US Pharmaceuticals: Generics tariff headlines: Our thoughts on exposure and takeaways from company discussions

研报英文原文证据摘录

US Pharmaceuticals: Generics tariff headlines: Our thoughts on exposure and takeaways from company discussions

Valuation Method and Risk Statement

Industry specific risks include, 1) Underwhelming drug product launches, 2) clinical trial failure

or discontinuation, 3) potential regulatory setback.

TEVA:

Our $42 price target is based on the Sum-of-the-Parts (SOTP) of TEVA business including

branded and matured products. We use a 7.5x P/'30Sales multiple for Teva's branded

products and a 6.5x EV/'27EBITDA multiple for mature products. We roll forward our PT one

year by CoE. Our Enterprise Value for TEVA factors in a $1.8bn negative impact of potential

litigation settlement.

Downside risks: 1) failure of TL1a to demonstrate positive clinical results, 2) failed to receive

FDA approval for Olanzapine LAI, 3) Slowdown in Uzedy adoption, 4) Austedo sales growth

below our expectations.

VTRS:

Our price target is based on 8.0x P/EPS multiple on our 2027 EPS estimate.

Downside risks include:

1) Pipeline failure for internal and/or recently acquired assets

2) Inability to achieve cost savings in the long-run

3) Identified spin-off transactions are not consummated or proceeds significantly below

expectations.

AMRX:

Our price target is based on a 18× P/E multiple applied to our 2027E EPS, underpinned by a

conservative PEG of 1.0× and our 5-yr forward EPS CAGR of 18%.

1. Slower than expected adoption of Crexont and Brekiya, which are the primary growth

drivers of the Specialty franchise.

2. Failure to secure, or delays in securing, approvals for new generics and biosimilars, which

could limit meaningful expansion of the Affordable Medicines portfolio.

3. Further deterioration in generic pricing dynamics.

Industry specific risks include:

1) Underwhelming drug product launches,