With Epipen Teva investors have something to celebrate at last

Sales of a generic version of Mylan’s severe allergy treatment Epipen are expected to make a relatively minor contribution to Teva’s financials, but given the Israeli company’s run of bad luck investors are grateful for any good news. Accordingly, US approval of the generic helped send Teva’s shares up 7% yesterday. The move has an important political dimension, too, since Mylan had come under fire in the US for hiking Epipen’s price in the absence of true generic competition; Mylan sells an authorised generic, and a version made by another competitor, Amneal Pharmaceuticals, is not therapeutically equivalent, thus not fully substitutable. Moreover, Mylan and Amneal have experienced supply problems, an issue that could clearly play to Teva’s advantage. Still, the Israeli group must move quickly, as Stifel analysts point out that August is typically the highest-volume month of the year for emergency treatment of allergic reactions. And whether the generic makes a dent on Mylan’s near stranglehold will depend on its price, which has yet to be revealed.