In Bid to Cut Costs, Teva to Halt R&D in Women's Health and Oncology

EZchip shares slide on revenue warnings; bourse staff face six-day workweek; Alcobra shares plummet after failed clinical trial.

Adam Reynolds/Bloomberg

Teva to focus R&D on nervous system, respiratory diseases

Teva Pharmaceuticals said Monday it would stop research and development in 14 projects, including oncology and women’s health, but will maintain a commercial presence in those segments. Canceling the projects is a cost-cutting move that will save the world’s biggest maker of generic drugs more than $150 million in research and development costs next year and more than $200 million for each of the following two years, it said. The savings will be partly directed to increasing resources where Teva has what it called a “leading position” in treating central nervous system and respiratory disease. The rest will be used to improve efficiency. “Out of the 30-plus product launches we anticipate by 2019, with a total of over $4 billion in new revenue on a risk-adjusted basis, over 20 products will be launched in these two core therapeutic areas,” CEO Erez Vigodman said. Teva shares ended 1% lower, at 199.90 shekels ($54.48). (TheMarker Staff)

EZchip shares slide on revenue warnings

EZchip, a designer of semiconductors used in computer networks, plunged in Tel Aviv Stock Exchange trading Monday after it said third-quarter sales would be far less than it had earlier predicted. The company said it expected revenue to be about $19 million for three months, 14% less than the $22 million it had previously forecast. “We have seen weakness in orders as well as inventory adjustments across most of our key customers,” said CEO Eli Fruchter. “We believe this is a temporary slowdown, caused primarily by a weaker carrier-spending environment that the market is currently going through.” He said EZchip’s imminent acquisition of U.S. chip maker Tilera would diversify his company’s markets and provide additional growth opportunities. Shares of EZchip ended down 12.6%, the biggest drop among TA-100 companies, to close at 80.50 shekels ($21.94). (TheMarker Staff)

Bourse staff face six-day workweek

The Tel Aviv Stock Exchange’s plan to move to a Monday-Friday trading week to align itself better with overseas bourses is going to leave some of its employees with a six-day workweek that begins Sunday, like most Israeli workplaces, but is also open Friday, unlike many local companies. Under a plan approved in principle by the TASE’s board August 21, Friday trading would end at 2 P.M. so as not to extend into Shabbat. But that means employees involved in clearing trades will not be able to complete them that day and will have to come in Sunday, when the rest of the bourse will be closed, to complete their work. Officials hope to arrange work so that employees can wind up their work on Sunday by 2 P.M. The Monday-Friday week is part of the TASE’s effort to increase trading volume by making it a more appealing platform for foreign investors. (Shelly Appelberg)

Alcobra shares plummet after failed clinical trial

Shares of Alcobra took a licking Monday after the Israeli drug development company reported that a clinical trial of its experimental drug for attention deficit hyperactivity disorder, or ADHD, failed to show any efficacy. Phase III trials of MDX, Alcobra’s formulation of vitamin B6, failed to do any better than a placebo at improving ADHD symptoms among 300 patients tested in the United States and Israel. The treatment did get a better statistical outcome after researchers removed four subjects with what it described as “extreme” placebo responses. “We are encouraged by these findings,” CEO Yaron Daniely said in a statement, but investors apparently weren’t convinced. Shares of Alcobra, which went public a year ago, were down close to 50%, to $7.08 in New York as of late Monday morning, Israel time. (TheMarker Staff)

Shares end down; Shahar yield falls to record low

The Tel Aviv Stock Exchange’s TA-25 index ended lower Monday, but the government’s 10-year Shahar bond rose sharply to cut its yield to a record low. The TA-25 and TA-100 indices both ended the day down 0.3%, at 1,462.32 and 1,312.34 points, respectively, as some 1.29 billion shekels ($350 million) in shares changed hands. Among the big losers, Africa Israel Investments fell 1.6%, to a close of 6.42 shekels, and Elbit Systems lost 1.3%, to 231.50. Israel Chemicals ended down 0.8%, to 26.10 shekels, after S&P Maalot cut its credit rating one notch to AA-minus. But Mazor Robotics shares jumped 8.7%, to 22.37 shekels, after it reported it sold five Renaissance systems in the third quarter. The 10-year Shahar bond climbed 0.32% to cut its yield to 2.28%. (Eran Azran)