Teva Stock Plummets After Two Patents are Invalidated by Mylan

Published: Aug 25, 2016

Teva Stock Plummets After Two Patents are Invalidated by Mylan August 25, 2016
By Alex Keown, Breaking News Staff

PITTSBURGH – While Mylan NV is under scrutiny for the high price of its EpiPen Auto-Injector, on Wednesday the company received some good news on another front—its fight with Teva Pharmaceuticals over a multiple sclerosis drug.

On Wednesday, the U.S. Patent and Trademark Office ruled that two patents on Teva’s MS drug Copaxone were unpatentable. That paves the way for Mylan to attempt to market its own version of the drug. Mylan is looking to roll out its own 40 milligram version of Copaxone and has filed with the U.S. Food and Drug Administration, Reuters reported. If the drug is approved, Mylan expects the drug could generate $3.3 billion per year. Mylan has filed four claims related to the Copaxone. The company is awaiting a third ruling by Sept. 1. On Aug. 15 the patent office ruled that Mylan’s application against a Copaxone 40 mg patent to be ineligible due to “procedural reasons.” Mylan said the new ruling may provide a pathway to revisit the one they lost earlier this month.

Takeda plans to appeal the decisions, Reuters reported. Copaxone had global sales in 2012 of $4 billion. Mylan already makes a generic version of Copaxone, but is seeking approval for a higher dose—a dose that Teva was able to have many of its patients switch to following the loss of patent protection, Reuters said.

Shares of Teva dropped following Wednesday’s ruling, but has since climbed back up. On Wednesday, shares dropped from $53.64 to $50.17. However, this morning shares are trading at $52.11 as of 10:50 a.m.

“We believe the Board's decision is comprehensive, well-reasoned, and highly persuasive in detailing the bases for the invalidity of Teva's 40 mg patents, and we look forward to further demonstrating the invalidity of the patents covering Copaxone 40 mg/mL,” Mylan Chief Executive Officer Heather Bresch said in a statement.

Multiple sclerosis is a chronic disease that affects an estimated 2.3 million people around the world, for which there is currently no cure. MS occurs when the immune system abnormally attacks the insulation and support around the nerve cells (myelin sheath) in the brain, spinal cord and optic nerves, causing inflammation and consequent damage, which can cause a wide range of symptoms, including muscle weakness, fatigue, difficulty seeing, and may eventually lead to disability.

Teva and Mylan have had a bit of a tempestuous relationship. Last year Teva acquired a portion of Mylan’s common stock in an effort to force the company to accept a takeover bid of $4.3 billion—a bid Mylan had already spurned.

Mylan is one of the largest generics and specialty pharmaceutical companies in the world, with about 1,400 different products it markets. Teva also focuses on generics, as well as specialty drugs and active pharmaceutical ingredients. It has a portfolio of more than 1,000 molecules, employs more than 45,000 people worldwide and sells in 60 countries.

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