07.17.13
5 Basel St.
P.O. Box 3190
Petach Tikva, 49131 Israel
www.tevapharm.com
Top Selling Drugs
Account for 94% of total pharma sales, down from 96% in 2011
In a year when almost every pharma posted losses or scant gains, Teva managed 11% growth in 2012, moving it up two spots to #10 in our Top Pharma ranks. A full year of Cephalon’s portfolio under its belt helped to juice results, as did another double-digit gain for relapsing multiple sclerosis treatment Copaxone.
Teva got some good news for top-seller Copaxone, which made up 22% of total pharma sales in 2012. In June and July 2012, the company received favorable patent rulings for Copaxone in the U.S. and UK, respectively. As a result, Teva should remain protected from generic exposure through 2015 at least.
In fact, the company is hoping for much longer coverage than that. Unlike the sudden implosion of revenues a typical drug faces when generics enter the field, Teva argues that Copaxone is so complex, with such a poorly understood mechanism of action, that a generic version might require full clinical trials from a regulatory body in order to get on the market. Further, MS is such a difficult disease to treat, and so prone to unpredictable, acute flareups that degrade the patient’s nervous system, that doctors may be inclined to keep using Copaxone and not risk a lesser effect from a generic product. This is a case where we might see extreme reluctance to move a patient from a drug that’s working fine. (The new oral MS treatments that have been making news are meant to be used if Copaxone fails or produces intolerable side effects.)
Teva is also hoping to stay ahead of the generic Copaxone curve by introducing a new dosage form that requires injection three times a week instead of the current daily injection regimen. The company has also moved forward with development of oral laquinimod for MS, with hopes of leapfrogging the oral treatments developed by Novartis, Sanofi/Genzyme and Biogen Idec in recent years.
With Copaxone (relatively) sorted out, chief executive officer Dr. Jeremy Levin can continue his work of trying to bring Teva into its specialty pharma future.
In December 2012, Dr. Levin gave a presentation to investors in which he outlined the shape of the new Teva and its growth plans. He noted that Teva shouldn’t be too reliant on a single product as it currently is, and wants to expand the company’s portfolio through new drugs — many licensed in or co-developed with partners — as well as New Therapeutic Entities (NTEs), Teva’s term for new uses, formulations, or combinations of existing marketed drugs.
The company decided to sell its injectables manufacturing site in Irvine, CA in February 2013. The facility suffered quality issues in 2010 and Teva has poured a lot of money into remediation. Some were surprised at the decision to let the site go, but Dr. Levin noted that five other Teva facilities could take over its production. As with the Mirabel site in Montreal that Teva sold to Halo last year, the company would likely keep a supply agreement in place with the buyer of the Irvine facility.
In April 2013, he announced plans to reduce Teva’s manufacturing footprint further, part of his strategy to lower expenses by $2 billion in the next five years. At that time, he noted that the company’s high-priced acquisitions from the previous decade had left Teva with an inefficient structure that needed streamlining. The company has also shut down some R&D programs and ended collaborations that were outside its comfort zone.
Teva also sold off its animal health business in the U.S. to Bayer HealthCare in September 2012 for $60 million upfront and $85 million in milestones related to manufacturing and sales targets. The facility in St. Joseph, MO and Teva’s Animal Health business, received a consent decree of permanent injunction in 2009, barring the unit from selling veterinary drugs. Some products returned to market in 2011 and Bayer has restored several more, with plans during the next 12 to 18 months to bring more products back after the massive GMP failures from 2007 to 2009.
In April 2013, Teva established a Global Specialty Medicines Group, with the goal of “optimiz[ing] our commercialization,” according to Dr. Levin. The GSM will use the company’s local generics operations to leverage its specialty offerings. In order to make its way into the post-Copaxone era, Teva will need to break into the Chinese market, where it has little presence. Its generic products are much more likely to succeed there than its higher-priced branded meds.
The company is also making strides in building a stable branded portfolio to smooth out the lumps of the generic market. In 1Q12, Teva benefited from first-to-file status for Zyprexa and an “insurance” payout from Ranbaxy for generic Lipitor. Without those boosts in 1Q13, generic revenues dropped $324 million in the U.S. The company will face more pain throughout the year, as Provigil sales fall off a cliff (4Q12 dropped 93%, from $350 million to $25 million; 1Q13 sales fell from $291 million to $24 million).
Teva is a mega-powerhouse in generics, with $10 billion in 2012 revenues, but its branded and biosimilars portfolios will dictate its future. Dr. Levin seems to taken Teva’s foot off the M&A pedal, and now faces the hard work of integrating the company he inherited while advancing its R&D partnerships and finding new uses for its existing portfolio.
Acquisition News
Target: MicroDose Therapeutx
Price: $40 million upfront, $125 million in milestones
Announced: June 2013
What they said: “The MicroDose [respiratory] platform is both simple and attractive, and their addition will help us to address the unmet needs of the youngest and oldest patients, who have a requirement for a better way of taking the medicines they rely upon.”
