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TEVA CFO Unconcerned by Copaxone Competition (More Propaganda from Teva)
Eyal Desheh: Copaxone is very difficult to copy and get approval for without clinical trials.
25 July 10 17:41, Shiri Habib-ValdhornTeva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) CFO Eyal Desheh is not worried by the US Food and Drug Administration (FDA) approval for generic versions of deep vein thrombosis treatment Lovenox, made by Sanofi Aventis SA (NYSE: SNY; Euronext: SNA), to Momenta Pharmaceuticals Inc. (Nasdaq: MNTA) and Sandoz. These raised concerns among investors that FDA will take similar action against Teva's multiple sclerosis drug, Copaxone. Teva's share price was down 6.5% on the TASE today after falling 8.5% on Nasdaq on Friday.
Desheh told "Globes," I don't think these things are significant. Copaxone is a much more complex product than Lovenox because of the randomness of its molecules. It is a product that is very difficult to copy and get approval for without clinical trials.
That is our belief and not something that is 100% certain but it is based on our know-how and the development of generic products and we understand a thing or two about this." (apparently they do not know enough to get generic Lovenox approved, even though they had a 2 year application lead over Momenta/Sandoz)
TEVA Shares Sink on Fear of Copaxone Competition
By Tova Cohen
TEL AVIV, July 25 (Reuters) - Shares in Teva Pharamaceutical Industries <TEVA.TA> fell sharply on Sunday on fears of looming competition for its blockbuster multiple sclerosis drug Copaxone.
Shares in Teva, the world's biggest generic drugmaker, were down 5.8 percent to 198.80 shekels at 0933 GMT, after its Nasdaq shares <TEVA.O> slid 8.6 percent to $49.38 on Friday.
U.S. health regulators approved on Friday the first generic version of widely used Sanofi-Aventis <SASY.PA> blood clot treatment Lovenox to the Sandoz generic drug unit of Switzerland's Novartis AG <NOVN.VX>, which is allied with smaller partner Momenta Inc <MNTA.O>. [ID:nN23123382]
The approval of the complex medicine has spooked Teva investors, who fear the FDA now might be willing to approve a generic version of Copaxone, which like Lovenox is complicated to make.
"If Momenta succeeded in getting approval for one complex molecule it's possible it will also get approval for Copaxone, and soon," Bank Hapoalim analyst David Levinson said.
Momenta and Novartis are seeking U.S. approval of a generic Copaxone, and Momenta said on a conference call on Friday it was working with the FDA on its Copaxone application.
Harel Finance analyst Steven Tepper said (small ISRAELI Finance company) he believed the path to approval of a generic version of Copaxone is long and complicated and called the comparison with Lovenox weak.
"The complexity of Copaxone is different from that of Lovenox and the process of approval is expected to be different," Tepper said. "Like Lovenox, the process for approving a generic version of Copaxone is expected to be long and take about five years."
(LOL!)
Teva said on Friday any potential generic version of Copaxone would need to be evaluated with full-scale clinical trials, given Copaxone's complexity.
Copaxone is patent protected until 2014, and Momenta and Sandoz will have to persuade the courts they are not violating the patent, Harel Finance's Tepper said.
Teva is also seeking to sell a generic form of Lovenox and Bank Hapoalim's Levinson said investors questioned why the company had not received approval yet.
Teva said it believed its generic Lovenox met FDA criteria and could be approved.
"There is no doubt we are at the beginning of the end for Copaxone," Levinson said. (TOO SAY THE LEAST!)
Even if Copaxone sales continue to grow in the coming year or two, Teva's shares will be volatile because the drug represents about 20 percent of Teva's sales, he said.
"We believe these sharp drops represent a long-term buying opportunity," Levinson said, who rates Teva outperform. "We believe the share is trading at a low price earnings multiple relative to the industry."
Harel Finance's Tepper maintained a buy rating for Teva but lowered his price target by $2 to $64 a share. ($1 = 3.85 shekels) (Editing by Karen Foster) ((telaviv.newsroom@reuters.com; +972-9-899-0222; Reuters Messaging: tova.cohen.reuters.com@reuters.net))
The cash will be rolling in to Cambridge very soon ... short of a TEVA approval Monday morning, I'll be buying more and not unloading shares for many months.
Great post! Agree on all points, #6 is particularly funny! (i was thinking the same thing when i heard him on the call)
jbog,
I would urge you to review the FDA document re: "Establishing Active Ingredient Sameness for a Generic Enoxaparin Sodium, a Low Molecular Weight Heparin"
Specifically, the high-thresholds outlined that must be met ( keeping in mind that Teva/Amphastar who had a 2 year lead over MNTA in submitting their mL application did not receive a nod). The approach articulated by the FDA is in-line with MNTA's approach, the level of sophistication needed requires MNTA's characterization platform...
It will take time for market participants to fully understand the implications of the FDA approval on the development of generics complex molecules -- in other words, the ? mark you outline is not really a ? mark, it is settled....
