The share of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) was down another 5% in morning trading on the Tel Aviv Stock Exchange (TASE), after falling 5.4% in trading on the New York Stock Exchange (NYSE) in the last two days of trading last week. The share price is now at its lowest point since 2000 (adjusted for dividends distributed over the years). Teva's current share price of $8.24 puts its market cap at $9 billion.
As of now, Teva's market cap is only slightly higher than the $8.77 billion market cap of competitor Mylan NV, which Teva attempted to take over four years ago. Mylan's share price has also plummeted since then. Teva was willing at that time to acquire Mylan at a company value of $40 billion with the aim of establishing a combined company that could achieve a market cap of $100 billion. When the attempt was unsuccessful, Teva instead acquired Actavis, the generic drug division of Allergan, for nearly $40 billion. Teva's share reached a peak of $70 at that time, but the enormous debt assumed by the company in order to pay for the acquisition (the price later proved to be inflated) made it necessary for Teva to conduct a major restructuring and affected its share price.
Concern in recent weeks about exposure to damage from two legal proceedings - one involving fixing prices of generic drugs in the US and the other concerning marketing of opioid pain relievers, leading to addiction - have pushed Teva's share price down in recent weeks. In the opioids case, Teva reached an $85 million settlement with the state of Oklahoma several weeks ago, but doubts were raised last week about implementation of this settlement, and Teva's share plunged in response, even though most of the analysts covering the share believe that the settlement will remain valid.
Published by Globes, Israel business news - en.globes.co.il - on June 16, 2019
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