Are Teva's Pop and Momenta's Crash Overreactions?

For now, Momenta Pharmaceuticals (NAS: MNTA) , Novartis (NYS: NVS) , and Mylan (NAS: MYL) will have to wait until 2015 to try to grab some of the nearly $4 billion market for Teva Pharmaceuticals' (NYS: TEVA) multiple sclerosis drug Copaxone.

Momenta, which is partnered with Novartis, Mylan, and India-based Natco Pharmaceuticals, lost its lawsuit aimed at invalidating the patents on Copaxone. Momenta is down 22%, Novartis and Mylan are down a little, and Teva is up 5%, which all makes sense considering the relative effect the drug has on their future.

Teva is dependent on Copaxone, not just because it made up 18% of the company's sales last quarter, but because the brand-name drug produces a higher profit margin than Teva's generic drugs, making Copaxone an even larger contributor to the bottom line.


Unlike Mylan and Novartis, which have multiple generic and brand-name drugs, Momenta only has one other drug, a generic version of Sanofi's Lovenox. Doubling its revenue streams with a generic version of Copaxone will have to wait until 2015.

Still, a 22% drop seems a little extreme for a three-year delay, especially since Momenta and Novartis weren't going to launch immediately even if they won the case; the FDA hasn't approved their copycat yet, and if they won, they were expecting Teva to appeal, which likely would have delayed the launch for a year anyway. Momenta will likely appeal the decision, so the companies could still launch in the 2013 time frame if they can get a little help from the higher court.

If that appeal fails, the issue for the generic-drug makers is how much of the nearly $4 billion Copaxone market will be eroded during the delay. Oral multiple sclerosis drugs from Biogen Idec (NAS: BIIB) , Sanofi, and Teva are likely to be approved soon. The market might look considerably different in 2015.

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The article Are Teva's Pop and Momenta's Crash Overreactions? originally appeared on Fool.com.

Fool contributor Brian Orelli holds no position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Momenta Pharmaceuticals. Motley Fool newsletter services have recommended buying shares of Momenta Pharmaceuticals. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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