Teva enters Israeli infant formula market

Teva aims to win a 15% market share within four years in partnership with Groupe Danone unit Nutricia.

Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) officially entered the infant formula market today in partnership with Groupe Danone SA (Euronext: BN) unit Nutricia. Teva has not yet disclosed the brand name that will be used in Israel, but it is one of the most popular brands in Europe.

Teva's infant formula is scheduled for launch toward the end of the year. The company is currently in the process of obtaining Ministry of Health certification.

Teva Israel CEO Ron Meron said that the company's entry into a market dominated by suppliers will greatly change the market in favor of consumers, in part by offering "fair" prices. He said, "This is a top-quality and proprietary product that is supported by medical studies. We are aware of the long-term investment necessary in this field."

The infant formula sector will become part of Teva's pharmaceutical operations, which includes prescription and non-prescription drugs, and consumer products. Teva Pharma Israel CEO Dan Danieli said that the company has an advantage with hospitals and doctors "as a provider of health services", which is a key anchor in winning consumer confidence.

Israel's infant formula market is estimated at NIS 500 million a year, according to Nielsen consumer price figures for June 2010-May 2011. Estimated market growth is 6% a year. According to Nielsen, the market is dominated by two brands: Materna has a 54% share, and Similac has 45%, in financial terms.

Consumers' strong brand loyalty means that Teva will have its work cut out. Danieli says that the company aims to win a 15% market share within four years.

Teva's share price fell a further 0.2% at the opening on Nasdaq today to $47.03, giving a market cap of $44.2 billion, but rose 0.7% on the TASE today to NIS 162.30.

Published by Globes [online], Israel business news - - on June 27, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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