Teva Has a Targeted Strategy to Expand in Major Growth Markets

Based on the dynamics in various growth markets, Teva Pharmaceutical (TEVA) has developed a strategy suited to the needs and quality requirements of each of these markets. With a targeted portfolio and an increased focus on integration efforts after the inorganic moves in Mexico, Japan, and the Allergan (AGN) Generics markets, the company expects to continue its trend of double-digit growth in these markets. The acquisition of Allergan’s generics business expanded Teva Pharmaceutical’s geographical presence by adding nine new markets.

If these projections prove to be correct, they may boost Teva’s share prices as well as those of the SPDR S&P World ex-US ETF (GWL). Teva Pharmaceutical makes up about 0.31% of GWL’s total portfolio holdings.

In Russia, Teva Pharmaceutical has created a strong portfolio of about 300 products and has been extensively developing its research pipeline. The company maintains a sales force of about 1,000 representatives and strives to expand its commercial presence across all provinces in the country. Currently, it’s the third-ranking generic player in Russia.

Teva plans to strengthen its position further in the branded generics segment through consumer advertising. These marketing efforts have also boosted the demand for Teva Pharmaceutical’s OTC (over-the-counter) and prescription drugs in Russia.

Teva Pharmaceutical is the third-ranking generic player in the Japanese market. The company has a broad product portfolio of approximately 750 products and a large sales team of about 350 representatives in Japan.

Teva Pharmaceutical entered into a partnership with Takeda Pharmaceutical (TKPYY) to form a joint venture called Teva Takeda Yakuhin on April 1, 2016. This venture, which combined Takeda’s solid brand equity with Teva’s rich generics portfolio, is targeted at increasing the generic drug penetration in Japan up to 80% by 2020. That’s in line with the objectives of the Japanese government.

On October 1, 2016, Teva Pharmaceutical is also entering into collaborations with two major distributors in Japan. These efforts are expected to make Teva a leading generic player in Japan, ahead of other players such as Mylan (MYL) and Perrigo.

Teva Pharmaceutical is the top-ranking generic company in Chile, the third-ranking generic company in Peru, and the ninth-ranking generic player in Argentina. The acquisition of Representaciones e Investigaciones Médicas (or Rimsa) has strengthened Teva’s position in the private healthcare market in Mexico. While the company lacks scale in Brazil, it’s actively seeking acquisition opportunities to expand in this market.

In the next part of the series, we’ll look at Teva Pharmaceutical’s research pipeline in more detail.