Teva Pharmaceutical Industries Ltd. (TEVA)’s shares fell in New York, creating the biggest discount among the largest Israeli companies traded in the U.S., as the drugmaker lost an appeal to halt Watson Pharmaceuticals Inc. (WPI) from selling a generic version of its birth-control pill.
Teva, the world’s largest maker of generic drugs, fell 1 percent last week to $40.52 in New York, while gaining 2.9 percent to 153.40 shekels, or the equivalent of $41.29, in Tel Aviv. They dropped 0.9 percent to 152.10 shekels, or $40.94 at the 4:30 p.m. close today. The discount last week was the largest among members of the Bloomberg Israel-US 25 Index of the biggest Israeli companies traded in the U.S. The measure fell 1.2 percent last week, led by Ceragon Networks Ltd. (CRNT), which reported a third-quarter loss.
Petach Tikva, Israel-based Teva is headed for its worst annual decline since 2006 as competition grew for its leading multiple sclerosis treatment Copaxone and after it introduced fewer generic drugs in the U.S. Teva lost an appeals court bid to stop Watson’s sales of a generic version of the Seasonique pill on Nov. 10 after the market closed in Tel Aviv.
“The generic pricing pressure and competition to its Copaxone treatment has hurt Teva,” said Les Funtleyder, a health strategist and portfolio manager with Miller Tabak & Co. in New York. “Given the markets’ environment, any risk would get magnified.”
The Bloomberg Israel-US 25 Index fell for a second week to 87.35. The benchmark Tel Aviv TA-25 Index, which slipped 0.1 percent last week, today surged 2.5 percent, the most since Oct. 16.
Teva’s 77-cent discount last week was the biggest since Nov. 1, according to data compiled by Bloomberg. The New York shares have retreated 22 percent this year.
Leon Cooperman’s Omega Advisors Inc. sold its stake in Teva during the third quarter, according to a Nov. 10 regulatory filing. Cooperman was the first chief executive officer of Goldman Sachs Asset Management and founded New York-based Omega in 1991.
The U.S. Court of Appeals for the Federal Circuit in Washington affirmed a lower court ruling that let Watson enter the market. Watson began selling a generic version of Teva’s Seasonique contraceptive in July.
Teva cut its sales and profit forecast for 2011 on Nov. 2 after fewer new U.S. generic-drug introductions led to the company’s first drop in quarterly earnings in four years.
Revenue will be between $18.3 billion to $18.6 billion, and earnings excluding some costs will be between $4.92 to $5.02 a share. Teva in July had forecast sales of $18.5 billion to $19 billion and earnings in the range of $4.90 to $5.20 a share.
Ceragon, the maker of wireless-networking systems, posted its biggest weekly plunge in three years, dropping 21 percent to $8.13. The Tel Aviv shares fell 20 percent to 31.37 shekels, or the equivalent of $8.44. The shares declined 2.1 percent to 30.71 shekels, or $8.27, today.
Ceragon reported a third-quarter loss of $6.7 million on Nov. 7 after a profit of $4.6 million a year earlier as it recorded $5.7 million in costs associated with the acquisition of Nera Networks AS in January.
The company, which had expected sales to grow at a 20 percent to 25 percent rate next year, now predicts an increase of about half that rate, Chief Executive Officer Ira Palti told analysts during a conference call.
Syneron Medical Ltd. (ELOS), the maker of aesthetic devices, whose largest shareholder is Seth Klarman’s Baupost Group LLC, was the biggest gainer among the largest Israeli companies traded in New York last week, after reporting third-quarter revenue that beat analysts’ estimates. The company climbed 7.9 percent to $12.02.
Israel, whose population of 7.7 million is similar to the size of Switzerland’s, has about 60 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.
Teva maintained its long-term target of $31 billion in sales by 2015 and said it’s considering returning more cash to shareholders. Sales of Copaxone climbed 26 percent in the third quarter to $1.02 billion.
An experimental multiple sclerosis pill being investigated as a successor to Copaxone may require another clinical trial before it can win approval to be sold in the U.S., the company said on Nov. 2
“Teva is a long-term story for us and we continue to tell our clients” to buy, said Judson Clark, an analyst at Edward Jones & Co.
Teva said last week that it sold $5 billion of senior notes to help repay debt, according to a regulatory filing. Teva sold 10-year notes with an interest rate of 3.65 percent, five-year notes with a rate of 2.4 percent and three-year notes offering a rate of 1.7 percent.
The shekel rose for the first time in six days, strengthening 0.5 percent versus the dollar to 3.7150 per dollar on Nov. 11. The shekel was the third-worst performer among 10 emerging-market currencies in Europe, the Middle East and Africa tracked by Bloomberg last week, dropping 1.
Nice Systems Ltd. (NICE), the Israeli maker of digital surveillance and monitoring systems, rose 2.7 percent to $34.55 on Nov. 11. The Tel Aviv shares gained 0.8 to 125.30 shekels, or the equivalent of $33.73. The 82-cent premium was the largest among the biggest Israeli companies traded in New York. The shares jumped 4.2 percent to 130.50, or $35.13, today in Tel Aviv.
EZchip Semiconductor Ltd. (EZCH), the Israeli maker of network processors, advanced 3.6 percent to $31.69 after Cisco Systems Inc. (CSCO), the world’s largest maker of networking equipment, reported on Nov. 10 a profit excluding some costs that beat analysts’ estimates. EZchip’s Israeli shares rose 1.3 percent to 115.40 shekels, or the equivalent of $31.06 on Nov. 10 and gained 3.4 percent to 119.30 shekels, or $32.11, today.
Cisco’s results are a “slight” positive for EZchip, which derives 20 percent to 30 percent of its revenues from the San Jose, California-based company, Mark Lipacis, an analyst at Jefferies & Co. in New York, wrote in an e-mailed report on Nov. 10.
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