Friday's news that the Israeli generic drug maker Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA), has received tentative approval from U.S. health regulators to market its generic version of GlaxoSmithKline Plc's (NYSE: GSK) Requip (Ropinirole HCl) tablets is just more proof that for investors, generics are the way to go. The tablets treat idiopathic Parkinson's disease and primary restless leg syndrome. The brand product had annual sales of approximately $455 million in the United States.

The bigger fundamental question has to do with the future of "big pharma"? Certainly companies like Merck and Co. (NYSE: MRK) and GlaxoSmithKline aren't going away anytime soon. The question is over the long run, with drug's continuously coming off patent, where is the growth going to come from? Generic makers like Teva (the world's largest generic firm) keep waiting for drugs to come off-patent, get approval to market a generic version, and immediately take significant market share away from the big pharma company. (Check out Zack Miller's analysis of this and other generic trends.) According to a report published by PriceWaterhouseCooper, by 2020 the pharmaceutical market is anticipated to more than double to US$1.3 trillion, but with weak pipelines, and soaring R&D costs, as well as higher legal costs, the big-pharma industry is at a crossroads.

Until we hear of a real long-term growth plan for big pharma, it seems like the best way to play the surging growth in he pharmaceutical market is to buy the generics.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. Disclosure: Writer owns stock and is long TEVA. He has no position in any other stock mentioned as of 12/2/07.

MOST NOTEWORTHY: Countrywide Financial (CFC), Hoku Scientific (HOKU), Lam Research (LRCX), Weight Watchers (WTW) and NutriSystem (NTRI) were today's more noteworthy downgrades:

• Friedman Billings downgraded Countrywide Financial (NYSE: CFC) to Underperform from Market Perform until credit stabilizes.

• Piper Jaffray downgraded Hoku Scientific (NASDAQ: HOKU) to Underperform from Outperform and sees several near-term risks, including competitive threats from larger and well-financed polysilicon start ups as well as financing risk.

• ThinkEquity downgraded Lam Research (NASDAQ: LRCX) to Source of Funds from Accumulate, expecting a recovery in the foundry segment but at 90nm, the nodes where Lam's market share is not high.

• Lehman downgraded Weight Watchers (NYSE: WTW) to Underweight from Equal Weight and NutriSystem (NASDAQ: NTRI) to Equal Weight from Overweight...

OTHER DOWNGRADES:

• First Albany downgraded Sketchers USA (NYSE: SKX) to Neutral from Buy.

• UBS downgraded Georgia Gulf (NYSE: GGC) to Reduce from Neutral.

• Bear Stearns cut GlaxoSmithKline (NYSE: GSK) to Underperform from Peer Perform.

• AG Edwards cut Peabody Energy (NYSE: BTU) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Motorola (MOT), SanDisk (SNDK), Time Warner (TWX), Schering-Plough (SGP), GlaxoSmithKline (GSK) and Openwave Systems (OPWV) were some of today's noteworthy upgrades:

• Deutsche Bank believes the worst is over for Motorola (NYSE: MOT) and expects an improvement in growth over the next several quarters, upgrading shares to Buy from Hold.

• CIBC upgraded shares of SanDisk (NASDAQ: SNDK) to Sector Outperformer from Sector Performer following checks that indicate NAND supply is being allocated, visibility is improving, and SanDisk positioning is strengthening.

• Pali Capital raised Time Warner (NYSE: TWX) shares to Buy from Neutral as they believe the "valuation has become too attractive to ignore."

• JP Morgan upgraded Schering-Plough (NYSE: SGP) and GlaxoSmithKline (NYSE: GSK) to Neutral from Underweight based on valuation.

• CIBC upgraded Openwave Systems (NASDAQ: OPWV) to Sector Performer from Sector Underperformer believing the Street's expectations are now in line with expectations, limiting downside potential at these levels...

OTHER UPGRADES:

• Merrill upgraded BT Group (NYSE: BT) to Buy from Sell.

• JP Morgan assumed coverage of Arkansas Best (NASDAQ: ABFS) with a Neutral rating, up from an Underweight rating.

• AG Edwards upgraded UnitedHealth (NYSE: UNH) to Buy from Hold.

• Merrill upgraded Dean Foods (NYSE: DF) to Neutral from Sell.

• UBS upgraded Marvell Technology (NASDAQ: MRVL) to Buy from Neutral.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: GlaxoSmithKline plc (GSK), RF Micro Devices, Inc (RFMD), BMC Software, Inc (BMC) and Tween Brands Inc (TWB) were today's noteworthy upgrades:

• GlaxoSmithKline (NYSE: GSK) was upgraded to Hold from Sell at Societe General on valuation.

• Jefferies upgraded shares of RF Micro Devices (NASDAQ: RFMD) to Buy from Hold and raised the target to $9.00 from $7.00 after their channel checks indicated RFMD's business has improved since its last earnings call.

• Cowen raised BMC Software (NYSE: BMC) to Neutral from Underperform citing valuation and improvements in the cash flow for their upgrade.

• Susquehanna upgraded Tween Brands (NYSE: TWB) to Positive from Neutral based on Justice's performance and recent buyback activity...

OTHER UPGRADES:

• Lenovo Group Ltd (OTC: LNVGY) was upgraded at Credit Suisse to Neutral from Underperform; JP Morgan upgraded Lenovo to Overweight from Neutral.

