Is This the Perfect Time to Buy Teva?

Shares of Teva Pharmaceutical Industries (TEVA) - Get Report are down this week, sliding down as far as $50.95, dangerously close to the stock's 52-week low of $49.51, which it hit earlier this month.

What about this Israel-based generic pharmaceuticals company has investors panicking and running for the exits?

Basically, all that is happening right now is that investors are overreacting to uncertainty surrounding Teva's acquisition of a portion of fellow drug maker Allergan. However, this uncertainty is providing us with some excellent opportunities to get into this potentially lucrative investment at bargain-basement prices.

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Teva announced its intention to scoop up Allergan's generics portfolio in July 2015. The deal is worth a whopping $40.5 billion and would solidify Teva's ranking as the world's largest manufacturer of generic drugs.

The deal was originally expected to close in the first quarter of 2016, but hurdles from the Federal Trade Commission (FTC) have slowed down the process.

In order to complete the purchase, Teva must finalize about $2 billion in asset sales to attempt to negate the FTC's antitrust concerns. The asset divestiture would involve the sale of as many as 75 drugs currently on the market or in development, and there's no guarantee the asset shedding will satisfy regulators. In addition, Teva reports that it is close to the finalization of another asset sale, this time for a portfolio of drugs worth approximately $500 million.

The company remains optimistic that these divestitures will occur within the very near future. And the company's CFO, Eyal Deshah, speaking at an Oppenheimer conference in Tel Aviv this week, reiterated his belief that the Allergan deal will be approved and completed as soon as within a month.

"We expect to close the Allergan deal in June," Desheh said, "and hope and believe we will obtain approval for it, but it takes a great deal of time for the U.S. Federal Trade Commission to check it."

Toward the end of last year, Teva made a share offering to raise about $7.2 billion toward the deal. But since then, the drug maker has lost about 17% of its value, finishing the first quarter with a debt load of $10 billion. However, the company remains positive that a completed Allergan deal will change Teva's finances for the better, as well as delivering profits to its investors.

Unfortunately, the federal government has a bit of history when it comes to nixing deals related to Allergan. Last month, plans by Pfizer to purchase Allergan for $160 billion were scrapped when the U.S. Treasury tightened its limitations on "inversion deals," wherein U.S. companies relocate to more tax-friendly jurisdictions for the purpose of lowering corporate rates. Pfizer is based in New York City and would have benefited from Allergan's location in tax-friendly Ireland.

But Teva is a strong company with a stellar portfolio of drugs. It's taking all of the necessary steps to complete the Allergan deal and is already looking to perhaps making more purchases in the future in order to further strengthen its pipeline of drugs.

"We're building a new Teva," Desheh said. "It's not evolution, not revolution, but the company is moving in the direction of becoming one of the leading companies in the world in the development and sale of drugs... We're working to strengthen our business infrastructure and financial profile, diversify sources of income and profit, build a unique pipeline, and make Teva a diverse and powerful company."

Now's a great time to grab shares of one of the world's leading pharmaceuticals companies at bargain-basement prices. Teva is a great company and an excellent investment, and once the Allergan deal goes through, the stock will be set to skyrocket.

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This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.