MarketLine Blog

2014: a year of transition at Teva

Teva Pharmaceuticals is a global leader in the pharmaceuticals industry, providing medicines to people all over the world. Teva is a giant in generic medicine and is the number one global producer of generic drugs worldwide. In Teva’s 2013 Annual Report, it stated that it was one of the top 10 pharmaceuticals companies in the world.

One of Teva’s best-selling products, and the source of much of their transition, Copaxone, is used for relapse-remitting multiple sclerosis, an autoimmune disease which affects the central nervous system, damaging the nerves of the brain and spinal cord, resulting in loss of muscle control, balance, vision, and sensation. Copaxone, a medication designed to reduce the frequency of relapses or flare-ups of the disease, had global sales of $3.9bn in 2012 and $4.3bn in 2013. However, the drug is set to lose its patent in 2014. Generic and specialty pharmaceuticals company, Mylan Inc. and the generics division of pharmaceuticals giant Novartis, Sandoz AG, sued Teva, filing with the FDA for approval of generic drugs that would compete with Copaxone. The US Court of Appeals invalidated the patent protecting the drug until 2015, giving way for cheaper generic competitors much earlier, as early as May 2014. According to research by Needham & Co., sales of Copaxone will fall by $300m in 2014 as generic competitors enter the market. Analysts estimate that sales of Copaxone will be down by 56% by 2016, due to competitors.

Teva has two outlooks for 2014. The “Generic Copaxone” scenario assumes the launch of at least two generic competitors to Copaxone in June 2014. Under this scenario, Teva predicts an operating profit of $4.8-5.1bn on total sales of $19.3-20.3bn (representing earnings per share of $4.50-4.80). Additionally; Teva forecasts revenues of $3.1-3.2bn from Copaxone, with contributions of $78m to net revenues for every month that Copaxone does not face competition from generic rivals. The “Exclusive Copaxone” scenario assumes no generic competition to Copaxone in June 2014. Under this scenario, Teva predicts an operating profit of $5.35-6.65bn on total sales of $19.8-20.8bn (representing earnings per share of $4.80-5.10) Teva forecasts sales of $3.6-3.7bn on Copaxone.

As of April 2014, Teva is facing no generic competition to its drug Copaxone. The company is aggressively attempting to block generic versions, getting help from the United States Supreme Court in late March (this request was denied the next month). Meanwhile, Teva has also been trying to convert patients to its new thrice-weekly version of Copaxone, which would not be subject to competition.  Once patients are converted to that form of Copaxone, insurers would have a hard time getting patients back on a daily injectable version, which is the form the generic competition would take.

As well as getting help from the US Supreme Court, Teva has been filing petitions to the FDA, claiming the complex make-up of Copaxone means that it is virtually impossible to demonstrate that a copy is the same as the original, with Teva stating that even subtle differences could render the drug ineffective or even dangerous.

Despite this, a team from Momenta Pharmaceuticals and Sandoz, and a team from Mylan and Natco Pharma, are both confident that their generic versions of Copaxone will be approved as early as May 2014.

For more details take a look at our Transition at Teva: Blockbuster drug Copaxone to lose patent protection in 2014 – Case Study.

Posted in Pharmaceuticals.

Leave a comment

*Required fields. We will not publish your email address