Market Overly Negative on Teva

While recent executive departures remain a concern for

While the market seems disappointed with a decline in generic segment profitability during the quarter and potentially slightly lower revenue from new launches over the back half of the year, we still think Copaxone’s fate represents one of the more critical near-term inflection points for the business, which for the time being creates a slightly more positive outlook. Based on the inability for Momenta to receive U.S. Food and Drug Administration approval on its generic Copaxone, based on contract manufacturer issues, the increasing likelihood of no generic competition could lead the company to outperform our expectations. We also remain somewhat skeptical about Mylan’s ability to receive approval on its generic Copaxone by this summer. A longer generic Copaxone approval window could buy Teva valuable time to get its generic operations in order and more cash to reduce its debt load.

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