Teva gains FDA response on generic Lovenox, prompting sharp dive in Momenta shares
This article was originally published in Scrip
Teva Pharmaceutical Industries reported that the US FDA issued the company a minor deficiency letter regarding its long-pending ANDA application for a generic version of Sanofi-Aventis' blood thinner Lovenox (enoxaparin), but the firm provided very little in the way of disclosure that would allow investors to gauge the chances of the product gaining regulatory approval.
At the same time, the news put Momenta Pharmaceuticals shares under pressure as investors acted on fears that Teva may be in the final stages of gaining approval, and the shares fell 21%, or $3.30, to $12.50 in late trading. Momenta and its partner Sandoz (Novartis) began selling their generic version in July after receiving US approval for their abbreviated new drug application – and so far, Momenta is the sole generic enoxaparin on the US market, despite the fact that Teva, along with another generics firm, Amphastar, had filed their abbreviated new drug applications earlier than Sandoz/Momenta.
Teva stated that it had received the minor deficiency letter, indicating "that the FDA has completed its review of the ANDA including the company's responses to key questions during the review process. Prior to potential final product approval, the Office of Generic Drugs requires responses to a short list of questions, which Teva intends to respond to in the near future".
Some have pointed to an inherent risk to the timeline presented by Teva, and they have urged a cautious approach. "Teva is indicating confidence that they will gain approval in the next 30-60 days, but it is important to note that minor deficiency letters can involve meaningful problems…(the simplest technical issues are designated by the FDA not as minor but as 'telephone deficiencies')," Avik Roy, health care analyst for Monness, Crespi, Hardt & Co said in a research note.
The analyst went on to state that, assuming that it takes Teva about a month to compose answers to FDA's questions, Teva could be about two to three months from gaining FDA approval. "However, without more information about the questions Teva is facing, it is difficult to know if Teva can answer these questions to the FDA's satisfaction," he said. "From a Momenta standpoint, it is worthwhile to take a conservative stance and assume that Teva's launch is close at hand." Some have pointed out that even though the FDA technically should respond in about 60 days, there are no user fee deadlines for generic applications, and thus no definitive timeline.
Oppenheimer analyst Bret Holley also expressed concern about Teva's limited disclosure, and stated that there is a chance that the firm's answers may not satisfy the FDA. Nevertheless, he believes there is an increased chance the ANDA could be approved in mid-2011.
Among the many unanswered questions is the following: Will the FDA rule positively that Teva has met the five criteria laid out in July 2010 by the agency for a generic Lovenox? As recently as November Teva management had told investors that it had a meeting with the FDA and the regulator confirmed that its proposed generic version met the FDA criteria to demonstrate "sameness" to Lovenox. Investors, however, had to take Teva on its word, since the FDA does not publicly comment on its ongoing reviews.
Against this backdrop is a patent infringement suit brought by Momenta against Teva concerning that company's production technology. Momenta has alleged infringement of purported novel methods it developed to solve the problem of processing an enoxaparin preparation that would match the structural profile of Lovenox, a claim that Teva disputes (scripintelligence.com, 3 December 2010). Oppenheimer analyst Holley claims the suit is a variable to consider, since, given the FDA's citizen's petition response when it approved the Sandoz/Momenta product, it appears technology like Momenta's "may be important to prove the sameness of a generic enoxaparin." At the same time, he admits outcome of this kind of litigation is hard to handicap and there is a good chance Teva would launch at risk, if it gained an FDA approval.
Momenta gains by remaining the sole provider of generic Lovonex, since it gets a 45% profit share as long as there are no third-party competitors marketing a Lovenox-equivalent product, as per its 2003 agreement with Sandoz. If other competitors come on the market, Momenta only gets a royalty on sales in the high-single digit to low-double digit range. A second competitor could also inflict damage by causing a drop in prices. For the last nine weeks of the July-September period, Novartis reported $292 million in enoxaparin revenue.
A third company, Amphastar, also has a pending ANDA, and recently it accused the FDA of unlawful treatment on how its application has been handled (scripintelligence.com, 5 January 2011).
Sanofi-Aventis has continued its effort to challenge the FDA's approval of the Momenta/Sandoz ANDA, as well as the agency's July 23rd response to a February 2003 citizen's petition (scripintelligence.com, 22 December 2010).