Wall Street analysts believe that Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is very close to making a major acquisition that may be announced by September, according to a report by "Bloomberg" on Teva.
The report was published in the US, following hints dropped by Teva executives in recent weeks, among them CEO Erez Vigodman, that Teva was considering acquisitions. The Teva share is only 4.8% below its all-time high on Wall Street.
Vigodman said last month that Teva was ready to switch to a strategy of inorganic growth, following a long period in which it had concentrated on defending its Copaxone patent and substantial cost cutting measures designed to position the company for the day after Copaxone. His statement was warmly received by investors, who pushed the share up to its highest level in the past five years.
"The closer we get to September, the closer they’re going to get to the finish line on completing a deal or at least announcing a deal,” CRT Capital Group analyst Timothy Chiang told Bloomberg. “That’s what the markets are hoping for, and what I’m hoping for.”
Teva has already managed to transfer 60% of its Copaxone patients to its new version of the drug, administered by injection three times a week, instead of the old version, which is administered daily. The Teva share has surged 8.7% this month.
“Our strong focus during 2014 was on getting our house in order first, solidifying the foundation, developing the cylinder that will fire for us in years to come,” Vigodman said in a February 5 conference call with investors. “We are reorienting the direction during 2015 towards inorganic moves as well.”
JP Morgan says that Teva has over $10 billion in debt capacity to spend on acquisitions and could go after Mylan Inc., which agreed to buy Abbott Laboratories’ generic drug unit last year. Wells Fargo, on the other hand, believes that this is unlikely.
After the Teva share climbed 55% since 2013, analysts and investors expect something big from Teva. "The bulk of the rise has been due to the delay of Copaxone competition," says BMO Capital Markets analyst David Maris. “It’s natural when a stock goes from $40 to $60, people start to say, ’What are you going to do next?'”
Published by Globes [online], Israel business news - www.globes-online.com - on March 29, 2015
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