IBI Investment House Ltd. gives Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) a target price of $58, a 26% upside on Friday's close, after Novartis AG (NYSE:NVS; LSE: NOV; SWX: NOVZ) disclosed 11 possible deaths related in Europe to its oral multiple sclerosis drug, Gilenya on Friday. The European Medicines Agency (EMEA) and US Food and Drug Administration (FDA) are investigating whether Gilenya may harm the heart.
Gilenya is a rival for Teva's intravenous multiple sclerosis drug, Copaxone.
IBI analyst Natali Gotlieb said, "All the cases of death involved the heart. One of Gilenya's known side effects is a slowing of the heart rate and irregular heartbeat. The EMEA advises doctors who decided to prescribe Gilenya to tighten their monitoring tests, and add EKG tests after taking the first dose, as well as hourly blood pressure tests for six hours after taking the first dose."
Neither the EMEA or the FDA have ordered a recall of Gilenya. The EMEA review is due to be completed by March. Gotlieb adds, "We assume that in view of the stricter guidelines for monitoring tests that have been put in place, there won't be any dramatic measure, such as a recall. We assume that the stricter monitoring requirements will be sufficient. The tests may show no link between the reported deaths and use of Gilenya.
Gotlieb says that Gilenya's troubles will boost Teva, because new patients may opt for drugs other than Gilenya, including Copaxone. She says that doctors recommending a treatment for multiple sclerosis will prefer to recommend drugs with a cleaner safety profile, including Copaxone, with the largest market share.
Teva's share price rose 0.8% by early afternoon on the TASE today to NIS 173, after rising 0.1% on Nasdaq on Friday to $45.83, giving a market cap of $40.6 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on January 22, 2012
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