TASE-listed shares of Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA)) are down sharply, following Friday's 7.2% drop of its shares on Nasdaq. Teva rival Momenta wants to develop a generic version of Copaxone.
Generic pharmaceuticals rival Momenta Pharmaceuticals, Inc. announced on Friday that its development and commercialization partner Sandoz had filed an abbreviated new drug application (ANDA) containing a Paragraph IV certification for Teva's multiple-sclerosis treatment Copaxone with the US Food and Drug Administration (FDA).
Teva intends to file a patent infringement suit against Momenta/Sandoz, which Teva expects will hold off FDA approval of the drug for 30 months, unless a court rules in Teva's favor prior to then. Momenta/Sandoz cannot launch a generic version of Copaxone before it receives final FDA approval of its application.
Deutsche Bank analyst David Steinberg wrote that with Copaxone responsible for an increasingly large part of Teva's profit from an estimated 24% in 2008 to about 32% in 2010 "investor sensitivity has recently become justifiably heightened" regarding Copaxone.
Deutsche Bank had already downgraded Teva to "Hold" last Monday following the news of the Copaxone 40 mg Phase III trial failure, "which significantly reduced the upside potential for this product".
Nonetheless, the analyst still feels that a generic version if Copaxone will be hard to develop due to Teva filing for a stay of the current application as well as the complexity of Copaxone's formulation.
However, Momenta's announcement "exemplifies the potential for generic "overhang" that may well keep Teva's multiple constrained in the near-term. And, we would not be surprised if another generic filer emerges in the near-term (e.g. Mylan/NATCO)." Steinberg adds that "we continue to believe that current outlook does not merit a premium to the forward growth rate".
Shares in Teva fell 7.2% on Nasdaq on Friday, reaching $41.78. Its TASE-listed shares are down 6.4%. Teva's market cap on Nasdaq as of Friday's close is $32.25 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on July 13, 2008
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