Bristol-Myers' Baraclude News Could Be Positive for Teva Pharma (TEVA) - Analyst

February 12, 2013 1:15 PM EST
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Price: $34.10 --0%

Rating Summary:
    19 Buy, 20 Hold, 0 Sell

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Today's Overall Ratings:
    Up: 23 | Down: 31 | New: 34
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Teva Pharma (NYSE: TEVA) is fractionally higher Tuesday as an opportunity may have emerged from Bristol-Myers Squibb's (NYSE: BMY) setback on Baraclude.

Yesterday, a U.S. court invalidated Baraclude's '244 composition of matter patent that was expected to run until February 2015. Teva filed an ANDA in 2010 for a generic version, and while not approved it could happen soon, according to analysts at Goldman Sachs. With US Baraclude sales expected to be approximately $265 million, this would provide upside to 2013 guidance and an important offset to the risk of lost profits if ACT wins the Pulmicort patent case.

Generic Baraclude could add around $80 million in revenues or $0.04 to EPS for 2013 for Teva, the firm estimates. This is not without risk, however. If an AG launched at the same time as TEVA, this would likely cut TEVA's potential revenue opportunity in half, Goldman notes. Also there are questions about TEVA's ability to supply the product, given the complexity of Baraclude. Although, that could keep others off the market.

"While small, this is good news for TEVA," the analyst concludes.

The firm maintained a Neutral rating and price target of $42 on TEVA.

For an analyst ratings summary and ratings history on Teva Pharma click here. For more ratings news on Teva Pharma click here.

Shares of Teva Pharma closed at $38.55 yesterday.

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