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The Pulse of the Pharmaceutical Industry
With revenue of more than $20 billion, the largest generics portfolio globally, the world’s leading multiple sclerosis product, and a growing presence in oncology, Teva has earned a place at the big kids’ table in the pharma world.
The Teva train just kept rolling down the tracks in 2012. While most other big pharmas were shedding revenue, the Israeli company enjoyed another year of double-digit revenue growth, crossing the $20 billion mark for the first time. Teva’s generics portfolio remains the world’s biggest, with more than $10 billion in sales in 2012; the company’s most successful branded product, Copaxone, nearly reached $4 billion in sales for the year and continues to dominate the multiple sclerosis market; and Treanda and Nuvigil, acquired in the Cephalon transaction in 2011, have brought new sources of growth to the table. And laquinimod, at the top of Teva’s pipeline, has generated positive study results across three potential indications.
“Our efforts over the past year clearly demonstrate Teva’s ability and commitment to transform the company,” says Dr. Jeremy Levin, Teva’s president and CEO. “Based on this, we will enter 2013 with a strong and disciplined business focus. Our generic franchise remains the core of our business. We launched 23 generic products in the U.S. in 2012, and anticipate a similar number of launches in 2013. Our specialty medicines business continues to drive value with strong fundamentals in multiple sclerosis, central nervous system, respiratory, oncology, and women’s health. Copaxone continues to lead the multiple sclerosis market in sales and market share. Our new R&D organization is showing great progress. Our New Therapeutic Entities pipeline is advancing as expected. At the same time, we are beginning to add external opportunities through our ‘Constellation’ business development program. We have launched our ‘Reshape’ program and are committed to managing our costs while we invest in Teva’s future.”
Teva’s top line rose yet again in 2012, increasing by 10.9 percent to $20.32 billion. The company’s net income fell, though, dropping 28.9 percent to $1.96 billion, while EPS for the year shed 84 cents to end up at $2.25. The drop in net income came mostly as a result of increased expenses for impairments, loss contingencies, and restructuring, which more than doubled for the year to $2 billion. Much of this resulted from in-process R&D write-downs ($625 million), impairment of existing product rights ($233 million), and a $670 million loss contingency relating to pending patent litigation concerning the company’s generic pantoprazole product. In the first half of 2013, the top line actually fell, decreasing 2.7 percent to $9.83 billion. Net income tumbled about 90 percent to $178 million and EPS was down from $1.96 to 21 cents.
Once again the guilty parties were legal settlements and impairments, which rose from $204 million in the first half of 2012 to $1.62 billion. This mostly consisted of an additional $930 million in connection with the settlement of the pantoprazole patent litigation and a provision of $485 million relating to Teva’s modafinil antitrust litigation.
Generic medicines remain Teva’s largest segment in sales, though their percentage of the company’s top line dropped to 51.1 percent in 2012, compared with 55.7 percent in 2011 and 61.5 percent in 2010. Total generic medicine revenue for the year was $10.39 billion, a 1.9 percent improvement over the previous year. Major generic launches during the year included escitalopram (Lexapro) and quetiapine (Seroquel) in March, clopidogrel (Plavix) in May, montelukast (Singulair) and pioglitazone (Actos) in August, and fenofibrate (TriCor) in November. In the first half of 2013, generics revenue totaled $4.73 billion, a drop of 9.7 percent and 48.1 percent of Teva’s total revenue.
Teva’s leading branded product by far remains the multiple sclerosis drug Copaxone, which generated just shy of $4 billion in sales in 2012, an improvement of 11.9 percent. Copaxone is the leading MS therapy both in the United States and globally. In February 2012, the company completed the assumption from Sanofi of the marketing and distribution rights of Copaxone; beginning with the second quarter of 2012, all global sales were made by Teva. Copaxone’s U.S. market share in terms of new and total prescriptions in 2012 was 39.9 percent and 40.8 percent respectively. This past May, FDA accepted for review Teva’s supplemental new drug application for Copaxone 40mg/1mL, a higher concentration dose that offers a less-frequent three-times-a-week dosing regimen administered subcutaneously for patients with relapsing-remitting multiple sclerosis. During the first half of 2013, Copaxone sales rose 12.9 percent year-over-year to $2.13 billion.
