Teva Pharmaceutical Industries Ltd. jumped the most in more than 12 years after a U.S. federal district judge ruling may block generic versions of its best-selling Copaxone drug from entering the market until 2015.
Shares of Petach Tikvah, Israel-based Teva surged 12 percent, the biggest gain since April 2000, to 163 shekels at the 4:30 p.m. close in Tel Aviv. The increase added 16.1 billion shekels ($4.1 billion) to Teva’s market value today.
Patent claims that Teva brought against Novartis AG’s Sandoz unit, Mylan Inc., and Momenta Pharmaceuticals Inc. are infringed, valid and enforceable, U.S. District Judge Barbara Jones in Manhattan ruled. The court decision covers several patents for its multiple sclerosis medicine, the last of which deals with the manufacturing process and expires on September 2015, Teva said in a Business Wire statement on June 23.
“While the market expected a Teva win, this clears a major uncertainty that was hovering over Teva’s shares,” said Steven Tepper, an analyst at Harel Finance Ltd. “There is a higher chance now that Teva will enjoy protection of its patents until their expirations.”
Teva is trying to block competition for Copaxone, its best-selling product, which generated 21 percent of the company’s revenue in 2011. Shares of the world’s largest maker of generic drugs decreased 4.9 percent since the start of the year through the June 21 close, as newer oral treatments such as Novartis’ Gilenya and the possible introduction of generics before patent expirations threatened to erode its market share.
Teva’s shares were raised to ‘buy’ from ‘outperform’ at Leader & Co. Investment House Ltd. in Tel Aviv. While investors expected Teva to protect its so-called Orange Book patents, which expire on May 2014, Teva’s success in defending its process patent due 2015 is a “big surprise,” analyst Sabina Podval said. The drug could yield profits of about $7.5 billion to $8 billion over the next three years, Podval said.
“The bottom line is this is excellent news for Teva,” Podval said. “The fact that generics now have to wait longer could allow Teva to move more of its patients to the better version of Copaxone,” which is now in clinical studies.
Teva said on June 14 that a late-stage trial of a longer-acting version of Copaxone reduced relapses from multiple sclerosis more than a placebo.
Teva may “rally significantly” over the next few days as many investors had “remained on the sidelines in front of this decision,” Shibani Malhotra, an analyst at RBC Capital Markets LLC in New York, wrote in an e-mailed note. Malhotra expects 30 percent of Teva patients to move to the new form of Copaxone once it’s approved.
Teva sued Basel, Switzerland-based Novartis and Cambridge, Massachusetts-based Momenta, saying that copies of Copaxone would infringe several patents.
“We are disappointed that the court determined that Teva’s patents were valid and infringed, and we look forward to reading the full opinion to understand its reasoning,” Momenta Chief Executive Officer Craig Wheeler said in a press release.
While drugmakers seeking to sell generic versions of Copaxone will appeal the decision, it will likely take eight to 15 months for an appeal process to unfold, wrote Jason Gerberry, an analyst at Leerink Swann & Co. in Boston.