Here's Why I Won't Touch Teva Pharmaceutical With a 10‑Foot Pole

By Reuben Gregg Brewer – Feb 27, 2026 at 6:22PM ESTKey PointsTeva Pharmaceutical Industries is a large manufacturer of generic drugs.The company is working to expand into more complex generics and to develop its own drugs.Teva Pharmaceutical Industries (TEVA +0.24%) is an interesting investment story. For the right investor, it could be an attractive buy. For me, however, it isn't. Here's the opportunity that Teva has ahead of it, and why that opportunity just doesn't interest me. What does Teva Pharmaceutical do? Historically, Teva produced generic drugs, which can be a lucrative business model. Essentially, some other pharmaceutical company puts in the time, effort, and expense of developing a medication. That company is granted a limited period during which it can sell the new drug exclusively; during the period of patent protection, it can produce massive revenue and profits. However, when that patent protection ends, companies like Teva can step in and make the drug themselves. Image source: Getty Images. The generic drugs that Teva makes normally sell for materially less than the name-brand versions. While that leads to a steep decline in revenue for each company that originally created a now-generic compound, Teva Pharmaceutical gets a new revenue stream. And Teva is very good at what it does. The generics business is getting harder The problem is that other companies have caught on to the generics opportunity. So competition in the space has increased over the years, leading to fewer profits for companies that make generics. Teva has responded by focusing on more complex-to-make generic drugs, where it has an edge over less experienced companies. That's reasonable, but it requires more investment and involves more risk. Sometimes, generic drugs don't actually work as hoped, especially when you're dealing with hard-to-make drugs. ExpandNYSE: TEVATeva Pharmaceutical IndustriesToday's Change(0.24%) $0.08Current Price$33.85Key Data PointsMarket Cap$39BDay's Range$33.05 - $33.8552wk Range$12.46 - $37.34Volume189KAvg Vol9.5MGross Margin51.82% So, Teva's business model is riskier than it used to be. That's a modest problem for me. Tipping me over the edge is the fact that Teva isn't just focusing on hard-to-make generic drugs -- it's also developing its own, original drugs. To be fair, there's an opportunity for success, and Teva is well-versed in drug development. However, there's also massive competition from companies with much more experience. Even some of the most successful drugmakers have products that don't work out. Pfizer, for example, had to abandon its internally generated GLP-1 weight loss drug not too long ago. Following that setback, Pfizer quickly acquired a company with a promising GLP-1 drug and inked a distribution agreement with yet another company. I'm not convinced that Teva has the wherewithal to pivot like that if its internal drug pipeline is weaker than expected. I'm a fairly conservative investor at this point in my life. I see why some investors would like Teva's current business approach. For me, however, the model change brings with it more risk than I'd like to shoulder in a very competitive sector. Maybe, after there's a longer track record for the new approach, I'd be willing to revisit the stock.Read NextDec 24, 2025 •By Sean WilliamsBillionaire Stanley Druckenmiller Sold Nvidia and Palantir and Piled Into One of Wall Street's Hottest Drug Stocks Ahead of 2026Dec 17, 2025 •By Reuben Gregg Brewer3 Things You Need to Know if You Buy Teva Pharmaceutical Stock TodayDec 14, 2025 •By Reuben Gregg BrewerShould You Forget Teva Pharmaceutical and Buy These Unstoppable Stocks Instead?Nov 30, 2025 •By Bram Berkowitz30% of Billionaire Stanley Druckenmiller's Portfolio Is Invested in These 3 Biotech StocksNov 5, 2025 •By Eric VolkmanWhy Teva Pharmaceutical Stock Rocked the Market TodayOct 13, 2025 •By Bram BerkowitzBillionaire Stanley Druckenmiller Is Selling Nvidia and Palantir and Piling Into One of Wall Street's Hottest Drug Stocks Ahead of 2026About the AuthorReuben Gregg Brewer is a contributing Motley Fool stock market analyst covering energy, utilities, REITs, and consumer staples. He is the former director of research at Value Line Publishing, where he rose from mutual fund analyst to equity analyst before leading all research operations. Reuben holds a bachelor’s degree in psychology from SUNY Purchase, a master’s in social work from Columbia University, and an MBA from Regis University. He has been featured as a financial expert on CNBC and in the Financial Times, Barron’s, and InvestmentNews.TMFReubenGBrewerStocks MentionedTeva Pharmaceutical IndustriesNYSE: TEVA$33.85(+0.24%)+$0.08*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.