Teva Pharmaceutical Industries Ltd.'s
) generics business has been performing below expectations over
the past few quarters. Second quarter 2013 generics business
sales in the U.S. were soft with revenues declining 8% to $970
million. Lower sales of generic Lexapro, no royalties on generic
Lipitor and lower sales of generic Avapro led to the decline in
However, Teva expects the generics business to pick up in the
second half of the year. 20-25 generic product launches are
slated for 2013. The company announced two exclusive product
launches in the U.S. in September - the first being its generic
) cholesterol management treatment, Niaspan (niacin
extended-release) tablets (500, 750, and 1000 mg) and the second
being its generic version of Adenoscan (adenosine injection),
which is marketed by
Adenoscan is used as an adjunct to thallium-201 myocardial
perfusion scintigraphy in patients unable to exercise adequately.
With Teva being the first to file for both products, the company
will enjoy 180 days of marketing exclusivity. As per IMS data, as
of Jun 30, 2013, Niaspan annual sales were approximately $1.12
billion in the U.S. Meanwhile, Adenoscan annual sales as of Jun
30, 2013, were about $65 million in the U.S., as per IMS data.
The launch of generic Niaspan is one of the most important
generic product launches at Teva this year and should boost the
performance of the generics business. Teva currently carries a
Zacks Rank #3 (Hold). The company is going through a tough
transition period given fewer large generic opportunities,
potential new competition for branded products (especially
Copaxone) and a higher cost base.
However, we are encouraged by Teva's plans to improve its
position. Teva said that it intends to accelerate growth
platforms, protect and expand core franchises, expand its global
presence, pursue strategic deals and reduce the cost base. We
expect investor focus to remain on the execution of the company's
At present, companies like
) look well-positioned with a Zacks Rank #2 (Buy).
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