Alvotech vs. Teva Pharma: Which Generic Drugmaker is the Better Play?

Both Alvotech ALVO and Teva Pharmaceuticals TEVA operate in the biosimilar space, but their business models differ significantly.ALVO has built its revenue model around partnerships, relying on alliances with regional players to bring products to market while it focuses on development and manufacturing.In contrast, TEVA operates as a global pharmaceutical giant that develops, manufactures and markets both branded and generic/biosimilar drugs.Let's examine the fundamentals of the two stocks to make a prudent choice.The Case for ALVOAlvotech has set itself apart in the generic/biosimilar space through a collaboration-based business model that gives it access to global markets while reducing the risks and costs of commercialization. In this regard, the company has partnered with established generic players, including Teva Pharmaceuticals and Dr. Reddy’s Laboratories RDY, which has allowed it to expand its footprint quickly without building a large-scale distribution network of its own.This strategy appears to be working well for Alvotech. In the first half of 2025, product revenues rose more than 200% year over year to nearly $205 million, fueled by strong uptake of its immunology biosimilars Simlandi (a biosimilar to AbbVie’s Humira) and Selarsdi (a biosimilar to J&J’s Stelara). With Teva handling sales in the United States and Germany-based Stada doing the same in Europe, both products have scaled rapidly, enabling Alvotech to reaffirm its full-year revenue target of $600 million-$700 million.The company is also expanding beyond the immunology space. Last month, Alvotech secured approval in the EU for Mynzepli, its biosimilar to Regeneron’s Eylea, through a partnership with Advanz Pharma, thereby entering the ophthalmology segment. Earlier this week, the EMA’s Committee for Medicinal Products for Human Use recommended approving the company’s regulatory filings seeking approvals for biosimilar versions of Amgen’s Prolia/Xgeva and J&J’s Simponi.To build on this progress, Alvotech has expanded its partnerships with Dr. Reddy’s and Advanz Pharma, with plans to develop multiple biosimilar candidates across neurology and oncology. These include developing biosimilars of Novartis’ Kesimpta and Merck’s Keytruda, among others.However, Alvotech operates in a highly competitive market, where numerous players, including large pharma companies and specialized generic/biosimilar companies, are competing for market share across several therapeutic areas.The Case for TEVAThis Israel-based company is the world’s largest generic drug company in terms of both total and new prescriptions. Its scale and manufacturing footprint provide it with significant leverage, particularly in the United States, where it has managed to offset some of the impact from recent tariff concerns. Teva commands a share of around 7% in the U.S. generic market.The company has established a growing presence in biosimilars. In the past few quarters, Teva has launched several successful biosimilars and other high-value complex generics, including Truxima (biosimilar to Roche’s Rituxan), Herzuma (biosimilar to Roche’s Herceptin), Epysqli (biosimilar to AstraZeneca’s Soliris), Simlandi and Selarsdi.Teva has a decent pipeline of biosimilars, with some being developed in partnership with Alvotech, including high-value complex generics, like Simlandi and Selarsdi. Simlandi and Selarsdi are the first two biosimilars to be launched in the United States under the Teva and Alvotech strategic partnership, which includes five biosimilars.Looking ahead, TEVA expects to launch eight (including Simlandi, Selarsdi and Epysqli) biosimilars in the United States and four in Europe between 2025 and 2027. Biosimilar versions of Amgen’s Prolia, Regeneron’s Eylea and J&J’s Simponi are under review in the United States, while those of Xgeva, Simponi and Prolia are under review in the EU.The company aims to double its global biosimilars sales by 2027. Teva launched three biosimilars, Simlandi, Selarsdi and Epysqli in the United States in the first quarter and expects five additional launches from the second half of 2025 to 2027.Beyond generics and biosimilars, Teva maintains a diversified portfolio of branded products. These include Copaxone (multiple sclerosis), Austedo (chorea associated with Huntington’s disease and tardive dyskinesia), Uzedy (schizophrenia) and Ajovy (preventive treatment of migraine).However, the company’s generic business has been weak in 2025 due to lower revenues from generic products in the United States and International Markets. In the United States, generic sales in the first half were hurt due to tough year-over-year comparable and increased competitive pressure. Meanwhile, in the International Markets, generics sales were hurt by the divestment of Teva’s business venture in Japan. The company also faces competitive pressure for some of its key branded drugs. Adding to these challenges, Teva continues to carry a high debt burden and faces legal headwinds related to price-fixing allegations.How Do Estimates Compare for ALVO & TEVA?The Zacks Consensus Estimate for Alvotech’s 2025 sales and EPS implies a year-over-year increase of nearly 35% and 133%, respectively. EPS estimates for both 2025 and 2026 have been trending upward over the past 60 days.Image Source: Zacks Investment ResearchFor Teva, the Zacks Consensus Estimate for 2025 sales and EPS implies a year-over-year increase of 2% each. While EPS estimates for 2025 have been trending upward over the past 60 days, those for 2026 have moved south.Image Source: Zacks Investment ResearchPrice Performance and Valuation of ALVO & TEVAYear to date, shares of Alvotech have lost over 14%, while those of Teva have plummeted 39%. In comparison, the industry has declined nearly 3%, as seen in the chart below.Image Source: Zacks Investment ResearchFrom a valuation standpoint, Alvotech seems to be more expensive than Teva, going by the price/sales (P/S) ratio. ALVO’s shares currently trade at 3.26 times trailing sales, higher than 1.32 for TEVA.Image Source: Zacks Investment ResearchALVO or TEVA: Which is a Better Pick?Both stocks have a Zacks Rank #3 (Hold), which makes choosing one over the other difficult. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Both Alvotech and Teva hold meaningful positions in the generics/biosimilar market, though they approach it from different angles. Teva’s strength lies in its scale, established presence in generics and diversified product portfolio, but the company is weighed down by competitive pressures and a sizeable debt load.Alvotech, on the other hand, is a much smaller pure-play biosimilar developer, but its partnership-driven strategy has delivered strong revenue growth and positioned it well for expansion into new therapeutic areas.Hence, we believe ALVO is a safer pick at present (despite its pricey valuation), as there appears to be room for growth buoyed by solid fundamentals.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dr. Reddy's Laboratories Ltd (RDY): Free Stock Analysis Report Teva Pharmaceutical Industries Ltd. (TEVA): Free Stock Analysis Report Alvotech (ALVO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks