Teva faces $100M lawsuit from Israel over unpaid Copaxone royalties: report

Teva Pharmaceuticals' big-selling multiple sclerosis drug Copaxone is losing ground in the U.S. thanks to generics, but the medicine was once the company's primary growth driver. Now, it's at the center of a lawsuit filed by the state of Israel over alleged unpaid royalties.

Israel has sued Teva for $100 million in royalties on the longer-lasting version of the medicine, Globes reports. While Teva owns Copaxone marketing rights, scientists at the Weizmann Institute of Science developed the medicine, the publication reports. 

When the original daily version, first approved in the U.S. in 1996, neared its patent expiration, the company switched its efforts to a longer-acting version. In its lawsuit, Israel claims government scientists at the Weizmann Institute developed the long-acting version as well, so it's owed royalties.

"The state has no alternative but to take legal action against Teva to ensure that it receives suitable remuneration for using public resources that brought Teva very large scale revenue," the suit says, according to Globes. 

Copaxone's U.S. sales peaked in 2013 at $3.2 billion, according to a 2020 congressional report on drug pricing. 

The Weizmann Institute researchers sued for royalties in 2018, according to the Globes report, and that's how the government became aware of the issue.

Teva isn't buying the allegations. In a statement to Globes, Teva said it's a "recycled lawsuit with groundless allegations that were claimed against Teva in the past in a lawsuit that has been pending since 2018."

"Teva will respond to the body of the allegations as part of the legal proceedings, as is customary," the company added.

The lawsuit is only one more headache for a company that's busy dealing with a tangle of opioid litigation in the U.S. plus competitive pressures for Copaxone and its generics business. In addition, the company has warned about exchange-rate effects on its 2022 financial performance.

In reporting first-quarter sales, Teva cut $200 million from its 2022 revenue guidance. The company now expects $15.4 billion to $16 billion, down from $15.6 billion to $16.2 billion. Teva also trimmed $100 million from its Copaxone outlook and is now expecting $750 million from the drug this year.