Abbott Laboratories (ABT), Biogen Idec Inc. (BIIB): Will Teva Pharmaceutical Industries Ltd (ADR) (TEVA) Help You Retire Rich?

Teva has been in the sweet spot of the pharmaceutical industry for years. Its plentiful generic drugs provide low-cost alternatives to expensive branded drugs as soon as their patent protection ends, helping to keep health care costs down. Although Teva isn’t the only company in the generics space, it’s the major player and gains benefits from its size and geographical scope.

But on the proprietary drug front, Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) faces potential new competition for its blockbuster Copaxone drug to treat multiple sclerosis. The European Union’s drug regulatory agency recommended Biogen Idec Inc. (NASDAQ:BIIB)‘s Tecfidera drug last week for approval, and a final decision could come within the next couple of months. Meanwhile, in the U.S., Tecfidera is up for consideration before the FDA, and because it’s a pill rather than an injected drug, many analysts expect the drug to take over the market, posing a big threat to Teva’s position in treating MS.

Still, Teva has ramped up in both segments of its business. Teva’s Azilect treatment for Parkinson’s disease has seen sales rise strongly in recent quarters, albeit with a relatively small contribution to sales at present. Moreover, its acquisition of Cephalon back in late 2011 helped add to its pipeline of branded drugs.

The big question facing Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is whether other major pharma players will get more involved in generics. Pfizer Inc. (NYSE:PFE) has had a positive experience in managing its Lipitor sales after its patent expired, showing how fighting back even after patent protection ends can help make the best of a bad situation. Moreover, even though Abbott Laboratories (NYSE:ABT) has spun off its branded-drug division, it continues to run a generics business that it could decide to expand upon as part of the company’s new focus. For now, though, Teva still has the leadership role in the generics space.

For retirees and conservative investors, Teva’s 3% yield and growing dividend payments have brought the pharmaceutical company closer to what most of its peers pay to shareholders. With the potential for far more growth as health-care payers seek to cut their expenses, Teva deserves strong consideration for retirement portfolios.

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The article Will Teva Pharmaceutical Help You Retire Rich? originally appeared on and is written by Dan Caplinger.

Fool contributor Dan Caplinger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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