Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) had one win and one loss in the US courts on Friday.
The US District Court for the District of New Jersey denied a motion filed by Wyeth (NYSE:WYE) and Altana AG for a preliminary injunction related to Teva's Pantoprazole sodium delayed release tablets, a generic version of Wyeth's Protonix tablets for the treatment of gastro-esophageal reflux disease. Teva said that it would thoroughly study the decision before deciding upon its next course of action. The brand product of Protonix has $2.5 billion in annual US sales.
In a separate case, the US Court of Appeals for the Federal Circuit issued an order temporarily enjoining Teva from further sales of generic Famciclovir tablets, a generic version of Novartis AG (NYSE:NVS; LSE: NOV; SWX: NOVZ) Famvir tablets for the treatment of shingles and genital herpes. Novartis filed an emergency motion following a court’s dismissal of its request for an injunction. The court decision cleared the way for Teva to market its generic version of Famvir, and the company had announced that it had begun shipping the drug.
The injunction will remain in place pending consideration of Novartis' emergency motion for a stay pending appeal. Teva will respond to Novartis' emergency motion on Tuesday, September 11. While Famvir has $200 million in annual US sales, Teva expects that its generic version will be quite profitable because it also produces the active pharmaceutical ingredient.
Teva has a market cap of $33 billion. It closed at $43.39 on Friday, about $1 below its 52-week high.
IBI Investment House analyst Noa Weisberg says that the legal dispute between Teva and Wyeth over Protonix may end in a compromise. The assessment is based on the case of Effexor ER, which has $3 billion in annual sales. Teva settled with the manufacturer, Wyeth, under which Teva obtained an option to launch a generic version of the drug six months ahead of competitors.
Weisberg says, however, that “there is a substantial incentive” for Teva to forego a settlement, and make an “at-risk launch” given the large volume of Protonix sales. Under this scenario, Teva’s guidance will be rendered irrelevant, and “there will be a favorable surprise in the company’s results.”
IBI reiterated its “Buy” recommendation for Teva at a target price of $54.
Published by Globes [online], Israel business news - www.globes.co.il - on September 9, 2007
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