Risks For Teva Remain As CEO Search Continues

Teva Pharmaceutical Industries Ltd (ADR) TEVA reported its Q4 2016 results, with revenue ahead of expectations, and reaffirmed its full-year guidance. Teva is now “aggressively looking” for a new CEO to turnaround the company, BTIG’s Timothy Chiang said in a report. He maintains a Neutral rating on the company, with a price target of $34.

Shares of Teva rose ~6 percent after the company reported its Q4 revenue at ~$6.5 billion. Management reiterated the full-year revenue and EPS guidance of $23.8 billion–$24.5 billion and $4.90–$5.30, respectively. The new board chairman, Sol Barer, indicated that a comprehensive search had been initiated to identify a new CEO of the company, following the recent exit of Erez Vigodman.

Generic Risk To Copaxone

Chiang cautioned that there were downside risks related to Copaxone, and wrote, “While the FDA has yet to approve generic versions of 40 mg Copaxone, we believe this could occur at any time.” He lowered the EPS estimate for 2017 from $4.93 to $4.48.

Related Link: 18 Biggest Mid-Day Gainers For Monday

The board indicated that additional cost cuts could be undertaken to support Teva’s financial targets. Chiang mentioned, however, that the entry of generic competition could result in a significant drop in Copaxone sales and profits. Since Copaxone is Teva’s largest selling product, protecting the company’s cash flow and profit margins “could be a difficult task.”

At last check in Tuesday's pre-market session, shares of Teva were down 0.56 percent at $33.81.