What caused Teva Pharmaceutical Industries (NYSE: TEVA; TASE: TEVA) stock price to drop nearly 20% in April and May? A filing with the US Securities and Exchange Commission (SEC) last week offers a partial explanation: Capital Research Global Investors, until recently Teva’s largest shareholder, sold its entire holding in the period. At the beginning of April, it acquired more than 10% of Teva; By the end of May, her possession was zero. Based on Teva’s average share price over that period, the sale value of the shares was approximately $973 million.
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Capital Research Global Investors is part of Los Angeles-based financial services firm Capital Group, which manages $2.2 trillion in assets. As far as is known, other Capital Group funds still own holdings in Teva, but no more than 5%. Capital Research Global Investors has owned 10% of Teva since 2018. Prior to the sale, it was the only entity with more than 5% in the company. She is not required to report the prices at which she bought and sold the shares, so it is not known whether she gained or lost on the investment.
Teva has a market capitalization of $8.2 billion on the New York Stock Exchange and the Tel Aviv Stock Exchange. Its shares gave a positive return of 14% in 2022, but the return for 2023 so far is 20%.
Last Thursday, the company finally cleared its U.S. opioid case, which has weighed on its business results and share price for several years, when it announced that it had completed the joining process to settle the case nationwide and that it had done so. He separately reached a $193 million settlement with the state of Nevada.
Earlier this year, Richard Francis became CEO of Teva, replacing Kare Schultz, who has held the position since 2017. Francis recently introduced Teva’s new strategy for the coming years, which aims to restore revenue growth after five years of decline, and continue Debt reduction. In the Schultz era, the focus is on innovative products and biosimilars. Teva will discontinue certain generic products that have low profit margins and for which competition is strong. In a meeting with investors to present the strategy last month, Francis estimated that Teva’s bonds could return to investment grade (as opposed to junk) within two to three years.
Published by Globes, Israel business news – en.globes.co.il – on June 11, 2023.
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