U.S. patent office puts new Copaxone's IP shield under the lens

Teva's ($TEVA) patents on Copaxone faced plenty of scrutiny before they were eventually upturned, paving the way for Sandoz's generic, Glatopa. Now, though, its IP protection on its new, long-acting version of the drug is under the microscope, too--and the Israeli drugmaker's prospects for hanging onto its patents don't look great.

Tuesday, the U.S. Patent and Trademark Office (PTO) instituted inter partes review proceedings against two of the patents on Copaxone 40 mg, with the third patent still pending. Next up will come a one-year review, and at that point, the office will decide whether to invalidate the IP shields, Bernstein analyst Ronny Gal wrote in a note to clients.

What does that mean for Teva? A review of the third patent is likely on the way, and "the odds of invalidation in this case are close to even," Gal wrote.

That's not great news to Teva, which scrambled to convert 70% of its patient pool over to the successor drug as it awaited word on the fate of original Copaxone. After a lower court dismissed the drug's patents, Teva scored a Supreme Court victory--only to see the case remanded and recently decided again in its rivals' favor.

Now, if Teva does lose its patents, Momenta ($MNTA)--which developed the Sandoz knockoff--will "very likely" win FDA approval on a 40 mg generic by January 2017, the point at which copycats can legally enter the market, Gal figures. And the "critical question," as he sees it, is how many of the other four generic filers will get their own green lights and enter the market at the same time.

Whatever happens with Copaxone, though, Teva's in a better spot now than it was when the franchise first encountered IP trouble. Recently, it inked a $40.5 billion pact to buy Allergan's ($AGN) generics business, leaving it less reliant on the MS star. The way Gal sees it, the downside is "limited" for the company; "Teva earnings will trough at $50 in 2017, and the company has a reasonable growth trajectory from there," he wrote.

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