Teva Completes Patient Enrolment

Phase III Development of Laquinimod Progressing – Patient Enrolment Completed

On June 25, 2009, Teva Pharmaceutical (TEVA - Snapshot Report) and its development partner, Active Biotech announced that they have finished enrolling patients for a second pivotal phase III clinical study, BRAVO, which is being conducted to evaluate the novel, oral once-daily immunomodulating compound, laquinimod, for the treatment of relapsing-remitting multiple sclerosis (RRMS).

Multiple sclerosis is a nervous system disease that affects the brain, spinal cord and optic nerves. BRAVO will study the efficacy, safety and tolerability of laquinimod versus placebo. The trial has also been designed to provide risk-benefit data for laquinimod versus Avonex, a currently available injectable treatment.

The BRAVO study is being conducted with more than 1200 patients at 156 sites across the U.S., Europe, Israel and South Africa. Another phase III study, ALLEGRO, is currently ongoing in North America, Europe and Asia.

The MS market is huge and represents significant commercial potential. The company estimates that more than 400k people are affected by the disease in the U.S. Over 2 million people are estimated to be affected worldwide. Laquinimod enjoys Fast Track status in the U.S. and if all goes well, it could hit the market as soon as late 2011.

Once launched, laquinimod will be competing with products like Biogen Idec's (BIIB - Analyst Report) Avonex, Bayer HealthCare’s (BAYRY) Betaseron, Pfizer/Serono's (PFE - Analyst Report) Rebif, and Biogen Idec/Elan's (BIIB - Analyst Report/ELN - Snapshot Report) Tysabri. As MS is a life-long disease, an oral treatment like laquinimod could find preference over currently existing therapies which need to be injected or infused.

We maintain our Buy recommendation on Teva. The company delivered a strong performance in 2008 despite the global slowdown and we remain optimistic on the company's growth prospects – Teva should continue posting strong revenues and earnings on the back of new product launches, both generic and branded. Long-term growth should be supported by the company's branded and biogenerics pipeline. Meanwhile, the Barr acquisition should help Teva strengthen its position in the U.S. and expand its presence in Europe. We recommend purchase up to the $52 level.