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.

Big pharma? Generics are the way to go originally appeared on BloggingStocks on Sun, 02 Dec 2007 13:10:00 EST. Please see our terms for use of feeds.

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Analyst downgrades 7-25-07: CFC, GSK, NTRI and WTW originally appeared on BloggingStocks on Wed, 25 Jul 2007 11:57:00 EST. Please see our terms for use of feeds.

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Analyst upgrades 5-25-07: GSK, LNVGY, RFMD and TWB originally appeared on BloggingStocks on Fri, 25 May 2007 11:01:00 EST. Please see our terms for use of feeds.

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Analyst downgrades 5-22-07: AQNT, GSK, LMT, MSFT and SNDK originally appeared on BloggingStocks on Tue, 22 May 2007 10:51:00 EST. Please see our terms for use of feeds.

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Analyst downgrades 3-22-07: Aeropostale, Motorola & Alcatel-Lucent downgraded today originally appeared on BloggingStocks on Thu, 22 Mar 2007 11:08:00 EST. Please see our terms for use of feeds.

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Analyst upgrades 2-09-07: UPS delivers, Ford & GM revs their engines originally appeared on BloggingStocks on Fri, 09 Feb 2007 11:07:00 EST. Please see our terms for use of feeds.