Deutsche Bank says the 8.5% fall in the share price of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) on Thursday in response to Biogen Idec Inc. (Nasdaq: BIIB) news about its oral multiple sclerosis drug, BG-12, was overdone. Deutsche Bank reiterates its "Buy" recommendation for Teva with a target price of $64.
Deutsche Bank says that BG-12's data appears to be superior to that of Teva's oral multiple sclerosis drug, Laquinimod, but that there is no safety data about BG-12. However, "it is difficult to compare data from different trials due to differences in endpoints and patient populations. And until we see head-to-head data, full safety data, and publication of the Define study in a peer-review setting, drawing definitive conclusions can be risky."
Deutsche Bank concludes that Teva's current share prices is close to a worst-case scenario in which generic versions of Copaxone come on the market in the near term, but there is still considerable upside to Teva's shares.
Merrill Lynch is not so sanguine. On Friday, it slashed its target price for Teva to $58 from $65, although it reiterated its "Buy" recommendation. It says that there is no realistic chance that Copaxone will disappear.
Teva's share price rose 1.6% on Nasdaq yesterday to $45.71, giving a market cap of $42.95 billion, but fell 5.7% in early trading on the TASE to NIS156.10 - the first day of trading since Biogen's news.
Published by Globes [online], Israel business news - www.globes-online.com - on April 26, 2011
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