After completing an exhausting obstacle course, Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) launched a generic version of Merck & Co.’s (NYSE:MRK) Zocor (Simvastatin) last Friday, on schedule. Teva had US Food and Drug Administration (FDA) marketing approval and beaten back an attempted injunction filed by Sandoz, the generic arm of Novartis AG (NYSE: NVS; LSE: NPV: SWX: NOVZ).
All the obstacles existed for one simple reason: Zocor is the best-selling drug ever whose patent has expired, with $4.6 billion in annual sales in the US for all dosages. Merck wasn’t going to give this up easily.
Teva’s share fell hard last week after Merck signed an agreement with UnitedHealth Group Inc. (NYSE:UNH) to reduce the co-payment for Zocor made by patients at pharmacies. Merck may sign similar agreements with other insurers, in an effort to make an end run around the generic drug companies.
Teva president and CEO Israel Makov told “Globes” last week that this was a one-off incident and that he was not afraid of its impact. “This might turn out to be much ado about almost nothing,” he said. Today, a few days after the launch, he sounds much more sure of himself. “I can now remove the caveat ‘almost’. This really was much ado about nothing,” he says.
“Zocor is the biggest launch in the history of medicine,” he told “Globes”. “We delivered large quantities of the goods within hours. The market was hungry for the goods. The launch was very successful by every measure, including sales and logistics. As for Merck’s agreement with UnitedHealth, I must state that we felt no effect whatsoever. There were no repercussions of any kind, and it seems to have been something very esoteric and limited.”
“Globes”: Would you have already felt an impact if there was one?
Makov: “I assume so. We’d have gotten feedback from the market if there was a real threat. A customer would have told us that he was cutting his order from 100 units to 90, for example. No customer called us to change or reduce his order. A second indication is from retail chains. They would have told us if there was any change.”
You said you’d meet your 2006 guidance for Zocor. You personally said the guidance was conservative. Now that there’s been no adverse change from Zocor, will you raise your guidance?
“We never provide prior announcements about such things. If we see fit to update our guidance for the quarter, we’ll do so, because we want to keep people informed, but we have nothing to say at this time. I assume that we’ll provide an assessment of the sales situation in early August, when we’ll publish our financial report.”
Last Friday, Teva also launched generic Biaxin (Clarithromycin), but on Monday, Abbott Laboratories (NYSE: ABT) filed an emergency motion in the US District Court for the Northern District of Illinois to enjoin Teva from further sales of the product pending additional appeals. The court will hear the motion on Thursday, and Teva may not continue sales until then.
Published by Globes [online], Israel business news - www.globes.co.il - on June 28, 2006
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