Shares of Teva Pharmaceutical Industries (NYSE:TEVA) were down about 1% after the company disclosed a federal investigation into its marketing practices. Both Teva's primary money-maker, Copaxone, which treats multiple sclerosis, and Azilect, used in the treatment of Parkinson's disease, will be the drugs in question during the investigation, which will track events dating back to 2006. If wrongdoing is found, there will probably be a settlement.
In this video, Motley Fool health-care analyst David Williamson notes that while he isn't concerned that this will dramatically affect Teva, such a settlement could come at a crucial time for the company. Paying out billions of dollars in a settlement could seriously affect Teva's flexibility, just as its big earner Copaxone begins facing generic competition. The company is currently trying to get aggressive in the face of this patent cliff, but having this legal issue on the horizon to settle may force the company to keep some of its powder dry at just the wrong time.
What's the best way for investors to play the biotech space?
The best way to play the biotech space is to find companies that shun the status quo and instead discover revolutionary, groundbreaking technologies. In The Motley Fool's brand-new free report "2 Game-Changing Biotechs Revolutionizing the Way We Treat Cancer," find out about a new technology that big pharma is endorsing through partnerships, and the two companies that are set to profit from this emerging drug class. Click here to get your copy today.
David Williamson has no position in any stocks mentioned. The Motley Fool recommends Teva Pharmaceutical Industries. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.