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Teva Pharmaceutical Industries Ltd. (TEVA - Analyst Report) recently received good news on the Copaxone front with the US District Court for the Southern District of New York ruling in the company’s favor in its patent infringement lawsuit. Teva had filed a patent infringement lawsuit against Momenta Pharmaceuticals, Inc. (MNTA - Snapshot Report)/Sandoz Inc. and Mylan (MYL - Analyst Report)/Natco Pharmaceuticals, who were looking to launch their generic versions of Copaxone.

Copaxone is approved for the reduction of the frequency of relapses in relapsing-remitting multiple sclerosis (RRMS), including patients who have experienced a first clinical episode and have MRI features consistent with multiple sclerosis.

The Ruling

The court ruled that the claims made by Momenta/Sandoz and Mylan/Natco about the Copaxone patents being invalid and unenforceable were unfounded. Moreover, the court ruled that the generic versions for which the companies were seeking Food and Drug Administration (FDA) approval would infringe the Copaxone patents.

Impact of the Ruling

With this ruling, Copaxone should be protected from generic competition in the US until May 24, 2014, when the Orange Book patents are scheduled to expire. Teva believes that the protection could extend up to September 1, 2015, when the process patent is slated to expire.

The favorable ruling is a major positive for Teva. With Copaxone contributing 19.5% to total revenues in 2011, the earlier-than-expected entry of generic versions of Copaxone would have been a major setback for the company. Teva can now focus on extending Copaxone’s life cycle.

The company recently announced positive top-line results on Copaxone from a phase III study, GALA, which was conducted to evaluate the efficacy, safety and tolerability of Copaxone (40mg) administered thrice a week compared to placebo in patients with RRMS. The 40mg dose being evaluated in the GALA study is a higher strength compared to the 20mg dose currently available (daily injection).  Results showed that Copaxone 40mg significantly reduced disease activity. The safety and tolerability profile was also found to be favorable.

The positive ruling has removed a major overhang on the shares. We currently have a Neutral recommendation on Teva, which carries a Zacks #3 Rank (short-term ‘Hold’ rating).

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