Teva's strategy for padding its Copaxone franchise even in the face of generic competition just took a major hit. The company lost its bid to defend the long-acting, 40mg version of the multiple sclerosis drug—the very product taking up the slack as copycats to the short-acting formula steal share.
Hit by pricing woes and more, Teva needed that long-acting formula to shore up Copaxone sales. But the U.S. Court of Appeals for the Federal Circuit decided the new version isn't a big enough advance on the old one to warrant a slate of newer patents. And in turn, the court affirmed a lower court’s decision that four patents on Copaxone 40mg are invalid.
The drug is a key sales contributor and a life raft for the franchise, thanks to plummeting sales of the short-acting version and erosion for the newer product. With Mylan and Novartis generics in the mix, sales for the first half of this year—for the 20mg and 40mg versions together—amounted to $940 million in North America, down more than $700 million from last year's $1.65 billion. Full-year 2017 sales clocked in at $3.8 billion worldwide, down from $4.2 billion in 2016.
In its decision, the appeals court agreed that the 40mg version of Copaxone administered three times a week would be "obvious to try” after the company already patented a 20mg daily version.
The decision is a positive for Mylan, Novartis and other generics makers because it gives them free rein to compete. And it removes the threat of damages they might have paid to Teva if the Israeli company had won the appeal. When Mylan's copy hit the market last October, Teva deemed the launch "at risk" and promised to pursue damages if it eventually won the patent fight.
The company’s then-CEO Yitzhak Peterburg said the company remained “confident in patient and physician loyalty to Teva’s Copaxone due to its recognized efficacy, safety and tolerability profile, and we will continue to promote and support the product.”
Former Lundbeck CEO Kåre Schultz now runs Teva, and he has more than Copaxone to worry about. The appeals decision comes as Teva's mammoth generics business faces industrywide pricing pressure in the U.S. On two occasions, the company has reduced its sales guidance by more than $1 billion. It’s also kicked off a massive round of layoffs and announced plans to shutter manufacturing facilities. Schultz has also been working to pay down debt, and those efforts have won praise from analysts.
As those challenges play out, the company is in the early stages of its launch for Ajovy, a migraine prevention med competing with new rivals from Amgen and Eli Lilly. Analysts believe the drug could bring in more than $500 million.