Replies to post #214856 on Biotech Values

[DewDiligence]

Actually, TEVA has a priority-review voucher for Fremanezumab that was acquired during 3Q17. This was confirmed on the 3Q17 CC.

[DewDiligence]

Re: TEVA’s balance-sheet leverage /dividend cut

The time to buy them might be after they cut their dividend.

The (almost certain) dividend cut may be announced in conjunction with 4Q17 results in early February. If not then, it will happen sooner, IMO. (The 4Q17 CC will be the first call led by the new CEO, who made a token appearance to say hello on the 3Q17 CC.)

TEVA’s balance sheet is not pretty: Net debt is about $34B (https://www.sec.gov/Archives/edgar/data/818686/000119312517330935/d486818d6k.htm#tx486818_1 ), which could be lowered to about $30B by year-end with planned divestitures.

Meanwhile, 2017 guidance for operating cash flow is a scant $3.15-3.3B.

TEVA has not yet issued any guidance for 2018, but it’s hard to see how 2018 EBITDA could exceed $5B, particularly with the likelihood of a second generic 40mg Copaxone in the US market (from NVS/MNTA). So, in the best-case scenario, net debt at the end of 2017 will be at least 6x 2018 EBITDA.

[DewDiligence]

The time to buy [TEVA] might be after they cut their dividend.

They just did; however, the stock is rallying because TEVA is also cutting 25% of its global workforce (~14,000 jobs):

http://www.businesswire.com/news/home/20171214005653/en/

https://www.fiercepharma.com/pharma/teva-s-stunning-list-cuts-targets-14k-jobs-3b-costs-and-plants-around-globe

https://www.reuters.com/article/us-teva-pharm-ind-restructuring/teva-pharm-to-lay-off-a-quarter-of-workforce-suspends-dividend-idUSKBN1E81ML

[DewDiligence]

FDA approves TEVA’s Ajovytm (fremanezumab) for migraine prevention:

https://finance.yahoo.com/news/teva-announces-u-approval-ajovytm-224800445.html

You know this is a big deal for TEVA if they issued a PR on a Friday :- )