Copaxone not dead yet as Teva appeal lives on

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New Teva Pharmaceutical Industries' chief executive, Erez Vigodman, has had a couple of lucky breaks. Yesterday the US Supreme Court agreed to hear the Israeli group’s appeal of its Copaxone patent claims, a decision that should put off competitors from launching biosimilars in seven weeks' time.

The decision came just weeks after the better than expected launch of the thrice-weekly Copaxone formulation, a lifecycle extension intended to defend Teva’s MS franchise. This concatenation of events, combined with the appointment of Mr Vigodman, has lifted Teva from its 18-month doldrums – its US listed shares are up nearly a third since January 1.

At risk or wait

America’s top judges have agreed to hear Teva’s appeal in their 2014-15 term, beginning in October. An earlier appellate court decision had opened the door to biosimilars developed by companies like Momenta Pharmaceuticals competing as early as May 24 this year, but this now seems unlikely – unless they are willing to take a chance on an “at-risk” launch and the chunky damages that can result from ending up on the wrong side of the law (Court accelerates countdown to generic Copaxone launch, July 29, 2013).

Teva could also obtain an injunction from the high court, so an at-risk launch might not be a possibility in any case. The patent at issue expires in September 2015, and justices will certainly not rule before hearing oral arguments in the case.

Once attorneys for Teva and its challengers, led by Novartis, debate the patent in court, it could be well into 2015 before a ruling is handed down. Even if this goes against Teva, it will still give the company a chance to maximise revenue from its biggest-selling drug, which brought in $4.3bn in 2013 and accounted for 21% of group pharmaceutical sales.

Switcheroo

It will also give Teva more cover for its switching strategy to the newer 40mg dose, administered three times a week, versus the 20mg daily dose. The FDA approved Copaxone 3TW earlier this year.

While there were doubts about how persuasive Teva could be with patients and, more importantly, payers as to the advantage of the higher dose, early sales have been positive. Bernstein Research analyst Aaron Gal wrote today that IMS reported that Copaxone 3TW had managed to grab 54% of new prescriptions and 21% of total prescription as of March 21.

Should the new formulation seize significant market share, Mr Gal writes, it is doubtful that payers would “aggressively drive a 'switch back'” because of price competition following generic entry. He notes that some payers are imposing step therapy today, and the more cost-conscious payers like Medicaid might do so even more aggressively, or even block use of 3TW altogether, upon launch of Copaxone generics.

But there was no doubt that investors were identifying winners and losers after yesterday’s news. Teva stock rose 7% to $52.84 yesterday, adding $3bn to the group's market capitalisation, while Momenta shares dropped 17% to $11.65.

Momenta is only one company believed to be readying a Copaxone biosimilar. Among the others are Mylan, Natco Pharma and the private Dutch group Synthon. The last of these has received a complete response letter from the FDA and is working on a resubmission, although like most generics companies it is not publicly disclosing launch plans, spokeswoman Fabienne Douven told EP Vantage today.

Last week Synthon’s biosimilar demonstrated equivalence to Copaxone in a study to support its European Medicines Agency submission.

The sun will eventually set on Copaxone’s market exclusivity, but thanks to the Supreme Court Teva looks like it will be able to make hay for at least a little while longer. This will be an important part of the group’s bounceback, and initial indications are positive.

To contact the writer of this story email Jonathan Gardner in London at jonathang@epvantage.com or follow @JonEPVantage on Twitter

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