U.S.-listed shares of the Israel-based company rose 4.9% to $7 in afternoon trading.
Teva, the world's largest generic drugmaker, is already selling the product for adults, after getting U.S. approval for its copy of EpiPen last August, following several years of delay.
Raymond James analyst Elliot Wilbur estimates the current U.S. epinephrine market is worth about $700 million.
"Teva can capture about $290 million-$300 million in annual sales, or roughly 45% market share," Wilbur said.
The launch of the EpiPen generic for children comes as welcome news for the company, as analysts have raised concerns over its ability to pay down its debt load, which was $28.7 billion at the end of June.
The drugmaker has been struggling with falling prices of generics and faces lawsuits that allege it helped fuel the U.S. opioid addiction epidemic.
On Tuesday, peers Endo International Plc and Allergan Plc tentatively agreed to pay $15 million to avoid going to trial in October in a landmark case involving two Ohio counties accusing certain drug manufacturers and distributors of fueling the opioid crisis.
Teva, which in May agreed to pay $85 million as a settlement to the state of Oklahoma in another opioid-related lawsuit, is set to face trial on Oct. 21.
Mylan also produces a generic version of its own life-saving EpiPen allergy treatment, which like Teva's product is priced at about $300.There has been a shortage of EpiPens in the United States, Europe and Canada, mainly due to a series of manufacturing delays at Pfizer Inc's Meridian Medical unit that produces all EpiPens sold globally at a single plant near St. Louis.