Teva sinks to new low

Kare Schultz Photo: Shlomi Yosef

The Israeli pharmaceutical company's share price was down another 8.87% on Wall Street on Thursday and fell further on Friday.

There are no signs that Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) share price has bottomed out. The troubled Israeli pharmaceutical company saw its share price fall 8.87% yesterday on Wall Street to $8.84, giving a market cap of $9.675 billion. And the share price fell a further 2.15% today on the NYSE to $8.65.

The latest falls follow a downgrading of the share by Merrill Lynch Bank of America yesterday by two ratings to "Underperform" as analyst Jason Gerberry spoke about the company's, "legal exposure and a pipeline that is interesting but has insufficient upside optionality." Merrill Lynch cut the target price from $19 to $9.

Earlier in the week, UBS cut Teva's target price from $22 to $12 and estimated that the company could be forced to pay $4 billion in court cases over alleged price fixing and contributing to opoid addiction. It did not help that Teva agreed an $85 million settlement in Oklahoma on opioids after previously insisting it would fight the case.

Teva's share price is now down 87% from its peak in 2015 and has lost over 60% of its value since the end of January 2019. Teva's share price is now trading at the level it was in 2000.

On top of its legal woes, Teva has a debt of $27 billion, fast falling revenue from Copaxone, its former blockbuster drug for treating multiple sclerosis, on which the patent has expired, and no new major growth engines in sight. On top of all that, there is the ongoing weakness in the US generics market.

CEO Kare Schultz has been successfully implementing an aggressive streamlining plan to save $3 billion in costs, including laying off 25% of the company's work force, but it now looks as though more cuts will be required.

Published by Globes, Israel business news - en.globes.co.il - on May 31, 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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