Options investors are betting against Teva Pharmaceutical Industries ($TEVA). And as Bloomberg reports, that fact doesn't surprise some analysts. Teva's new CEO, Jeremy Levin, unveiled his strategy last month--and that plan failed to quell shareholders' fears, they say.
The world's biggest generics maker is actually quite dependent on its leading branded drug, the multiple sclerosis treatment Copaxone. But that product faces generic competition when its patent expires in 2015. So, investors are looking to Levin for ideas about how to fill that gap.
During December's investor presentation, Levin ticked off new sources of revenue, including emerging markets, over-the-counter drugs, and new formulations of existing drugs, such as combination products. He promised to stick to Teva's dividend and to continue buying back shares. He reiterated a promise to shed $2 billion in costs. And all that followed Chairman Phillip Frost's hints about small buyouts to come.
Meanwhile, Teva has petitioned the FDA in an attempt to keep a Copaxone rival--Biogen Idec's ($BIIB) BG-12--off the market a bit longer. The company asked the agency to require safety studies of any new MS drug before approval.Teva has petitioned the FDA to keep a Copaxone rival off the market a bit longer--courtesy of Teva Pharmaceuticals
But there's not a lot of faith in that anti-BG-12 strategy. And apparently, Levin's proposals weren't enough. "Sentiment on the shares hasn't been that great since the investor day," Gary Nachman, an analyst at Susquehanna Financial Group, told Bloomberg.
"There's still a lot of pressure in a lot of areas of their business," Nachman went on to say. "Even though they took down guidance, there's still more chance of downside than upside."
And that chance is all too familiar to Teva investors. The company's stock was one of FiercePharma's biggest losers for 2012. We'll have to wait and see whether Levin's Teva can turn that sentiment around.
- read the Bloomberg story
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