Teva Stock Prediction

On July 26^th, 2015, The I Know First algorithm gave a bullish signal of 2.66 for the ticker TEVA (Teva Pharmaceuticals), which had a strong predictability indicator of .44. In accordance with the algorithm’s prediction, TEVA pharmaceuticals spiked 16.40% on trading day July 27^th.

Teva Pharmaceutical Industries in an Israeli Biotech giant, enjoying over 20 Billion dollars of revenue for the last 3 years with tens of thousands of employees all across the globe. Founded in 1901, Teva has been pumping out patent after patent for over 100 years, and currently offers products ranging from Adderall to Zolpidem, antibiotics to cancer treatments, general to specific. Although the company constantly has a haze over its name due to legal controversies, it is still very much a company in growth and an enviable international presence.

Since the 1980’s when Teva took over Plantex, Teva has adopted an aggressive acquisition strategy, taking over companies with beneficial product lines or intellectual property. For months, Teva has been raising its stake in fellow multi-national biopharmaceutical company Mylan Inc, in an open bid to take over the company. Mylan, a well-established company in its own right, had an overwhelming amount of shareholders who refused to relinquish control. Although this story dominated news surrounding Teva for some time, Teva was simultaneously mounting an effort to buy the generic medicine arm of Allegran. Apparently, Teva has been looking to bolster its position as the largest manufacturer of generic brand drugs in the world; Allegran is a natural acquisition target.

Teva pharmaceuticals stock enjoyed a 16.4% gain on July 27^th as news broke out that the company has struck a deal with Allegran to acquire its generic medicine business operations for nearly 41 billion dollars. Mergers and acquisitions are two of the largest and fastest-acting stock movers in today’s market, so a movement of this size is not surprising. Surprising is the spillover effect the story is having on Mylan Inc (MYN), down 14.5% on trading day July 27^th, as Teva officially renounced its offers and intentions to take over Mylan. Even though Teva’s take over bid was overtly hostile and cause great strain on Mylan shareholders and executives, the allure of an acquisition had the stock price inflated for months.

With the integration of Allegran into its business, Teva is poised to remain the number 1 manufacturer of generics for at least the near future. Mylan is a distant third, and Novartis a distant second.