Israel's Teva Reels as U.S., Europe Approve Generic Multiple Sclerosis Drug

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A worker at a Teva factory in Kfar Sava shows the Teva drug Copaxone.
A worker at a Teva factory in Kfar Sava shows the Teva drug Copaxone.Credit: Ofer Vaknin

Teva Pharmaceutical Industries was reeling Thursday from a double blow to its best-selling multiple sclerosis drug after U.S. regulators approved Mylan’s generic version Tuesday and European regulators gave the go-ahead for a generic version made by Alvogen and Synthon two days later.

The news sent Teva shares, already battered by a series of business setbacks, down 18% Wednesday and through early afternoon Thursday in New York. The stock stood at $15.89, while Teva bonds sank after Moody’s Investors Service called the approvals a “credit negative” for Teva.

Copaxone is Teva’s top-selling product, generating more than $4 billion in revenue for the Israeli drug maker last year. The new generic competition comes as Teva struggles with huge debts, price pressure on its core generic-drugs business in the United States and a leadership vacuum.

Teva said its early assessment of the impact of the two generic Copaxone launches to its fourth-quarter earnings could be a reduction of at least 25 cents a share, or about $250 million.

The first blow to Teva came when the U.S. Food and Drug Administration approved Mylan’s applications for both 20- and 40-milligram versions of generic Copaxone. The 40-milligram dosage accounted for more than 85% of Copaxone prescriptions in the second quarter.

The FDA clearance came earlier than either Teva or Mylan had expected and just a day after the agency had said it would introduce measures to speed up approval of generic versions of complex drugs like Copaxone to help address the rising cost of pharmaceuticals.

JPMorgan analysts said Teva now faced full generic competition for Copaxone nine to 12 months earlier than expected. Teva had already been hurting due to weak generics prices in the United States and high debt.

Teva warned on Wednesday that Mylan was launching the drug before resolving patent suits with Teva, meaning that Mylan may risk having to pay damages if Teva prevails.

“We remain confident in patient and physician loyalty to Teva’s Copaxone due to its recognized efficacy, safety and tolerability profile, and we will continue to promote and support the product,” Yitzhak Peterburg, Teva’s interim CEO, said in a statement.

On Thursday, Alvogen and Synthon said they had received decentralized European approval for a 40-milligram dose of generic Copaxone. The two companies, which work as partners in selling the product, already market a 20-milligram version in Europe, but the 40-milligram dose is more popular.

Alvogen said Europe accounted for more than 505 million euros ($591 million) of Copaxone sales in 2016, based on IMS Midas data.

Analysts called the approval a big win for Mylan, a U.S. company that is traded on the Tel Aviv Stock Exchange, and said it would help 2017 and 2018 earnings. Mylan filed its first application for a version of Copaxone in 2009.

Mylan had lowered its 2017 and 2018 earnings forecast in August, due in part to delays getting FDA approvals for key generics like its versions of Copaxone and asthma treatment Advair. At the time it said it did not expect any major product launches until 2018.

After the approval, Mylan said it expected to start shipping its generic drug very soon. The FDA approval letter also said the company might be eligible for 180 days exclusivity on the drug, Mylan said.

Momenta Pharmaceuticals and the Sandoz unit of Novartis already sell a generic version of 20-milligram Copaxone and are developing a version of the 40-milligram dosage.

But their difficulties in getting the higher-dose version approved had dampened expectations for Mylan before Tuesday. Momenta said the companies would still be able to launch during any exclusivity period if they received approval.

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