A stark reminder of the patent cliff facing research-based companies like AstraZeneca and Pfizer comes from the large number of generics submissions that Teva has filed.

As of Feb. 5, U.S. branded product sales of more than $113 billion were being targeted by Teva's 216 product applications awaiting final FDA approval, company execs said during a Feb. 16 earnings call. The marketing applications include 43 tentative approvals and 140 Paragraph IV applications, which are challenging U.S. patents on branded products.

Teva, the world's leading generics company, is also the leading exponent of grabbing first-to-file status for its generics in the U.S., thereby gaining a lucrative six months of marketing exclusivity. Management said it believes it is first to file on 89 of its pending product applications, which would represent branded sales of $55 billion.

The expansion in generic opportunities extends to Europe, where Teva said it has 3,143 marketing applications awaiting approval in 30 European countries. These relate to 241 compounds in 485 formulations, and include nine applications pending with the EMEA.

First US BLA filing

At the same time, Teva CEO Shlomo Yanai was keen to expound on Teva's progress in innovative R&D. Teva made equity investments of around $35 million in 2009 in an effort to expand its innovative pipeline, on top of total R&D spending of $923 million, which amounted to 6.6 percent of sales.

Earlier this month, for instance, Yanai revealed the FDA accepted Teva's first biologic license application, for a G-CSF product, a cytokine that belongs to the family of drugs called hematopoietic agents. The products is already marketed in the UK and several other EU countries as the biosimilar, TevaGrastim , and Teva is aiming to generate $800 million to $900 million in revenue from biosimilars by 2015.

A long-acting G-CSF product has just completed Phase II clinical trials, and is expected to enter Phase III trials during the first half of this year, Yanai said.

A new injectable formulation of the multiple sclerosis treatment, Copaxone (glatiramer acetate), will be submitted for U.S. approval in the first quarter, and a clinical study of higher doses should start in the second quarter, according to Yanai. A supplemental NDA for Azilect (rasagiline mesylate), which is based on a study on delaying Parkinson's progression, should be submitted in the U.S. in the first quarter.

Last year, Teva licensed a Phase III product, OGX-011, from OncoGenex for multiple oncology indications. More recently, it acquired worldwide marketing rights to the potential oral MS therapy, laquinimod, which is in Phase III development with the Swedish company, Active Biotech.

Teva Stays Mum On Ratiopharm Buy, Lovenox Generics

But Yanai provided little update on two speculative issues, the first being a potential acquisition of the German generics company ratiopharm. Teva is rumored to be one of the finalists bidding for the company, but Yanai refused to comment on the issue. Teva is ranked in the top three generic companies in all European countries except Germany, so the acquisition would be an opportunity for Teva to extend its reach ("The Pink Sheet DAILY', Jan 25, 2010).

Another key issue on the minds of investors is the potential launch of a generic version of Sanofi-Aventis' low-molecular weight heparin Lovenox (enoxaparin). Momenta Pharmaceuticals and Novartis' Sandoz unit are reportedly taking orders for their generic version suggesting that an FDA approval of their application may be nearing. Teva, however, has its own ANDA for a generic version of Lovenox at FDA, having filed the application in 2003, two years ahead of Momenta/Sandoz. It's a lucrative drug that brought in $4.1 billion in sales for Sanofi in 2009. Yanai, however, declined to comment on the possible timing of an approval of a generic version.

Barr And Copaxone Lead Growth

Teva's 2009 net sales rose 25 percent to $13.9 billion, led by strong sales of Copaxone, while net income gained 22 percent to $3 billion on a non-GAAP basis. Earnings per shaer increased to $3.37, up 11 percent on a non-GAAP basis. The EPS were slightly below analyst consensus figures.

The Barr acquisition spurred sales growth particularly in the U.S., Russia, Poland, Germany and Croatia, Yanai reported. Teva says it has made a profitable business out of Barr's European arm, Pliva, and Yanai expects cost savings of $500 million from the acquisition by 2012.

Net sales of $16 billion were forecast for this year by the Teva CEO, although he warned currency exchange rates might affect this total (they had a $500 million negative effect on net sales in 2009). He also forecast non-GAAP EPS of $4.40 to $4.60 for the year, although one analyst on the earnings call thought the forecasts were conservative.

North America continued to be a key market for Teva, with 2009 sales of $8.6 billion (up 34 percent, representing more than half of its total sales). U.S. sales growth was led in the fourth quarter by launches of generic versions of Prevacid (lansoprazole) Delayed Release and Allegra-D 12 Hour (fexofenadine/pseudoephedrine) and the relaunch of a generic version of Pulmicort Respules (budesonide). There were also strong sales of generic versions of Protonix (pantoprazole) and Adderall XR (mixed amphetamine salts).

European sales increased by 10 percent in constant currencies to reach $3.3 billion, and were up by 22 percent in local currencies, despite Europe being more adversely affected by the global financial downturn than other regions, according to Yanai. Growth came from generics sales in Germany, Spain, Poland and France, as well as increased sales of Copaxone and Azilect.

Separately, Teva's chairman, Eli Hurvitz, has also successfully responded to treatment for a recently diagnosed disease, and is taking a three-week leave of absence.

- John Davis (j.davis @elsevier.com)

Teva Targets $113 Billion In Branded Sales With Dozens Of Pending Applications

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