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Biotech / Medical : Teva Pharmaceuticals -- Ignore unavailable to you. Want to Upgrade?

To: Ron Kline who wrote (136)	12/17/1997 12:22:00 AM
From: Uncle Mikey	Read Replies (1) \| Respond to of 340

Nice update from Lehman Bro. So why is the stock still sliding? Headline: Teva Pharmaceutical: Biovail Deal Boosts Generic Drug Pipeline Author: Richard B. Silver 1(212)526-5387 Rating: 1 Company: TEVIY Country: COM CUS Industry: PHARMS Ticker : TEVIY Rank(Prev): 1-Buy Rank(Curr): 1-Buy Price : $44 52wk Range: $69-42 Price Target: $70 Today's Date : 12/15/97 Fiscal Year : DEC -------- Price (As of 12/15): $44 Revenue (1997): 1.1 Bil. Return On Equity (97): 23.5 % Proj. 5yr EPS Grth: 45.0 % Shares Outstanding: 62.6 Mil. Dividend Yield: 0.7 % Mkt Capitalization: 2.70 Bil. P/E 1997; 1998 : 19.2 X; 12.4 X Current Book Value: $9.89 /sh Convertible: None Debt-to-Capital: 17.9 % Disclosure(s): C Earlier today, Teva and Biovail Corp. announced that they have entered a U.S. marketing and development agreement covering Biovail's pipeline of controlled release generic drug products. * Under the agreement, Teva has gained exclusive U.S. marketing rights for eight of Biovail's controlled release generic drugs with current combined U.S. annual brand sales exceeding $2.3 billion. * In our opinion, by providing Teva with access to Biovail's wide range of controlled-release technologies, the agreement significantly enhances Teva's generic drug pipeline and future earnings potential. * We continue to view controlled-release drugs as one of the more exciting areas in generics, characterized by relatively high barriers to entry, attractive profit margins, and long product lifecycles. * We reiterate our 1-Buy investment rating. The Biovail transaction has substantially improved the visibility of Teva's generic drug pipeline -- several of Biovail's products have been disclosed (in contrast to most generic companies' pipelines). In addition, we continue to believe that investors are paying little or nothing for Teva's MS drug Copaxone. ------------------------------------------------------------------------------ MAJOR PRODUCT OPPORTUNITIES: The products include already filed generic versions of Cardizem CD ($700+ million in brand sales), Verelan ($100+M in brand sales), and Trental ($100+M with generic competition). Also included are four cardiovascular products (including Procardia XL - nearly $1BN in brand sales) and a non-steroidal anti-inflammatory. Biovail expects to file two of these applications with the FDA within the next month and the remainder next year. Several of the products are expected to gain marketing approval in 1998. No generic versions are currently marketed for 5 of 8 products, including Cardizem CD, Verelan, and Procardia XL. TERMS OF THE TRANSACTION: Teva will pay Biovail $34.5 million based on FDA acceptance of Biovail's generic drug (ANDA) filings with the agency. These payments are expected over the next 12-14 months including an upfront payment of $6.5 million. Upon commercialization, revenues will be divided approximately 50/50 between the companies (with Biovail receiving no more than 58% and Teva no less 42%). Biovail has exclusive manufacturing rights for the U.S. market and is also responsible for regulatory filings and the approval process. In addition, the companies have agreed to jointly develop a minimum of four additional controlled release versions of major U.S. products with development costs and revenues to be shared by the two companies. BUSINESS DESCRIPTION: Israeli-based, fully integrated, int'l pharma co. & third largest generic drug firm in the U.S. through its wholly owned subsidiary Teva USA. Also produces bulk pharmaceuticals & hospital supplies. ------------------------------------------------------------------------------ Disclosure Legend: A-Lehman Brothers Inc. managed or co-managed within the past three years a public offering of securities for this company. B-An employee of Lehman Brothers Inc. is a director of this company. C-Lehman Brothers Inc. makes a market in the securities of this company. G-The Lehman Brothers analyst who covers this company also has position in its securities.