Why This Teva Pharmaceutical Analyst Is Turning Bullish On The Austedo Franchise

Shares of Teva Pharmaceutical Industries Ltd (NYSE: TEVA) climbed in early trading on Monday, after several analysts raised their forecasts.

The stock seems poised for a recovery due to the Austedo franchise, the improved positioning of the U.S. generics business and a better capital structure, according to Piper Sandler.

The Teva Pharmaceutical Industries Analyst: David Amsellem upgraded the rating for Tel Aviv-Yafo, Israel-based Teva from Neutral to Overweight, while raising the price target from $12 to $19.

Check out other analyst stock ratings.

The Teva Pharmaceutical Industries Thesis: The Austedo franchise is well positioned due to a growing addressable market (more diagnoses), only two market participants, and an XR (extended release) form of the tablet that “essentially levels the playing field” with Neurocrine Biosciences, Inc’s (NASDAQ: NBIX) Ingrezza, Amsellem said in the upgrade note.

The Austedo franchise could account for around 10% of Teva’s revenues in 2024, which is likely to grow to around 16% by 2028 and to about 18% by 2032, the analyst stated.

“For a product with exceedingly high gross margins (most likely not unlike what we see for Ingrezza), along with the ability to drive operating leverage (e.g., there is not a general practitioner prescriber base here; direct-to-consumer (DTC) activities can essentially become an annual fixed cost), the Austedo franchise can readily drive corporate EBITDA stability for Teva (at a minimum),” he added.

TEVA Price Action: Teva shares spiked 6.82% to $12.84 at the time of publication on Monday.