When it comes to pharmaceutical ubiquity, you can't beat or ignore

Teva Pharmaceutical

(TEVA) - Get Report

.

Last Thursday, shareholders approved a $7.4 billion takeover of generic-drug rival

Ivax

(IVX)

. If the Federal Trade Commission endorses the deal, Teva will reclaim its title as the world's biggest generic-drug maker, which it recently

relinquished to the Sandoz unit of

Novartis

(NVS) - Get Report

.

The previous week, Teva won a court battle involving the

Bristol-Myers Squibb

(BMY) - Get Report

cholesterol drug Pravachol and signed a tentative agreement with

Wyeth

(WYE)

settling a patent suit for the antidepressant Effexor XR. Analysts say both actions will help Teva's sales, earnings and stock price.

And this month, Teva is expected to begin selling a generic version of

Pfizer's

(PFE) - Get Report

big antibiotic Zithromax.

That's only part of the Teva story. The company is poised to benefit from a resurgence of generic-drug opportunities, after a fairly fallow 2005, because many more brand-name drugs will lose patent protection in 2006 and 2007.

During the next two years, Teva could be involved in more than 80 generic-drug launches, including 30 in which it could gain a six-month exclusive marketing advantage, says David Steinberg of Deutsche Bank Securities in a recent research report. Those brand-name drugs produce more than $80 billion in sales, although generic versions will fetch less.

Determining Growth

By contrast, this year Israel's Teva has the opportunity for only 20 launches, including four with six-month marketing exclusivity, Steinberg says. Those brand-name drugs have sales of $10 billion to $12 million.

Like the majority of analysts, Steinberg has a buy rating because of upcoming patent expirations, "the depth of Teva's pipeline, and the potential accretive impact of the Ivax merger." He doesn't own shares, but his firm has provided investment-banking services or financial advisory services in the last year.

At the moment, the best case against being bullish about Teva is a concern that its stock price is stampeding its projected sales and profit growth. Teva's stock growth has outpaced the

S&P 500

and the Amex Pharmaceutical Index on a split-adjusted basis at intervals of three months, six months, 12 months, two years and five years. The stock closed at $38.12 on Monday, just below its 52-week high.

The cautious view is presented by Albert Rauch of A.G. Edwards, who says he's concerned that continued pricing pressure among generic brands will hit Teva.

Rauch told clients in an Oct. 24 research report that Copaxone -- Teva's brand-name drug for multiple sclerosis -- would be hurt if the drug Tysabri returns to the market.

Biogen Idec

(BIIB) - Get Report

and

Elan

(ELN)

pulled Tysabri from the market in late February over safety concerns. They have since asked the Food and Drug Administration to reinstate it.

Rauch notes that Teva is trading at 21.1 times his 2006 EPS estimate, well above its peers' price-to-earnings ratio of 15.8. Despite Teva's industry leadership, Rauch says, continued price competition prompts his neutral rating because the shares are "fairly valued at current levels." He doesn't own shares of Teva.

Everybody Wins

Other issues concern Teva's ability to digest Ivax, as well as the company's upcoming quarterly results. Analysts expect a profit of 38 cents a share on revenue of $1.29 billion, for the three months ended Sept. 30. For the same period last year, Teva earned 38 cents a share and had revenue of $1.25 billion. Official results will be issued Nov. 8.

"Third-quarter earnings could be mixed -- but not a disaster," says Ken Cacciatore of SG Cowen in an Oct. 24 research report. Although pricing pressure will affect third-quarter results, "this is not a cause for concern, as these pressures likely will abate in the fourth quarter," he says.

Cacciatore calls the Wyeth deal and the likely Zithromax launch "potential significant near-term triggers." Several weeks ago, Wyeth and Teva announced a tentative agreement on Teva's patent challenge to Effexor XR, which, along with the original Effexor, is Wyeth's

biggest source of revenue.

The companies plan to announce the terms in a few weeks. "We believe the settlement has likely created a win-win situation for both parties," says Cacciatore.

The key U.S. patent on Zithromax expires today. Teva won't be the only generic player, but Cacciatore believes Teva is well-positioned to charge into the market quickly. His research report says that he or members of his research team "have the equivalent of a long position" in Teva.

Ivax Opportunities

Another boost for Teva was a recent federal court decision involving the Bristol-Myers cholesterol drug Pravachol, which loses its U.S. patent protection in April.

U.S. law grants six months of marketing exclusivity to the company filing the first proper generic-version application to the Food and Drug Administration, and Teva thought it was first to file.

Following complicated litigation involving another company vs. Bristol-Myers over Pravachol, the FDA subsequently told Teva that its own six-month exclusivity had expired on three Pravachol patents -- even before Teva's planned April 2006 launch.

Teva sued the FDA and won on Oct. 21, giving it marketing exclusivity on the prescription strengths that account for 89% of the Pravachol that's dispensed, says Deutsche Bank's Steinberg. That should be worth an extra 10 cents a share next year, he says.

Plus, Ivax is expected to leap into the market next year with generic versions of

Merck's

(MRK) - Get Report

cholesterol giant Zocor and the company's Proscar treatment for an enlarged prostate. It also plans to sell a generic version of Pfizer's antidepressant Zoloft.

Cacciatore says Ivax has first-to-file rights for Zoloft and Proscar. "For generic Zocor, we have assumed a competitive launch with multiple players," he says. "Ivax continues to believe that they hold generic market exclusivity, although various checks with our industry contacts have provided a wide range of views."