Teva's Asthma Therapy Reslizumab Fails In Late-Stage Studies

Teva Pharmaceutical Industries Limited TEVA announced that two phase III studies evaluating the subcutaneous formulation of its asthma injection, Cinqair (reslizumab) did not meet their primary endpoints.

Cinqair is already available in the market in an intravenous formulation to treat patients with severe asthma and elevated blood eosinophils.

The phase III registration study evaluated subcutaneously administered reslizumab at a fixed-dose of 110 mg in a pre-filled syringe in patients with uncontrolled asthma and elevated blood eosinophils. Top-line results from the study showed that reslizumab was unsuccessful in significantly reducing the frequency of clinical asthma exacerbations (CAEs), thereby failing to meet the primary endpoint.

The other phase III claim-support study evaluated the subcutaneous dosing option in patients with oral corticosteroid (OCS) - dependent asthma. Here too, reslizumab failed to meet its primary endpoint of reduction in daily OCS dose. Teva stated it will determine the subsequent course of action after a full review of the data.

Teva's shares have slumped 35.8% in the past year compared with the industry's decline of 17.1%.

Teva is facing significant challenges in the form of generic competition for its largest branded drug, Copaxone, new competition for branded products, pricing erosion in the U.S. generics business, lower-than-expected contribution from generic launches and a massive debt load.

The U.S. generics industry is facing significant competitive and pricing pressure, which is hurting the company's top line.

Teva's blockbuster multiple sclerosis drug, Copaxone's sales have been declining for quite some time now. In October, in a major blow to Teva, Mylan MYL launched (at-risk) its generic version of the 40 mg formulation, much earlier than expected. Meanwhile, Glatopa, a generic version of Copaxone 20 mg, is marketed by Momenta and Sandoz, Novartis' NVS generic arm, since 2015. Mylan also launched its version of the 20 mg formulation in October. With the entry of the generic version of the 40 mg formulation and a second generic version of the 20 mg formulation, Copaxone sales are expected to erode rapidly.

Additionally, the company's debt burden increased as a result of the $40.5 billion acquisition of Allergan's AGN generic unit, Allergan Generics in 2016. With nearly $35 billion in debt, the company's borrowing costs have increased significantly, which is hurting profits.

In order to combat these challenges, Teva has divested some non-core assets to cut its significant debt load and aims to cut its global workforce by more than 25% over the next two years. However, a clear path to growth is not visible. These efforts might not prove enough to revive the company's fortunes during this challenging period, especially as it faces erosion of its largest product, Copaxone.

Teva carries a Zacks Rank #4 (Sell).

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