Perrigo launches generic version of Teva's ProAir

Perrigo CEO Murray Kessler Photo: Perrigo PR

ProAir HFA is one of Teva's important branded products.

After delays, pharmaceutical company Perrigo Company (NYSE:PRGO; TASE:PRGO), managed by CEO Murray Kessler, has obtained marketing approval from the US Food and Drug Administration (FDA) for its generic version of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) ProAir HFA inhaler.

The inhaler is designed for treatment of airways and shortness of breath caused by asthma. This approval is good news for Perrigo, even though it appears that the effect on Perrigo's results will initially be fairly small. Perrigo announced that it would first launch a limited quantity of the product and speed up production later in order to meet the demand. Perrigo developed the product in cooperation with Catalent Pharma, its partner. Perrigo's share price was up 3.2% in late trading on Wall Street.

For Teva, however, the news is bad, because ProAir HFA is one of the company's important branded products. At the same time, Teva has already made preparations for competition from a generic version of its drug, which was originally scheduled for launching in 2018.

Teva began marketing its own approved discounted generic version of the original inhaler itself in early 2019, after Ventolin, an approved competing product made by GlaxoSmithKline (GSK), was launched. When the approved generic version was launched, sales of the original product in the US totaled nearly $1.5 billion. Teva's 2019 reports show that sales of ProAir products in the US totaled $274 million, 31% less than in 2018. These figures, however, do not include sales of Teva's approved generic version. According to Teva's figures, the product's 24.9% market share is the second highest in the sector in the US; if Teva's generic sales are included, its market share rises to 46.7%.

"Achieving FDA approval of this complex generic product was the outcome of an industry-leading collaboration in product development and regulatory expertise between Perrigo and Catalent that spanned over a decade," says Perrigo EVP and president Rx pharmaceuticals Sharon Kochan. "We are immediately launching with limited commercial quantities and anticipate that we will be in a position to provide a steady supply of this product by the fourth quarter of 2020. This approval and first-to-market generic launch is another vivid example of our team's commitment and ability to bring new specialized products to market that lower costs for consumers and payers."

Teva and Perrigo signed a compromise settlement in 2014, under which Perrigo was allowed to launch it generic version of the inhaler without quantitative restrictions in 2018, following a period of restricted sales starting in late 2016. Due to delays in obtaining FDA approval, however, Perrigo did not enter the market on the planned date, giving Teva some breathing space that helped it deal with its other problems at the time. Teva signed another compromise agreement for the inhaler with Lupin, which is also yet to launch its generic version. In response to Perrigo's announcement, Credit Suisse wrote that the market was a very large one, amounting to $1 billion, but mentioned that there were now already three approved generic versions. Credit Suisse believes that Perrigo will have the advantage of entering the market earlier than Lupin.

Acquired for $130 million from a bankrupt company

At the same time, Perrigo announced another acquisition yesterday in the dental health field. In recent years, Perrigo, which specializes in private brand over-the-counter drugs, has moved more in the direction of selfcare, preventing diseases and improving quality of life, in contrast to healthcare. As part of these efforts, the company planned to sell its prescription drug business, but no such deal has gone through yet

As part of its new strategy, Perrigo is now acquiring the assets for High Ridge Brands for $130 million, following the latter company's bankruptcy proceedings. The acquisition follows two other acquisitions in 2019: Ranir, a mouth and dental health company, for $750 million, and the rights to a drug for treatment of heartburn from GSK.

Published by Globes, Israel business news - en.globes.co.il - on February 25, 2020

© Copyright of Globes Publisher Itonut (1983) Ltd. 2020

Perrigo CEO Murray Kessler Photo: Perrigo PR
Perrigo CEO Murray Kessler Photo: Perrigo PR
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018