Mylan Gains Slightly on Copaxone News - Analyst Blog

Shares of Mylan Inc. MYL gained 1.18% following a favorable ruling by the U.S. district court on a patent related case pertaining to Teva Pharmaceutical Industries Ltd.'s TEVA multiple sclerosis MS drug Copaxone 20mg/mL. The U.S. Orange Book patent covering Copaxone is set to expire in May 2014 and worldwide in May 2015.

Copaxone generated approximately $4.3 billion in worldwide sales in 2013, accounting for more than 21% of Teva's total revenues. U.S. sales were $3.2 billion in 2013. Worldwide Copaxone revenues edged up 1% to $1.07 billion in the first quarter of 2014. Sales in the U.S. grew 1% to $816 million benefiting from a January price increase.

By dismissing Teva's suit against the U.S. Food and Drug Administration (FDA), the court has foiled the former's attempt to delay the release of generic versions of Copaxone. Teva had argued that more testing was needed for the cheaper formulations of the MS drug. We note that Mylan had intervened in this suit and supported the U.S. regulatory body.

The court ruling removes any hurdle for the FDA from approving generic versions of the drug following its patent expiry. Several generic companies including Momenta Pharmaceuticals, Inc. MNTA/Sandoz Inc., a subsidiary of Novartis NVS and Mylan /Natco Pharmaceuticals are looking to get their generic versions of Copaxone in the market.  

In the event of Mylan launching its generic version of the drug, its generic segment would be boosted significantly. In the first quarter of 2014, third-party net sales in the generic division climbed 7.1% to $1.51 billion driven by strong performance in North America.

We expect the generic segment to continue performing well. Mylan's focus on emerging markets is encouraging. Emerging markets are slowly and steadily gaining more importance and several companies are now shifting their focus to these areas.

Mylan carries a Zacks Rank #3 (Hold). Mallinckrodt MNK is an example of a better-ranked stock in the health care space with a Zacks Rank #1 (Strong Buy).