John Boris of Citi Investment Research and Analysis sees Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) gaining breathing room after defeating the challenge to its patents on MS drug Copaxone from Mylan and Sandoz, but notes that Biogen's orally administered MS treatment BG-12 is likely to win large market share and impact Copaxone adversely.
"Teva has sufficient time to complete clinical trials and secure approval on its low-volume formulation, for which it received a Complete Response letter in December 2010. Additionally, we expect it to seek approval for its high dose Copaxone," Boris writes.
On the challenge from BG-12, Boris notes, "At Citi’s Annual Cleveland Clinic meeting, a leading MS doctor noted high BG-12 demand, with their center warehousing patients ahead of approval… BG-12’s safety/efficacy pose a threat to ABCR therapies, including Copaxone. We project U.S. Copaxone sales of $2.90 billion 2012E declining to $1.26 billion in 2015."
Boris sets a price target of $49 for Teva, which compares with a close of $38 on NYSE on Friday, and NIS 160.50 on the Tel Aviv Stock Exchange this morning.
For RBC Capital Markets, Shibani Malhotra and Austin Nelson similarly see Teva's court win as giving it a window of opportunity for new doses of Copaxone. "The trial win comes after the recently released positive data from the GALA study, which suggests that the new formulation of Copaxone (requiring less frequent dosing) could be approved by mid-year 2013. With the favorable ruling, Teva would now have at least one year and possibly over two years to switch patients to the new dose if approved, making the franchise much more sustainable longer-term in our view. We currently expect that at least 30% of the franchise will move to the new form of Copaxone. Given that many investors we have spoken with recently have remained on the sidelines in front of this decision, we expect Teva to rally significantly over the next few days and we remain buyers of the stock given our confidence in new CEO Dr. Jeremy Levin," they write.
Malhotra and Nelson have raised their price target for Teva by $4 to $52.
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2012
© Copyright of Globes Publisher Itonut (1983) Ltd. 2012