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Teva Pharmaceutical Industries Ltd. (TEVA - Analyst Report) and Perrigo Company (PRGO - Analyst Report) recently launched their generic version of Merck’s (MRK - Analyst Report) oncology drug, Temodar (temozolomide).

Teva and Perrigo have a collaboration agreement for generic Temodar under which Teva will manufacture, market and distribute the product in the U.S. while both companies will share the cost and profit on the sales of the generic version of the drug in the U.S.

As Teva was the first to file for a generic version, it will enjoy 180 days marketing exclusivity.

We note that Temodar is indicated for the treatment of adults suffering from newly diagnosed glioblastoma multiforme along with radiotherapy and subsequent maintenance.

Temodar is also approved to treat refractory anaplastic astrocytoma in patients whose disease has progressed while being treated with a regimen containing nitrosourea and procarbazine

As per IMS, Temodar generated sales of $423 million in the U.S. in 2012. We remind investors that Temodar lost patent exclusivity in the EU in 2009.

We note that Teva’s generics business in the U.S. posted revenues of $970 million in the second quarter of 2013, down 8% from a year ago. Teva expects the generics business to pick up in the second half of the year as approximately 20-25 generic product launches are slated for 2013.

The launch of a generic version of Temodar should boost the generics business in the U.S. for Teva.

Meanwhile, Perrigo also announced that it received approval from the U.S. Food and Drug Administration for its abbreviated new drug applications for its generic versions of Derma-Smoothe/FS Scalp Oil, and Derma-Smoothe/FS Body Oil. Perrigo intends to start shipping both products next month.

Both Teva and Perrigo currently carry a Zacks Rank #3 (Hold). Right now, Shire (SHPG - Analyst Report) looks attractive with a Zacks Rank #2 (Buy).

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