Business in Brief: Teva Suffers an FDA Setback

U.S. property firms issue bonds; Leumi nonbank unit shines; Tel Aviv shares rebound.

TheMarker
TheMarker
Trucks drive in front of Teva Pharmaceutical Logistic Center in the town of Shoam, Israel.
Trucks drive in front of Teva Pharmaceutical Logistic Center in the town of Shoam, Israel.Credit: AP
TheMarker
TheMarker

Setback for Teva as FDA cites problems with anti-allergy injector

Teva Pharmaceutical Industries’ had hoped to launch a generic version of Mylan’s EpiPen anti-allergy injector in the second half of the year, but these hopes have been dashed after the U.S. Food and Drug Administration said the Israeli company’s applications contained “major deficiencies. Teva said Tuesday its launch would be “significantly delayed” until at least next year. The setback is good news for Mylan, a U.S. company listed on the Tel Aviv Stock Exchange that has generated annual sales of $1 billion in each of the last two years from EpiPen. Bloomberg quoted Evercore ISI analyst Umer Raffat as saying the delay may boost Mylan’s 2017 earnings by 20 cents a share. Until now, he noted, analysts had forecast a loss of $200 million in EpiPen sales in 2017. Teva shares ended down 1.45% at 217.29 shekels ($55.82) while Mylan fell 1.1% to 177.40. (Yoram Gabison)

Two U.S. property companies issue bonds
Two more U.S. property companies tapped the Tel Aviv Stock Exchange for debt this week. KBS, an American real estate investment trust, or REIT, was on its way to selling 1 billion shekels in bonds to institutional investors, 400 million more than it had planned, after its issue attracted a surge of orders. KBS was awarded an AA-minus rating from Standard & Poor’s Maalot and an Aa3 from Midroog, which only one other U.S. property firm, the Zarasai Group, has ever won. All told, 15 U.S. real estate firms have raised 9 billion shekels in Israel to date. Meanwhile, All Year Holdings raised 163 million shekels ($41.9 million) on Monday in a follow-on offering of its Series Aleph bonds and warrants. The bonds were sold at an effective yield of 8.1%. All Year, which invests mainly in Brooklyn residential real estate, issued its first 370 million shekels in bonds on the TASE a year ago. (Eran Azran)

Leumi’s nonbank investment unit emerges as major profit source
Leumi Partners, the nonbank holding unit of Bank Leumi, saw its net profit jump 32% last year to 406 million shekels ($104 million), making it by far the most profitable of the big three banks’ nonbank businesses. For 2013-15, Leumi Partners racked up profits of 940 million shekels, equal to 15% of the Leumi group’s total net profit. Last year, Leumi Partners posted big gains from the sale of shares in the collision-prevention company Mobileye and from the company that operates the Route 6 toll road. It also made 210 million shekels in new investments over the year. But Bank Hapoalim’s Hapoalim Capital Markets unit had a poor year, showing a 10-million-shekel loss after taking a 52-million-shekel writedown on its Poalim Securities USA unit. Still, it made major investments in 2015, including in the security products maker Rav Bariach. Discount Capital Markets saw its 2015 net profit drop 13%, but at 81 million shekels it accounted for a sizable 11% of Israel Discount Bank’s total earnings for the year. (Michael Rochvarger)

Tel Aviv shares back in the green
Tel Aviv shares resumed their gains Tuesday, following the lead of global stock markets. The TA-25 and TA-100 indexes both advanced about 0.3% to end at 1,442.54 and 1,243.66 points, respectively, on light turnover of just over 1 billion shekels ($258 million). Bezeq led blue chips, closing 3.3% higher at 9.05 shekels. Jerusalem Economy Corporation surged 11.7% to 5.81 a day after it raised 750 million shekels in a secondary share offering that left the Summit group the property company’s biggest shareholder. JEC’s Industrial Buildings unit surged 12.5% to 3.67 shekels. Electra Consumer Product closed 2.1% higher at 29.89 after it reported a 9.3-million-shekel fourth-quarter profit, reversing from a 50-million loss a year earlier. Tech and biomed shares ended lower. In the fixed-income market, the government’s 10-year Galil bond fell 0.29% to raise its yield to 0.27%. In forex trading, the euro extended its losses to end down 0.4% at 4.2373 shekels. (Ruti Levy)

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