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Standard and Poor’s thinks Teva Pharmaceuticals rocks

Posted on September 19, 2007 • By Miriam Schwab
Category: Business |

Standard & Poor’s Equity Research has published a detailed report in Business Week explaining why they think Teva Pharmaceuticals Industries has “what [they] believe to be the broadest product line and most extensive generic drug pipeline in the U.S., as well as a leading generic lineup in other countries.”

They make a pretty persuasive case:

• Teva was the largest pharmaceutical company in the U.S. in 2006 on a total prescription basis, commanding an 11.4% share of all branded and generic drug prescriptions filled.
• Teva is one of the lowest-cost producers of active pharmaceutical ingredient (API) thanks to their stability of supply and vertical integration efficiencies

Standard and Poor’s estimates that Teva’s external sales of API products will produce a compounded annual growth rate of 5% to 10% over the next three years, and that revenues will rise 13.3% to $10.7 billion in 2008, from their 2007 revenue estimate of $9.5 billion, reflecting a 12.5% increase from 2006. They even make some positive reference to Teva’s corporate governance (negative too):

We view positively that the board is comprised of 15 directors; the current chief executive is not a board member; a large majority of directors, 11 (73%), are independent, according to Nasdaq regulations; the board meets frequently; and that insiders do not sit on the audit and compensation committees. We view negatively that there is no disclosure of a policy that the board reviews its own performance regularly, and that there is no governance committee.

There’s lots more in the report…

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