Merrill Lynch: Tysabri not cancer is threat to Teva's Copaxone

"Proof of an increased cancer risk with Copaxone use… is potentially years away."

Commenting on reports that a study has shown a connection between use of drugs for treatment of multiple sclerosis and a higher incidence of breast cancer, Merrill Lynch analyst George Gilbert plays down this threat to Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA), which produces MS drug Copaxone, but says that Copaxone faces real competition from Elan and Biogen's new MS treatment Tysabri.

"According to media reports, an article linking Teva’s Copaxone (for multiple sclerosis) with an increased risk of breast cancer may be published soon in the medical journal Breast Cancer Research and Treatment. We believe that these reports have had a negative effect on the stock. While our rating remains Neutral, we believe that definitive proof of an increased cancer risk with Copaxone use, if there is one, is potentially years away," Gilbert writes.

"According to the company, since Copaxone was launched in 1996, the incidence of cancer for patients treated with the product is below the rate for the overall population. While this statement does not assess Copaxone’s position relative to other MS products, we believe it provides some perspective on the relevance of preliminary findings from a small study with limited statistical power.

"The more relevant near to intermediate-term issue for Copaxone, in our view, will be how it fares in the face of new competition from Elan/Biogen’s Tysabri. We will continue to monitor prescription trends for Copaxone and the interferon products to assess the impact of a more competitive environment."

Teva shares closed 2.38% off in New York yesterday, at $27.85, a price that gives the company a market cap of $17.12 billion. On the Tel Aviv Stock Exchange, Teva shares are currently up 1.16%, at NIS 121.90, after opening on a 0.79% positive arbitrage gap.

Published by Globes [online], Israel business news - www.globes.co.il - on January 19, 2005

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