Meitav Dash downgrades Teva

Kare Schultz Photo: Shlomi Yosef

"Revenue from Copaxone will continue to slide."

One week after Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) published its first quarter financials, investment house Meitav Dash has downgraded its recommendation for the company's share to "Market weight," with a target price of $17.

On the positive side, Meitav Dash healthcare analyst Jonathan Kreizman cites the stability in the generics sector and a resolute stance in the opiates affair. On the negative side, he mentions the rate of decline in sales of Teva's multiple sclerosis treatment  Copaxone in the face of generic competition.

Kreizman says that Teva CEO Kare Schultz contributed to moderating the fall in company's share price on the day the financials were released by taking a resolute stand in the pain relievers affair. "Kare declared that Teva was not involved in the campaign in favor of generic opiates, while in the original drugs, all of the marketing actions completely complied with the FDA's instructions," Kreizman explained. Schultz said that Teva had no intention of compromising in the pain relievers affair.

Teva's revenue from Copaxone continue to slide in the first quarter, with the main weakness being in the US, with a 52% drop in revenue. Kreizman wrote that the decline "was probably due to more difficult than expected negotiations with insurers last February, in addition to an inventory clear-out, which accounted for half of the decrease, and which is not expected to recur in the second quarter."

Teva lowered its 2019 guidance by $200 million, taking into account three generic drugs competing with Copaxone. "Copaxone's market share is just under 70%, and Teva expects revenue from it to fall 45% in a year. Teva reported $360 million in free cash flow in the quarter, and we predict another weak quarter and a stronger second half," Kreizman wrote.

Published by Globes, Israel business news - en.globes.co.il - on May 7, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

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Kare Schultz Photo: Shlomi Yosef
Kare Schultz Photo: Shlomi Yosef
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