Teva Advances on NYSE Trading, Cheap Valuation: Tel Aviv Mover
Teva Pharmaceutical Industries Ltd. (TEVA) jumped the most since 2010 on a cheap valuation relative to other health-care companies and as benchmark funds added the stock after it began trading on the New York Stock Exchange. (NYX)
Teva climbed 6.7 percent, the most since December 2010, to 156.30 shekels, or $40.02, at the close in Tel Aviv. The Petach Tikva, Israel-based drugmaker trades at 7.4 times estimated earnings, compared with the 11.1 average multiple for companies on the New York Stock Exchange’s Arca Pharmaceutical Index, data compiled by Bloomberg show. Teva’s American depositary receipts were little changed at $39.19 at the close in New York.
“The move into the NYSE means some benchmark funds have to add the stock,” said Gilad Alper, a senior analyst at Excellence Nessuah Investment House Ltd. in Ramat Gan, Israel. “The stock was also due for a correction as it was trading cheaply relative to its peers.”
The company may also benefit as an accord to fund new medicine and device reviews with U.S. regulators passed the House of Representatives, according to Jonathan Kreizman, an analyst for Clal Finance Brokerage.
Under the measure passed by the House late yesterday, generic-drug companies will pay $1.58 billion to quicken review times and ensure the Food and Drug Administration has the resources to inspect foreign plants.
Companies making generic versions of complex biologic drugs, a process not allowed until passage of President Barack Obama’s health law in 2010, will pay user fees, which the budget office determined would total $128 million through 2017.
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