Credit Suisse: FDA won't approve Teva's migraine drug this month

Teva Photo: Reuters Ammar Awad

Credit Suisse has downgraded Teva saying that the risk-reward ratio for an investment is unattractive.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is unlikely to receive marketing approval for its branded drug for treatment of migraine in the coming days, says Credit Suisse. The bank has also downgraded its recommendation for Teva's share from "Market outperform" to "Neutral" and lowered its target price by $2 to $23.

The date for the US Food and Drug Administration (FDA) for making a decision on Teva's Fremanezumab drug is September 16. Credit Suisse writes that Teva still believes that the drug will be approved this month for marketing, and the drug will be launched immediately after approval is obtained. At the same time, according to Credit Suisse the visits by FDA personnel to the production site of Celltrion, Teva's partner, which is producing the active ingredient for the drug, have not been completed, which Credit Suisse believes makes approval of the drug in the near future "increasingly unlikely."

Credit Suisse adds that the drug's commercial expectations  are also too high, given the dynamics in the market.

Credit Suisse says that the risk-reward ratio for an investment in Teva's share is unattractive in the absence of additional catalyzers for the share. The bank's economists expect more details from Teva about future growth engines before they take a positive view of the share.

The downgrade in Credit Suisse's recommendation comes after seven months of positive recommendations for Teva's share, during which the company's share price rose from $18.60 to $21.50. Teva, managed by CEO Kare Schultz, has a current market cap of $21.9 billion.

Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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Teva Photo: Reuters Ammar Awad
Teva Photo: Reuters Ammar Awad
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