Sales in Teva’s various over-the-counter product lines increased by 22.4 percent in 2012 to $936 million. About 80 percent of this total came from the outside-North America OTC partnership with Procter & Gamble, first launched in late 2011. The increase, company leaders say, was mainly due to growth in sales in Latin America and Europe. In the first half of 2013, OTC sales increased 35.7 percent year-over-year to $563 million.
The oncology drug Treanda enjoyed a hefty bounce in 2012, with sales more than quadrupling from $131 million to $608 million for the year, though this mostly reflected inclusion of the former Cephalon product in Teva’s portfolio for the full year. Treanda is indicated in the United States for the treatment of patients with chronic lymphocytic leukemia and patients with indolent B-cell non-Hodgkin’s lymphoma that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. In October 2012, Teva received a complete response letter from FDA addressing its supplemental new drug application for the use of Treanda as a first-line treatment of patients with NHL in combination with rituximab. Although the BRIGHT study had met its endpoint of non-inferiority, FDA requested additional data, specifically progression-free survival data, which was not available from this trial. No further registration trials are planned in the United States. In the first half of 2013, Treanda sales rose 21.3 percent to $348 million. In September, FDA approved a new liquid formulation of Treanda that removes the step of reconstituting lyophilized powder with sterile water prior to adding the medicine to the dilutent and administering to a patient.
Teva’s Women’s Health portfolio of products increased its sales by 2.3 percent to $448 million in 2012. The growth was primarily attributable to increases in sales of women’s health products in Europe and Latin America. Sales in the United States declined, mainly as a result of generic competition to the oral contraceptive product Seasonique, starting in the third quarter of 2011. This decline was partially offset by growth in sales of the contraceptive products Paragard and Plan B One-Step. Other Teva Women’s Health brands include the oral contraceptive Zoely and the menopause product Enjuvia. Women’s Health sales in the first half of 2013 totaled $210 million, a decrease of 4.5 percent.
The sleep disorder products Provigil and Nuvigil both grew sales in 2012; Provigil by 19.1 percent to $417 million and Nuvigil more impressively by more than three times to $347 million – though, as with Treanda, much of this was reflective of their first full year on Teva’s books after the Cephalon acquisition. Provigil began to face generic competition in the United States in March 2012, so sales have been falling off there accordingly; the product is still marketed in more than 30 other countries. This past August, Teva announced top-line results of its final Phase III clinical study for Nuvigil as adjunct therapy in adults with major depression associated with bipolar I disorder. The study reached statistical significance in several important secondary endpoints, such as responder rate and remission. However, it did not reach its primary endpoint – to determine whether Nuvigil treatment is more effective than placebo as adjunct therapy to mood stabilizers and/or atypical antipsychotics. This study was the third of three Phase III studies, all of which demonstrated improvements in patient response. However, based on an evaluation of the totality of results, Teva will not proceed with regulatory filings for Nuvigil for the treatment of major depression associated with bipolar I disorder. In the first half of 2013, Provigil sales dropped to $43 million, while sales of Nuvigil fell off 10.3 percent to $157 million.
Sales of the Parkinson’s drug Azilect grew by 13.8 percent in 2012 to $330 million. This improvement, company leaders say, reflected both price increases and volume growth in the United States, as well as volume growth in Europe, mainly in Germany, France, and Spain. In March, Teva and partner marketer H. Lundbeck announced that a double-blind, placebo-controlled, randomized, multicenter study of Azilect met its primary endpoint. The study, known as ANDANTE, assessed the efficacy and tolerability of Azilect as add-on treatment to dopamine agonists compared to placebo. While the efficacy of Azilect as adjunct to levodopa has been established in previous studies (leading to its indication as adjunct therapy to levodopa), its efficacy in combination with dopamine agonist monotherapy has not previously been studied. Results from the study demonstrated that the addition of Azilect provided a statistically significant improvement from baseline to week 18 in patients sub-optimally controlled with dopamine agonist monotherapy compared to placebo. In the first half of 2013, Azilect sales were up 7.8 percent to $180 million.
