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Teva's Migraine Candidate Gets Priority Review From FDA

Teva Pharmaceutical Industries LimitedTEVA announced that the FDA has accepted its biologics license application (BLA) seeking approval for its monoclonal antibody candidate, fremanezumab, as a preventive treatment for migraine. With the FDA granting priority review designation to the BLA, a decision from the FDA is expected in mid-2018. Teva looks to launch fremanezumab next year.

The BLA submission was supported by positive data from two phase III studies under HALO program, which evaluated the candidate in patients with episodic migraine ("EM") and chronic migraine ("CM").

Fremanezumab is also being evaluated in late-stage studies (ENFORCE) for the prevention of chronic and episodic cluster headache. In the latest press release, the company also said the FDA has granted fast track designation for fremanezumab for the prevention of cluster headache. In addition, recently a phase II clinical program in post-traumatic headache has also been initiated.

Meanwhile, Teva's restructuring plan announced last week, which aims to lay off more than 25% of its global workforce and shut down some plants, has resulted in massive protests and strikes in Israel by employees as well as the country's main public-sector labor union. The strikes briefly shut down the Ben-Gurion airport, banks, stock exchange and government offices on Sunday. Teva is one of Israel's biggest employers,

Last month, Teva's new chief executive officer, Kare Schultz announced a new organizational and leadership structure to save costs and increase productivity. The organizational changes included the departure of heads of three divisions.

Teva's shares have slumped 48.9% so far this year compared with the industry 's decline of 26.1%.

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 new 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 topline.

Meanwhile, 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 while 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 the entry of 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. It remains to see if the latest corporate shake-up, planned layoffs and divestures are 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).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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