On September 30, Teva Pharmaceutical Industries Ltd (
TEVA), sold the worldwide rights to a generic version of the white blood-cell boosting drug filgrastim to Hospira Inc (NYSE:
HSP). With three divestitures (ABIC Biological Laboratories Teva Ltd, Assia Pharmaceuticals Ltd, and Abic Veterinary Products Ltd) already, the year 2009 was unlike 2008 for Teva Pharmaceutical. However, the stock breached the $50 mark in July 2009 and has been on a roll till yesterday (October 1) when it fell below the $50 mark.
Investors could be fretting over the fact that the stock closed October 1 at $49.25 below the simple moving average (20 days-$49.41; 50 days-50 days-$49.43; and 200 days-$49.74). However, I feel, investors should be worried too much as the relative strength index (20 days-30.34; 50 days-38.22; and 200 days-39.89) is above the worrisome level of 30. On a split-adjusted basis, Teva's stock is up nearly 80-fold since early 1990 and about 76% since the beginning of 2005.
You might feel, I am ok with technicals, I am more interested in fundamentals. Here we go.
2008 was a year of record-breaking results and major strategic achievements for Teva. During the year the company leadership in the US and globally, had a record number of Paragraph IV launches, and achieved record sales of Copaxone, which became the world's number one therapy for the treatment of multiple sclerosis. I believe that these accomplishments in 2008 emphasize the fundamental strength of Teva's balanced business model and its ability to deliver continuous, profitable growth.
During 2008, Teva also expanded its global reach with the acquisition of Bentley in Spain and its joint venture with Kowa in Japan. The company's most exciting strategic achievement of 2008 was, of course, the $7.5 billion acquisition of Barr, which made it the largest generic drug manufacturer in the US with a market share of 22%.
Copaxone is Teva's largest single product with an estimated 22% of earnings per share contribution in 2008. For the second quarter ending June 2009, Copaxone recorded a 21% sales gain over the same period in 2008. Its $682 million in sales represented 20% of total revenue. The share of Copaxone in the compnay's earnings per share could go up to nearly 30% in 2010.
Copaxone faces intense competition from existing products, such as Avonex, Betaseron, Rebif and Tysabri. Further, Copaxone's Hatch-Waxman exclusivity expired December 20, 2001 and its 7-year Orphan Drug exclusivity expired December 20, 2003. There are also four Copaxone formulation patents listed in the FDA's Orange Book expiring in 2014.
