Goldman Sachs believes Teva's stock decline constitute a buying opportunity

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by Ifi Reporter Category:Financial Oct 19, 2018

Goldman Sachs is confident that yesterday's declines constitute a buying opportunity. Teva is offering Teva a target price of $ 30, 42% higher than Wall Street's ($ 21.19) price.
Goldman Sachs notes that the target price is a multiple of 11 on EBITDA (profit before depreciation, taxes and financing expenses) of 2019, and that the major risks to Teva are: greater competition for Copaxone, delay in obtaining approvals for new generic drugs, and high restructuring expenses.

Express Scripts announced that it will not introduce Teva's new drug, Ajovy, to the drug basket that will be funded for health insurance policyholders as of April 2019. Express Scripts has decided to fund the two migraine drugs that compete with Teva's drug Aimovig Amgen and Emgality of Eli Lilly.
All three drugs work with the same biological mechanism, blocking the short protein (peptide) CGRP that is responsible for migraine, and all drugs are priced at $ 575 per patient per month. The decision is a blow to Teva's recovery efforts, since the original drug was considered as one of the two main candidates for providing Teva with an alternative source of revenue and profits to replace Copaxone, which suffers from growing generic competition from Sandoz-Momenta and Milan-Nattco.
Express Scripts' decision is an image blow to Teva, as the company explained its decision to include the two drugs competing with Teva's Ajovy, which are identical to hers, in the health benefits of the drugs.
"While we are disappointed with ESI's decision not to add an innovative product developed with flexible dosage options for migraine treatment, we have plans to support patients to ensure that appropriate patients Will have access to AJOVY. "For those living with this neurological disease, a broad approach allows the patient and healthcare provider to choose the appropriate treatment option for everyone."
 "We understand the significant impact of migraine on patients' lives and feel that it is important to bring AJOVY to the market at a wholesale price (WAC) that is in line with the recommendation of the Institute for Clinical and Economic Research." In just a few weeks since its launch, prescriptions for AJOVY show strong demand, And patients and doctors choose the option of a quarterly dose. "
Teva received FDA approval for the migraine drug AJOVY a month ago. The drug is intended for the prevention of chronic and temporary migraine in adults as a monthly or quarterly injection.

Ajovy's wholesale price is $ 575 per month, a price similar to that of Aimovig, which is sold by Amogen and Novartis, and has been available for marketing in the US since May 2004. Teva's drug can also be given once every three months at the price of $ 1,725.
Teva said it would offer a plan for insured patients so they would not have to take part in a self-participation to buy the drug.
"We felt that $ 575 was worth it," said Brendan O'Grady, who is responsible for Teva's commercial activity in North America. He said that Teva had negotiated with insurance companies and other players in the market regarding the issue of how to make the drug accessible to those in need.
The drug was postponed due to regulatory concerns in the United States over its manufacturing process at the South Korean plant of its partner, Celerion.
About 39 million Americans suffer from migraines, according to the American Migraine Research Foundation. This is a large market share that attracts a number of pharmaceutical manufacturers. Eli Lilly is also developing migraine treatment with the same new drug type, which the FDA is supposed to test until September 27.
The demand for Amine and Novartis' Aimovig injection was considered strong, partly due to Amgen's plan to give new patients free treatment for two months. Analysts predict the drug will reach $ 1 billion by 2022.
 Teva announced last month that its net debt fell to $ 28.4 billion, after reaching a record $ 35 billion.

In response to Express Scripts' decision, Teva's share in the New York Stock Exchange fell by nearly 5 percent. However, analysts estimated that the drug could nevertheless become a significant growth engine for the Israeli pharmaceutical company

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