HSBC lowered its rating for Teva Pharmaceuticals to hold from buy, citing increasing government scrutiny of the generic drugs industry.
Teva shares fell 9.5 percent Thursday on a Bloomberg report saying the Department of Justice may file charges in its generic-drug price collusion investigation by the end of the year.
"US DOJ investigation into alleged US generic drug price collusion creates significant uncertainty," analyst Steve McGarry wrote in a note to clients Friday.
"We have no view as to the merits of the DOJ investigation, whether there is a case to answer for Teva or any other generics company, or whether Teva will have any liability in terms of fines or penalties."
"Investors are likely to 'shoot first and ask questions later,'" he added.