Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) is currently embroiled in a legal contest against Proneuron Biotechnologies, a young company, over the rights to use Copaxone for treatment of diseases other than multiple sclerosis. This struggle, however, is liable to also affect Teva's core business of Copaxone for treatment of multiple sclerosis, which currently accounts for half of its profits. Careful reading of the transcripts of the trial between the two companies reveals new evidence submitted by Proneuron in Teva's appeal. Comparing this evidence with things said by Teva representatives recently in Delaware concerning the intellectual property for 40-milligram Copaxone raises serious questions about Teva's treatment of its flagship product and the patients who use it.
The main allegation, which Proneuron has been raising for many years, is that Copaxone, a drug given to multiple sclerosis patients by injection, can be administered less than daily, but that Teva deliberately abstained from testing this. If the allegation is correct, it casts doubt on the need for 40-milligram Copaxone, because 20-milligram Copaxone, for which the patent has already expired, and which is now a generic product, can be administered at longer intervals, rather than daily, as it has been administered for the past 20 years.
If 40-milligram Copaxone administered every other day or three times a week has no advantage over 20-milligram Copaxone administered with the same frequency, then half of the injections received by patients who used the drug for years were unnecessary, and they could have avoided great discomfort, because the drug causes side effects in the area in which it is injected, and also costs a great deal of money. Transcripts of the two trials - in Israel and Delaware - and the new evidence that Proneuron is now presenting give rise to suspicions that not only does 40-milligram Copaxone have no advantage over 20-milligram Copaxone, but that Teva knew about this possibility, and deliberately chose to ignore it.
Same product + different dosage = differentiation in the market
The documents submitted in the trial in Delaware, which began after Teva filed a lawsuit against generic manufacturers for patent violation, show that already in 1996, when Teva obtained authorization to use 20-milligram Copaxone, one of the parties granting approval stated that it was recommended to consider the possibility of administering the drug according to a non-daily regime, so that treatment would be more comfortable. Teva heard the recommendation, but as far as is known, did nothing about it.
Proneuron, which, in cooperation with Teva, developed the Copaxone molecule for treatment of diseases other than multiple sclerosis, also objected to the frequency of treatment, and the two companies did not agree on how the drug should be administered to patients. Proneuron founder and scientist Prof. Michal Schwartz asserted that for most diseases, it would be preferable to administer Copaxone once a week or once a month, not daily.
A business dispute emerged between the companies in 2006, following which Proneuron sued Teva for the restoration of its rights in Copaxone other than for the treatment of multiple sclerosis. In the framework of the legal proceeding, which ended two years ago, Proneuron contended that Teva had done everything in its power to prevent the market from raising the possibility of administering Copaxone less frequently. For example, Proneuron presented in court a Teva work plan stating, "Because Copaxone is being marketed for multiple sclerosis as a daily injection, it is clear that the same product cannot be used for glaucoma less frequently without creating commercial problems." At a meeting at Teva to discuss a trial for treatment of glaucoma, according to the documents submitted by Proneuron, it was stated that "Presenting two different treatment regimes for multiple sclerosis and nerve degeneration diseases is liable to affect Copaxone's market share, because neurologists are liable to also consider a less frequent regime for multiple sclerosis."
In the framework of the cooperation between Teva and Proneuron at the time, it was decided to solve the problem by developing a "quasi-Copaxone" - a molecule named TV5010, which is very similar to Copaxone, but which has a heavier molecular weight. From time to time, Teva referred to TV5010 as "Copaxone," but the intention was to portray the two products in the market as completely different drugs. One of them - 20-milligram Copaxone - is administered daily for treatment of multiple sclerosis, while the other - TV5010 - is administered once a month for treatment of glaucoma. This was the way utilized to put Copaxone on the market for less frequent use without affecting the existing Copaxone. In the end, TV5010 failed for safety reasons, and the idea was shelved.
During the trial, Proneuron also presented a conference summary document prepared by Teva employees, in which they report, "Several neurologists are interested in conducting their own trials for a different drug administration regime… We have to devise a strategy for responding to all of these trials for using Copaxone for multiple sclerosis and other diseases through less frequent injections."
In his testimony at the trial against Proneuron, then-Teva Innovative Ventures head Dr. Aharon Schwartz was asked whether he was concerned that following a trial for administering 20-milligram Copaxone for other diseases at other intervals, any doctor might ask himself why the same thing could not be done in using Copaxone for treatment of multiple sclerosis. Schwartz answered, "This is a legitimate question, and there is indeed a degree of risk in it, but it did not affect our decision." Dr. Ety Klinger, a senior member of the Copaxone development team for years and the researcher in whose name the patent for 40-milligram Copaxone was registered, said, ""At this stage, we preferred the daily regime for Copaxone."
