Teva Pharmaceutical Industries might have had a good year, but the same direction might not be a good fit for the future of the company.
Teva Pharmaceutical Industries is the largest generic drug company in the entire world, and it has its headquarters in Israel, Europe, South Africa, and North America. As of February 2017, Yitzhak Peterburg became the chief executive officer who previously was a chairman of the board since 2015. The company has just published its financial report for the earnings during the fourth quarter of the year which brought good news for the investors.
On Monday, Teva made public its fourth-quarter earnings. The revealed results are in tune with the positive projections for last year. As a consequence of this, the shares of the Teva Pharmaceutical Industries have increased by 4%. The good news contradicted some of the investors. They weren’t hopeful about good results in light of the fact that in January there were many discussions about changing the leadership of the organization. This decision was sparked by a U.S. court ruling. As a consequence, Teva lost its patent on Copaxone, which was the best-selling product within the company. After this event, Teva expects to have a tighter competition within the generic drug market.
On the other hand, the new decisions of the latest CEO of the company have doubtful chances of success. Thus, Teva is going to maintain the same core guidance as before the negative ruling. Some experts are calling this an ignorance of the past and also strong signs of overconfidence. Investors are not happy without a proactive plan. If there is no safety measure taken and with their best asset dwindling, the sales of Copaxone only are possibly going to fall to $1.2 billion. This is a major difference of $1 billion from its precedent value.
In light of these recent events, analysts have just changed their estimations regarding the performance of Teva Pharmaceutical Industries for the course of this year. These expectations are much lower from two years ago when the earnings were measured at 26 billion, yet February 2017 is expected to reach one of the lowest thresholds of 23.5 billion. On the other hand, all the revenue revolves around Copaxone. If the drug is going to suffer 20% decrease in terms of volume and a 25% drop in price, the impact on the company could be even larger than analysts predicted
Image source: 1
Leave a Reply
You must be logged in to post a comment.