In September 2012, Teva agreed to purchase all rights, assets, and obligations relating to Huntexil, a drug candidate being developed for the symptomatic treatment of hand movement, balance, and gait disturbances in Huntington disease, from NeuroSearch. Under the agreement, Teva was to pay to NeuroSearch about $26 million over a period of at least six months. Regulatory and commercialization milestone payments may result in additional funding for NeuroSearch.
Previous trials in the United States, EU, and Canada demonstrated significant symptomatic relief for patients with HD including improved hand movements and improved gait and balance. These results were observed without any side effects such as sedation and depression seen with other therapies such as neuroleptics and tetrabenazine. Teva leaders believe that Huntexil will, when used as a symptomatic agent, make a real difference to the quality of life for patients suffering from HD.
“Based on the clinical trial evidence to date, we believe Huntexil holds promise for symptomatic relief for HD and merits additional study in late-stage clinical development,” says Michael R. Hayden, M.D., Ph.D., president of Global R&D and chief scientific officer of Teva. “Teva has a broad commitment to find new approaches to managing devastating CNS diseases, such as Huntington disease. This promising development for Teva is just one example of our covenant with patients to develop medicines to improve their quality of life all around the world.”
In December, Teva and Handok Pharmaceuticals agreed to establish a business venture in South Korea, allowing Teva to gain entrance into the Korean pharmaceutical market, currently valued at about $14 billion. Under the terms of the agreement, Teva will contribute its global resources, with responsibilities for manufacturing and supplying a wide range of affordable and innovative medicines. Handok’s primary responsibility will be in sales and marketing, distribution, and regulatory affairs. Teva will have a controlling stake in the new business venture, with a profit split of 51 percent/49 percent to Teva and Handok, respectively.
“This is another significant step in our strategy to expand Teva’s presence in growing markets and excluding Japan, this is our first alliance in East Asia,” says Prof. Itzhak Krinsky, chairman of Teva Japan, chairman of Teva South Korea, and head of business development Asia Pacific. “By utilizing Teva’s broad portfolio, R&D capabilities and its global infrastructure and know-how coupled with Handok’s expertise and strong reputation in Korea, Teva and Handok plan to assume a prominent position in the Korean pharmaceutical market.”
In January, Teva announced the termination of its collaboration with CureTech over the compound CT-011, a humanized monoclonal antibody being developed as a treatment for hematological malignancies and solid tumors. The compound was assessed in several phase I and II clinical studies in various cancer indications including diffuse large B-cell lymphoma, colon cancer, metastatic melanoma, and additional investigator initiated studies. Teva entered into agreements with CureTech in 2006.
“We are in the process of conducting a disciplined review of our pipeline. As we looked closely at CT-011 and the most recent clinical and biochemical data, we have made the strategic decision to invest our resources elsewhere where we can have the most impact for patients,” Dr. Hayden says.
During May, Teva and Alexza Pharmaceuticals entered into an exclusive U.S. license and supply deal for Adasuve inhalation powder 10 milligrams for the acute treatment of agitation associated with schizophrenia or bipolar I disorder in adults. Teva is responsible for all U.S. commercial and clinical activities for Adasuve, including U.S. post-approval clinical studies, and has gained rights to conduct additional clinical trials of the compound for potential new indications in neurological disorders. Alexza is responsible for manufacturing and supplying Adasuve to Teva for commercial sales and clinical trials.
Under the terms of the license and supply agreement, Alexza received an upfront cash payment of $40 million and is eligible to receive up to $195 million in additional milestone payments, based upon successful completion of the Adasuve post-approval studies in the United States and achieving net sales targets. In addition, Teva will make tiered, royalty payments based on net commercial sales of Adasuve. Teva also will make available up to $25 million to Alexza via a five-year convertible note and agreement to lend, which Alexza may access to support its Adasuve activities. Alexza may prepay up to 50 percent of the outstanding amount at any time prior to maturity. Teva may convert, at maturity, all or a portion of the then outstanding amount under the note into equity of Alexza.
“Approximately four to five million patients with bipolar I disorder or schizophrenia in the United States experience and seek treatment for agitation episodes,” says Larry Downey, president, North America Specialty Medicines, Teva “This agreement reflects our business development strategy to pursue opportunities in our core therapeutic areas where we can apply our expertise and experience to enhance treatment options for patients.”