• Morgan Keegan upgraded Symmetricom, Inc (NASDAQ: SYMM) to Outperform from Market Perform.

• Goldman upgraded CDI Corp (NYSE: CDI) to Buy from Neutral.

• Stifel raised MedCath Corp (NASDAQ: MDTH) to Buy from Hold.

• Soleil upgraded VA Software Corp (NASDAQ: LNUX) to Hold from Sell.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: GlaxoSmithKline plc (GSK), SanDisk Corp (SNDK), Lockheed Martin Corp (LMT) and aQuantive, Inc (AQNT) were today's noteworthy downgrades:

• Deutsche Bank and ABN Amro cut GlaxoSmithKline (NYSE: GSK) to Hold from Buy following the New England Journal of Medicine warnings from Avandia.

• Merrill Lynch cut SanDisk (NASDAQ: SNDK) to Neutral from Buy due to concerns that oversupply in the industry will extend through next quarter.

• Cowen downgraded shares of Lockheed Martin (NYSE: LMT) to Neutral from Outperform based on slower 2007-2008 EPS growth and less cash redeployment upside than General Dynamics Corp (GD) and Raytheon Co (RTN).

• UBS downgraded aQuantive (NASDAQ: AQNT) to Neutral from Buy and RBC Capital cut shares to Sector Perform from Outperform after the Microsoft (MSFT) acquisition...

OTHER DOWNGRADES:

• Piper Jaffray downgraded Cytyc Corp (NASDAQ: CYTC) To Market Perform from Outperform.

• NetBank, Inc (NASDAQ: NTBK) was downgraded to Underperform from Market Perform at Friedman Billings.

• Merrill Lynch downgraded shares of Aeropostale, Inc (NYSE: ARO) to Neutral from Buy.

• AG Edwards downgraded BHP Billiton Ltd (NYSE: BHP) to Hold from Buy.

• Gabelli downgraded shares of Alltel Corp (NYSE: AT) to Hold from Buy.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Some of the more notable downgrades today include Alcatel-Lucent (ALU), AstraZeneca plc (AZN), GlaxoSmithKline plc (GSK) and Motorola, Inc (MOT):

• Goldman Sachs downgraded shares of Alcatel-Lucent (NYSE: ALU) to Neutral from Buy on integration issues, as the firm does not expect a sales recovery before Q3.

• JP Morgan cut both AstraZeneca plc (NYSE: AZN) and GlaxoSmithKline plc (NYSE: GSK) to Underweight from Neutral on valuation.

• RBC downgraded Motorola Inc (NYSE: MOT) to Sector Perform from Outperform; following Motorola's pre-announcement, the firm expects shares to trade sideways for the balance of the year.

OTHER DOWNGRADES:

• Bank Of America downgraded Aeropostale, Inc (NYSE: ARO) to Neutral from Buy with a $42 target based on valuation.

• RF Micro Devices, Inc (NASDAQ: RFMD) was cut to Sector Perform from Outperform at CIBC citing the risk from Motorola; the firm believes RFMD's story outside of Motorola remains strong and consistent but sees downside to FY08 targets given MOT's contribution to RFMD's top line.

• Raymond James downgraded Yamana Gold Inc (NYSE: AUY) to Outperform from Strong Buy. UBS also downgraded Yamana to Reduce from Neutral.

• Citigroup cut Allegheny Energy, Inc (NYSE: AYE) to Hold from Buy with a $53 target.

• Lehman downgraded International Rectifier Corp (NYSE: IRF) to Equal Weight from Overweight and a $40 target.

• Raytheon Co (NYSE: RTN) was downgraded to Sell from Neutral at Goldman based on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: United Parcel Service Inc (UPS), Ford Motors (F), General Motors Corp (GM) and The Walt Disney Co (DIS) were today's notable upgrades:

• Baird upgraded United Parcel Service Inc (NYSE: UPS) to Outperform from Neutral with an $86 target following the increased dividend and buyback to reflect valuation.

• Deutsche Bank upgraded both Ford Motor Co (NYSE: F) and General Motors Corp (NYSE: GM) to Buy from Hold based on optimism the Big Three will seek an agreement with the United Auto Workers on health care. The firm believes such an agreement would improve the companies' flexibility in restructuring as well as profitability.

• The Walt Disney Co (NYSE: DIS) was upgraded to Buy from Hold on positive fundamental trends at Matrix USA.

OTHER UPGRADES:

• Quest Communications Int'l Inc (NYSE: Q) was upgraded to Hold from Sell at Stifel, as they believe the company's better-than-expected 2007 guidance and share buyback will create a near-term floor on the stock.

• Citigroup upgraded DaimlerChrysler AG (NYSE: DCX) to Buy from Hold as they believe the company's optimization plan will prove successful.

• UAL Corp (NASDAQ: UAUA) was added to Goldman Sachs America's Conviction Buy List with a $55 target.

• JP Morgan upgraded the Semiconductor Sector to Bullish from Cautious as they believe utilization rates will bottom in the first quarter. Deutsche Bank also upgraded the Semiconductors to Overweight from Neutral as they believe fundamentals will bottom in the second-quarter and that valuations are attractive.

• Bear Stearns upgraded GlaxoSmithKline plc ADR (NYSE: GSK) to Peer Perform from Underperform to reflect the better-than-expected 2007 outlook.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).