"Reuters" reports that analysts at several investment houses believe that Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) and other generic drug makers will likely keep up an aggressive push to launch versions of brand medicines at-risk, that is long before US patents expire. "Teva and other firms are more willing to risk legal damages from such launches because of their increasing size, and because few companies have actually been harmed by such damages," "Reuters" adds.
Oppenheimer & Co analyst Elliot Wilbur said, "Generic companies today are roughly double and triple the size they were five years ago, and are much more well-capitalized so they have greater risk tolerance." He added that the companies' willingness to launch allows investors to have more certainty about generic companies' profitability, because they are not waiting for patent challenges to wind through the court system.
"On a broader scale, aggressiveness by the generics could shorten the length of time brand-name companies can exclusively sell their medicines, which may undermine profits for an industry already struggling with generic competition and sluggish research productivity," "Reuters" notes.
At the end of 2006, Teva announced it would be making an at-risk launch of its generic version of Wyeth's drug for the treatment of Reflux disease, Protonix, and accordingly upped its profit estimates for 2007 to $1.96 billion from $1.94 billion.
"When you have a lot of money in the bank, and you're big and powerful, you can afford to take more risks," said WR Hambrecht analyst Andrew Forman.
Teva's share closed 0.96% higher at $47.45 on Nasdaq yesterday, giving the company a market cap of $36.3 billion. The share ended Wednesday up 1.7% on the Tel Aviv Stock Exchange (TASE).
Published by Globes [online], Israel business news - www.globes.co.il - on January 17, 2008
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