On Tuesday, Teva Pharmaceutical Industries Ltd (NYSE:TEVA) announced the commercial launch of its generic version of Sandostatin LAR, an acromegaly treatment with annual sales of $826 million as of July 2024. BofA Securities has reaffirmed its Buy rating and $22.00 price target for Teva's stock.
The company's generic is the first to market, enjoying an exclusive position, although the branded drug, produced by Novartis (SIX:NOVN), no longer holds patent or regulatory exclusivity. Competitors like Viatris are also nearing approval for their generic versions. Teva obtained approval for its generic in December 2023, but the launch was delayed, partly due to the runoff of an EU patent and the time required to scale up manufacturing capacity.
Teva has not provided specific details on its manufacturing capacity, but it is believed that the delay in launch was to ensure a significant supply at market entry. The launch is seen as a positive move, potentially adding to Teva's revenue, with an estimated $200 million annual contribution if the company can maintain exclusivity. This exclusivity hinges on overcoming regulatory and manufacturing barriers, which have been noted by Novartis as significant challenges for injectable drugs.
The analyst from BofA Securities views the introduction of the generic Sandostatin LAR as a potential upside for Teva's financials in 2024-25. This optimism is bolstered by unexpected positive results from other products in Teva's portfolio. The firm maintains its positive outlook on Teva, expecting a re-rating to a growth multiple in the stock's valuation.
In other recent news, Teva Pharmaceuticals has made significant strides in recent developments. The company launched the first generic version of Sandostatin® LAR Depot in the U.S., offering a more accessible treatment option for patients with acromegaly and severe diarrhea associated with carcinoid syndrome. In addition, Teva reached an $80 million settlement with the city of Baltimore over opioid litigation, contributing to the city's total recoveries of $402.5 million in similar cases.
Analysts have also been active in their assessments of Teva. UBS raised its price target for Teva to $26.00, maintaining a Buy rating, due to the promising prospects of Teva's drug candidate duvakitug. The firm's revised expectations for duvakitug's peak sales now reach $1.5 billion.
Meanwhile, Piper Sandler reiterated its Overweight rating on shares of Teva, maintaining a price target of $23.00, following the announcement by Evernorth to exclude the brand Humira from its Express Scripts commercial formularies starting in 2025. This decision is expected to benefit Teva's Humira biosimilar, Simlandi.
The company also reported a significant increase in its second-quarter revenue for 2024, with an 11% growth to $4.2 billion. These are recent developments involving Teva Pharmaceuticals, reflecting the company's ongoing efforts in product development, legal settlements, and financial performance.
InvestingPro Insights
The launch of Teva's generic Sandostatin LAR aligns with several positive indicators from InvestingPro. According to InvestingPro data, Teva's revenue growth stands at 8.48% over the last twelve months as of Q2 2024, with a notable 7.37% quarterly growth. This trend could be further bolstered by the new generic launch.
InvestingPro Tips highlight that Teva is expected to be profitable this year, which supports the analyst's optimistic view on the company's financial trajectory. The company's stock has shown strong performance, with a 76.67% price return over the past year and is currently trading near its 52-week high, reflecting investor confidence in Teva's strategic moves.
It is worth noting that Teva's market cap stands at $19.93 billion, positioning it as a prominent player in the pharmaceutical industry. For investors seeking more comprehensive analysis, InvestingPro offers 11 additional tips for Teva, providing deeper insights into the company's financial health and market position.
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