One, two, three, gone: Teva loses third patent on new Copaxone formula

Copaxone

Three strikes for the patents on Teva Pharmaceutical’s long-acting Copaxone formula: The U.S. Patent and Trademark Office’s review board has now invalidated the third of those patents to come up for review.

Mylan, under fire now for large price increases on its EpiPen anaphylaxis treatment, challenged the Teva patents through the PTO’s new inter partes review (IPR) process, and the Patent Trial and Appeals Board handed down the decision late Thursday.

That puts Mylan three-for-three in targeting Teva’s protections on Copaxone 40 mg, a new formulation of the multiple sclerosis drug that’s intended to fill the gap as the blockbuster original product succumbs to generic competition.

But Teva’s branded drug isn’t out of the exclusivity game yet.

The Israeli drugmaker still has a chance to defend itself, in a court fight scheduled to begin Sept. 26. Novartis and Momenta Pharmaceuticals will be trying to upturn a fourth patent covering the med. A decision in that case will likely come in the first quarter of 2017, RBC Capital Markets analyst Randall Stanicky figures.

And now that the IPR process has swept aside three patents, analysts aren’t optimistic that the decision will go Teva’s way. “Teva is more likely to lose than win the court case,” Credit Suisse analyst Vamil Divan said in an investor note after last week’s patent strikedown.

Meanwhile, Mylan is expected to target that fourth patent separately, via the same IPR process; the company has promised to pursue "all avenues” to bring that patent down, and analysts believe that includes IPR. They also expect yet another patent to be challenged the same way.

Confused yet? The upshot is that three of the patents protecting Copaxone 40 mg from generic competition are now knocked out. The fourth goes to court this month. The fifth hasn’t yet been challenged, but odds are it will be.

This thrice-weekly version of Copaxone has been key to Teva’s strategy for protecting its leading MS franchise. In a stroke of good luck, Teva won FDA approval for the new iteration just in time to switch a majority of patients before the original med’s IP shield went down. Novartis’ Sandoz unit and Momenta have since seen slow going for their knockoff of the original version, Glatopa.

Teva took a fight over the original Copaxone’s patents all the way to the Supreme Court. If it loses to Novartis and Momenta which are developing a Copaxone 40 mg knockoff together, it’s likely to appeal. It might well appeal the PTO board’s decisions as well. All this could add months--even years--to the patent argument.

“[W]e expect Teva to exhaust all legal appeals, assuming all its Copaxone IP is invalidated, which would keep generic challengers off the market until 2018,” Leerink Partners analyst Jason Gerberry said in a recent investor note.

Even so, Gerberry advises Teva to huddle up with Novartis and Momenta to set a date for a generic launch. Making a deal with those two companies, which have the leading contender, would “bridge the company to the launch of some of its high proprietary pipeline brands,” Gerberry said. That would give Teva a chance to bulk up sales of its other specialty brands before Copaxone generics descend in full force.

That would be a surprise move on Teva’s part. But either way, Bernstein analyst Ronny Gal sees Copaxone 40 mg facing generic rivals sooner rather than later.

“We see the odds of generic entry on Copaxone in 2017 at ~80% after today,” Gal wrote after the patent board struck down the first two patents. “This would essentially force a much faster transition of the debate on the company to its remaining two businesses--generics and the innovative branded pipeline.”

Related Articles:
Best way for Teva to deal with Copaxone threat? Settle, analyst urges
Teva's new Copaxone formula loses two defenses against generics
With Allergan deal sealed, Teva turns its attention to branded M&A
Teva's Copaxone finally succumbs to copycats, putting a drag on 2015 sales
Why is Novartis' Copaxone copy lagging? It's all about coverage, analyst explains
U.S. patent office puts new Copaxone's IP shield under the lens