Analysts get bullish on generics makers

The flip side of Big Pharma's angst over generic competition is growing exuberance about generics makers. Early this week, the Wall Street Journal tipped off investors to Indian generics companies' waxing fortunes. Yesterday, several major generics makers saw sizable stock gains. Meanwhile, individual companies are attracting analyst kudos:

• Teva Pharmaceutical got an "outperform" rating from Cowen & Co., which predicted a strong 2008, marked by the exclusive launch of a copycat Risperdal, plus possible shared exclusivity on generic Wellbutrin XL, Lamictal, and Fosamax.
• A Banc of America Securities analyst started covering Teva, Mylan, and Barr Pharmaceuticals, rating each a "buy." He called Teva a "Best in Class Generic," setting a price target of $55 on its stock, which currently is trading at around $45. Mylan got an $18 target (its current share price is $13.77), on the strength of three big launches next year. And he cited Barr for its 70 drug apps pending at the FDA.

The WSJ's focus on Indian generics makers emphasized that their stocks have "taken a beating" recently, so they're starting to look cheap. Plus, several companies are on a growth spurt; the country's biggest drug maker, Ranbaxy, for instance, is expected to grow earnings by 41 percent next year.

- read the Wall Street Journal's bullish generics article
- get more on Cowen's report on Teva
- see the Banc of America report

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