1. Copaxone

Copaxone

Company: Teva
Disease: Multiple sclerosis
2016 U.S. sales: $3.479 billion
Patent expiration: Pending

With far and away the most 2016 U.S. sales for the meds anticipated to face generic siege this year, Teva’s long-acting Copaxone formulation also has one of the more compelling patent stories.

All the elements for drama are there. Teva is struggling under a debt burden, taking flak from angry investors and criticism for a $40 billion Allergan generics buyout that looks a lot less attractive now than it seemed to be when the deal was struck last summer. Its CEO, Erez Vigodman, made an abrupt exit soon after slashing the company's revenue guidance for the year, and Teva simultaneously announced an operational review. It lost patent protection for the first Copaxone formula earlier than expected, and now it's facing a similar disappointment with the new Copaxone 40 mg version. Billions of dollars are at stake at a time when Teva can least afford the loss.

Of course, Teva plans to defend its key med’s intellectual property fiercely in the face of generic competitors poised to eat away at those billions in sales and gravely hurt the Israeli drugmaker’s fortunes—provided they can prevail in patent court.

But that defense might prove tough. The company lost two key patent fights last year, and in late January, a court invalidated four patents on the long-acting MS med, further advancing prospects for generics. Most analysts are betting that, with those patents struck aside, generic challengers will get ready to roll. In the wake of the latest district court decision, though, Credit Suisse analyst Vamil Divan reminded investors that generics companies have “several steps still to go” before taking a stab at the Teva brand.

Either way, Teva is appealing that decision. Any launch during that process would be considered “at-risk,” but with a blockbuster drug to target, and several patent rulings in their favor, generic companies are expected to be willing to take their chances.

Currently, no would-be competitors have FDA-approved copycats, so it’s impossible to say for certain when a Copaxone generic would hit the market. But Bernstein analyst Ronny Gal, for his part, wrote in February that “it is likely we will see Copaxone genericization in the next few months."

During the company’s fourth-quarter conference call February 13, interim Teva CEO Yitzhak Peterburg described the situation as “extremely dynamic.” He said Teva could lose $1 billion to $1.3 billion in sales on the introduction of 40 mg generics in 2017.

On Friday, one challenger hit a road bump. After market close, Momenta and partner Sandoz reported that an FDA warning letter is poised to delay their competitor. Several analysts are still expecting a generic to launch in the second or third quarter this year, while others speculate the Momenta problems could drag into 2018.

Last month’s court decision followed separate setbacks for the med’s IP shield after the U.S. PTO ruled in favor of Mylan on its request for an inter partes review last fall. The agency’s review board struck down two patents in August and a third in September.

The pending Copaxone assault comes as Teva faces questions over whether it should split up and shortly after it walked back its 2017 guidance by $1 billion. It's also agreed to multiple pay-for-delay settlements lately that are adding up.

Copaxone first won FDA approval in 1996, according to Drugs@FDA.

1. Copaxone