Our stock of the day to watch is Teva Pharmaceuticals (TEVA). The Israeli pharmaceutical company has now recovered its sharp losses following the announcement of its second quarter results two weeks ago.
Recent gains came after two positive pieces of news. Firstly, Teva Pharmaceuticals (TEVA) announced a successful Phase III trial for Fasinumab for the treatment of chronic pain caused by osteoarthritis of the knee or hip. Secondly, the US Food and Drug Administration (FDA) granted marketing approval for a first generic version of EpiPen, Mylan’s branded treatment for severe, life-threatening allergies.
EpiPen is Mylan’s flagship branded drug, which it acquired from Merck KGaA in 2007. Teva Pharmaceuticals (TEVA) has had a protracted wait for FDA approval for generic EpiPen after its 2016 application was rejected on the grounds that a generic version could only be launched in 2017. In the end approval has been awarded only now.
EpiPen has had a controversial history with serious complaints two years ago about price hikes and a $465 million settlement in a compromise agreement with the government Medicaid insurance program over incorrect classification.
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We believe TEVA will once again become the generic leader it once was and expect the shares to move toward the $40 range over the next 12 months.