Druckenmiller is scooping up shares of Teva Pharmaceutical

 While Stanley Druckenmiller was busy overseeing the sale of high-profile AI stocks in Duquesne's investment portfolio, he was piling into one of Wall Street's top-performing pharmaceutical stocks of 2024: Teva Pharmaceutical Industries (NYSE: TEVA). Shares of Teva are higher by 112% for the year, with Druckenmiller's fund adding 1,427,950 shares during the September-ended quarter.

The previous eight years for Teva weren't the easiest, to say the least. It racked up a lot of debt by overpaying for generic drugmaker Actavis in 2016, and faced litigation from pretty much every U.S. state regarding its role in the opioid crisis. The potential for an unknown/large legal settlement, coupled with the subpar pricing power and sales performance of generic drugs in recent years, heavily weighed on Teva's share price.

The good news is that a number of strategic changes and legal resolutions have made Teva one of Wall Street's most sought-after drug stocks to own ahead of 2025.

Arguably the most important upside catalyst has been putting its opioid litigation in the rearview mirror. Last year, the company entered into a $4.25 billion settlement with 48 states, which'll be spread over 13 years. Some of this settlement value includes supplying up to $1.2 billion of generic overdose reversal drug Narcan to states.

One of the key strategic moves made by Teva's management team has been to shift its focus to brand-name therapies. Even though novel drugs have a finite period of sales exclusivity, they possess better margins and juicier growth potential than generic drugs. Two of the company's top-selling brand-name drugs, Austedo for tardive dyskinesia and Ajovy for migraine prevention, grew sales by more than 20% in the September-ended quarter (on a constant-currency basis) from the prior-year period.

Teva's novel-drug pipeline is showing plenty of promise, as well. The reason shares are on fire in December has to do with the reporting of positive phase 2b data for experimental drug duvakitug as a treatment for patients with moderate-to-severe inflammatory bowel disease. The drug, which was developed in collaboration with Sanofi, met its primary endpoints and achieved clinical remission in more patients with ulcerative colitis and Crohn's disease than the placebo. If approved, duvakitug could blow past $1 billion in peak annual sales.

Furthermore, Teva's leadership has done a standup job of selling noncore assets, lowering operating expenses, and steadily improving the company's financial flexibility. Whereas Teva Pharmaceutical had north of $35 billion in net debt following its acquisition of Actavis in 2016, it now has less than $15.7 billion in net debt on its balance sheet.

With Teva's long-awaited turnaround finally here, shares remain inexpensive at less than 8 times forecast earnings per share (EPS) for 2025.

https://finance.yahoo.com/news/billionaire-stanley-druckenmiller-selling-nvidia-095100223.html