Teva Pharmaceuticals (TEVA) is in the dumps.
It’s officially on the activist investor radar. At decade lows, it’s hard not to be tempted by Teva. Generic drug pricing pressure and poor earnings are crushing the company. A great opportunity, perhaps, for an activist investor?
The big thesis is to get Teva to get its debt load under control. It carries $35 billion in debt on a $21 billion market cap. The board is already feeling the heat, and we could also see a board shakeup. This includes getting a CEO with a strong international reputation, which it’s having a hard time doing.
Then we have the overhang of Allergan (AGN) owning a 10% stake, and possibly ready to unload it. Allergan is free to dump these shares, which could put further selling pressure on the company.
