Cephalon, Inc. (CEPH) recently received a Paragraph IV Certification Notice Letter regarding an Abbreviated New Drug Application (ANDA), which has been filed by Teva Pharmaceuticals (TEVA) with the U.S. Food and Drug Administration (FDA). Generic player, Teva, is looking to market and sell its generic version of Cephalon’s Nuvigil (50 mg, 100 mg, 150 mg, 200 mg and 250 mg strengths).   Nuvigil (armodafinil) is a follow-on version of Provigil (modafinil), which contributed about 50% to revenues in 2008. With Provigil slated to face generics from 2012, Cephalon is looking to protect its sleep franchise sales by switching patients to Nuvigil.   Cephalon is aggressively promoting Nuvigil which was launched in June 2009. The company has taken several initiatives to ensure the smooth transition of users to Nuvigil, which has been priced at a significant discount to Provigil. Besides this, Cephalon is working on gaining approval for ...

If you have not read part one of this three part article, please find the link here.

As I have already highlighted, the health care industry is subject to many swings that are caused by macroeconomic variables, regulation, trends, and beliefs.  These changes can be hard to pick up on, especially if you are new to the health care industry or if you are not as familiar with it as with more experienced investors.  In the first part of this article, I explained how the Obama Administration and the FDA are shaping the environment for health care companies.  It is very important to understand the relationship between companies and their stakeholders and the major forces in the industry in order to properly evaluate a health care company.

Major M&A Activity

Recently, there has been some major consolidation within the industry as companies

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TEVA, the “Generic Giant,” as I once referred to it back in November when I recapped its quarterly earnings, continues to outshine and outclass its peers on pretty much every level. Since I have followed healthcare equities for quite some time now and kept my focus solely on this sector, it is easy for me to say that Teva [TEVA: 43.96, 0.00 (0.00%)] is one of the best managed companies out there, and I think you would agree based on its recent performance and strategic moves. Earnings for the fourth quarter were highly scrutinized by all investors and Street analysts as our financial crisis continues onward, perhaps even getting worse. Many companies unloaded their books for fourth quarter earnings, marking down what is left. Others squeaked out positive gains but still were hesitant on guidance. Well, I obviously

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We have 2 late filers tonight in Brazilian homebuilder Gafisa (GFA) and American iron ore producer Cleveland Cliffs (CLF). It looks like they will be reporting later in the evening, but I expect positive things from both - but wish to hear something negative to lead to selloffs in both to build up positions. I really doubt anything of that nature could happen in CLF simply due to its long term iron ore contracts but maybe in GFA. Andarko Petroleum (APC) which is a natural gas/oil hybrid is out late this evening and continues the drumbeat for successful outcomes in that space. Frankly, the dichotomy in this market is very easy to spot. You can either buy (a) trash that has bad earnings, and unclear prospects on hopes you are catching the "bottom", the "strong dollar" will last more than a week and a half, "the 2nd half recovery" is imminent ...