Major generic drug makers traded mixed Tuesday in an overall down market, as a Goldman Sachs analyst recommended Teva Pharmaceutical Industries Ltd. and Mylan Inc. amid the rising risk of a recession.
In a note to clients, analyst Randall Stanicky characterized Israel-based Teva and Canonsburg, Pa.-based Mylan as especially defensive in the already defensive health care sector, given the weakening economy.
He referred to the stocks as "cost saving defensive ideas," saying they are well-positioned with profits linked to high-growth markets outside the U.S. and in emerging markets.
The analyst includes Teva and Mylan among his "conviction Buy" rated stocks, a list of the firm's preferred stocks in a certain sector. In addition, he noted that the stocks are well-placed within his "Attractive" rated coverage of the generics sector.
Stanicky said Teva is a stable, large-capitalization generic drug maker, with the potential to beat Wall Street's expectations for 2008 earnings per share.
Separately, Mylan said the Food and Drug Administration tentatively approved its generic version of Gilead Sciences Inc.'s Viread HIV treatment, through an emergency plan for AIDS relief.
Here is how some key generic drug makers performed Tuesday:
Teva Pharmaceutical Industries Ltd., down 23 cents to $44.85.
Mylan Inc., up 11 cents to $14.35.
Barr Pharmaceuticals Inc., down 27 cents to $54.10.
Watson Pharmaceuticals, up 9 cents to $28.80.
Par Pharmaceutical Co., up 37 cents to $19.87.
Caraco Pharmaceutical Labs, down 20 cents to $14.41.
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