Teva Announces Share Pricing Pending Actavis Generics Acquisition
Understanding TEVA
Headquartered in Israel, Teva Pharmaceutical (TEVA) is a world leader in the generic pharmaceutical industry. Nearly 45% of the company’s total revenue comes from the US markets, while 32% comes from the European markets.
For 2014, Teva reported revenue of $20 billion. It was followed by Actavis, now Allergan (AGN), at around $13 billion, Sandoz, a part of Novartis (NVS), at $9.6 billion, and Mylan (MYL) at around $7 billion.
The above chart shows Teva’s stock price after its share pricing announcement. On an annualized basis, the stock has returned nearly 21% year-to-date.
Teva deals in branded and unbranded generics, specialty medicines, active pharmaceutical ingredients (or APIs), and over-the-counter (or OTC) medicines. For OTC medicines, the company has a joint venture with Procter & Gamble, an FMCG (fast-moving consumer goods) brand.
Teva’s business segments
Teva operates through two business segments:
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Generic medicines
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Specialty medicines
The company has a broad product portfolio spanning different therapeutic areas. Teva also deals with innovative pharmaceuticals, focusing on areas including treatment products for central nervous system and respiratory conditions. The company also deals with OTC medicines for the following categories:
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Digestive wellness
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Analgesics
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Skin medicines
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Cough and cold allergies
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Vitamins and supplements
Teva’s generic medicines
Teva’s generic medicines, which include branded and unbranded medicines, are manufactured in a variety of dosage forms, including tablets, capsules, injections, inhalants, and ointments. Teva also manufactures active pharmaceutical ingredients for captive consumption as well as for sales to third parties through its 20 API manufacturing units.
Teva’s specialty medicines
Teva’s Specialty Medicines segment provides medicines for the following therapeutic areas:
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Central nervous system, with a focus on multiple sclerosis and neurodegenerative disorders
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Respiratory system, with a focus on asthma and chronic obstructive pulmonary disease (or COPD)
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Oncology
In order to divest risk, investors can consider ETFs such as the PowerShares International Dividend Achievers ETF (PID) or the Market Vectors Pharmaceutical ETF (PPH), each of which has holdings in Teva.
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