THE TEVA building in Jerusalem..
(photo credit: REUTERS)
Shares in Teva Pharmaceutical Industries rose by 8.75% to NIS 8,727 on the Tel Aviv Stock Exchange on Sunday after the Israeli drug maker received approval from the US Food and Drug Administration to sell its new migraine treatment, raising hopes for a brighter future for the heavily indebted company.
The FDA approved on Friday Teva’s fremanezumab injection, known as Ajovy, for the preventive treatment of migraine, a condition that impacts more than 36 million men, women and children in the US, according to the American Migraine Foundation.
The approval looks likely to boost Teva’s financial fortunes, which have suffered since the company acquired Allergan Generics in a transaction worth $40.5 billion in July 2015 and as a result of narrowing profit margins from existing treatments.
The wholesale acquisition cost for Ajovy is $575 per monthly dose or $1,725 per quarterly dose, and will be available in pharmacies within two weeks. According to Deutsche Bank estimates, the newly-approved drug could bring in as much as $500 million in sales annually.
Ajovy is the second preventive drug for migraine to receive FDA approval this year. Aimovig, manufactured by Teva’s rivals Amgen and Novartis, was approved in May and is currently sold at a similar price.
According to Reuters data, Aimovig could be worth nearly $1 billion in annual sales by 2022.
Teva, which is also listed on the New York Stock Exchange, saw shares rise by 2.88% during Wall Street trading hours on Friday and 5.95% after hours to $24.21 per share.
Teva’s financial health detoriated in July 2017 when Dutch-American pharmaceutical company Mylan N.V. cut the wholesale monthly cost of its generic version of Teva’s best-selling multiple sclerosis treatment Copaxone by 60% from $5,000 to $1,900.
Teva had relied heavily on revenue from sales of Copaxone, priced at $5,800 and accounting for some 20% of sales, since 1996 when the drug was first released into the market.
Despite dwindling profits due to loss of market share, the company announced last month that its debts had fallen from $35 billion to $28.4 billion after new CEO Kåre Schultz implemented a series of debt-cutting measures since taking the reins last year.
Slashing the debt of the world’s biggest generic drug maker has been Schultz’s primary focus since being appointed – and he has wasted no time in making his presence felt both at Israel’s Petah Tikva headquarters and around the world.
In November 2017, Teva announced a new organizational and management structure, combining the company’s generic and specialty drugs divisions, in addition to two research and development groups belonging to the divisions.
One month later, Teva announced it would be cutting 14,000 jobs by the end of 2019, constituting approximately 25% of its global workforce and including 1,700 Israeli employees. The move led to mass protests by Teva’s Israeli workers and a Histadrut labor federation-approved general strike in solidarity with those affected.
Teva’s chief scientific officer Michael Hayden; head of global specialty medicines Rob Koremans; and head of the global generic medicines group Dipankar Bhattacharjee all stepped down at the end of 2017.
The approval of Ajovy by the FDA represents a further milestone in Schultz’s efforts to turn around the fortunes of Teva.
Although the company’s current $24.21 NYSE share price is far from its November 2017 low point of $11.23 when Schultz took over, Teva still remains a long way from returning to its $70.32 peak in August 2015.
“The approval of Ajovy helps us to continue to provide access to important medicines and to deliver on our commitment to our key stakeholders – patients, employees and shareholders,” Schultz said following the FDA’s decision.
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