Mylan Inc. (MYL) received some good news recently when a US District court denied Teva Pharmaceuticals Industries’ (TEVA) motion for a summary judgment, finding no inequitable conduct in the Copaxone infringement lawsuit. The court has ordered that the trial for inequitable conduct defense will commence on July 11, 2011. The remaining issues will be tried from September 7, 2011.
Teva is challenging Mylan’s application for making a generic version of Teva's Copaxone, a top selling drug for the treatment of multiple sclerosis. Copaxone loses patent protection in 2014. In December 2010 Teva filed a Citizen Petition (CP) with the FDA asking the agency to refuse approval to generic versions of Copaxone.
The company said that any generic version of Copaxone should be subject to pre-clinical studies as well as full-scale clinical studies to prove its safety and efficacy. The company has also asked the FDA to get any abbreviated new drug application (ANDA) for Copaxone to be reviewed by an FDA advisory panel. The Copaxone patent challenge is currently Teva’s moot concern.
Mylan on its part has a global marketing agreement with Natco Pharma Ltd. for making a generic version of Copaxone. The agreement grants Mylan exclusive distribution rights in the US and in all major markets in Europe, Australia, New Zealand, Japan, and Canada with an option to expand into additional territories. The Mylan management is confident of getting Copaxone tentatively approved before the 30-month stay expires in March 2012.
Our Recommendation
We currently have a Neutral recommendation on Mylan. The shares carry a Zacks #3 Rank (short-term Hold rating). Mylan is one of the leading players in the US generics market. The company holds immense potential as many blockbuster drugs are slated to lose patent exclusivity in the forthcoming period. We are encouraged by Mylan’s robust generic pipeline. However, competition in the generic segment is strong with players like Teva Pharmaceuticals (TEVA), Watson Pharma (WPI), Par Pharmaceuticals (PRX) and Sandoz – the generics arm of Novartis (NVS) in the field. We also remain concerned about the lack of growth in the European generics business. We intend to remain watchful until we get better visibility on top-line growth prospects in Europe.
MYLAN INC (MYL): Free Stock Analysis Report
NOVARTIS AG-ADR (NVS): Free Stock Analysis Report
PAR PHARMA COS (PRX): Free Stock Analysis Report
TEVA PHARM ADR (TEVA): Free Stock Analysis Report
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