Teva Pharmaceutical Industries Ltd. (TEVA) announced that the U.S. Food and Drug Administration (FDA) has approved its generic version of GlaxoSmithKline’s (GSK) Lovaza. Lovaza is used to lower very high triglyceride levels in adults.
Teva believes that it was the first to file and the only company to receive approval for generic Lovaza. Thus, the company may enjoy 180 days of marketing exclusivity. The product will be launched immediately.
As per IMS data, as of Dec 31, 2013, Lovaza annual sales were approximately $1.1 billion in the U.S.
Our Take
We view the launch of Lovaza in the U.S. as an important generic product launch for Teva this year and should boost the performance of its generics business.
We note that the performance of Teva’s U.S. generics business, which generated approximately 21% of total revenues, was soft in 2013 with revenues declining 5% to $4.2 billion. This was primarily due to the termination of a royalty agreement related to the generic version of Pfizer’s (PFE) Lipitor. Lower sales from generic versions of Lexapro, Actos and Actoplus also impacted revenues unfavorably.
On its fourth quarter conference call, the company stated that it had 133 abbreviated new drug applications (ANDAs) pending FDA approval, representing $81 billion in annual sales. These include 51 first-to-file opportunities, representing $40 billion in annual sales. Since then, the company has launched several products including generic versions of Xeloda and Evista.
Teva carries a Zacks Rank #2 (Buy). Some other stocks in the same sector worth considering include Dr. Reddy's Laboratories Ltd. (RDY) carrying a Zacks Rank #1 (Strong Buy).
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