From ML
Generic Copaxone waiting game goes on after legal ruling
The US Supreme Court ruled in favor of Teva (see our note) on a patent related to
1x/day Copaxone (for multiple sclerosis). The ruling itself does not currently gate
FDA approval of pending ANDAs as no injunction exists, but it could potentially
delay generic entry until there is more legal clarity from the Appeals Court. MNTA
remains hopeful of an approval in the “near term”. If approved, MNTA has said in
the past that it is urging partner, Sandoz, to consider an at-risk launch. We now
assume a launch in Sep-15 (vs. late-2014, which did not occur) with one other
competitor entering (no change on this). Our DCF-based PO remains at $14 and we
continue to believe that the shares present an opportunity for risk-tolerant investors.
With pipeline and/or legal news flow coming up, we expect MNTA to be volatile, and
we will keep a close lookout for additional information that would inform our view.
Legal process to take time, generic delay helps Teva’s switch
The Appeals Court will have to reconsider its ruling that invalidated Teva's '808 non-
Orange Book-listed patent on 1x/day Copaxone (expires on 9/1/15, if valid). MNTA
believes a legal decision may come within a year. Delays for generics would help
Teva to switch more patients to its 3x/week version (Rx switch rate is ~63% now).
Some quick generic Copaxone DCF scenarios
A year’s delay vs. our base case estimate of a Sep-15 launch drops our DCF
value/share by ~$1. If MNTA is alone through 2016, our DCF value/share would go
up by ~$2. If MNTA’s generic Copaxone sales are halved (due to more competition
or brand switching), our DCF value/share would go down by ~$5, all else equal.
Other potential upcoming catalysts to keep in mind
On biosimilars, the FDA could issue finalized guidelines in 2015. There could be
news flow from trials involving MNTA’s biosimilars. Baxter could make a decision on
whether it will pursue three more biosimilars in its collaboration. On its innovative
products, MNTA could report more data on necuparanib (metastatic pancreatic
cancer) Phase I/II dose escalation studies; Part A top-line results were promising.
