In the past few days, Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) has been considering how to act. Should it make an at-risk launch of its generic version of Wyeth's Protonix, which has annual sales of $2.5 billion? Should it ignore the fact that, if it loses in the patent infringement action Wyeth has brought, it will have to pay Wyeth compensation to the tune of three times sales at original prices? Maybe it would be better not to market the drug, and to wait patiently until the patent expires in 2010? Or perhaps it should direct its efforts towards reaching a compromise agreement with Wyeth, one that won't harm the US company severely but will nevertheless be reasonably remunerative for Teva?
For the time being, all options are open, and Teva has not declared its intentions. On Thursday, after the close on Wall Street, Teva announced that the New Jersey District Court had dismissed the petition filed by Wyeth, together with Altana AG, for a temporary injunction forbidding sales of Pantoprazole delayed-release tablets, a generic version of Wyeth's Protonix tablets for the treatment of gastro-esophageal reflux disease (GERD). Teva said that it would thoroughly study the decision before deciding upon its next course of action. The drug is sold in 20mg and 40mg doses, and Teva's version has already received approval from the US Food and Drug Administration. No date has yet been set for hearing the patent action itself.
"The legal position is complicated," writes IBI analyst Noa Weisberg. "The court in effect enabled Teva to market the drug at risk immediately. The judge said that there was substance to Teva's claim that the Protonix patent was invalid, but Teva will have to prove this convincingly.
"If Teva chooses to market the drug at risk, it will infringe a patent that protects the drug, and will be exposed to the payment of damages amounting to three times sales, at original prices. On the other hand, if it launches the product, this will probably contribute $200 million to its sales and $0.30 to its earnings per share in the exclusivity period. Teva must therefore make in in-depth situation assessment before any launch. We believe that there is a high chance of a compromise agreement being signed between Teva and Wyeth, and if that happens Teva will refrain from launching the generic version of Protonix, and receive compensation that will maximize profit from the product."
More on at-risk launches: on Friday, at 12:00 New York time, Teva announced that it had started selling Famiclovir, its generic version of Novartis's Famvir, in 125mg, 250mg, and 500mg doses. Famvir is a treatment for genital herpes. Since Teva was the first to obtain approval for a generic version of Famvir, it has 180 days exclusivity. The original product has annual sales of $200 million, and although the patent suit between Teva and Novartis is still pending, Teva made an at-risk launch after the New Jersey District Court denied Novartis's petition for a temporary injunction.
At 21:00 New York time, Teva announced that the US Court of Appeals for the Federal Circuit had issued a temporary injunction preventing it from continuing to sell the tablets. The announcement did not indicate that the court had ordered Teva to recall products from the market. Teva is due to respond to the injunction tomorrow, September 11. Teva was expected to derive revenue in the tens of millions of dollars from the drug in the exclusivity period.
At this stage, it looks as though Teva still managed in the few hours available to it to ship an unknown quantity of the product. In another such episode, in May 2007, Teva managed in one day to ship two-three months' supply of another Novartis drug, blood pressure treatment Lotrel, according to Novartis's evidence. Annual sales of that drug amount o $1.4 billion, and Teva has generic exclusivity.
Teva has a market cap of $34.8 billion on Nasdaq.
Published by Globes [online], Israel business news - www.globes.co.il - on September 10, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007