Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has seen its share price drop sharply on Wall Street after it was announced that the US Food and Drug Administration (FDA) had approved for sale the first generic version of Teva's blockbuster multiple sclerosis treatment Copaxone.
The generic version, called Glatopa, was jointly developed by Novartis subsidiary Sandoz and Momenta Pharmaceuticals. It represents an alternative to 20 mg dose Copaxone. Momenta will be entitled to payments amounting to some $140 million, of which $10 million becomes due with the FDA approval under an ANDA (abbreviated new drug application) procedure.
In the past four quarters, Teva's revenue from was $4.2 billion, about 21% of its total revenue.
Teva's guidance for 2015 projects Copaxone sales of $3.5-3.7 billion, with a gross margin of 89-90%. Teva estimated that two generic versions of the drug would be launched in September. If generic competition is brought forward, this will cut its operating profit by $30-50 million.
Apart from the immediate financial impact, the delay in the launch of a generic version of Copaxone enabled Teva to switch more patients from the 20mg dose to the double dose that was approved for sale a year ago and is patent protected.
The companies are still involved in patent litigation, and it is not clear when Glatopa will actually start to be sold. Two weeks ago, Teva filed an appeal with the FDA, its eighth, in an attempt to prevent generic Copaxone.
Teva's share price is currently down 3.37% at $63.75.
Published by Globes [online], Israel business news - www.globes-online.com - on April 16, 2015
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