Here's one way to increase your drug sales overnight: First, buy a company. Then, raise its product prices up to 25%. That, apparently, is Teva Pharmaceutical Industries' ($TEVA) strategy for Cephalon ($CEPH), the U.S.-based drugmaker it acquired just a couple of months ago. Almost as soon as the deal closed, Teva "implemented a series of unusually robust price increases" for several of Cephalon's branded meds, Deutsche Bank says.
Citing a wholesale pricing report from Medi-Span, Deutsche Bank analysts say Teva hiked the prices on Cephalon painkiller Fentora and wakefulness drug Provigil 15%--and raised the price on Provigil follow-up Nuvigil 25%. The latter increase came on top of an 8% price rise just 6 months before.
The analysts approved of the increases, Globes news service reports. "Taken together, these recent increases could likely bolster the outlook for Teva's North American pharmaceutical sales in the fourth quarter, and, more importantly, in 2012," they wrote (as quoted by Globes). Together with Teva's profit-sharing deal with Ranbaxy on copycat Lipitor, its recent launch of a Zyprexa copy, and the planned debut of generic Lexapro, Deutsche Bank figures Teva's new target price at $46, compared with yesterday's $40 close.
- see the story from Globes