In a year when Teva Pharmaceutical Industries Ltd. lost its chief executive officer, a patent ruling on its best-selling drug and analysts became the most bearish on the stock, the Israeli drugmaker is poised for the first gain since 2009.
Jeremy Levin resigned as Teva’s CEO in October in a dispute with Chairman Phillip Frost, while a U.S. court ruling in July gave its multiple sclerosis treatment Copaxone less than a year of patent protection. Shares of the world’s largest maker of generic drugs capped a three-month 6.6 percent slump through October. The stock traded at 8.1 times estimated earnings, the cheapest valuation among the world’s largest drug companies, according to data compiled by Bloomberg.
Soros Fund Management LLC, the family office of billionaire George Soros, boosted its Teva holdings to the most since 2010 in the third quarter, according to a filing on Nov. 14, while Susquehanna Financial Group LLLP recommended buying the shares last month. The stock jumped 9.9 percent to $40.76 in November, leaving it up 9.2 percent this year. The Bloomberg Israel-US Equity Index of the most-traded Israeli companies in the U.S. capped the biggest monthly gain since 2011.
“It just makes sense to want to own Teva, certainly at this price level,” Jason Kolbert, an analyst at Maxim Group LLC in New York, said in a phone interview on Nov. 26. “Value buyers are really saying that the stock is oversold. That’s the nature of the conversations that I’ve had with the institutions that are calling me.”
Kolbert expects Teva’s shares to rally 37 percent to $56 in the next twelve months, the most of any analyst surveyed by Bloomberg. The stock will gain 7.6 percent to $43.85, according to the mean estimate of 20 analysts compiled by Bloomberg.
Analysts forecast sales of Copaxone, which makes up about 50 percent of Teva’s profit, will fall over the next five years as new oral pills lure patients from the older Teva injected product. The medicine already faces competition from Biogen Idec Inc.’s oral branded drug and low-priced generic copies of Copaxone may reach the market as soon as next year. MS causes the immune system to attack the insulating tissue around nerve fibers.
Soros Fund Management increased its holdings of Teva to 1.8 percent of its $7.75 billion U.S. stock portfolio in the third quarter, it said in a regulatory filing with the Securities and Exchange Commission last month.
Four out of 29 analysts, or 14 percent, rate the stock the equivalent of a sell, the most since 1998, according to data compiled by Bloomberg.
Levin stepped down on Oct. 30 after less than 18 months on the job in a dispute with Frost over how to restructure the company. Chief Financial Officer Eyal Desheh will be interim CEO while the board seeks a permanent replacement.
Teva’s shares in Tel Aviv gained 1.4 percent to 144.60 shekels at the close in Israel.