Bad news, Teva--Sandoz has an FDA nod for generic Copaxone. But when will it launch?

It's been a long, hard battle since a court upturned Teva's ($TEVA) Copaxone patent in July 2013, but a Supreme Court fight, several petitions and a regulatory journey later, Copaxone generics are here.

The FDA approved the first substitutable copy for the company's MS star on Wednesday--a knockoff from Novartis' ($NVS) Sandoz and Momenta Pharmaceuticals ($MNTA) that the pair has dubbed Glatopa. And with that, the revenue decline for the $5.58 billion seller is on. Or is it?

According to ISI Evercore analyst Umer Raffat, the companies may not be able to launch their version just yet. For one, the court ruling that bumped Copaxone's patent expiration up from September 2015 to May 2014 is still in question; after ruling in Teva's favor earlier this year, the U.S. Supreme Court remanded the case back to a lower court. And it's "unclear" if Novartis is interested in launching at-risk before that IP shield comes down in September, Raffat wrote in a Thursday note to clients.

The longer Glatopa takes to roll out, the more time Teva will have to switch patients over to a new, long-acting version of the drug--something it's been working on since it won FDA approval last January. So far, the company has made quick work, converting more than 67% of patients, Raffat said.

But the company still has plenty to lose. Copaxone generated 21% of the company's top-line haul in 2014, and it made a "significantly higher percentage contribution to our profits and cash flow from operations" last year, the Israeli drugmaker said in an SEC filing. As Raffat wrote earlier this month, the latest consensus estimates had Copaxone's sales eroding by 31% by 2016, and 50% by 2018.

Teva knows it, too, and it's gone to great lengths to dissuade the FDA from green-lighting a challenger. Earlier this month, it filed its eighth citizen's petition with the agency, taking issue, in part, with abstracts Momenta and Novartis submitted for the American Academy of Neurology's 2015 conference.

Now, though, Teva will just have to keep on working to lessen its reliance on Copaxone, something CEO Erez Vigodman has said it plans to do through M&A. Earlier this month, it inked a pact to buy California's Auspex Pharmaceuticals for $3.2 billion, a move it said would boost sales by next year.

- read Novartis' release

Special Reports: Top 10 Drug Patent Losses of 2014 - Copaxone | Top 10 Generics Makers by 2012 Revenue - Teva - Novartis (Sandoz)

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