Teva Pharmaceutical Industries Ltd. Chairman Phillip Frost said he backed the management’s strategy following criticism from Goldman Sachs Group Inc. and Morgan Stanley analysts who are advising investors to sell.
The drugmaker’s blockbuster multiple sclerosis treatment Copaxone, which faces potential generic competition as early as next year, has a “long way to go” as a commercially viable medicine, Frost, 76, said in a Bloomberg Television interview from Tel Aviv today. Teva is seeking approval for a new version of the injected drug that can be taken three times a week, replacing the daily doses patients must now endure.
“I don’t pay too much attention to what other analysts are saying,” Frost said. “We need to do what’s important for the company and I personally have expressed my confidence in the way I know how to do it, and that’s by buying shares.” Frost acquired 1 million Teva shares at prices ranging from $37.82 to $39.57 each, the company said on June 1.
Teva’s shares have lagged behind pharmaceutical peers as analysts predict Copaxone sales will fall in each of the next five years on possible generic competition and as patients choose new oral medicines over an injection. While Chief Executive Officer Jeremy Levin has pledged to revive growth by making small acquisitions and developing drugs internally, Goldman Sachs analyst Jami Rubin asked on an Aug. 1 earnings call whether the board was behind the CEO.
Rubin cut the stock to sell from neutral in July, citing “0 percent return potential.” Petach Tikva, Israel-based Teva was downgraded to underweight from equalweight by Morgan Stanley on Aug. 5 as analysts said generic drugmaker Mylan Inc. may secure U.S. Food and Drug Administration approval for its generic version of Copaxone in 2014. Teva’s American depositary receipts have returned 7.3 percent this year, including dividends, compared with a 21 percent gain for the Bloomberg Europe Pharmaceutical Index.
Frost was speaking at the Tel Aviv Stock Exchange to mark the listing of Opko Health Inc., of which he is the largest shareholder. He said he hopes to turn the Miami-based drugmaker into “the next Teva” after the company agreed to purchase Ness Ziona, Israel-based Prolor Biotech Inc., which is developing a long-acting version of human growth hormone that’s in the final stage of clinical trials.