Biotech Values

[DewDiligence]

FDA approves Teva’s “authorized” generic Effexor XR; the product will be launched July 1 pursuant to a prior settlement with Wyeth:

http://finance.yahoo.com/news/Teva-Announces-Approval-of-bw-2885306480.html?x=0&.v=1

This is a highly consequential launch for Teva because:

• Effexor XR has annualized US sales of $2.4B (based on PFE’s 1Q10 report);

• As part of the 2005 settlement between Wyeth and Teva, Wyeth (now PFE) will not grant any company other than Teva the right to launch a generic Effexor XR until 6/1/11, and hence Teva will have at least eleven months in the market as the sole US generic; and

• The Effexor XR patents in the Orange Book preclude anyone from making a non-at-risk launch of generic Effexor without PFE’s permission until Dec 2013 (and possibly later than that). Thus, Teva’s period of exclusivity could last even longer than the eleven months indicated above.

The Effexor XR situation has been known to investors for some time, so it’s unlikely that Teva will get an immediate pop from this news. However, some analysts may not have incorporated into their models the likelihood of Teva’s having a sole US generic for substantially longer than the usual 180 days.