Why Teva Pharma (TEVA) Should Settle With Novartis - Leerink

Leerink Partners analyst, Jason Gerberry, reiterated his Outperform rating on Teva Pharma (NYSE: TEVA) and cut the price target to $61 from $66. After losing an IPR decision on two Copaxone 40mg anchor patents, the analyst believes TEVA’s share price implies a generic entrant sometime in 2H17. In order to mitigate EPS downside in 2017-18 and eliminate business uncertainty, he believes the most prudent course of action is for TEVA to settle with the most credible generic threat Novartis AG (NYSE: NVS) for market entry in 1Q’18.

The Copaxone 40mg brand has five very similar method-of-use patents covering its 40mg formulation to treat relapsingremitting multiple sclerosis (RRMS) with three subcutaneous (Copaxone 40mg) injections over seven days. On 8/24, the Patent Trial and Review Board’s (PTAB) invalidated two of the Copaxone patents subject to inter partes review (IPR) proceeding, US patent #8,232,250 & #8,399,413, on grounds those patents were obvious in view of prior art disclosures. A decision on US patent #8,969,302, which has very similar subject matter as '250/'413, is expected on or before 9/1.

For an analyst ratings summary and ratings history on Teva Pharma click here. For more ratings news on Teva Pharma click here.

Shares of Teva Pharma closed at $50.56 yesterday.

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