Because of the complexity described above, FDA found that the criteria typically used to approve generic drugs (e.g., compendial requirements) were inadequate by themselves to characterize the “sameness” of enoxaparin sodium, and that additional criteria were needed. To address this issue, FDA developed a set of rigorous and overlapping criteria to be used in the approval of generic enoxaparin sodium (See Table 1).
Table 1. Criteria Used for Sameness Determination of Enoxaparin Sodium
1. Equivalence of heparin source material and mode of depolymerization
2. Equivalence of physiochemical properties
3. Equivalence in disaccharide building blocks, fragment mapping, and sequence of oligosaccharide species
4. Equivalence in biological and biochemical assays
5. Equivalence of in vivo pharmacodynamic profile
The first three criteria are used to ensure that the heparin source material, the chemical reaction used in the manufacturing process, and the structure (the distribution of molecular weight, chemical composition and sequence) of the active ingredient, enoxaparin sodium, in the generic drug product is equivalent to that in the brand name counterpart, Lovenox. The fourth and fifth criteria are used to ensure that the generic enoxaparin sodium has the same degree of anticoagulant activity as Lovenox. Together, these criteria ensure that a generic enoxaparin sodium will have the same active ingredient as Lovenox.
Using these criteria, FDA has approved a generic version of Lovenox (enoxaparin sodium injection). FDA determined that Sandoz demonstrated that all requirements for generic drug approval were met, including that its generic enoxaparin sodium has the same active ingredient as the brand name product, Lovenox.
If the market undervalues MNTA, it may lead to a quick buyout. The FDA in approving MNTA mL has, for all practical purposes, validated MNTA's sophisticated characterization platform. They have come out and articulated a very high-threshold for competitors to meet. This goes far beyond m-enox, it is a lock on complex molecule generics.
The m-enox revenue is just a drop in the bucket at this point. At 20$ a share, this stock is ridiculously cheap. In light of the existing pipeline and the many others to come from the platform, I would argue that DD's valuation thesis in the ReadMeFirst looks far more reasonable.
I'll step out and say what i know others are thinking but not wanting to say ... the next few weeks should result in some pretty stunning gains, which will make the ITMN runnup in March-April 2010 look modest. 80% gain on Friday was just the first step. The market will price this right, in the end... if it takes too long, big pharma will price it right for the market (via a takeover).
Don't forget, co. valuations have moved much higher on pure speculation (see SQNM's jump to a 2 billion $ company a few months ago on pure speculation).
Threat from a serious legal challenge is minimal.
The FDA has the authority to determine safety/efficacy standards ... Amphastar/Sanofi's "concern" for patient safety doesn't on its face translate into a meaningful lawsuit against Momenta. (I can't even think of a plausible cause of action here against MNTA or FDA).
Patent issues are moot.
What we have before us is a classic example of sour-grapes on the part of Teva/Amphastar...
Sanofi will do everything in its power to try to slow down the process (to keep the cashflow a little bit longer), but I suspect they would have launched their legal challenge the moment m-enox was approved if they thought there was a way to slow this down. (They had been saying for months that they were expecting mL approval in the near term)
I think the best indicator of how the stock will perform is the price action of Intermune in March. Note that the move from 14 --> 47 was incremental and steady through a period of 3 weeks. I expect good things next week, this is a GIFT, IMHO.
MNTA: One of the best biotech buying opportunities for some time is taking place right now. The inefficiency of the market in this regard is very striking.
I would be very surprised if this dislocation remains as is. MNTA at these levels, in light of these events, is a safer bet than it has ever been.
MNTA: Just one quick question. Who is selling MNTA at 17.90 after approval (sole thus far), when a couple months ago stock was trading in the 16's on anticipation of a approval ... what a world we live in :)
I agree Dew, but its interesting that with all of this "potential" being factored in MNTA is not seeing much a gain. MNTA is certainly LTBH, but i expect some serious volatility (to upside) next week. (it appears we are getting our downward volatility early :)
MNTA, SNY, TEVA:
In the moments following today's mL approval, some interesting facts:
MNTA gained ~$350 million in market cap.
SNY lost about ~$3 billion from its market cap.
TEVA lost ~$4.2 billion from its market cap
Let's hope some of those who sold SNY and TEVA today, will buy MNTA in the near future. I'm hopeful MNTA can hit 30-40 in the near future.
i think he was alluding to the fact that it has been "frustrating" to wait to partner this ... but now that mL is here, i suspect those discussions will be a bit different
MNTA: Has the most bizarre liquidity of any stock i've been in. I have a feeling that the next few days for the PPS will be interesting.
jbog, good question. In light of todays new, it would be surprising if MNTA were still independent OR < $50 per share.
DEW: Wouldn't it follow that MNTA should be up quite a bit more because of copaxone?
TEVA: Now getting slaughtered. Down ~9%.
blade, i agree that the market is discounting many details... which it tends to do as the fast money starts rolling. once it settles i suspect we'll see some nice movement.
MNTA: If this is not a great buying opportunity... then i don't know what is. MNTA now approaching its high of the year (~17) and we have approval.
