Teva Pharmaceutical Industries Limited (TEVA) has launched its generic version of Novartis’ (NVS) Exforge HCT (amlodipine, valsartan, hydrochlorothiazide) tablets in the U.S. Exforge HCT is approved for the treatment of hypertension in order to lower blood pressure.
With Teva being the first to file, the company will enjoy 180 days of marketing exclusivity. As per IMS data, Exforge HCT tablets recorded annual sales of approximately $158 million in the U.S. as of Sep 2014.
We believe the launch of Exforge HCT in the U.S. should boost the performance of Teva’s generics business further. We note that Teva’s U.S. generics business generated revenues of $3.2 billion in the first nine months of 2014 as compared to approximately $3.0 billion in the first nine months of 2013. Meanwhile, the fourth quarter should be eventful for the company with seven U.S. and multiple international generic launches expected before year end.
Teva, which is going through a transition period, continues to face headwinds in the form of new competition for branded products (especially Copaxone) and fewer generic product launches. Meanwhile, we are encouraged by Teva’s efforts to delay the entry of generic Copaxone. The Copaxone appeal hearing in the Supreme Court took place on Oct 15, with a ruling expected late this year/first quarter of 2015. The company estimates that the introduction of AB-rated generic competition to Copaxone could reduce operating income by $40–$50 million per month.
We expect investor focus to remain on the forthcoming business update meeting to be held next week and on the generic Copaxone situation.
Teva currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Akorn, Inc. (AKRX) and Mylan, Inc. (MYL). Both hold a Zacks Rank #1 (Strong Buy).
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