Berkshire's Big Bet on Teva May Be Just What Shareholders Need

(Bloomberg) -- Teva Pharmaceutical Industries Ltd. is getting some much-needed support.

Warren Buffett’s Berkshire Hathaway Inc. disclosed a position in the world’s largest generic drugmaker on Wednesday afternoon, becoming the tenth largest shareholder. The disclosure sent Teva’s American depositary receipts up 8 percent in after-hours trading, and comes weeks after Jana Partners LLC built a long position in the stock.

The Israel-based company is working on a turnaround, with new Chief Executive Officer Kare Schultz tightening belts aggressively as competition to Teva’s top medicine is intensifying. The drugmaker is also struggling with an approximately $33 billion debt burden while expecting sales to slump further this year amid escalating pressure on generic prices in the U.S.

--With assistance from Brad Olesen

To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net.

To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, Morwenna Coniam

©2018 Bloomberg L.P.