The FDA has come through with a delayed OK for Teva’s new migraine drug. And this one represents a badly needed win for the new management team as they look to regain some lost respect.
Teva put out the word about the approval late Friday. Its shares $TEVA were up 6% in after-market trading.
This new drug fremanezumab — to be marketed as Ajovy — comes in as the second approval for the batch of CGRP drugs in the pipeline. Amgen scored bragging rights, as well as an opportunity to set the bar on the price, as first mover with Aimovig. Now Eli Lilly remains in its familiar position towards the end of the line, with a PDUFA date set for next month. Alder remains at the back of the pack after delays pushed back any decision into next year.
Teva — pushed back 3 months by some manufacturing issues at a facility run by Celltrion — does have some special boasting rights here that will play out in the unfolding marketing battle, heralding an OK for a drug that proved effective with monthly and quarterly dosing.
The company plans to start selling the drug in the US at $575 per monthly dose and $1,725 per quarterly dose. That will line up right alongside Amgen’s price for Aimovig, set at $6,900 a year for a monthly dose.
For Teva, the news had to spark more than a few high-fives in the C-suite. Bloomberg’s consensus on sales is set at $500 million in 2022. But some added respect after watching the generic business get torn up — while its lead innovative drug for multiple sclerosis was finally axed by repeat clinical failures — is priceless for CEO Kåre Schultz, who is working to turn the company around.
Leerink’s Geoffrey Porges joined in the applause for Teva, noting that Amgen’s early success with Aimovig underscores the drug category’s $5 billion to $6 billion potential by the mid-’20s as the full field of drugs develops the market.
Here’s what Umer Raffat had to say:
The story at TEVA has really been about establishing credibility with investors- especially with the targets they have set for themselves. Many investors had pegged CGRP approval as one of these key targets. Hitting this target is very important validation for management’s credibility.
Ami Fadia at Leerink also is betting that peak sales can do better than the Bloomberg consensus.
Teva expects Ajovy to be available in ~2 weeks, and the company has previously indicated that the fremanezumab launch will involve “giving away free drug” at least during the initial launch period and that no earnings contribution is incorporated into 2018 guidance (we assume only $3M this year). Our sales estimates have assumed timely approval of Ajovy, which we believe positions it to reach peak share within the injectable CGRPs of 20%. Raising our PoS to 100% (from 75%) increases our US Ajovy sales in 2019 to $108M (vs $81M) and sales in 2023 to $629M (from $471M).
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