Debt-ridden Taro Pharmaceutical Industries Ltd. needs to put itself up on the block if it wants to save itself, those who follow the generic drugmaker said Tuesday. "Looking at the state of the company's balance sheet from more than two years ago and its debt covenants of about $200 million, Taro has little or no choice but find a buyer to gain some value," said Ori Hershkovits, an analyst at Leader & Co. "If the company goes on for much longer without finding a buyer or some other option, it is poised to go bankrupt." The Nasdaq-listed company with a market capitalization of around $392m., was founded by Israeli pharmacists and American physicians and has made pharmaceuticals since 1950 with operations in the US, Israel, Canada, Ireland and the UK. "Similar companies to Taro have been sold at three to five times their annual sales," said Hershkovits, estimating that "with approximately $300m. in sales, Taro could be sold for anywhere between $600m. and $1 billion" if $200m. in debt and about $100m. in litigation costs for delaying filing of their accounts are subtracted out of the purchase price. Leading candidates to buy Taro, according to Hershkovits, were Perrigo and Mylan Pharmaceuticals Inc., while Novartis or Merck could also show interest. Teva Pharmaceutical Industries Ltd., the world's largest generic company, was not seen as a likely buyer. "I don't think Teva will be interested or have her focus on a company like Taro," said Yisca Erez, an analyst at Clal Finance Batucha. "Taro does not suit Teva's pipeline." Last month, the Taro said it might be delisted from the Nasdaq because it hadn't filed its 2005 annual report. It expected to complete the audit of its 2005 financial statements this month August and make the necessary filings. In June, the company said it would need to restate 2003 and 2004 results because its estimates for accounts receivables did not include information from customers that it only recently received. "Something has been cooking there for months, which put the company on the block," said Hershkovits. "The company had been delaying filing its accounts since May or June. It is clear that Taro is in a very tight spot without the ability to reinvest." The last full audit of the company's accounts was carried out in December 2004. The company's share price had fallen from around $30 in June 2005 to under $10 in June this year. Following press reports this week that Taro was looking for a buyer and has hired an investment bank, shares jumped as high as $13.75 on Tuesday. Taro's general manager Samuel Rubinstein declined to comment on the rumors that the company was in the process of seeking a buyer. At the beginning of this month Franklin Resources Inc, the global investment management company, raised his stake in Taro from 10.8% to 16.8%.