As Teva searches for its footing, billionaire Soros ups his stake
Piece by piece, Teva ($TEVA) is working on its turnaround, and at least one key investor seems to think the company is headed in the right direction. Billionaire George Soros boosted his family office's stake in the Israeli company in the last quarter of 2013, adding 5.7 million shares to make the Israeli generics giant its largest holding.
As Bloomberg reports, Soros Fund Management upped its Teva holding to $373 million in Q4, according to an SEC filing. Bloomberg data lists Teva at 4% of the fund, worth $9.2 billion.
|George Soros--Courtesy of Norway UN|
After a rocky fall fraught with controversial cost-cutting measures, labor disputes and the exit of then-CEO Jeremy Levin, shares of the Petah Tikva, Israel-based company have gained 10.3% this year, the news service notes. Shareholders and analysts alike cheered the CEO announcement of Erez Vigodman in early January; though he lacks pharma experience, he comes with turnaround know-how. And driven by investor pressure, Chairman Phillip Frost has promised to surround him with a slimmed-down board of pharma veterans.
Also important in winning market favor has been the FDA approval of a new, longer-acting formulation of Teva's top seller, the multiple sclerosis treatment Copaxone. The January nod gave the company a few months to convert as many patients as possible to the new-and-improved version before losing patent exclusivity on the original in mid-May; company execs say they expect 45% of current patients to make the switch.
That's key for a company about to lose protection on a drug responsible for half its profit haul. While new generic approvals and 10% growth in cancer drug Treanda recently helped Teva beat fourth-quarter sales and earnings forecasts, Copaxone still accounted for about 20% of revenue, netting $5.43 billion. Analysts expect sales to erode by more than half by 2016, and Teva itself has warned of a $550 million sales hit this year.
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