Shares of Teva Pharmaceutical (TEVA) fell 14% on Wednesday after saying it expects its Q4 earnings per share to suffer an at least $0.25 negative impact after the U.S. Food and Drug Administration approved rival Mylan’s (MYL) generic Copaxone, Teva’s lead multiple sclerosis drug.
Teva said its early assessment of the impact of these launches to its earnings Q4 is that it could be affected by at least $0.25 cents per share.
It also said that any launch by Mylan of a generic version of Copaxone prior to final resolution of the pending patent appeals and other patent litigation should be considered an “at-risk” launch, “which could subject Mylan to significant damages among other remedies.”
“As we are closing the third quarter, it is too soon to officially comment on any change to our full year business outlook,” interim CEO Yitzhak Peterburg said.
Teva said that two appeals will be argued before a single panel of judges of the U.S. Court of Appeals for the Federal Circuit. In the first case, Teva is appealing the December 2016 inter partes review decisions of the Patent Trial Appeal Board that found all of the claims of three Copaxone patents to be unpatentable. In the second case, Teva is appealing the January 2017 decision of the U.S. District Court for the District of Delaware, which declared certain claims of four Copaxone patents invalid.
The two appeals have been fully briefed and await the scheduling of oral arguments, Teva said. In additional litigation, Teva brought suit against five abbreviated new drug application filers, including Mylan, for infringement of a patent covering a manufacturing process for glatiramer acetate product.
Meanwhile, Oppenheimer said in a note to clients the impact on Teva will be an approximately $0.20 to $0.25 “headwind” to the 2017 EPS guidance of $4.30 to $4.50 as a generic Copaxone was not factored into their guidance.
Oppenheimer also anticipates an approximate 5% move to the downside in the price of Teva’s stock in respect of a $2.5 billion erosion to Teva’s 2018 Copaxone earnings.