Teva upgraded at J.P. Morgan on upcoming catalysts

Teva Pharmaceutical (NYSE:TEVA) traded higher on Friday after J.P. Morgan reviewed its specialty pharma coverage and upgraded the Israel-based generic drugmaker, citing a favorable catalyst set up in the months ahead.

Analyst Chris Schott highlighted Phase 3 data expected for the company’s once-monthly atypical antipsychotic, olanzapine LAI, and Phase 2 data expected from a TL1A asset in H2 2024.

“While we have been concerned that the investments required to develop these assets would preserve margins, the company has done an effective job of partnering these programs to address this dynamic,” Schott wrote as he upgraded Teva to Neutral from Underweight with its price target raised to $14 from $11.

In October, the company joined hands with Sanofi (SNY) to co-develop and co-commercialize its anti-TL1A asset TEV’574 for inflammatory bowel disease.

A month later, Royalty Pharma (RPRX) agreed to provide up to $125M in funding to support its olanzapine LAI program.

Elsewhere in its specialty pharma coverage, J.P. Morgan remained Neutral-rated on Teva’s rivals, Viatris (VTRS) and Organon (OGN), with price targets of $14 and $18 per share also unchanged.

While VTRS’ 2024 guidance is achievable, the analyst is concerned about the company’s business development strategy. As for Organon (OGN), Schott continues to see a limited catalyst path in 2024, even though the stock has recovered its value from 2023 lows.

J.P. Morgan also retained Overweight ratings on Perrigo Company (PRGO), Amphastar Pharmaceuticals (AMPH), and Pacira BioSciences (PCRX), with their price targets set to $41, $60, and $45, respectively.