Piper Jaffray analyst David Amsellem downgraded Teva Pharmaceuticals (TEVA) to Neutral from Overweight today on concerns that competition for its multiple sclerosis drug Copaxone is clouding the company’s prospects. Biogen (BIIB), for instance, has developed a promising competitor to Copaxone called BG-12, and Teva is also trying to protect the drug against generic competition.
“Following strong data for Biogen Idec�s BG12…we believe doubts regarding the long-term future of Copaxone will only deepen, making it difficult for us to envision sentiment surrounding TEVA turning around in the next several months,” Amsellem writes.
“As such, we are downgrading TEVA to a Neutral from an Overweight, and lowering our price target to $45 from $63. Though we acknowledge that TEVA shares are relatively inexpensive in the context of strong cash flow generation, the reality is that concern regarding Copaxone (i.e., brand and generic competition) will not resolve anytime soon, making it difficult in our view for investors to step in primarily on the basis of valuation.”
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