Teva Rebounds on Drug Study Amid Global Rally: Israel Overnight
Teva Rebounds on Drug Study Amid Global Rally
Ahikam Seri/Bloomberg
A worker checks pharmaceutical products during the production process at Teva Pharmaceutical Industries factory in Petah Tikva.
A worker checks pharmaceutical products during the production process at Teva Pharmaceutical Industries factory in Petah Tikva. Photographer: Ahikam Seri/Bloomberg
Teva Pharmaceutical Industries Ltd. (TEVA) rose for the first day in four in U.S. trading as the clinical trial success of a medicine for attention deficit hyperactivity disorder outweighed concern that the company may lose patent litigation for its best-selling brand drug.
The American depositary receipts of the world’s largest maker of generic drugs climbed 2.5 percent yesterday to $40.33, the most in six trading sessions. The advance helped Teva’s New York-traded shares narrow their discount to Israeli shares to 4 cents, from 36 cents on Sept. 1.
All but two stocks gained among the 25 stocks on the Bloomberg Israel-US 25 Index of the largest Israeli companies traded in New York. Mellanox Technologies Ltd. (MLNX), an adapter maker part-owned by Oracle Corp., surged 6.5 percent, the most among all members in the index, to a three-week high. Nice Systems Ltd. (NICE), a maker of digital surveillance and monitoring systems, followed with a 6.2 percent jump, the most in almost four weeks.
The success in Teva’s new drug study is “obviously a positive,” said Judson Clark, an analyst at Edward Jones & Co. by phone from Des Peres, Missouri. “Investors are overly focused on the headwinds surrounding the company’s franchise, and they’re ignoring all the positives going forward. Teva is well-positioned to benefit from this wave of brand drugs going generic.”
Teva’s Tel Aviv-traded shares fell 1.3 percent to 146.10 shekels, or the equivalent of $39.70, at 1:34 p.m. today
Global Rally
The Bloomberg Israel-US 25 Index rose 2.3 percent to 84.36 yesterday, the most in a week.
Israel’s benchmark TA-25 Index advanced 0.1 percent to 1,073.16 today. The gauge has declined 19 percent this year. The shekel lost 0.4 percent to 3.6804 per dollar in Tel Aviv.
Results from a mid-stage clinical trial of Teva’s candidate drug MC01CI for treating adults with attention deficit hyperactivity disorder (ADHD) met its main efficacy goals, according to a joint statement yesterday by Teva and Alcobra Ltd, the collaborator on the medicine development.
Concern the company may lose patent litigation over multiple sclerosis medicine Copaxone, whose sales made up 22.7 percent of Teva’s $4.21 billion revenue in the second quarter, contributed to the stock’s 23 percent slide this year.
Copaxone Litigation
Teva, which licensed patents from Yeda Research and Development Co. for Copaxone, sued Novartis AG (NOVN)’s Sandoz in 2008 and Mylan Inc. in 2009 after they separately tried to win approvals from the U.S. Food and Drug Administration to market generic versions before patents expire in 2014. The patent- infringement trial over the drug started in New York yesterday.
Copaxone, an injected treatment, also faces competition from the first approved multiple sclerosis pill, Novartis AG’s Gilenya.
Analysts at Collins Stewart LLC and Sanford C Bernstein & Co. reiterated their recommendations to buy Teva’s stock on Sept. 6.
“The risk-reward is favorable to Teva’s stock ahead of the trial,” analysts led by Louise Chen at Collins Stewart in New York wrote in a research note Sept. 6. Investors are “assuming that Copaxone will face brand and generic competition near term. This is the worst case outcome. If this does not happen, the stock will trade higher on both multiple expansion and upwards earnings revisions.”
Chen set a price target of $65.
Epilepsy Drug
Teva’s U.K. unit also announced yesterday the start of generic tablets used to treat epileptic seizures.
Israel posted a 3.2 billion-shekel budget deficit in August, the Finance Ministry said in an e-mailed statement yesterday. The nation’s foreign-currency reserves reached a record $78.1 billion last month, the Bank of Israel said yesterday.
Israel, whose population of 7.7 million is similar to Switzerland’s, has 57 companies traded on the Nasdaq, the most of any country outside the U.S. after China. The country is also home to the largest number of startup companies per capita in the world.
The nation’s stock market was upgraded to developed market status by MSCI Inc. in May 2010, the same month the 63-year-old country was accepted to the Organization for Economic Cooperation and Development.
Orbotech Ltd. (ORBK), the Yavne, Israel-based maker of equipment to test screens of smartphones and tablets, advanced the most in a week in New York trading. Its stock was given a new “neutral” recommendation yesterday by JPMorgan Chase & Co. analysts, with a price target of $13 by December 2012.
To contact the reporter on this story: Belinda Cao in New York at Lcao4@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net
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