If copies of #Teva’s #Copaxone hit, oral MS rivals could be the real threat

If forced to use a generic version of Copaxone 40 mg, the follow-up to Teva’s previous Copaxone formula, about 70% of patients and doctors would switch to an oral therapy instead, Rob Koremans, Teva’s CEO of global specialty meds, explained on the company’s Q4 conference call.

If Teva wins its appeals in patent court, the spending will have to continue. The company needs to “make sure that when successful in an appeal, actually there is a switchback” to its product.

As long as there’s a “fair chance” of a successful appeal, “this is really financially the best option going forward,” Koremans said.

MS pills—leader Tecfidera from Biogen, Gilenya from Novartis and Aubagio from Sanofi—have put a thorn in the side of injectable drugmakers since they arrived on the scene. Some injectables have weathered the storm better than others, however, and Copaxone is one of them.

The threat from oral drugs could also end up playing out in Teva’s favor when generics arrive, Koremans explained. “Payers are going to be reluctant to force anyone to a generic version of the 40 mg if they know that the patients are going to switch, in 70% of cases, to more expensive oral therapies,” he said. And the way he sees it, a pending appeal will only increase payers’ hesitancy to force a switch.

Would-be generics makers are expected to stage at-risk launches—essentially, rollouts that come before patent fights are fully resolved—should they win FDA approval for their Copaxone 40 mg products. If Teva ends up winning in court, those companies would be on the hook for damages based on lost sales, and those could be substantial.

But Teva, of course, would prefer the copycats stay away. The drugmaker thinks they could take a toll of between $1 billion and $1.3 billion on its revenue haul, and they could thwart the debt-laden company’s plans to hit its 3.5x year-end leverage target, RBC Capital Markets analyst Randall Stanicky wrote in a Tuesday note to clients.

But with a court having already tossed out four patents on the product, “a generic launch is a real risk,” Stanicky said. An at-risk generics launch “is our current expectation,” Barclays analyst Doug Tsao wrote in his own research note, though Jefferies’ David Steinberg noted that he has tweaked his model to assume Copaxone knockoffs in early 2018.

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