Seeking Alpha

Teva working to protect key drug's sales ahead of generic competition

  • Teva Pharmaceuticals (TEVA) is busily trying to convert users of its MS drug, Copaxone, to its new formulation that has patent protection until 2030 before competing generics launch in May.
  • The new version requires thrice-weekly injections instead of daily.
  • Copaxone delivers over 20% of the firm's revenues and 50% of its profit, so management is keen to preserve as much of the revenue stream as possible.
  • The company offers a $1,000 discount from the current annual cost of $60,500 as an incentive to convert to the new version.
  • Investors don't yet seem concerned about the issue since shares are up 23% year-to-date.
  • Mutual fund ownership has eased from 1054 to 967 over the past four quarters.
Comments (1)
  • mikeurl
    , contributor
    Comments (441) | Send Message
     
    I sold off all my position into this strength. I'm not sure I trust management to pull off a seamless transition when Copaxone goes generic. If they can't the risk is that so much of their profitability goes away rather quickly.

     

    I think they're priced now with the assumption they pull this off without a hitch. I'd be looking to buy back lower if top and bottom lines take a hit.

     

    But kudos to Teva for getting the 3 injection patent just under the wire. I'm assuming that is why the stock finally started to move. I'm not convinced that cheap insurance companies aren't going to twist themselves into a pretzel trying to force people on the generic. So it feels too risky for me.
    3 Mar 2014, 12:05 PM Reply Like
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