Teva Pharmaceutical Industries Ltd. is best known as a generic drug producer. Indeed, Israel’s Teva is the world’s largest generic drug company. However, Teva also spends significant sums of money on research and development of new pharmaceutical treatments, and their flagship product Copaxone is an ethical drug for multiple sclerosis.
Mylan Laboratories Inc. have announced an agreement with India’s Natco Pharma Ltd. to distribute a generic version of Copaxone. Natco already markets generic Copaxone in India and Ukraine and is facing a patent infringement lawsuit filed by Teva in India.
This surprising turn of events, caused Teva’s shares to fall over 2 1/2% on Nasdaq yesterday.
Teva’s Copaxone is patent protected in the US through 2014 and in Europe through 2015. To the best of Teva’s knowledge, no applications had been filed to register generic Copaxone in either of these markets. According to Teva, Copaxone is a complex drug to develop and produce. If Natco’s formulation is different, it will require lengthy clinical trials on many patients in order to prove its safety and clinical efficiency.
Both Sandoz and Momenta Pharmaceuticals Inc. (Nasdaq: MNTA) have also been developing their own generic versions of the drug, but so far, neither company have filed a Paragraph IV application with the FDA (US Food and Drug Administration) to challenge the Copaxone patent.
Whilst investor panic seem premature, there is little doubt that Teva is as susceptable to generic competition as other drug development companies.
