Amgen, Inc. (NASDAQ:AMGN) is paying around 13 times the amount Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) will generate in sales over the next year or so, according to most analysts. In the biopharmaceutical industry, this multiple is one of the highest.
Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is an Israel-based biotech company, and in June, it acquired MicroDose Therapeutx, a drug delivery specialist. Teva paid $40 million in cash up front to purchase all shares and $125 million in possible payments contingent on the achievement of development, regulatory, and sales-based milestones.
Earlier this month, Teva launched Temozolomide, a generic version of Temodar. According to IMS data in 2012, Temodar generated $423 million in annual sales in the United States. Teva’s launch of its generic version renders a quality substitute, thus reducing costs for patients who undergo cancer therapy.
Teva has many generic versions that will hit the United states markets in the near future. Teva has a generic version of Shire’s Adderall XR capsules for the treatment of attention deficit hyperactivity disorder. According to IMS data in 2012, Adderall XR generated $2 billion in annual sales of both generic and brand sales in the United States. Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA)’s Sildenafil is a generic version of erectile dysfunction drug Viagra and is available in Europe and other countries as of now, but will most likely end up in the United States soon.
Almost every biotech company is searching for a treatment to cure cancer, and Amgen, Inc. (NASDAQ:AMGN) is trying to take the lead by acquiring Onyx, which has already made strides in this direction. Amgen could be the one to change the world and discover a cure, which would result in major profits for the shareholders of such a company. Onyx Pharmaceuticals, Inc. (NASDAQ:ONXX) seems like a buy if you jump in now.
Although going through a transition phase given fewer large generic opportunities, Teva is still a good play. Investors should look at Teva, but beware that Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is in the game of producing generic versions, drawing attention to patent infringements that result in litigations, which could send the stock in a downward spiral.
The article Onyx Is Black, but This Biotech Envisions Green originally appeared on Fool.com.
Gayron Wainwright has no position in any stocks mentioned.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.