Teva Pharmaceutical Industries Limited (TEVA) announced that a new dose of its multiple sclerosis (MS) drug, Copaxone (40mg/mL), has been approved by the U.S. Food and Drug Administration (:FDA). The drug has been approved for relapsing forms of multiple sclerosis.
This dose of Copaxone allows three times a week subcutaneous administration as compared to the daily administration schedule for the currently available formulation (20 mg/mL). The lower frequency of administration will be more convenient for patients. The three-times-a-week Copaxone will be available within a few days.
New Copaxone Approval, a Major Positive
We view the approval of the new formulation of Copaxone as a major positive for the company. We expect Teva’s shares to gain on the news.
Copaxone generated approximately $3.2 million in sales in the first nine months of 2013, accounting for more than 20% of the company’s total revenues. However, Copaxone could start facing generics this year.
Last month, Teva provided guidance for 2014 based on two likely scenarios related to Copaxone – Copaxone remaining exclusive and Copaxone going generic. The entry of Copaxone generics this year could cut total revenues by about $500 million and earnings by 60 cents.
Teva has undertaken several initiatives (including developing new candidates targeting MS and the new formulation of Copaxone) to mitigate this loss. With MS candidate Nerventra receiving a negative opinion from the Committee for Medicinal Products for Human Use earlier this month, the FDA approval of the new Copaxone formulation comes as a relief.
Teva is planning to switch a significant number of patients (approximately up to 45%) from Copaxone 20 mg/mL to Copaxone 40 mg/mL in the next few months.
However, we remind investors that the competition in the MS market is intense. Apart from injectables, several oral therapies including Novartis’ (NVS) Gilenya and Biogen Idec’s (BIIB) Tecfidera are also available.
Teva carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks include Actavis (ACT) carrying a Zacks Rank #1 (Strong Buy).
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