Last update - 00:00 01/11/2007
Hambrecht sees Teva buying Impax
Teva's strategic plans for 2008 to 2010 will be based on at least one strategic acquisition, W.R. Hambrecht assesses. Its analysts point to one good candidate: Impax, valued at an estimated $1 billion based on a 40 percent premium over its estimated value. Such an acquisition could raise Teva's profit by $0.10 per share in 2008.
Another candidate for Teva to buy is any small European firm, likely German, that would be substantially less costly that Merck KgaA, the generic firm that Mylan bought. Hambrecht analysts believe that Teva is likely to up its 2008 profit forecast from $2.50 per share to $2.65 to $2.75 per share, and sales estimates from $10 billion to $10.5 billion. Current forecasts for 8-percent growth in revenues and 12-percent increase in profit per share is overly conservative, assuming that Teva manages to maintain its 20 percent slice of the U.S. generic pharmaceutical market, which is growing at a rate of 10 percent annually.