TEVA has not been approved, yet (if at all). M118 partnership is lined up for the kill.
Who would have thought you could get generic lovenox approval and still be able buy MNTA in the teens... looks like they are trying to peg it at 20. Im a buyer under 30. Waiting for all the upgrades to roll in next week!
I've already liquidated some of my other biotech positions to build powder for more buying!!
MNTA: Congrat all! Interesting that the BID/ASK spread for the Sept/Jan calls are huge. Bid for Sept 17.5 is 5.6, ASK is 9.6 ... those ASKING know what is likely to happen here in the coming weeks. Any Buy under 30 IS a steal.
Dew,RKRW,others...
your thoughts on this from months ago...
http://www.cnbc.com/id/15840232?play=1&video=996683829
Dew already answered this ... he thinks it would go up slightly.
Dew, there is no letter, but the FDA will provide guidance on approvability....
Under section 505(j)(4)(A) of the act, within 180 days of the initial receipt of an ANDA, FDA must either approve or refuse to approve the ANDA, unless FDA and the applicant agree to an extension. If FDA refuses to approve the ANDA, it must give the applicant a notice of an opportunity for a hearing (NOOH) on whether the ANDA is approvable and will issue such a notice if the applicant elects to request a hearing rather than to amend or withdraw its application...
Pretty dangerous to be burning through money on other projects when the FDA still has yet to move on M-Enox. If the "delays" in obtaining a FDA decision continue into next year, the PPS drop will not mix well with the need to raise more $$$ to fund operations.
Very sad and very frustrating.
I'm not as upset with MNTA as I am with the FDA and their unwillingness to act because of political motivations. (how much dotting of i's and crossing of t's do they need?)
When will these career bureaucrats be held accountable by the American people? (see my previous posts) Lack of transparency into these agencies is downright scary.
What about a FDA "approvable" notice?
MNTA: What are they doing w/ 180 employees ... they don't need that kind of staffing when they are in wait/see mode. I haven't seen a meaningful press release for many months. A lot of thumb twiddling? Very disappointing leadership if you ask me.
She'll pull out of this .... will be back to the high 12's/low 13's in a couple of days (irrespective of the market)
MNTA has been range-bound between 11 - 14 for some time. It can be kicked down (5%) or move higher (5%) on as little as 30k-40k shares.
I am a buyer down here for the swing-trade (again) and I continue to hold my core position.
MNTA: Has anyone heard anything? Sounds like crickets chirping....
MNTA: Markman hearing?
Did the judge go on an extended vacation? Red-tape and bureaucracy at its finest!
How does it take a judge 6 months to construe the scope of the patent claims and to make a decision on summary judgment request. Humans only live ~75 years. This is taking a while.
Very few of my small cap biotech holdings (even the more controversial ones like SQNM) have gone down. In fact, I've had several appreciate nicely since Wallstar posted his 'suggestion' to the board... SQNM and MNTA are up or flat since May 20th (when he posted), JAV buyout worked out, IDIX has done terrific and even weaker stocks like CERS have outperformed nicely.
I'm actually quite happy i stayed long ...
frankly, i would be hesitant to short biotech here.
stocks like MNTA can explode higher on a dime. I would be a buyer at this time.
indeed... couldn't have said it better myself. That being said, it is strange to have a half-billion $ enterprise with such little liquidity. It's not everyday you see something like this.
Amazing how a measly ~80k shares can knock $30 million dollars off the market cap of this company, and all before lunch time on the west coast! In fact, it was down nearly 3% on ~20k shares this morning.... :)
I plan to hold until the FDA decision. Management seems frustrated that a decision has yet to emerge ... but appear confident that it is coming in "the near term." (They've started singing this tune (again) starting in November) My gut tells me that we will hear something mid-summer, but i must admit that the delays are excruciating ... and the fact that markman ruling is weeks behind the analyst ETA is a cherry on top to the frustration.
The interesting twist is how MNTA is explaining away the lack of response thus far -- they claim that the FDA is being extra cautious with the application before ruling -- essentially, making sure they dot their i's and cross their t's.
Seems interesting that MNTA is willing to make such an assertion ... are they being in contact with the FDA about the "hold-up" ... one can conclude that they are in some sort of communication with the agency, since they have been aggressively stating that the agency is working hard to complete the applicaiton. I wonder what the FDA is telling them....
It is rangebound between 11 - 15. I expect it will get back to $14 w/in a month. I've successfully swing traded 2 waves, looking for the third here. I picked up a few thousand shares to trade in the high 11's.
I have to disagree. I think the Celtics will retain him, for fear of losing cohesion in their lineup.
I fully concur. A close friend of mine who got back into the market 2 months ago told me that they panicked and called their broker this afternoon to get them out of the market and into cash. I see much gloom and doom around us. Makes you wonder who is left long in the stock market ... they must be crazy! :)
p.s. I'm now officially a DNDN long!
i just took one and i feel better... i will keep doing that everyday until mL is approved!!