Who leaked the scary Copaxone numbers? Teva aims to find out

Teva's best-selling multiple sclerosis drug Copaxone will face generic competition next year, fully 18 months before the company had anticipated. That's gonna hurt. How much will it hurt? An Israeli publication thinks it has Teva's answer to that--a 42% cut to the drug's sizable profits.

That number comes from a financial forecast The Marker obtained, apparently from a Teva ($TEVA) source. But Teva followed that with a press release pooh-poohing the number. The information "appears to be from an outdated presentation," the Israeli drugmaker said, adding that it's "incomplete" and "does not reflect our full analysis."

And woe to the source of that report, the company said. Teva intends to investigate the leak, which is far from the first anonymous tipoff in recent months. Anonymous sources of one kind or another have alerted the media to Teva's plans, including details about layoffs and behind-the-scenes management dust-ups.

In fact, one media report--itself based on leaked information--said that now-former CEO Jeremy Levin pushed board members to undergo polygraph tests as part of an investigation into information leaks. According to reports, Levin's probe ended up bearing fruit; the leaky source was identified.

But while all this skullduggery is juicy stuff, the real story here is Copaxone. You'll notice that Teva didn't directly dispute the figure quoted in The Marker's story. The company only said it expects to offer up its 2014 financial outlook next month "and does not intend to comment further until then."

Like other drugmakers facing major patent losses, Teva has been working for years to prepare for Copaxone's ride into the sunset. The company made a string of deals in 2010 and 2011, including its purchase of Cephalon, the U.S.-based maker of narcolepsy treatments Nuvigil and Provigil, and the cancer drug Treanda. Before those deals, Copaxone accounted for two-thirds of the company's specialty pharma sales and almost one-fifth of sales overall. And even last year, Copaxone made up a good chunk of the company's growth, with an increase of 12%.

Still, Copaxone delivers a big chunk of Teva's profits: about half, according to some reports. Recent spurts of growth mostly stem from price increases rather than volume growth. If a generic version launches in May when the 2014 patent expires--as would-be copycat Mylan ($MYL) promises--Teva's ability to hike prices will evaporate, and Mylan's copy will drain away sales.

Plus, Copaxone faces new branded competition in the form of Tecfidera, the hard-charging Biogen Idec ($BIIB) pill approved earlier this year, as well as Novartis' ($NVS) Gilenya, another oral treatment. A 42% hit to Copaxone's results? Seems to be within the realm of possibility. We'll see Teva's official numbers in December.

- read the Teva statement

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