UBS Warburg

rated generic drug giant

Teva Pharmaceuticals

(Nasdaq:TEVA) a Buy and set a price target of $70, 30% above the stock's market price. The bank said that Teva is one of the better-positioned companies in the hybrid generic drug universe.

The bank noted that Teva is the biggest generic drugs maker in the world. It believes that its market segment in the United States comes to 10% of a market worth $11 billion.

Teva's acquisitions of Novopharm and Copley Pharmaceuticals boosted Teva into the high-growth market. Also, the manufacturing outlay of the companies decreased following Teva's reorganization measures, the bank wrote.

The bank believes that the sales of Teva's flagship product Copaxone, used in the treatment of multiple sclerosis, will rise to $175 million in 2001.

Teva has three promising products in the pipeline: an oral version of Copaxone and two drugs used in the treatment of Parkinson's Disease, say analysts Steven J. Valinquette and Michael R. Worden.

Teva is awaiting FDA approval for 50 drugs with an aggregate market of $14 billion, the analysts wrote.

The price target is based on an earnings multiple of 33 in respect of predicted 2002 earnings of $2.1 per share. UBS explains that Teva maintains a balance between generic and proprietary drugs and has proven its ability to successfully integrate the companies it buys. The bank also refers to Teva's excellent executive, which has been heading the company for a decade.

UBS believes that Teva's revenues in the fourth quarter of 2000 will rise to $478 million, and that revenues for 2000 will reach $1.7 billion. The bank forecasts 17% revenue growth in 2001 to $2.01 billion.