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Teva Jumps on Move Into Branded Drugs: Israel Overnight

Teva Pharmaceutical Industries Ltd. (TEVA) surged to a two-month high in New York as the purchase of a new treatment signaled the world’s largest generic drugmaker will seek to boost profit by moving into branded medicines.

The Israeli company advanced 1.6 percent to $41.23 in New York yesterday, the highest level since July 27 and a 55-cent premium to its shares traded in Tel Aviv. The Bloomberg Israel- US Equity Index (ISRA25BN) of the biggest New York-traded Israeli companies gained 1.8 percent to 87.01 as Spain pledging to cut its deficit and prospects China will do more to stimulate its economy boosted U.S. stocks.

Teva bought Huntexil, a treatment being developed to improve hand movement and balance in people with Huntington’s Disease from Ballerup, Denmark-based NeuroSearch A/S (NEUR) for $26 million, to be paid over the next six months, the Israeli company said in a statement yesterday. New Chief Executive Officer Jeremy Levin assumed the role in May from Bristol-Myers Squibb & Co., the maker of the blood thinner Plavix, to help Teva diversify its stable of medicines and products.

“Teva is trying to transform its profile toward specialty pharma from a pure generic play and I think this is a smart move,” Vincent Meunier, an analyst at Exane BNP Paribas, said in a phone interview from Paris yesterday. “If they want to continue to grow the bottom line they need to increase profitability and this is coming from branded drugs.”

Israel’s benchmark TA-25 Index rose 1.9 percent to the highest since August 2011 at 1,189.25. The gauge has advanced 12 percent this quarter, the most in two years.

Austerity Package

Equities rallied globally as Spanish Prime Minister Mariano Rajoy’s nine-month-old government announced its fifth austerity package and China injected a record amount of funds into the financial system.

Levin, who was brought in by Teva after shares tumbled the most in five years in 2011, said on Aug. 2 that he will announce his strategic plan for 2013 on Dec. 11 in New York.

The Israeli company bought Frazer, Pennsylvania-based Cephalon Inc. last year in a bid to broaden its portfolio of brand-name treatments.

Growth in the last quarter was driven by contribution from Cephalon’s medicines and other branded treatments, the company said in the Aug. 2 call with investors. Sales of $982 million from Copaxone, a branded medicine used for multiple sclerosis therapy, contributed to 20 percent of total revenues in the second quarter, the company said.

‘Shift in Strategy’

Levin, who replaced Shlomo Yanai as the CEO, was known for overseeing the “string of pearls” strategy of small acquisitions and partnerships at Bristol-Myers.

“The shift in strategy is based on comments that he has already made and his background,” Meunier said. “He is a pure pharma guy and he was responsible for business development at Bristol-Myers.”

Teva said on Sept. 14 that it sold its animal health unit to German drugmaker Bayer AG (BAYN) for as much as $145 million. The move was made to focus on its core business and strategically position the company in both the generic and branded medicines market, the company said.

Teva’s Tel Aviv shares rose 2 percent to 159 shekels, or the equivalent of $40.68.

Ceragon Networks Ltd. (CRNT), a maker of wireless networks, increased 6.6 percent to $5.69, the most since July 5. The Tel Aviv shares advanced 1.7 percent to 21.63 shekels, or the equivalent of $5.54.

Internet Gold-Golden Lines Ltd. (IGLD), which owns a stake in Bezeq Israeli Telecommunication Corp, surged 9.6 percent to $3.3, the highest level since June 18. Its shares in Tel Aviv rallied 13 percent to 12.5 shekels, or the equivalent of $3.2 following a 4.1 percent gain for Bezeq.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editor responsible for this story: Emma O’Brien at eobrien6@bloomberg.net

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