Mylan N.V. (MYL) Gain Is Teva Pharmaceutical Industries Ltd (ADR) (TEVA) Pain

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) shares are diving nearly 15% in Wednesday’s trading session, following the news that competitor Mylan N.V. (NASDAQ:MYL) has won FDA approval for generic version of Teva’s Copaxone. Mylan notes it plans to “begin shipping imminently.”

Oppenheimer analyst Derek Archila commented, “Our 4Q17 Copaxone forecast of ~$745M (vs. Street’s ~$876M) already assumed a generic 40mg launch, and management has in the past quantified a full-quarter impact in 2017 from “one or more” 40mg generics as a ~20-25c headwind to its 2017 EPS guidance of $4.30- $4.50 (our 2017 EPS estimate is $4.17 vs. consensus of $4.31). Recall a generic was not factored into guidance. We believe a ~5% move to the downside is an appropriate move for the stock based on the news. Our 2018-2022 estimates already assume meaningful erosion to the Copaxone franchise (our 2018 estimate is ~$2.5B, -30% y/y) from several generic competitors.”

“Consensus estimates generally seem to take generic competition into account, albeit in varying degrees of magnitude (2018 estimates range from ~$1.7B-$3.7B). We believe MYL will likely be aggressive in trying to secure meaningful share of both the 20mg and 40mg presentations and noted a patient support service in order to capture new patient starts and switches,” the analyst added.

Archila rates TEVA a Market Perfom, without suggesting a price target. (To watch Archila’s track record, click here)

Overall, 3 sell-side analysts have rated the stock with a Sell rating, 12 analysts have assigned a Hold rating and 2 have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $18.50 which is -1.7% under where the stock closed yesterday.

Teva is a global pharmaceutical company, which provides patient-centric healthcare solutions. It operates through two segments: Generic Medicines and Specialty Medicines. The Generic Medicines 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 engages in the provision of core therapeutic areas of central nervous system medicines.


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