Lowe Down
Deal after deal, acquisition after acquisition: that’s what made Teva the big generics force it is today. But now that it’s the biggest company in that category, management seems to be looking around and wondering why, exactly, they went to all the trouble. The generics business is competitive and cutthroat, with lower margins than those of discovery-based drug companies. It’s supposed to have some stability to make up for that, though, and Teva’s probably waiting for some of that to kick in any time now. Problem is, a good bit of its (high-margin) money is coming from Copaxone, a compound that it has exclusivity on, and the multiple sclerosis space has become hugely competitive over the last two or three years.
Teva’s latest idea is to split the difference between generics and completely new drugs, with something called a New Therapeutic Entity. This would be a reworked version of an existing drug — different enough to sell for more money, but similar enough to have a shorter (and cheaper) path to approval. It all depends on how many opportunities there are in that space, and no one’s quite sure yet. And would a compound that’s different enough to persuade payers to spend more on it really be similar enough to get an easy regulatory path?
Backup Plan
In June 2013, the Obama administration relented and allowed Teva’s Plan B One-Step emergency contraceptive to be sold over the counter without age restrictions. The administration has yielded many disappointments since 2009, but it was quite disheartening to see the Obama White House follow the same anti-science agenda of its predecessor. In 2011, the secretary of Health and Human Services, Kathleen Sebelius, overruled an FDA decision to permit the OTC distribution of Plan B One-Step, earning the ire of a federal judge who ordered the decision reversed. The (male) judge wrote that Sec. Sebelius’ move “was politically motivated, scientifically unjustified, and contrary to agency precedent.”
The FDA had determined that the product was safe and not likely to be abused, but Sec. Sebelius complained that the agency’s studies had not determined whether 11-year-old girls would be capable of reading and understanding the Plan B One-Step’s instructions. This seems like something to take up with the Department of Education and not the FDA.
Teva will have to file a supplemental application for wider OTC distribution of the emergency contraceptive, which the FDA has promised to approve without delay.
P.O. Box 3190
Petach Tikva, 49131 Israel
www.tevapharm.com
Headcount | 46,500 | |
Year Established | 1944 | |
Pharma Revenues | $18,535 | 11% |
Total Revenues | $20,317 | 11% |
Net Income | $1,963 | -29% |
R&D Budget | $1,356 | 24% |
Top Selling Drugs
Drug | Indication | $ | (+/- %) |
Generics | $10,385 | 2% | |
Copaxone | MS | $3,996 | 12% |
Treanda | oncology | $608 | 364% |
Women’s health | $448 | 2% | |
ProAir | bronchial spasms | $406 |
-7%
|
Provigi | insomnia | $417 | 19% |
Nuvigil | insomnia | $347 | 303% |
Qvar | chronic asthma | $297 | -3% |
Azilect | Parkinson’s disease | $330 | 14% |
Oncology | incl. biosimilars | $252 | -6% |
In a year when almost every pharma posted losses or scant gains, Teva managed 11% growth in 2012, moving it up two spots to #10 in our Top Pharma ranks. A full year of Cephalon’s portfolio under its belt helped to juice results, as did another double-digit gain for relapsing multiple sclerosis treatment Copaxone.
Teva got some good news for top-seller Copaxone, which made up 22% of total pharma sales in 2012. In June and July 2012, the company received favorable patent rulings for Copaxone in the U.S. and UK, respectively. As a result, Teva should remain protected from generic exposure through 2015 at least.
In fact, the company is hoping for much longer coverage than that. Unlike the sudden implosion of revenues a typical drug faces when generics enter the field, Teva argues that Copaxone is so complex, with such a poorly understood mechanism of action, that a generic version might require full clinical trials from a regulatory body in order to get on the market. Further, MS is such a difficult disease to treat, and so prone to unpredictable, acute flareups that degrade the patient’s nervous system, that doctors may be inclined to keep using Copaxone and not risk a lesser effect from a generic product. This is a case where we might see extreme reluctance to move a patient from a drug that’s working fine. (The new oral MS treatments that have been making news are meant to be used if Copaxone fails or produces intolerable side effects.)
Teva is also hoping to stay ahead of the generic Copaxone curve by introducing a new dosage form that requires injection three times a week instead of the current daily injection regimen. The company has also moved forward with development of oral laquinimod for MS, with hopes of leapfrogging the oral treatments developed by Novartis, Sanofi/Genzyme and Biogen Idec in recent years.
With Copaxone (relatively) sorted out, chief executive officer Dr. Jeremy Levin can continue his work of trying to bring Teva into its specialty pharma future.
In December 2012, Dr. Levin gave a presentation to investors in which he outlined the shape of the new Teva and its growth plans. He noted that Teva shouldn’t be too reliant on a single product as it currently is, and wants to expand the company’s portfolio through new drugs — many licensed in or co-developed with partners — as well as New Therapeutic Entities (NTEs), Teva’s term for new uses, formulations, or combinations of existing marketed drugs.
