What happened
Shares of Teva Pharmaceutical Industries (TEVA +1.34%) were jumping 5.7% as of 11:21 a.m. ET on Thursday. The solid gain came after the Israel-based drugmaker announced a new growth strategy.
Teva CEO Richard Francis said that this new strategy is based on four key pillars:
- Commercial portfolio and biosimilars
- Pipeline
- Generic drugs
- Capital allocation
Francis maintained that focusing on these four areas will enable Teva to "gain momentum as a stronger, bolder, and simpler organization." The pharma stock had fallen nearly 11% year to date prior to today's news.
At least one Wall Street analyst seemed to be convinced that Teva could now be on the right track. Evercore ISI Group's Umer Raffat upgraded the stock from in line to outperform.
NYSE: TEVA
Key Data Points
So what
Companies roll out new strategies to boost growth all the time. What made Teva's so well received?
It certainly helps that the company already has a product with strong sales growth in its lineup with Huntington's disease and tardive dyskinesia drug Austedo. Teva expects the drug to generate annual sales topping $2.5 billion by 2027. The drugmaker also has several promising pipeline candidates.
But investors were probably especially glad to hear that Teva plans to increase its business development efforts to fuel long-term growth. They also no doubt liked that the company is reallocating resources to improve its growth while continuing to service its debt.
Now what
The proof will be in the pudding for Teva. The company posted a loss in the first quarter of 2023, with flat revenue growth. Wall Street's consensus forecast is for Teva to deliver weak revenue growth in 2023 and 2024.
