva refused to comment further but indicated that the totality of information it has still supports a timely approval on Sept 16. If fremanezumab approval is delayed to 2019, its market uptake, pricing, and rebating could be pressured,” the analyst added
How does Koffler’s bullish gamble weigh up against the word of the Street? It appears other voices are not as willing to bet on the generic drug giant, as TipRanks analytics demonstrate TEVA as a Hold. Based on 13 analysts polled in the last 3 months, 3 rate a Buy on TEVA stock, 9 maintain a Hold, while 1 issues a Sell on the stock. The 12-month average price target stands at $23.11, marking a slight downside potential from current levels.