Teva's patent victory on Copaxone boosts franchise long-term

Teva Pharmaceutical Industries ($TEVA) has won a big Copaxone battle. But that doesn't mean it has won the war. The drugmaker's multiple sclerosis treatment--its biggest-selling drug--won't face generic competition for at least two more years, under a new court ruling. So, the threat of immediate generic erosion has ebbed.

But as Citi anayst John Boris points out in a note to investors, Copaxone still faces competition on its opposite flank. Branded rivals, particularly Biogen Idec's ($BIIB) forthcoming oral drug BG-12, are expected to knock Copaxone back. "We project U.S. Copaxone sales of $2.9 billion in 2012 (estimated) declining to $1.26 billion in 2015," Boris wrote (as quoted by Globes).

What the patent decision does is buy Teva some time. U.S. District Judge Barbara Jones ruled against two generic challengers, one from a partnership between Novartis' generics unit Sandoz and Mylan ($MYL), the other between Momenta Pharmaceuticals and India's Natco Pharma. The companies had asked FDA to approve their knockoff versions, but Jones determined that Teva's patents would be infringed. Best of all for Teva, Jones upheld Copaxone's process patent, which doesn't expire till 2015.

So, in the meantime, Teva can push its newer Copaxone product toward the market. The drugmaker is working on a longer-acting version to make the injections more convenient for patients. That formulation is up for approval mid-year 2013, RBC Capital Markets analysts Shibani Malhotra and Austin Nelson say.

"Teva would now have at least one year and possibly over two to switch patients to the new dose ... making the franchise much more sustainable longer-term," the analysts wrote. "We currently expect that at least 30% of the franchise will move to the new form of Copaxone."

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