Teva:P&G :: Peanut Butter:Chocolate

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

Teva Pharmaceuticals (Nasdaq: TEVA  ) and Procter & Gamble (NYSE: PG  ) are like peanut butter and chocolate -- from totally different worlds and yet look so good together.

The generic-drug maker and consumer-products company are forming a joint venture to sell over-the-counter medication, with both companies bringing their strengths to the table.

P&G gets manufacturing expertise; Teva will take over the production of the drugs. It also gets the global reach into pharmacies that P&G lost when it sold its prescription drug business to Warner Chilcott (Nasdaq: WCRX  ) a couple of years ago.

For its part, Teva gets brand recognition that can only come from hooking up with a company like P&G. Vicks, Metamucil, and Pepto-Bismol? They're all P&G over-the-counter products. P&G also has better reach into supermarkets that might sell over-the-counter medications an aisle over from the Tide.

Combined sales of over-the-counter products from both companies totaled more than $1 billion last year. The joint venture should be able to build on that just by exploiting each company's reach. And the larger size will likely spur efficiencies that will improve the bottom line.

But the real key to the joint venture will come from new products that the companies might be able to bring into the fold. The switch from prescription to over-the-counter can open a whole new world for a drug. Johnson & Johnson (NYSE: JNJ  ) successfully switched Zyrtec to over-the-counter status after it bought it from Pfizer (NYSE: PFE  ) . And sanofi-aventis's (NYSE: SNY  ) acquisition of Chattem was mainly driven by Sanofi's desire to bring its allergy medication, Allegra, from behind the pharmacists' counter.

We'll have to wait to see how this joint venture plays out, but it certainly looks like two great tastes that taste great together.

Johnson & Johnson and Pfizer are Motley Fool Inside Value selections. Johnson & Johnson and Procter & Gamble are Motley Fool Income Investor recommendations. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of Johnson & Johnson and Teva Pharmaceutical Industries. Motley Fool Alpha LLC owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool has a disclosure policy.

Read/Post Comments (1) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 28, 2011, at 7:56 PM, energysystems wrote:

    I'm an owner of Teva(buyer under 50$), and I'm estatic about this deal. PG is a marketing/name brand giant, and most people(outside of some active investors) have never heard of TEVA before, despite their giant footprint in genarics. It's a win win without a doubt.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1464950, ~/Articles/ArticleHandler.aspx, 10/28/2016 12:29:47 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 3 hours ago Sponsored by:
DOW 18,169.68 -29.65 -0.16%
S&P 500 2,133.04 -6.39 -0.30%
NASD 5,215.97 -34.29 -0.65%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/27/2016 4:07 PM
PG $86.58 Down -0.82 -0.94%
Procter and Gamble CAPS Rating: ****
TEVA $43.15 Down -0.21 -0.48%
Teva Pharmaceutica… CAPS Rating: ****
JNJ $115.70 Up +1.14 +1.00%
Johnson and Johnso… CAPS Rating: ****
PFE $32.48 Up +0.08 +0.25%
Pfizer CAPS Rating: ****
SNY $37.25 Up +0.19 +0.51%
Sanofi CAPS Rating: *****
WCRX.DL $0.00 Down +0.00 +0.00%
Warner Chilcott CAPS Rating: *****