Kg $$$20

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مستثمر
التسجيل
6 فبراير 2002
المشاركات
210
الإقامة
jeddah
King Pharmaceuticals, Inc. shares fell as Dow Jones reported that JP Morgan issued a note before the open saying that the firm is now concerned that generic Levoxyl is more of a threat than previously anticipated
 

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مستثمر
التسجيل
6 فبراير 2002
المشاركات
210
الإقامة
jeddah
In addition to market and sector-wide factors
that have been weighing on King shares, investors
have become increasingly concerned about the
potential for generic competition to Levoxyl
(levothyroxine sodium for the treatment of
hypothyroidism), King’s second most important
product (14% of 2002 estimated revenue).
Last week, Mylan received approval for its
generic version of Watson’s Unithroid, a branded
version of levothyroxine sodium that competes
with Levoxyl. Unithroid was the first
levothyroxine product for which an NDA was
approved, so it is logical that Unithroid would be
the first product in the segment to be genericized.
Unithroid has only a 2% share of new
prescriptions in the segment. We expect
Mylan’s generic to make significant inroads into
Mylan’s share, but not into the shares of other
levothyroxine products. The more significant
risk for the other products, such as King’s
Levoxyl, is the approval of specific generic
versions of those products. While the current
FDA Draft Guidance lists Unithroid as the only
reference product for ANDAs, we believe that,
in practice, the FDA will accept ANDAs
referencing Levoxyl. Recall that Unithroid was
the only product with an approved NDA at the
time the Guidance was posted








Despite the generic Levoxyl risk, we remain
bullish on the shares based on our expectation
for strong sales and EPS growth in the coming
quarters. In addition, the market is not
currently ascribing any value to King’s ability
to make acquisitions that would diversify the
revenue base and/or improve the company’s
long-term viability. Finally, the stock’s P/E of
19x our 2002 estimate is below the generic
group’s average of 20x..
 
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