In the end, it turned out that TV5010 was less safe than Copaxone, and it was decided to discontinue its development. At the same time, Teva considered a clinical trial testing whether 40-milligram Copaxone was more effective or faster-acting than 20-milligram Copaxone. The trial failed, and Klinger testified at the trial in Delaware that at that stage, 40-milligram Copaxone was considered a "dead" product.
Small trial, big question: How did 40-milligram Copaxone come into being?
At that time, in 2008-2009, doctors began a trial for administering 20-milligram Copaxone less frequently - Teva's great worry. Two small trials, the Kahn trial in 2008 and the Caon trial in 2009, found no difference in effectiveness between administering the drug every day and every two days. These trials were not large or properly controlled, but they hinted that there was medical and research logic in carrying out a larger trial. All the patients who took part in the Kahn trial decided to switch to less frequent drug regime.
Teva knew about these trials. It even used them in a protocol it wrote and submitted for a Gala trial testing whether 40-milligram Copaxone could be administered less frequently, while achieving the same results as daily dosages of 20-milligram Copaxone. In effect, Teva entered this trial on the basis of the small trials that had been conducted showing that 20-milligram Copaxone could also be administered with less than daily frequency.
At the Delaware trial, Klinger herself claimed that the idea that 40-milligram Copaxone might be effective in a less frequent regime arose following a trial of the TV5010 product, because of the similarity between the two products. The judge did not accept this claim, saying that it sounded illogical, because TV5010 was not mentioned at all in the protocol for the Gala trial. The court ruled that the market was very interested in 2008-2009 in the possibility of a less frequent regime for Copaxone. "A reasonable person in the field knew at the time that daily injections of Copaxone were so uncomfortable for patients that some of them discontinued the treatment," the judge wrote. "Any reasonable person would have looked for a less frequent treatment regime."
170 unnecessary injections: A company's limits of liability
In simple words: it is possible that Teva's desire to administer 20-milligram Copaxone in a daily regime resulted in patients receiving twice as many injections as long as 20-milligram Copaxone dominated the market. Furthermore, it is possible that today, when 40-milligram Copaxone in a less frequent regime dominates the market, insurers and health baskets are paying unnecessarily for the use of the "improved" product, while by using 20-milligram Copaxone, which is now a cheaper generic drug, they could obtain the same effectiveness of treatment with the same number of injections. This, of course, assumes, as hinted by the small trials of Kahn and Caon, and as Prof. Michal Schwartz has been claiming for years, that 20-milligram Copaxone is no less effective under a less than daily regime.
Why was the possibility of administering 20-milligram Copaxone under a less frequent regime not considered? Isn't it about time for independent doctors to do this? Can a regime even less frequent that the current one for 40-milligram Copaxone be attained? Was Teva's behavior the legitimate behavior of a commercial concern, or is a drug company responsible for offering patients the best and most comfortable treatment with its products, even if it thereby loses a substantial amount of money?
Presenting these questions also requires an examination of the company's patterns of behavior. In the case of Teva, this can be learned by studying the way it handled TV5010, the "quasi-Copaxone" it sought to develop in order to create an identical product that could be differentiated in the market. In drug companies, this policy is called "managing the product's lifespan." After the patent for the original product expires, a small change is made in it, and a reason (or an excuse) is found for registering a new patent for it.
Teva adopted a two-faced attitude towards TV5010. It portrayed it to the regulators in Europe as a very similar product to Copaxone in order to obtain approval for clinical trials without first conducting the safety tests required for a completely new product. At the same time, the company's internal documents, presented during the Proneuron trial, stated simultaneously that when these trials were nearing completion, it would announce the product as a new chemical entity in order to register a new patent and new FDA approval for it. In other words, the company portrayed the product simultaneously as both an existing and a new product, depending on whom it was talking to.
Is it merely coincidental that both molecular weight and a higher dosage were regarded by Teva as factors that could "lengthen the duration of the product's action," thereby making it possible to administer the drug less frequently? Or did Teva's executives and scientists believe that any variation of Copaxone could also work with a less frequent regime, and it only remained to find a way to differentiate it for marketing, patenting, and regulatory purposes? If the latter is the case, it is more likely that Teva knew that 20-milligram Copaxone would likely be effect in a non-daily regime.
A company named Mapi Pharma is also working on a delayed release Copaxone that can be given once a month. Such a product could provide significant competition for the existing Copaxone, especially if Copaxone can be given once a month in any case, in which case there is no real possibility of failure in development of the product, which is projected to reach the market in 2020. Company founder and CEO Ehud Marom previously worked at Teva on developing a formulation for Copaxone. Teva has not yet responded to Mapi Pharma's existence, and has not attempted to halt its activity.