In June, Teva agreed to acquire MicroDose Therapeutx, a privately held pharmaceutical and drug delivery company focused on inhalation technologies and products for lung diseases and infections with the potential to dramatically improve efficacy and patient compliance. Under the terms of the deal, Teva was to acquire all of MicroDose’s outstanding shares for a payment at closing of $40 million, additional payments of up to $125 million upon achievement of regulatory and development milestones, plus sales-based milestones and tiered royalty payments upon commercialization of MDT-637 and an earlier-stage asthma/COPD medicine.
With MicroDose’s technologies and products, company leaders say Teva is taking a significant step toward in expanding its respiratory pipeline. The company has access to MicroDose’s proprietary technology including its multi-dose dry-powder nebulizer device, which requires no preparation and can be administered in under 30 seconds. MicroDose’s pipeline is anchored by MDT-637 for respiratory syncytial virus. The inhaled, low-dose, small-molecule, fusion inhibitor prevents viral replication.
In July, Teva announced the formation of a global scientific research collaboration to create a comprehensive understanding and drive insights into neuroprotective therapeutic approaches in Huntington disease. The collaboration brings together the field’s leading scientific researchers from Singapore, the United Kingdom, Canada, Germany, the United States, and Israel in a coordinated and intense research program developed in Israel by Dr. Hayden, one of the world’s foremost experts on Huntington disease in addition to his role at Teva. The focus of the program is the interaction between laquinimod, a neuroprotective agent currently being investigated in multiple sclerosis, and various molecular pathways operative in Huntington disease.
“HD is a neurodegenerative condition that places an immense burden on the individual, their family, and the community,” Dr. Hayden says. “This program is an important collaboration that will provide vital insights into potential new treatment paradigms in Huntington disease.”
In September, Teva and Cancer Research Technology, Cancer Research UK’s technology development arm, signed a multi-project alliance agreement to research and develop first-in-class cancer drugs that modulate DNA damage and repair response (DDR) processes in cancer cells. DDR plays a key role in protecting cancer cells from the damaging effect of chemotherapy – creating an in-built antidote to the toxic effects of the anti-tumor drug. As the cancer cells that are best able to repair the DNA damage caused by the cancer treatments survive, they replicate, naturally selecting for the mutation with the enhanced repair capability – leading to recurrence and resistance to treatment.
“For cancer patients, it is important that we maintain the momentum of progress that has been made in oncology in recent years,” Dr. Hayden says. “Cancer Research UK, CRT, and their outstanding academic partners, are a driving force in the improved understanding of cancer and its treatment. This research collaboration will build on our understanding of how cells repair DNA damage, help us identify possible points of therapeutic intervention, and lead us onto a pathway toward improve clinical outcomes for cancer patients.”
According to company leaders, the CRT alliance provides Teva with the opportunity to research and develop selected and differentiated novel treatments targeting DDR processes. With a focus on mechanisms and molecular targets related to the emergence of therapeutic resistance in cancer cells, the partnership also opens up the potential to expand the clinical utility and therapeutic effectiveness of Teva’s current portfolio of oncology chemotherapeutic agents. This approach builds on Teva’s growing focus on personalized medicine throughout its R&D pipeline, and specifically within its oncology portfolio.
Building on a prior well-established working relationship, the multi-year agreement sets out the provision of new molecular targets, selected by CRT from Cancer Research UK’s portfolio of biological research in DDR. These targets will be validated to prove their therapeutic importance before progressing to the early stages of drug discovery in CRT’s Discovery Laboratories. CRT and Teva will then jointly undertake chemical lead generation activities. Under the terms of the agreement, CRT will receive research funding and be eligible to receive milestone payments, and royalties on projects advancing through Teva’s drug pipeline.
