As one would expect, it’s a good period for generic drug companies, who make their profit from manufacturing generic versions of mainstream pills. Despite a reduction in spending, the demand for medicine remains. What better way to meet the medicinal demand than with lower costing products?
Therefore, the generic drug industry is worth looking into. CNN Money covered one of the leading generic drug companies, Teva , an Israeli-based company. The company is the leading manufacturer in the market. The company is on track to earn $14 billion in revenue this year. Recently, CEO Shlomo Yanai has made a ballsy announcement to grow the company’s revenue share to $20 billion by 2012. So, the company is making noise and turning heads.
If Yanai anticipates great potential and growth within this market, then it stands to reason that there’s potential for investors as well. However, Smart Money advises that we must keep a few things in mind when looking at generic drug companies to invest.
1. Look into companies that are undervalued. Companies with potential will be those with a strong presence in the industry but with strong innovative practices. This way you will benefit from their growth period.
2. Stay away from companies with only one or two pills under their belt. The big companies in the industry have a diverse range of medications under their belt.
3. Make sure that their operations are strong. Their FDA relationship should have promising results. They should have or have the potential for a strong market share.
Move over Yanai, we want some of those billions too!
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