Deutsche Bank reiterates its "Buy" recommendation for Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) with a target price of $68, despite a recent US Food and Drug Administration (FDA) decision that Gilenia, made by Novartis AG (NYSE:NVS; LSE: NOV; SWX: NOVZ) is safe and effective as an oral treatment for multiple sclerosis.
The vote by the FDA panel was unanimous, although the panel cautioned that use of Gilenia involves increased safety risks, including low heart rate, a small decline in lung function, and increase in macular edema. The vote was expected, given Gilenia's strong efficacy signal and the still significant unmet need for multiple sclerosis treatments.
Deutsche Bank believes that the FDA will approve Gilenia by September 21.
Deutsche Bank says that Teva investors have already factored in the emergences of competing oral multiple sclerosis drugs. It believes that Gilenia will have only a marginal effect on Copaxone initially, until physicians become more confident about oral multiple sclerosis drugs, as their long-term safety data is still limited. Also, physicians may be less likely to switch patients who are well-controlled on existing treatments. Oral drugs are more likely to gain share among new patients.
In the longer term, Teva has its own oral candidate, Laquinimod, which could reach the market in 2012-13.
Teva's share closed at $52.97 on Nasdaq on Friday, and the share price rose 1.6% at the opening on the TASE today to NIS 204.10.
Published by Globes [online], Israel business news - www.globes-online.com - on June 13, 2010
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