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Teva Stock Rises on Patent Settlement With Neos Therapeutics

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Shares of Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) rose 8.4% on the news that it has entered into a confidential settlement and licensing agreement with Neos Therapeutics, Inc. (NEOS - Free Report) for resolving all ongoing patent litigations related to the launch of the generic version of the latter’s Cotempla XR-ODT. Teva had filed an abbreviated new drug application (“ANDA”) looking for approval of the generic version with the FDA last year.

The drug is an extended release, orally disintegrate tablet approved for the treatment of attention deficit hyperactivity disorder (“ADHD”) in pediatric patients.

The company’s shares have decreased 16.6% so far this year compared with the industry’s decline of 28.6%.

 

 

Per the terms of the agreement, Neos Therapeutics has granted Teva rights to manufacture and commercialize a generic version of its ADHD drug beginning Jul 1, 2026 or earlier under certain circumstances.

However, no further details are available. The agreement is due to be submitted to the Federal Trade Commission and the U.S. Department of Justice.

Neos Therapeutics is a small drug company specializing in modified-release drug delivery technology platforms. The company has three approved drugs, including Cotempla XR-ODT. All of them are available for the treatment of ADHD.

Teva is facing significant challenges in the form of accelerated generic competition for its key multiple sclerosis injection, Copaxone, new competition for branded products, pricing erosion in the U.S. generics business, lower-than-expected contribution from generic launches and a massive debt load. These settlements provide a future roadmap for growth of the company’s generics portfolio. Teva already has several generics in its ADHD portfolio including Lilly’s (LLY - Free Report) Strattera, Novartis’ (NVS - Free Report) Focalin and Shire’s Intuniv.

Zacks Rank

Teva currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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