Teva Pharmaceutical Industries Ltd. (TEVA - Free Report) recently announced disappointing top-line results from a study evaluating Nuvigil (armodafinil) as an adjunct therapy in adults with major depression associated with bipolar I disorder.
Top-line results showed that although Nuvigil showed a numerical improvement, it failed to achieve statistical significance in Study 3072.
Earlier, Teva had reported positive results from another phase III study – Study 3071. Two more studies (3073 and 3074) are currently ongoing. Teva expects to report results from Study 3073 later in 2013.
Nuvigil is currently approved for the improvement of wakefulness in adults who experience excessive sleepiness due to obstructive sleep apnea, shift work disorder, or narcolepsy. Nuvigil is expected to generate sales of $280 - $320 million in 2013.
Teva is working on driving Nuvigil sales by expanding its label. Nuvigil, which became a part of Teva’s portfolio following its acquisition of Cephalon, could start facing generic competition from 2016. With Study 3072 failing to deliver positive data, we expect a delay in Teva’s plans for seeking approval for Nuvigil’s label expansion for the bipolar I disorder indication. Positive data from Study 3072 would have allowed Teva to file for FDA approval and potentially launch the product for this indication in the first quarter of 2014.
Teva currently carries a Zacks Rank #3 (Hold). Teva, which is going through a transition period, provided disappointing guidance for 2013. However, with the company not including the impact of the cost-savings plan in its guidance, we believe Teva is leaving some room for delivering above expectations. Share buybacks also leave some room for upside. We expect investor focus to remain on the execution of the company’s new strategy. Earlier this year, Teva sold off its animal health business in the US to Bayer (BAYRY - Free Report) . This will allow Teva to focus on developing, manufacturing and marketing branded and generic drugs globally -- Teva’s primary areas of strength.
Among generic companies, Mylan (MYL - Free Report) currently looks better-positioned with a Zacks Rank #2 (Buy). Pernix Therapeutics Holdings, Inc. (PTX - Free Report) , a specialty pharmaceutical company that also sells generic products, also carries a Zacks Rank #2.