Business in Brief: Dollar at Two-year High Versus Shekel

Teva shareholders demand company sue U.S. employees over role in alleged cartel ■ Tel Aviv shares ride back of Wall Street rebound as China trade fears ease

Tel Aviv Stock Exchange, August 4, 2016.
Rina Castelnuovo/Bloomberg

Dollar at two-year high versus shekel, but dealers say trend will reverse next year

The dollar reached its highest against the shekel in nearly two years Tuesday, but dealers said the Israeli currency should reserve course next year. The dollar strengthened more than 0.5% Tuesday to a representative rate of 3.751, marking a gain of 10% since the end of January. The euro recovered, advancing nearly 0.3% to 4.272 shekels. The dollar has been gaining against nearly all global currencies in the past year as the U.S. Federal Reserve raises interest rates at a far faster pace than other central banks, including the Bank of Israel. “It’s not a local story about the shekel,” said Lior Faust, head of the foreign currency desk at Leumi Capital Markets. That said, the shekel has gained against most other currencies. Faust said the shekel will rebound over the course of next year because the pace of Fed rate hikes is slowing and concerns about political stability in Israel and slower economic growth should ease. (Guy Erez)

Teva shareholders demand company sue U.S. employees over role in alleged cartel

A group of Teva Pharmaceuticals Industries shareholders are demanding that the company file lawsuits against employees and executives of its U.S. subsidiary over their role in an alleged generic-drug cartel. The investigation began in 2014 with a probe into the suspected price-fixing of two drugs, but on Sunday The Washington Post reported that its scope had expanded to at least 16 companies, including Teva, and 300 drugs. The price-fixing was coordinated by executives of the companies over steak dinners, cocktail parties and rounds of golf, prosecutors say. In a letter to Teva Chairman Sol Barer, lawyers for the shareholders cited Section 194 of Israel’s Companies Law, according to which if the company fails to take legal action against the suspect employees, shareholders can sue Teva USA. They claim the cartel will cost Teva hundreds of millions in legal costs alone. Teva shares ended up 0.6% at 69.49 shekels ($18.52). (Yoram Gabison)

Entera shares soar on drug-development agreement with Amgen

Shares of Entera Bio soared Tuesday after it said it had reached an agreement with the U.S. drug giant Amgen. Under the agreement, Entera will use its proprietary drug-delivery platform to develop oral formulations to treat inflammatory disease and other serious illnesses. Amgen has selected one preclinical large-molecule program and has an option to select up to two additional programs to include in the collaboration, Entera said. Entera will receive a “modest” initial technology access fee from Amgen, which will also pay for preclinical development. In addition, Entera will be eligible for up to $270 million in aggregate payments, as well as tiered royalties up to mid-single digits, tied to clinical and commercial milestones if Amgen decides to move all of these programs forward. Entera said it would retain all intellectual property rights to its drug delivery technology. Entera shares were up 4.2% at $5.20 at late morning local time in New York. (Yoram Gabison)

Whitestone bonds soar after U.S. property company receives offer to buy assets

Bonds of B.H. Whitestone soared 10% Tuesday after the U.S. property company said it had received an offer to buy all of its assets as well as assets of a sister company. Whitestone bonds, like those of many other of the 35 U.S. real estate companies listed on the Tel Aviv Stock Exchange, have fallen sharply, leaving yields at junk levels. Tuesday’s announcement contained few details, including the name of the buyer or how much it was prepared to pay for the assets. Whitestone said it expected the valuation would be higher than what appears in the company’s books. “At this stage the company and its controlling shareholders are examining the offer and engaging in talks on a deal and its terms,” Whitestone said. “In addition, the company and its controlling shareholders haven’t been able to verify the financial ability of the proposed buyers,” it said. Whitestone has issued 400 million shekels ($107 million) in bonds on the TASE. (Eran Azran)

Tel Aviv shares ride back of Wall Street rebound as China trade fears ease

Tel Aviv shares snapped three sessions of losses Tuesday as U.S. stocks jumped on signs of progress between China and the United States to resolve their trade dispute. The TA-35 and TA-125 indexes both finished ahead 0.7% at 1,590.70 and 1,440.25 points, respectively, on turnover of 1.35 billion shekels ($360 million). Blue chip gains were led by a 6.3% rise to 29.62 shekels for B Communications, although its Bezeq subsidiary only posted an 0.4% rise to 4. Opko Health rose 4.7% to 12.83, Perrigo advanced 4.2% to 227.20 and Partner Communications added 3.45% to 20.08. Banking shares were lower:  Leumi dropped 1.15% to 23.17, Israel Discount 1.1% to 12.56 and Hapoalim 0.9% to 24.22. Redhill rose 2.1% to close at 2.68 after it announced the completion of the public offering of its American Depositary Shares at $7.00 each, or a total of $20 million. The Tel-Bond Global index rose 0.83% to 332.45. (Guy Erez)