Mild market reaction as Teva loses Copaxone patent
After 17 years and more than $20 billion of sales, Teva Pharmaceuticals’ patent rights for its Copaxone multiple sclerosis treatment formally expired on Saturday. Copaxone was not only Teva’s best-selling drug by far and one of its few nongeneric medicines, the enormous profits it earned on it – 75 cents of operating profit on every $1 of sales – enabled the company to finance a string of acquisitions, aimed in part at weaning the company off its reliance on the drug. Goldman Sachs has recommended investors buy put options on Teva stock, to hedge against a fall of as much as 10% if one of the three potential generic makers, Mylan, introduces a product soon. Nevertheless, the expiry didn’t have a pronounced effect on Teva stock Sunday, which rose 1.8% to close at 179.30 shekels ($51.40) in Tel Aviv. One reason for the mild reaction is Teva’s campaign to defend Copaxone by, among other things, offering a new version that requires injections thrice-weekly instead of daily.
Mivtach Shamir opens talks with Bright Food over Tnuva
Mivtach Shamir said Sunday it is holding talks over whether to sell its 21% minority stake in Tnuva – Israel’s biggest food maker – to China’s Bright Food or remain as a shareholder and reach terms on how to jointly manage the company. The announcement comes days after Bright Food struck a deal to buy 56% of Tnuva from the British private equity house Apax Partners, in a deal that values the dairy company at $2.5 billion. Mivtach has a “tag-along” option to sell its shares to Bright Food under the terms with Apax, which means it would get $500 million from selling them. But if the negotiations result in agreement, Mivtach said it would remain in Tnuva, as would a group of kibbutzim that own the remaining shares. Mivtach Shamir shares dropped 1.3% to close at 121.10 ($34.70) in Tel Aviv.
U.S. firm Extell raises $270.8m in first phase of bond sale
Extell, the New York property development company, raised 945 million shekels ($270.8 million) at the end of last week in the institutional tranche of a bond, becoming the third U.S. real estate company to tap the Israeli capital market. Controlled by Gary Brent, Extell had planned to raise just 700 million shekels. But meeting up with orders of 1.3 billion shekels, the company increased the size of the issue. The interest paid on the bonds will be 4.9%, similar to what other U.S. corporate real estate bonds are trading at on the Tel Aviv Stock Exchange, but half or less what it would be in the United States. The public portion of the issue will take place this week.
Castro profits wearing thin in first quarter
The apparel chain Castro suffered an 80% drop in first-quarter profit from a year earlier, it announced Sunday. Citing an unusually mild winter, the cost of store renovations and the timing of the Passover holiday, the retailer reported a profit of just 2.4 million shekels ($690,000) for the three months, as sales edged just 0.4% higher to 197.7 million shekels. “The company is continuing its strategy of expanding and upgrading shops with the aim of increasing floor space, to make room for the growth in our collections over the past few years,” CEO Gabi Rotter said. Castro shares fell 0.2% to 98.26 shekels in Tel Aviv.
Tech stocks lead TA-25 above 1,400 points
Technology shares rallied on the back of a stronger Wall Street over the weekend, pushing the TA-25 index above 1,400 points for the first time in more than a month. The benchmark index closed up 0.9% at 1,401.83 while the TA-100 added 1.1% to 1,265.13, although turnover was a very low 526.8 million shekels ($151 million). The TASE’s technology indices all rose in excess of 2%, led by a 5.5% jump for Silicom, which closed at 171.70 shekels. Compugen and Opko Health were not far behind with 4.4% increases each to end at 28.72 and 30.40 shekels, respectively. LivePerson rose 3.6% to 35.24 shekels, TowerJazz 3.3% to 32.45 shekels and Allot Communications 3.3% to 48.35. Union Bank shares sank 2.2% to close at 15.97 shekels after reporting yesterday that first-quarter net profit declined 34% to 23 million shekels, making it the biggest loser of the day among TA-100 stocks.
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