Several new products at the top of Teva’s pipeline have earned approvals recently. In August 2012, FDA granted approval for tbo-filgrastim, the first new granulocyte colony-stimulating factor to be approved in the United States in more than 10 years. Tbo-filgrastim is a short-acting recombinant form of G-CSF, indicated to reduce the duration of severe neutropenia in patients with certain types of cancer (non-myeloid malignancies) who are receiving chemotherapy that affects the bone marrow. Neutropenia is a condition in which the number of white blood cells is decreased, leaving patients more susceptible to potentially life-threatening bacterial infections. Teva markets filgrastim in Europe under the trade name Tevagrastim, a biosimilar to Amgen’s blockbuster brand Neupogen.
“As a company dedicated to bringing needed medicines to patients, we are delighted with the approval of tbo-filgrastim which offers physicians and their patients undergoing chemotherapy a new supportive care treatment option,” Dr. Hayden says. “The approval of tbo-filgrastim demonstrates Teva’s strong commitment to providing patients with new treatment options. It expands upon Teva’s existing Oncology portfolio with the addition of the first biologic and supportive care agent for oncology patients.”
In October 2012, FDA approved Synribo for Injection to treat adult patients with chronic phase or accelerated phase chronic myeloid leukemia with resistance and/or intolerance to two or more tyrosine kinase inhibitors. Synribo received an accelerated approval that allows FDA to approve a drug to treat a serious disease based on clinical data showing that the drug has an effect on a surrogate endpoint that is reasonably likely to predict a clinical benefit to patients.
“Teva Pharmaceuticals is pleased to bring Synribo to the market for patients who need additional treatment options when others have failed,” Dr. Hayden says. “Synribo joins Treanda and Trisenox as important hematologic treatment options in the Teva Oncology portfolio.”
In March 2013, FDA approved Quartette tablets for the prevention of pregnancy. Quartette was designed to minimize breakthrough bleeding between scheduled periods.
“Teva is the leader in the pharmaceutical industry in the marketing and development of extended regimen oral contraceptives, and Quartette represents the next generation of these contraceptives,” says Jill DeSimone, senior VP and general manager, Global Teva Women’s Health. “It is a uniquely differentiated product and is based on Teva’s research into when breakthrough bleeding is most likely to occur with these regimens. Quartette is the newest product in our global women’s health franchise and is an example of our dedication to providing a variety of contraceptive and family planning options that fit women’s lifestyles.”
The most prominent compound still in Teva’s pipeline is the immunomodulator laquinimod. In October 2012, the company published Phase IIa clinical data for laquinimod in moderate to severe Crohn’s disease demonstrating that treatment with orally administered laquinimod 0.5 milligrams per day resulted in a robust, early and consistent effect on remission and response rates in patients with moderate-to-severe CD versus placebo. In March, study results from the Phase III ALLEGRO trial of laquinimod in relapsing-remitting multiple sclerosis showed that early start patients were less likely to experience disease progression than those with a delayed start of the drug; that same month, the first patient was enrolled in the CONCERTO study, the third Phase III placebo-controlled study of laquinimod in RRMS. And in June, the results of a Phase IIa study of oral laquinimod designed to assess safety, tolerability, and clinical efficacy in patients with active lupus nephritis showed that treatment with laquinimod provided an additive effect in improving renal function when combined with current standard of care for active lupus nephritis compared with standard of care alone.
As for other compounds in the pipeline, in March Teva announced the publication of results of the Phase III clinical trial of Milprosa vaginal ring in Fertility and Sterility. The study compared the efficacy and safety of once-weekly Milprosa to daily 8 percent progesterone vaginal gel for luteal phase support in in-vitro fertilization and found that clinical pregnancy rates per retrieval at eight and 12 weeks were comparable between patient groups. Adverse event profiles were similar between the two treatment groups and consistent with known AEs associated with progesterone.
As of mid-July, Teva’s generic pipeline had 142 product registrations awaiting FDA approval, including 38 tentative approvals. Collectively, the branded versions of these 142 products had annual U.S. sales exceeding $91 billion. Of these applications, 102 were Paragraph IV applications challenging patents of branded medicines. Company executives believe that Teva is first to file with respect to 62 of these products, the branded versions of which had annual U.S. sales of more than $45 billion.
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All sales are in millions of dollars.
*For 2011, net sales of Cephalon products were recognized from the acquisition date (October 2011).
All figures are in millions of dollars except EPS.
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