Tel Aviv investment house Nessuah Zannex Securities affirmed a Buy rating for Teva Pharmaceuticals (Nasdaq:TEVA) (TEVA) - Get Report on Thursday, praising the Israeli drugmaker for rejecting the injectibles business of F.H. Faulding & Co. (Australia:FHF) from Mayne Nickless (OTC:MAYNY).

Senior analyst Haim Israel affirmed Teva's 12-month price objective at $79, compared with its closing price on Wednesday of $57.95.

Negative sentiment started to swirl about Teva after it pulled out of the Faulding deal. But in his research update, Israel lauds the company's cautious, long-term business approach, noting that the acquisition probably would not have satisfied stockholders' long-term interests.

Teva said it will sustain efforts toward vertical expansion, but regarding the Faulding unit, it ruled that minimal benefits could not outweigh acquisition costs of $365 million.

M&A is a problematic row to hoe, though, Israel notes. He gives the example of the $50 million write-off Watson Pharmaceuticals is making after an ill-fated merger with Schein. Watson might blame the adverse condition of the generic-drugs market, but that is a smoke-screen, Israel judges.

On the flip side of Watson's woes, they create an opportunity for Teva to bite off more of the lucrative American generics market, he concludes.

In conclusion, Israel wrote, Teva's rejection of Faulding shows its selective M&A philosophy, which indicates its strong management.

Nessuah Zannex is allied with US Bancorp Piper Jaffray.