Teva Pharmaceutical Industries Ltd.’s (NYSE: TEVA) U.S. affiliate and MedinCell disclosed that the U.S. Food and Drug Administration (FDA) has rejected their injection for treating schizophrenia. Shares of TEVA tanked 4.5% in Wednesday’s early trading session.
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The company has not disclosed the contents of the complete response letter it received from the regulator. Teva seeks to solve the matter with the FDA and provide risperidone to U.S. patients soon.
Teva had filed the New Drug Application based on Phase 3 data from two pivotal studies. These studies evaluated how effective and safe risperidone is for patients with schizophrenia.
Analyst’s Take
Earlier this month, Barclays analyst Balaji Prasad upgraded Teva’s rating to Buy from Hold and raised the price target to $13 from $11. The new price target implies 27.7% upside potential from current levels.
Based on two Buys and four Holds, the stock has a Moderate Buy consensus rating. TEVA’s average price target of $11.33 implies 11.3% upside potential from current levels. Shares of the company have grown 22.2% so far this year.
Retail Investors
TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Teva, as 5.5% of investors on TipRanks increased their exposure to TEVA stock over the past 30 days.
Takeaway
The company benefits from its strong hold in the world’s largest generic market. Also, its efforts to move ahead of past legal issues look impressive. However, the recent setback may keep investors cautious for some time.
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