Pat McKeough responds to many personal questions on stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on a selection of the most intriguing questions of the past week go out to all Inner Circle members. And every Friday, we offer you one of the highlights from these Q&A sessions.
This week, there was a question about the world’s largest maker of generic drugs. While an aging population is good for drug stocks, there are still a number of thorny issues to consider, such as patent regulations and increasing competition, as Pat observed in his response.
Q: Pat: Can I have your view on Teva Pharmaceutical? Thank you.
A: Teva Pharmaceutical Industries Ltd. (ADRs, symbol TEVA on Nasdaq; www.tevapharm.com), is the world’s largest generic drug maker.
Israel-based Teva makes and sells more than 500 generic drugs in North America, which accounts for 50% of its sales. Europe provides 31% of Teva’s sales and the rest of the world accounts for 19%.
Teva also develops and markets some of its own name-brand drugs, including Copaxone, the second-highest-selling multiple-sclerosis drug, and Azilect, a Parkinson’s drug. Together, these two drugs accounted for 23% of the company’s 2010 sales.
Teva is one of the most successful firms in the competitive generic-drug business. It regularly wins first-to-file applications on drugs whose U.S. patents are expiring.
The company continues to grow by acquisition. In August 2010, it paid $5.2 billion for Ratiopharm, Germany’s second-largest generic drug maker. As a result, Teva is now Europe’s largest generic-drug company.
As a member of my Inner Circle, you will get individual answers to your personal investment questions. And you will see my answers to questions other investors like you are asking. In fact, you will get virtually all the investment advice I have to give. You will have access to all of our advisories – The Successful Investor, Wall Street Stock Forecaster, Stock Pickers Digest and Canadian Wealth Advisor – and full access to the members-only, password-protected Inner Circle section of The Successful Investor Network website.
Although my team carefully researches all the stocks that members ask about, I personally review each and every recommendation. To ensure this close personal attention, only a limited number of members can be admitted to our Inner Circle. Under the pressure of world events, even more investors are asking for my personal investment advice. We are nearing our membership limit already. Click here to secure your membership in the Inner Circle right away.
Drug stocks: Teva faces competition with its key multiple sclerosis drug
Teva’s shares have moved down from $57 in early 2011, mainly due to concerns over rising competition to its multiple sclerosis drug Copaxone. Rival drugmaker Novartis AG recently started selling Gilenya, a new oral multiple sclerosis drug. Because it’s in pill form, this drug is much more convenient to take than Copaxone, which must be injected.
However, doctors may be reluctant to switch patients to a new drug if they are responding well to Copaxone. As well, Teva is now developing its own oral multiple-sclerosis therapy, called laquinimod, as well as a low-dose form of Copaxone.
Drug stocks: Teva aims to sell more non-prescription drugs
Meanwhile, Teva has over 180 generic drug applications awaiting FDA approval. The company also has a number of late-stage drugs under development, including treatments for women’s health, respiratory conditions and wound care.
Teva also aims to sell more non-prescription drugs. It recently formed a joint venture with Procter & Gamble Co. (New York symbol PG) that will make and sell over-the-counter drugs outside North America. Procter will own 51% of this new business, called PGT Healthcare, and Teva will own the other 49%.
You can see Pat’s recommendation on Teva Pharmaceuticals in this week’s Inner Circle Q&A. In his buy-hold-sell analysis, he examines the likely effects of long-term demographic trends on generic drug sales. He also looks at how greater competition might affect profit margins for Teva and other generic drug makers.
Inner Circle members see Pat’s analysis and recommendations on the stocks other members have asked about in each week’s Inner Circle Q&A. You can view it immediately when you become a member of this special investment group. You will get Pat McKeough’s answers to your personal investment questions, full access to our members-only Inner Circle website, and many other membership privileges. Click here to get started right away.
I think it’s too late to buy Teva as the American Politicans had first chance to buy Teva,so now we are just adding fuel to Tevas’ fire;so watch the stock drop when the fire goes out !It’s probably better to but Teva puts six months or more down the road.
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I think it’s too late to buy Teva as the American Politicans had first chance to buy Teva,so now we are just adding fuel to Tevas’ fire;so watch the stock drop when the fire goes out !It’s probably better to but Teva puts six months or more down the road.