Teva, Sandoz have launched Narcan generics, but Emergent's branded option should still thrive: analysts

Generics are coming at Emergent’s opioid overdose drug Narcan. On the same day in December, Teva and Sandoz launched copycat versions of the successful nasal spray, suggesting Narcan’s reign of dominance was soon to end.

But don’t write off the branded treatment just yet, analysts at Cantor Fitzgerald say, as "market complexities" may favor the brand in the short term.

With opioid-related deaths increasing throughout the pandemic, according to the Centers for Disease Control and Prevention, Narcan’s sales have also been on the rise. Through the first three quarters of last year, the drug generated $314 million, which exceeded its sales for all of 2020. In the third quarter of 2021, Narcan’s sales were $133 million, an increase of 50% year over year.

Teva’s Dec. 22 launch of its generic threatens those sales as the companies are in a legal battle over a Narcan patent. Teva won an initial court battle in 2020, and the companies are awaiting the result of an Emergent appeal, which was heard by a three-judge panel last summer.

Sandoz launched its generic the same day. Its version is essentially Narcan in a different package and has been authorized by Emergent, which gets a cut of what Sandoz makes from its sales.    

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Both generic versions have been priced higher than expected, Cantor Fitzgerald analysts said, which is a positive for the durability of Narcan’s sales.

“We are pleased that pricing has remained strong and that Teva has priced its generic at a higher average wholesale price and weighted average coast than we had anticipated,” Cantor Fitzgerald analysts said.

While analysts expected a 20% to 30% discount, Teva’s generic is priced only 5% lower on a wholesale price basis. Sandoz’s generic carries a 6.2% discount compared to the original version.

Cantor Fitzgerald also points out that since 2016, Emergent has offered Narcan at a 40% discount on the public interest market.

“We don’t see Teva discounting to that extent in the public interest channel,” Cantor's Brandon Folkes wrote. That channel makes up 60% to 70% of the overall market, he pointed out.

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Other generics with different dosages to Narcan’s 4-mg formula are in the mix, including Hikma’s Kloxxado, an 8-mg spray that was approved in April 2021, and Adamis’ Zimhi, a 5-mg injectable. But, at least in the short term, Emergent’s product should continue to thrive, Folkes wrote.