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Merrill Lynch predicts that Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) will win its patent case to protect Copaxone, its intravenous treatment for multiple sclerosis, and therefore reiterated its "Buy" recommendation raised its target price to $57 from $55.
Merrill Lynch analysts Gregg Gilbert, Haim Israel, and Sumant Kulkarni also predict that generic Copaxone will enter the market in mid-2015, rather than in 2013, which they say was an overly conservative estimate.
US district court rulings on the two patent challenges to Copaxone by Momenta Pharmaceuticals Inc. (Nasdaq: MNTA) and Sandoz Inc. and by Mylan Inc. (NYSE: MYL) and India's Natco Pharma Ltd. could come at any time. Copaxone is protected by seven Orange Book-listed patents (all expire on May 24, 2014), which are part of litigation. The analysts estimate that Copaxone will have $2.6 billion in US sales in 2012.
In separate developments, several generic companies are challenging Teva's Nuvigil for excessive daytime sleepiness, with trials against Mylan and Watson Pharmaceuticals Inc. (NYSE: WPI) scheduled for June. The analysts expect a settlement to allow generics to enter the market on January 1, 2015, instead of in 2018.
Merrill Lynch forecasts Teva's earnings per share of $5.58 on $21.65 billion revenue in 2012 and $6.21 on $22.22 billion revenue in 2013.
UBS also reiterates its "Buy" recommendation for Teva with a target price of $60. It cited yesterday's announcement of positive results in a Phase III clinical trial of QNASL for the treatment of seasonal and perennial allergic rhinitis
Teva's share price fell 0.6% by early afternoon on the TASE today to NIS 171.20, after falling 0.4% on Nasdaq yesterday to $45.06, giving a market cap of $42.5 billion.
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