Post-TEVA Deal, ANIP Shares Rise

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Following the acquisition of several marketed generic drugs from Teva Pharmaceutical Industries Ltd (TEVA), ANI Pharmaceuticals, Inc.’s (ANIP) shares gained 16.2%.

The deal adds 31 products (20 solid-oral immediate release products, 4 extended release products and 7 liquid products) to ANI Pharma’s portfolio. In return, Teva will get $12.5 million in cash and a share in future gross profit from the products covered under the deal. According to IMS Health, the products address a total current annual market of $860 million.

ANI Pharma plans to start working on manufacturing the products immediately and launch them at the beginning of the fourth quarter of 2014.

We expect to see more such deals at Teva as the company increases its focus on high-value complex generics (which are likely to face less competition) and core franchises. The company is also working on streamlining its operations and reducing its cost base. 2014 is expected to be a tough year for Teva, in which major transitions across the company are expected to take place.

Teva carries a Zacks Rank #3 (Hold). The generic Copaxone situation is one of the major overhang on Teva shares. Earlier this month, Teva provided an outlook for 2014.

The company provided guidance for two scenarios related to its key branded drug, Copaxone – Copaxone remaining exclusive and Copaxone going generic. The entry of Copaxone generics next year could cut total revenues by about $500 million and earnings by 60 cents. Meanwhile the company continues with its search for a new Chief Executive Officer (CEO).

Some better-ranked stocks include Dr. Reddy's Laboratories Ltd. (RDY) and Vanda Pharmaceuticals, Inc. (VNDA). Both carry a Zacks Rank #1 (Strong Buy).

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