nature
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, Formerly considered the stock of the people, is going through some difficult years. Last night, the company again published not-so-good reports. Revenues have also declined and the outlook is for a less good continuation, partly due to the continued decline in revenues from what was once the flagship drug and sold gold for the company – the Copaxone drug for the treatment of multiple sclerosis. The stock did respond initially to declines, but then the traditional post-report conference took place, where the trend changed.
The reason for the change was an update by the company regarding a cloud that has been hovering over its head for some time – the opioid affair. As you may recall, the company is accused, along with several other companies in the industry, of encouraging or at least not preventing the phenomenon of opioid painkillers, which has become a national epidemic in the United States, and even causes deaths. Huge lawsuits have been filed against the company across the United States and have aroused real fear among investors that the company simply will not be able to meet the compensation arrangements it will set. Teva has recently reached a number of compromises in which a compensation mechanism has been established in which the payment in cash is relatively low, and most of the payment will be made in medicines over decades to come, but so far no comprehensive arrangement has been established.
What encouraged the investors in the conference call are the words of the company’s CEO Kor Schultz The company estimates that it will resolve the matter completely By the end of 2022: “This is the result of an overall assessment of the results of the agreements we have reached so far, and the most reasonable development in light of the negotiations currently underway.” Teva believes that the total cost of the arrangements in the field will reach $ 2.6 billion, most of the amount has already been recorded in the reports, so this may be in line. It is certainly an amount whose “division” over years is possible to nature.
What does this post mean?
The opioid lawsuits have already caused real damage to nature. According to the latest reports, Teva had to part with about $ 1 billion in order to settle the claims in the last quarter. But the real damage is more than the current loss, the damage is the uncertainty.
Uncertainty is perhaps the most hated thing in the capital market. When there is such a cloud hovering over the head of a company, it is difficult to appreciate it. Will she have to pay another billion in the next quarter? Another ten billion? What happens if a judge “goes crazy” and decides to award extreme compensation? Investors who do not know how to value the company, and fear that the bad from before it will not invest in it. In this case the concerns do not only concern the question of how much it will lose or gain in the next quarter. Here there were real concerns in general about the ability of the company to continue to exist, if indeed the lawsuits would reach severe sentences to the detriment of nature.
Aside from investor concerns and inability to value the company, this weight placed on the company’s necks for some time has also hurt executives and their ability to manage the company’s resource allocation in an informed and efficient manner. This is particularly detrimental to research and development that form the basis of the company’s ability to grow by developing new drugs. When the CEO does not know how much cash he will need to settle claims, it is difficult for him to increase his investment in research that will allow continued growth, and this is one of the reasons for the slowdown and even decline that the company has experienced in recent years.
All of these things have plagued the company and the stock for a long time. Recently, however, more and more cases are accumulating in which Teva reaches local arrangements with different countries. Although the cash component is not negligible – in recent arrangements it stood at between $ 15 million and $ 200 million – but still at a level that Teva can meet, especially when you see the light at the end of the tunnel. Payment through medication over time is of course much more convenient to nature. It should be remembered that when it was determined that Teva would pay about x billion dollars in drugs, it was about a consumer, that is, according to the price at which Teva would sell the drug. The production of the drug itself costs nature itself much less. So while Teva will not profit from these drugs as much as it could, the operational damage will not be so high.
But the most important thing is, as mentioned, the certainty. If the crisis is indeed resolved and a clear and transparent price tag is attached to it, Teva’s and investors’ biggest gain will simply be knowing “how much it will cost us” (which will probably be less than the worst concerns). From now on, it will be possible to re-evaluate the value of the company and refer to the numbers it produces and the reports themselves and not worry about what will happen if …
This story accompanies nature for too long. If it does resolve soon, then Teva will become independent and will be able to try to recreate its glorious days from the past. It already has a new blockbuster drug (which sells for over a billion dollars a year) (osteo), and there are a few more drugs in the pipeline. Under Schultz Teva’s management, it also streamlines operations and lowers the excess leverage it has suffered from. Will we return to see the stock of the people in nature in a few more years?
Comments on the article(19):
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16.
Made bedding!
A lover of medicines
05/05/2022
11:07
0
0Buy Teva at every opportunity to have a trade and get stuck with a few tens of thousands of NIS available !!!
closed
15.
When the debt still stands every $ 22 billion.
This is Independence Ltd.
04/05/2022
17:36
0
02023 will be the most challenging year. There is a large bond redemption. The solution to the legal problems estimated at between 1 and 4 billion is certainly significant probably at its price. But the iron chain to which nature is attached is the debt. Maybe 7 years from now will be something to talk about. If debt has dropped to single digits and nature will even see growth the sky is the limit. But it will take a long time.
closed
This is the breakthrough Teva pays in medicine and not in cash
mik
05/05/2022
15:16
0
0With such a tempting profit multiplier I have no doubt that the people will return to the people’s share from this slump one can only take off See signs in the last month
closed
14.
If the future is rosy then
Investor
04/05/2022
17:32
0
0How is it that right now Teva is crashing in the NASDAQ by 8.5 percent ??? Anyone … hello … does anyone know how to explain?
closed
13.
The markets will fly from yesterday with an increase ending in declines (LT)
A solid Frenchman
04/05/2022
16:16
3
1- Load more
12.
The markets are on the way to strong rises in the sand (LT)
A solid Frenchman
04/05/2022
16:16
4
1Or are we in the midst of an avalanche? We will never know (LT)
S.A.
04/05/2022
16:46
0
011.
I bought Long Dex and Long Snoopy at 200A (LT)
phot
04/05/2022
16:15
2
110.
Buyers of shortlisted stocks and losers (LT)
emir
04/05/2022
16:14
1
09.
Buy Long Ducks and Long S I will fly up (LT)
emir
04/05/2022
16:13
1
08.
I in his generation on nature will reach $ 4-5 (LT)
Samson
04/05/2022
16:13
1
27.
Erez Vigodman, former CEO
Derder 1
04/05/2022
14:23
10
0The damage he did is simply incalculable, destroying a highly profitable company …
closed
6.
Let them sell this company. She’s next in line
nature
04/05/2022
12:58
2
5After the strain. ICL Tower.
closed
5.
Caution
Einav
04/05/2022
12:17
5
9Do not buy the exercise in the article, the guy is interested and wants to sell you expensively and make money from you
closed
4.
As soon as Teva finishes the spoilers it will rise north strongly (LT)
Shraga Eliyahu
04/05/2022
11:20
12
4You’ll never finish. There are more masses in the pipeline. Pay close attention:
To Elijah
04/05/2022
12:42
1
12Until the end of November 2024, Teva will not exist and will leave a trail of debts without anyone’s ability to repay their owners.
closed
3.
The direction is now up
Short term 12. Long term 20.
04/05/2022
10:57
10
4Short term 12. Long term 20.
closed
2.
I wonder how much you get paid to post an ad about nature
Know nothing
04/05/2022
10:55
10
11She has huge debts, with the rise in interest rates even heavier on her, why lie to people !!
closed
1.
Teva does not generate operating profit – Teva capital is eroded
Lily
04/05/2022
10:53
6
6Erosion of equity – poses a danger to the existence of the company
closed