Boston, MA 05/22/2014 (wallstreetpr) – Drug companies are in high-activity mode around the world. While some like Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) are working hard to block generic competitors, others like Pfizer Inc (NYSE:PFE) are seeking deals to join forces with promising peers. It is all about actions and counter actions in the global pharmaceutical space, and these are happening because competition has grown so intense in the market that revenue and profits are at stake.
For Teva, there is an uphill task ahead. However, the company is not entirely soaked in trouble. While stopping generic competition seems to be falling apart if recent developments are anything to go by, the company is making deals to ensure that shareholders keep getting value for their investment in the company.
The boldness in Teva
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) recently announced an agreement with an Israeli energy company that would see about four of its factories in Israel run on natural gas which were earlier being operated from oil and LPG that are considered expensive and polluting.
The drug company signed a deal with Delek Israel Fuel Corp to convert four of Teva facilities to use natural gas energy instead of oil and liquefied petroleum gas (LPG). Teva uses more than 15 million cubic meters of gas every year on the four facilities and the conversion to natural gas will lead to significant cost saving for the company. In addition, conversion to the environmentally friendly natural gas will help the company to lower its carbon emissions.
According to Teva officials the four facilities may start running on natural gas as early as 3Q2014. Cost-saving through energy will enable the drug company to improve its free cash flow and make more investments or acquisitions and return a bigger value to the shareholders.
The beauty is at stake
The beauty of Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is that it generated more than 50 percent of its earnings from the sale of Copaxone, its bestselling drug currently. However, the drug faces potential market competition as its patent is set to expire soon, yet Teva cannot seem to get the ears and attention of the U.S. Food and Drug Administration to its problem. The company recently lost a case to block generic makers of the drug, a development that could hurt the sale of Copaxone.