The credit facility is being offered to Teva by a number of banks headed by Bank of America Merrill Lynch and HSBC, and by them Barclays, BNP Paribas, Citibank, Credit Suisse, Goldman Sachs, JP Morgan, Mizuho, Morgan Stanley, MUFG, Sumitomo Mitsui , PNC and Banca IMI.
Optimism is expected from revenues from new products
At the end of 2018, Teva’s debt was $ 28.9 billion ($ 27.1 billion net), compared with more than $ 35 billion at the end of 2017. Most of Teva’s debt was taken in 2016 to finance the acquisition of Actis. In 2017, Teva introduced a massive efficiency plan aimed at cutting $ 3 billion in annual costs to serve the debt. Teva is traded in New York and Tel Aviv at $ 15.9 billion.
At the same time, Citigroup analysts published a buy recommendation for Teva, but lowered its knowledge price from $ 27 per share to $ 23, still 64% higher than today’s share price. Citi analysts write that the change is due to a sharper-than-expected decline in Copaxone’s market share for the Milan generic competitor. “If we had previously seen the company’s predictions as conservative, we are now more cautious,” they wrote.
Analysts estimate that Teva will be able to get rid of the debt it is burdening, but given the EBITDA currently expected for 2019, which is lower than analysts initially expected, it is likely that the debt will also take longer than expected. Generic sales are expected to be stable throughout the year, and the good news is continued optimism about the expected revenues from new products, treatment of movement disorders and treatment of chronic migraine.