Pharmaceuticals giant Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) presented current and future respiratory growth strategy on Thursday to the financial community in New York. Teva said that its operations in the respiratory marketplace are expected to contribute approximately $2.4 billion to the company’s overall 2015 target of $31 billion.
Teva said that it intends to file ten products, six of which are new brands, for approval in the US and Europe by 2015, targeting approximately $25 billion in brand value, including new combination products.
Teva president and CEO Shlomo Yanai said, “One of the key pillars of Teva’s long term strategy is the expansion of our branded businessand our respiratory franchise will play an important role in this growth. Over the next five years, and beyond, Teva’s unique product portfolio and robust pipeline will enable us to significantly expand our presence in the global respiratory market."
Teva claims to be one of the top five players in the global respiratory market. Since its acquisition of IVAX Pharmaceuticals in 2006, Teva’s global respiratory product sales have nearly tripled; by the end of 2010, annual respiratory sales are projected to reach $1 billion.
Citi says that Teva expects to reduce its dependency on Copaxone through growth in it respiratory franchise (26% of its branded sales target in 2015), women’s health segment (17%) & biosimilars (9%). Teva is targeting respiratory drug classes that account for $25B of the $34B respiratory market in 2010, through 10 product submissions by 2015.
Citi analyst John Boris says, "We see the respiratory category as offering attractive growth potential and high barriers to entry. We see a risk to Teva’s strategy, as GSK’s Ventolin HFA (32.6% share) appears to be chipping away at Teva’s ProAir HFA US market share. We see regulatory & commercial risk, given the unpredictability of the FDA’s decision-making in this category & slow launches of new brands."
Boris maintains his "Buy" rating on Teva.
Boris says that Teva believes it’s one of the few players with the capital and manufacturing capabilities to receive approval for inhaled corticosteroids (ICS) alone & in combination therapy. The market appears to be somewhat analogous to biosimilars in the US, since there is no established clinical model that can show dose response. Therefore, large Ph-III trials are necessary for approval through a branded pathway.
Teva expects to file QNAZE (QVAR for nasal allergic rhinitis) in 2011. Teva believes QNAZE can be differentiated in the crowded space (including generic Flonase) because of its Easi-Breathe delivery system, which has a dry powder nebulization vs. aqueous solution for other drugs (which cause a bad taste from runoff in the back of the throat).
According to Boris, QVAR growth is encouraging for Teva’s targets, ProAir less so.
Teva closed at $50.77 on Friday, giving a market cap of $45.59 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on November 7, 2010
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