The company decided to sell its injectables manufacturing site in Irvine, CA in February 2013. The facility suffered quality issues in 2010 and Teva has poured a lot of money into remediation. Some were surprised at the decision to let the site go, but Dr. Levin noted that five other Teva facilities could take over its production. As with the Mirabel site in Montreal that Teva sold to Halo last year, the company would likely keep a supply agreement in place with the buyer of the Irvine facility.
In April 2013, he announced plans to reduce Teva’s manufacturing footprint further, part of his strategy to lower expenses by $2 billion in the next five years. At that time, he noted that the company’s high-priced acquisitions from the previous decade had left Teva with an inefficient structure that needed streamlining. The company has also shut down some R&D programs and ended collaborations that were outside its comfort zone.
Teva also sold off its animal health business in the U.S. to Bayer HealthCare in September 2012 for $60 million upfront and $85 million in milestones related to manufacturing and sales targets. The facility in St. Joseph, MO and Teva’s Animal Health business, received a consent decree of permanent injunction in 2009, barring the unit from selling veterinary drugs. Some products returned to market in 2011 and Bayer has restored several more, with plans during the next 12 to 18 months to bring more products back after the massive GMP failures from 2007 to 2009.
In April 2013, Teva established a Global Specialty Medicines Group, with the goal of “optimiz[ing] our commercialization,” according to Dr. Levin. The GSM will use the company’s local generics operations to leverage its specialty offerings. In order to make its way into the post-Copaxone era, Teva will need to break into the Chinese market, where it has little presence. Its generic products are much more likely to succeed there than its higher-priced branded meds.
The company is also making strides in building a stable branded portfolio to smooth out the lumps of the generic market. In 1Q12, Teva benefited from first-to-file status for Zyprexa and an “insurance” payout from Ranbaxy for generic Lipitor. Without those boosts in 1Q13, generic revenues dropped $324 million in the U.S. The company will face more pain throughout the year, as Provigil sales fall off a cliff (4Q12 dropped 93%, from $350 million to $25 million; 1Q13 sales fell from $291 million to $24 million).
Teva is a mega-powerhouse in generics, with $10 billion in 2012 revenues, but its branded and biosimilars portfolios will dictate its future. Dr. Levin seems to taken Teva’s foot off the M&A pedal, and now faces the hard work of integrating the company he inherited while advancing its R&D partnerships and finding new uses for its existing portfolio.
Acquisition News
Target: MicroDose Therapeutx
Price: $40 million upfront, $125 million in milestones
Announced: June 2013
What they said: “The MicroDose [respiratory] platform is both simple and attractive, and their addition will help us to address the unmet needs of the youngest and oldest patients, who have a requirement for a better way of taking the medicines they rely upon.”
—Michael Hayden, President, Teva Global R&D, and chief scientific officer
Lowe Down
Deal after deal, acquisition after acquisition: that’s what made Teva the big generics force it is today. But now that it’s the biggest company in that category, management seems to be looking around and wondering why, exactly, they went to all the trouble. The generics business is competitive and cutthroat, with lower margins than those of discovery-based drug companies. It’s supposed to have some stability to make up for that, though, and Teva’s probably waiting for some of that to kick in any time now. Problem is, a good bit of its (high-margin) money is coming from Copaxone, a compound that it has exclusivity on, and the multiple sclerosis space has become hugely competitive over the last two or three years.
Teva’s latest idea is to split the difference between generics and completely new drugs, with something called a New Therapeutic Entity. This would be a reworked version of an existing drug — different enough to sell for more money, but similar enough to have a shorter (and cheaper) path to approval. It all depends on how many opportunities there are in that space, and no one’s quite sure yet. And would a compound that’s different enough to persuade payers to spend more on it really be similar enough to get an easy regulatory path?
—Derek Lowe
Backup Plan
In June 2013, the Obama administration relented and allowed Teva’s Plan B One-Step emergency contraceptive to be sold over the counter without age restrictions. The administration has yielded many disappointments since 2009, but it was quite disheartening to see the Obama White House follow the same anti-science agenda of its predecessor. In 2011, the secretary of Health and Human Services, Kathleen Sebelius, overruled an FDA decision to permit the OTC distribution of Plan B One-Step, earning the ire of a federal judge who ordered the decision reversed. The (male) judge wrote that Sec. Sebelius’ move “was politically motivated, scientifically unjustified, and contrary to agency precedent.”
The FDA had determined that the product was safe and not likely to be abused, but Sec. Sebelius complained that the agency’s studies had not determined whether 11-year-old girls would be capable of reading and understanding the Plan B One-Step’s instructions. This seems like something to take up with the Department of Education and not the FDA.
Teva will have to file a supplemental application for wider OTC distribution of the emergency contraceptive, which the FDA has promised to approve without delay.