An Israeli Jewish Pride



By: YOSEF TASTASSA  
Published: December 2nd 2010
in Economics » Israel

Teva Logo

About "Teva"

 

It is the Hebrew language word for "nature" but also one of the world's most promising pharmaceutical companies, a real Israeli and Jewish pride.

 

It started a few decades ago as a small company in Israel, and today it's a leading company in its area, and it sells its products proudly around the world.

 

It's traded in the NASDAQ SE under the name "TEVA" and it is also traded in Tel-Aviv SE under the same name.

 

The market value of Teva is $45 billion and its shares are traded for $50 each.

 

The company announced that it will use its positive cash flow in order to buy-back its own shares for 1$ billion.

 

Teva's strategy

 

It has a very sophisticated distribution system that enables "Teva" to reach remote markets effectively and show sustainable growth in its selling. It is a generic based company, meaning that it can produce substitutes to existing drugs after their patent has expired but for much lower prices.

 

It recently declared that by 2015 it intends to achieve yearly sales of $31 billion, nearly double than in 2010.

 

The Copaxone

 

Teva is not only generic drugs but it has its unique products and patents as well. One of the most famous drugs "Teva" is selling is the Copaxone. The drug helps many patients around the world that suffer from multiple sclerosis disease (MS).

 

The Copaxone is responsible for about a quarter to a third of Teva's revenues and its patent expires in 2014. Many competitors are waiting for this year in order to produce a generic version of the Copaxone.

 

Is Teva a good buy?

 

It depends who and when you are asking. The company shows sustainable growth and the most optimistic analysts see an upside of over 30 per cent to the current price. The EU published this week some regulations that will open a $36 billion drug market in 2015. Teva is a company that is waiting for this opportunity.

 

Others say that the company will suffer from high competition in the future and the loss of the Copaxone exclusivity will make it difficult to show the same profits as before.

 

In addition, the continuing recession prevents people from buying medicines. It's a dangerous social phenomenon, but also bad news for the pharmaceutical industry.

 

This article does not recommend investing in the capital market



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