Teva Pharmaceuticals'
The generic-drug maker is banding together with Japanese Kowa to form Teva-Kowa Pharma -- wonder how long it took to come up with that name? The 50/50 partnership seems like a good move for both companies; Teva brings its generic-drug know-how, while Kowa contributes its knowledge of the regulatory system in Japan and a recognized brand name.
Japan is a relatively untapped generic-drug market. About 17% of prescriptions written in Japan are for generic drugs, compared to more than 50% in the U.S. The Ministry of Finance is working to increase that to 30% by 2012 to curb health-care spending, so the expanding market should help the companies reach their goal of $1 billion in sales by 2015.
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While Teva's prospects look good, now may not be the best time to be jumping into its stock. Investors have priced Teva at a premium -- somewhat deserving given the aforementioned wiping of the floors -- but there are some unknowns hanging over its head. For instance, will its patents on Copaxone hold, and how effectively can it integrate Barr, a company with about a quarter the revenue of Teva?
If it can get through those unknowns and hit its goal of $20 billion in revenue by 2012, its stock will likely beat the market from here, but that's a lot of ifs, and investors looking for a value play will have to look elsewhere.
More Foolishness that's far from generic: