Deutsche Bank reiterated its "Buy" recommendation for Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) with a target price of $48, compared with today's opening price of $40 in New York, despite the US appellate court ruling against the company over its Copaxone patents.
Deutsche Bank notes that the Appeals Court for the Federal Circuit issued a mixed ruling on Friday in Teva's patent infringement case against generic challengers, upholding the lower court’s decision on the validity and enforceability of four of Teva’s May 2014 Copaxone patents, it reversed the District Court’s ruling on the other patents expiring May 2014 and a formulation/process patent, which expires September 2015.
"While this ruling could allow the Copaxone generic challengers to enter the market 16 months earlier than current expectations, the Abbreviated New Drug Application (ANDA) filers still need to obtain regulatory approval prior to introducing generics. We’ve believed for some time that the most significant barrier to generics is the FDA. At this point, Momenta Pharmaceutical Inc.'s ANDA has been under review at the FDA for five years and Mylan Inc.s (MYL) for nearly four years. And the regulatory pathway still remains murky. The agency has not provided any guidance on a pathway for approving a bioequivalent to complex synthetic peptides such as Copaxone. Moreover, it is entirely possible that clinical trials will be necessary. In our view which incorporates discussions with several experts in this field over the years there is a real possibility that a generic to Copaxone still may not emerge for a number of years," says Deutsche Bank.
It concludes, "Our current model assumes generic competition to Copaxone commencing in September 2015."
However, Deutsche Bank added that if generic competition does enter the market following the current May 2014 patent expiry, it sees Copaxone 2014-2016 revenue declining to $1.86 billion, $1.16 billion, and $871 million (versus its current forecast of $3.32 billion, $2.92 billion, and $1.58 billion).
Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2013
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