Teva, chasing Amgen's Aimovig, scores much-needed FDA approval for migraine drug Ajovy

Amgen has had several months to build its lead in the new CGRP field of migraine meds, but now Teva has secured an approval for Ajovy. The approval couldn't come at a better time for Teva, as it provides the company a new growth driver during its business turnaround.

Ajovy, an injection given monthly or quarterly to prevent migraines, will compete with Amgen’s Aimovig, plus another potential entrant from Eli Lilly this fall. Teva's drug costs just as much as Aimovig, at $6,900 per year, according to Jefferies analyst David Steinberg.

In a note, Steinberg wrote that his team sees Ajovy reaching peak sales of more than $500 million, “emerging as a key contributor to Teva’s potential turnaround" after other drugs Copaxone, ProAir and Treanda face new competition in the coming years. Ajovy suffered a regulatory delay this year due to manufacturing problems at a Celltrion plant in Korea.

Teva’s North American commercial EVP Brendan O’Grady said in an interview that Ajovy’s option for monthly and quarterly dosing offers an advantage over rivals. He said Teva talked with patients, physicians and payers and determined that “parity pricing” compared with Amgen’s Aimovig was appropriate.

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Aimovig won its approval in May, and Amgen has already seen the effects of “pent-up demand" in the migraine field. On the company's second-quarter conference call, global commercial head Anthony Hooper said “the response to Aimovig in the marketplace is beyond our expectations.” The company set up a hub to help process prescriptions and allow patients to access the drug early in the launch.

Hooper said the majority of Aimovig prescriptions are free right now under an access program, but that Amgen is “rapidly converting that business to paid prescriptions.”

Despite Amgen's first-to-market advantage, Steinberg wrote that his teams still sees a “major market expansion opportunity for competitive CGRP agents.” One potential stumbling block for Teva's drug is that it doesn’t have an autoinjector option. Still, the company plans an “aggressive sampling program” to provide free drugs while it works through access hurdles with payers, Steinberg wrote.

Overall, Wells Fargo analyst David Maris wrote that the approval was important “given Teva’s lack of other near-term pipeline assets and continuing troubles in generics.” He said a regulatory stumble on the med “would have delayed a key growth driver and hurt" management's credibility.

Eli Lilly is still anticipating FDA action on its CGRP drug this fall, according to Steinberg. Alder BioPharmaceuticals has a program in development, as well.

Ajovy's approval comes as Teva CEO Kåre Schultz works on a massive turnaround following the company’s 2015 purchase of Allergan’s generic offerings. Following the deal, generics prices have eroded in the U.S., and the company has had to reduce its sales guidance by more than $1 billion twice. Teva has also kicked off a huge round of layoffs and plans to shutter manufacturing facilities. But efforts to cut its debt have drawn praise from analysts. Just last week, the Israeli drugmaker said it would slash it further with a tender offer to pay up to $400 million of notes that were due in 2019 and 2020.

Editor's note: This story was updated with comments from Teva's Brendan O’Grady.