Israel’s Teva Pharmaceuticals shares rallied after the U.S. Food and Drug Administration approved Thursday the company’s generic version of the best-selling, lifesaving allergy injection EpiPen.
Although Teva didn’t say when it would begin sales of its product or its price, the approval promises to turn the company into a champion for the millions of Americans who use the EpiPen product despite the fact that its maker, Mylan, has been accused of price gouging.
“We’re applying our full resources to this important launch in the coming months and eager to begin supplying the market,” Teva said, without providing pricing details.
The generic EpiPen approval is also a big boost for Teva, which has been trying to emerge from the weight of huge debt undertaken by its 2016 acquisition of Actavis Generics, the loss of exclusivity for its best-selling multiple sclerosis treatment Copaxone and falling prices for generic drugs.
Teva shares closed up 4.6% at 88.19 shekels ($24.09) on the Tel Aviv Stock Exchange on Sunday.
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EpiPen is a handheld device that treats life-threatening allergic reactions by automatically injecting a dose of epinephrine, also known as adrenaline. The FDA has approved several epinephrine auto-injectors, including Adrenaclick and Auvi-Q, while Mylan launched its own “authorized generic” version in 2016.
The Teva product, however, will be the first generic version of EpiPen. Analyst Elliot Wilbur of the U.S. investment house Raymond James estimated that Teva could win 30% of the U.S. EpiPen market, meaning sales of $200 million to $230 million a year for the product.
Developing a device like the EpiPen, which comprises a drug as well as a specialized instrument for administering it, is difficult. Teva sought but failed to get FDA approval for a EpiPen copycat in 2016, just before an uproar over the price of the Mylan product exploded. The price of the Mylan product jumped 400% in the decade after it acquired the product in 2007 and amid the public outcry the company decided to offer its own “generic” version.
The company last year reached a $465 million settlement resolving the U.S. Justice Department claims it overcharged the government for the EpiPen.
Meanwhile, Mylan’s EpiPen revenues have dropped sharply over the last year due to increased competition and the launch of the company’s own generic. Today, the price for Mylan’s generic EpiPen is $320 for a package of two, versus $630 for the branded version.
Teva’s efforts also got a boost from the FDA itself, which issued guidance last November to try to make it easier for generic copies of complex medicines like the EpiPen to reach the market
As it turns out, Teva’s approval comes amid a shortage of EpiPen in North America, Europe and Canada since earlier this year due to manufacturing problems. The FDA in May added the treatment to its list of drugs in shortage.
With reporting from Reuters.