No matter how many times generic manufacturers kick the door blocking entry of Copaxone lookalikes, Teva has been able to keep it closed. Yesterday’s US patent decision shows just how big the cracks are getting, but until challengers have knocked away every last scrap of intellectual property the Israel-based group will still have a big seller.
Exclusivity of the original daily 20mg dose of the multiple sclerosis (MS) treatment evaporated in 2015, of course, but Teva has been masterful at persuading patients to switch to a 40mg formulation used three times a week. Special US patent judges ruled yesterday that a bigger dose was not enough of a change to warrant additional protection, but it could take many months more to firm up generic competitors’ legal standing.
2017 or 2018, not 2030
The Patent Trial and Appeal Board (PTAB) invalidated two of the Copaxone 40mg methods patents, leaving three major patents standing between Teva and generic competition. A PTAB decision on a third is still pending, a fourth is subject to a court trial beginning September 26, and a challenge to the fifth is expected soon (Upcoming events – Crucial patent ruling on Copaxone and PDUFA for Parsabiv, August 18, 2016).
Mylan has been leading the legal charge through the inter partes review process. Teva says it will appeal the board’s decision to the US Court of Appeals for the Federal Circuit, which handles appeals from national jurisdictions, meaning months more of legal wrangling.
Thus, although the patent board’s decision was negative for Teva, Copaxone is not dead yet. Bernstein analyst Ronny Gal wrote that there was now an 80% chance of generic launch in 2017, while Leerink's Jason Gerberry assumes that generics will not come to market until 2018.
Nevertheless, Teva’s US-listed shares fell 3% following the late-afternoon announcement of the decision. It was a boon to Momenta Pharmaceuticals, which saw a rise of 11% – Momenta is the maker of the generic 20mg Copaxone version called Glatopa, which it markets with Novartis’s Sandoz division.
The patents themselves have a legal expiry date of 2030, which means that the remaining exclusivity time is significantly shorter than that blue-sky scenario. However, the intellectual property protecting 40mg Copaxone was viewed as weak, and few expected Teva’s hold on the thrice-weekly space to persist for long.
EvaluatePharma’s consensus of sellside analysts had the combined US 20mg and 40mg sales shrinking from $3.2bn in 2015 to $986m in 2022. In the meantime, as patent protections have faded Teva has pushed through price increases, with annual costs surging from $37,000 a year in 2010 to $72,000 in 2015. It is no wonder that generics companies saw Copaxone as a ripe target.
Price increases are just one tried-and-true pre-generics strategy – reformulations are another. Entry of the 40mg dose has allowed Teva to hold on just a bit longer – the company said in its second-quarter earnings call that 83% of US Copaxone users were now on the 40mg dose, and Copaxone is the number one MS product with 24.1% share. It does not look like this will last much longer.
Perhaps nobody knows better how to beat generic competition than a company that has itself been a generic competitor. Its aptitude in squeezing the Copaxone franchise for every last penny might be good for Teva shareholders, but not necessarily for patients paying higher prices. Happily for the latter group, they might not have much longer to wait for relief.