Teva said in response, "The dosages approved for the use of Copaxone are the dosages that were tested and found to be effective in difficult clinical trials conducted under the supervision of health authorities around the world at the cost of millions of dollars, and were approved for use by all the authorized agencies. Proneuron's manipulative allegations and the timing with which they were raised (close to the preliminary hearing in the Supreme Court) were designed to influence the pending legal proceedings between the parties, even though they are unrelated to these proceedings (which deal with a trial of Copaxone for treatment of diseases other than multiple sclerosis). They constitute an attempt to generate an artificial connection with the proceedings in the US, which are still subject to appeal. What is involved is an improper attempt to influence the legal proceedings by using the media to raise unfounded claims unsupported by admissible scientific data, and which were rejected by the District Court. As it has done until now, Teva will continue to conduct its legal affairs in the courts, and will not be dragged into conducting proceedings in the media."
The regulator must investigate this matter
Eli Tsipori
The investigation presented here by "Globes" of Teva Pharmaceutical Industries, the largest company in the Israeli economy, and the world's largest generic company, makes dramatic findings. It raises tough questions about the conduct by the company's management regarding Copaxone, Teva's flagship branded drug and multiple sclerosis treatment. As part of the investigation recounted here by Gali Weinreb, "Globes" medical and life sciences correspondent, dozens of legal documents have been looked at that are packed with legal and medical-pharmaceutical terms. The conclusion that can be drawn is that there is certainly a possibility that Teva provided Copaxone treatment on z daily regime of 20 milligrams when it would have been possible to suffice with a lower dosage.
This conclusion is drawn from many years of legal documents of a relatively small and unknown company called Proneuron, which had a cooperation agreement with Teva and was even partly owned by Teva, and was also conducting a legal battle with Deva in Delaware in the US over its patent for 40 milligram Copaxone.
In order to bypass the attack by its rivals on Copaxone 20 milligram's patent, Teva successfully launched 40 milligram dosage Copaxone in 2014 - an injection required three times a week instead of the daily 20 milligram injection (the transition to this dosage, in effect, continued to protect Copaxone's patent and maintain its profitability), and within two years it became the leading drug in the US multiple sclerosis treatment market. Teva successfully managed to transfer most of its patients from the 20 milligram dosage to the 40 milligram dosage.
Globes investigation, put simply, reached the conclusion that it's possible that the daily injection dosage of 20 milligrams over the years was unnecessary. Moreover, the legal documents submitted by Proneuron to the Supreme Court portray a very sad picture of Teva's conduct and the way it presented things, firstly in the Israeli court and then in the US court. Teva, Proneuron writes, conducted itself wrongfully and the company "would not hesitate to juggle facts that it claims as required and to raise contradictory claims simultaneously in different proceedings."
From the legal documents, it appears that throughout all the discussions in the case between the two companies, Teva attacked Proneuron and Prof. Michal Schwartz for claiming that treatment by Copaxone for Central Nervous Systems (CNS) disorders is effective only when administered at intervals. Teva called these claims "groundless," claimed that theories on this matter had completely failed and insisted that the only effective treatment regime administered for Copaxone was actually a daily one, both for multiple sclerosis and other illnesses.
In the court in Delaware, in contrast, Teva attempted to profit from an innovative treatment regime, which justified a new patent, even though Proneuron claims that it was absolutely clear that it had already drawn this conclusion from trials conducted over many years, a large part of them in cooperation with Proneuron itself.
The possibility that perhaps multiple sclerosis patients received unnecessary injections over many years is a dramatic one both pharmaceutical and financial terms.
At the pharmaceutical level, tough questions arise regarding Teva's conduct: Did Teva pass on the full information to the FDA regarding information about intervals in administering Copaxone when proposing to replace the daily regime? Was there information about a treatment regime with greater intervals for injections 20 years ago that was concealed? And the most important question of all in light of all this information: could multiple sclerosis patients have "benefitted" from fewer injections than the daily regime?
To all these questions there is huge financial significance. Copaxone was a major bonanza for Teva. The medication brought phenomenal profitability and a zero percent tax exemption that created for Teva a major anchor of profitability, which is not achieved even elsewhere in Israeli high-tech. Teva's annual Copaxone sales have been over $4 billion since 2013 with operating profits of 80%, on which the company paid zero tax. In other words over $3 billion profit annually just on one drug. A Copaxone treatment regime with much greater intervals rather than a daily dose would have meant much less revenue and much less profit. Or put another way, the more profitable dosage was not the correct dosage.
This possibility is bothersome, alarming, and worth investigating more deeply by the regulatory authorities in charge of Teva, whether it is Israel's Ministry of Health, or the US Food and Drug Administration (FDA). All of us must hope that this is not another instance in which a company stretches the limits or maliciously exploits them for commercial gain while the regulator looks the other way.
Published by Globes [online], Israel Business News - www.globes-online.com - on April 27, 2017
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