At this rate, we're hardly going to be able to call the world's largest generic-drug maker, Teva Pharmaceuticals
The additional branded products came from its acquisition of Cephalon last year, but Teva's legacy branded drugs also contributed to the 27% increase in branded sales. Multiple sclerosis drug Copaxone jumped 11%, and respiratory drugs ProAir and Qvar were up 26% and 27%, respectively.
Generics weren't exactly lagging, up 12% in the fourth quarter. The only weak spot was the U.S., where sales fell 5% despite launches of a generic version of Eli Lilly's
Teva has also made a push into the over-the-counter business. While sales make up only a small portion of total revenue, they grew 19% during the quarter as its joint venture with Procter & Gamble
This diversification was necessary if Teva was going to grow further. It's mastered the generic-drug space's bigger-is-better philosophy, but growth by acquisition can't continue forever. There are only so many generic-drug makers left and only so many new territories to move into.
But don't be lulled into thinking the added branded products make Teva less risky. If anything, I think increasing branded exposure makes the company more risky, considering that they expose the company to patent risk. Yes, Teva already faced that problem with Copaxone, which made up 18% of the company's revenue in 2010. Teva is now less dependent on Copaxone, but it's more dependent in general on branded products and their patents.
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Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Teva Pharmaceutical Industries. Motley Fool newsletter services have recommended buying shares of Pfizer, Procter & Gamble, and 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.