Teva Falls on Negative CHMP Opinion - Analyst Blog
Teva Pharmaceutical Industries Limited
) and Active Biotech announced that their oral multiple sclerosis
(MS) candidate, Nerventra, received a negative opinion from the
European Medicines Agency's (EMA) Committee for Medicinal
Products for Human Use (CHMP). The companies are looking to get
the candidate approved for the treatment of relapsing-remitting
multiple sclerosis (RRMS).
The CHMP rendered a negative opinion as it believes that the potential risks associated with Nerventra outweigh the benefits based on currently available data. Data found in animal studies - a higher occurrence of cancer after long-term exposure to Nerventra - and chances of an adverse effect on the unborn baby when taken by pregnant women, led to the CHMP opinion. Teva and Active Biotech are planning to request a re-examination of the CHMP opinion. Teva's shares fell 2.45% on the news.
We are disappointed with CHMP's opinion on Nerventra. The successful development and launch of Nerventra would help strengthen Teva's multiple sclerosis drug portfolio. Teva already has a multiple sclerosis product in its portfolio - Copaxone.
However, Copaxone could start facing generics this year. Last month, Teva provided guidance for 2014 based on two scenarios related to Copaxone - Copaxone remaining exclusive and Copaxone going generic. The entry of Copaxone generics this year could cut total revenues by about $500 million and earnings by 60 cents.
We note that several oral multiple sclerosis therapies are currently available including Novartis ' ( NVS ) Gilenya and Biogen Idec 's ( BIIB ) Tecfidera among others. Competition in the oral multiple sclerosis market is intense and Nerventra needs to demonstrate superior efficacy and safety to gain share in this market.
Teva carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks include Actavis ( ACT ) carrying a Zacks Rank #2 (Buy).
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