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Teva Completes Sale of Women's Health Segment for $703M

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Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) announced that it has completed the divestment of its global women’s health business to privately-held private equity firm, CVC Capital Partners. The deal was closed for $703 million in cash.

The divested portfolio includes products across contraception, fertility, menopause and osteoporosis categories. The drugs in the portfolio include Ovaleap, Zoely, Seasonique, Colpotrophine and Actonel, which are sold outside the United States. These products will now be sold by Theramex, a women’s health unit previously held by Teva.

The sale is part of Teva’s planned divestment of specialty products in women’s health.

We remind investors that Teva had signed a definitive agreement for this sale with CVC Capital Partners in September 2017. Moreover, the company also signed another definitive agreement with Foundation Consumer Healthcare for the sale of its Plan B One-Step and brands of emergency contraception.

CVC Capital Partners has appointed Anish Mehta, former head of International Business Development at Allergan , as Theramex’s chief executive officer.

In a separate SEC filing, Teva reported that it has entered into a settlement agreement with Allergan, jointly dismissing the working capital dispute arbitration. Allergan will pay Teva $700 million as part of the settlement.

Teva’s shares rose 3.8% on Feb 1, following the news. However, shares of the company have declined 38.5% in the past year, underperforming the industry’s decline of 24.9%. Teva’s decline can be attributed to industry pressure, generic competition for its blockbuster drug, Copaxone, and a massive debt load.

 

Teva also suffered a another setback in October 2017 as Mylan launched its generic version of the 40 mg formulation of Copaxone, much earlier than expected.

In order to combat these challenges, Teva has divested some non-core assets to cut its significant debt load and aims to cut its global workforce by more than 25% over the next two years.

Zacks Rank & Stocks to Consider

Teva carries a Zacks Rank #4 (Sell).

Zoetis Inc. (ZTS - Free Report) is a better-ranked health care stock, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Zoetis’ earnings per share estimates have increased from $2.72 to $2.94 for 2018 over the last 30 days. The company delivered a positive earnings surprise in the trailing four quarters with an average beat of 2.32%.

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