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Complex generics will boost speciality biz, Teva says

By Dan Stanton+

16-Jan-2014

Complex generics will represent over 50% of Teva’s generic market by 2017, the firm says, but investments in delivery technology will have positive implications across the full business.

During a standing-room only session at yesterday’s JP Morgan Global Healthcare Conference, Teva’s acting CEO Eyal Desheh, and President of R&D, Michael Hayden spoke about the firm’s strategy and its move towards complex generics.

According to the US Food and Drug Administration (FDA) , complex generics are off patent versions of drugs that may involve complex APIs such as peptides or natural source products, complex formulation process, a unique route of delivery, or a drug-device combination, and therefore offer a high-barrier to entry.

“We are moving very intensely into the complex generic products, creating more barriers to copying these products, using novel complex technologies,” Hayden said. By 2017 “significantly more than 50% of [Teva’s] generic market will be in complex generic products,” he continued, adding the company was spending “significant amounts from [its] generic R&D budget in the development of complex technology.”

Whilst some technology will be developed in-house, others will be brought in via licensing agreements or acquired, he added, saying this “major commitment” was supported by recent recruitments as Erez Vigodman, who has just been selected as the new CEO.

However, whilst Teva is the world’s largest generics firm by revenue, Hayden told potential investors it is “the only company in the world with a truly integrated generic and branded R&D portfolio,” and recent in-house delivery technology developments - including patches, injectable devices, nasal suspension and long-acting injectables - would equally support the firm’s specialty drug business.

“These particular technologies have been the basis for the development of our NTE [new therapeutic entities] programme, which is seeing 14 new products this year coming out that were essentially an idea a year ago and are coming out a year later.”

Copaxone

On example of complex technology bolstering Teva’s speciality business is with its top multiple sclerosis drug, Copaxone (worth $4bn (€2.9bn) in 2012 ), coming off patent later this year.

However, the firm has reformulated the drug to a thrice-weekly injection and, according to Hayden, is “completely confident of approval of approval” in the US in the near future.

He continued to add Teva was looking conservatively at up to 45% patient switching before Copaxone expires in June.

M&A

Teva has also undertaken a cost-cutting strategy which it hopes to save $2bn annually by 2017 . However, with the savings - plus recent financial settlements with Pfizer and a fully paid $700m tax bill to the Israeli Government - acting CEO Desheh said yesterday Teva was in a position to “more than a small acquisition or in-licensing transaction,” raising a laugh by hinting potential targets were roaming the corridors of the conference.

For the increasingly consolidated generics industry, the major players are all looking to move fast on the same targets, he continued, though stressed whilst there is a rush to acquire, “let’s not confuse sense of urgency with doing dumb deals.”

Consolidation

When asked whether the Big Four players - Teva, Sandoz, Actavis and Mylan, according to this report - were likely to become the Big Three, Desheh admitted it might be a possibility.

“A lot of smaller players mostly outside of US that will be consolidated, they will not survive the competition,” he said. “Economically does it makes sense to reduce the big four competitiors to three? Probably yes. Legally, with anti-trust issues I’m not sure it’s possible but there will be people looking at it over the next few months.”

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