Teva falls on Celltrion warning letter, guidance

Teva Pharmaceutical Industries Ltd. (NYSE:TEVA; Tel Aviv:TEVA) fell $2.21 (11%) to $18.64 in New York on Thursday after reporting earnings that included lower than expected 2018 guidance and indicated Teva may not be able to launch its migraine candidate fremanezumab (TEV-48125) on schedule after its manufacturing partner Celltrion Inc. (KOSDAQ:068270) received a warning letter from FDA.

The company's 2018 guidance of revenues between $18.3-$18.8 billion and EPS of $2.25-$2.50 fell short of the Street's expectations of $19.2 billion and $2.93 EPS. On a conference call to discuss the earnings, CEO Kåre Schultz attributed the reduced guidance to the company's restructuring and increased generics competition.

FDA's Jan. 26 warning letter to Celltrion, the sole supplier of the active pharmaceutical ingredient in fremanezumab, described GMP violations observed at a drug manufacturing facility in South Korea and said the agency could withhold approval of associated applications until the issues are corrected.

On Thursday, Teva said Celltrion's remediation of the issues addressed in the letter would likely result in delayed approval, adding that Teva is "in active dialogue with the FDA in an effort to maintain our priority date for the approval." Schultz said warning letter issues can take six to 18 months to resolve. FDA granted Priority Review to a BLA for fremanezumab in December; Teva expects a decision in mid-2018 (see BioCentury Extra, Dec. 14, 2017).

Fremanezumab, a humanized mAb targeting the calcitonin gene-related peptide (CGRP) ligand, is in a market race with anti-CGRP mAbs from Eli Lilly and Co. (NYSE:LLY) and Amgen Inc. (NASDAQ:AMGN). Lilly's galcanezumab (LY2951742) has a PDUFA date in 2H18, while Aimovig erenumab (AMG 334) from Amgen and partner Novartis AG (NYSE:NVS; SIX:NOVN) has a PDUFA date of May 17, 2018. Additionally, Alder BioPharmaceuticals Inc. (NASDAQ:ALDR) reported positive data in June from a Phase III trial of its anti-CGRP mAb, eptinezumab (IV ALD403), and plans to submit a BLA to FDA in 2H18 (see BioCentury Extra, Dec. 18, 2017).

Teva reported 4Q17 revenues of $5.5 billion, outperforming the Street's expected $5.3 billion, and adjusted EPS of $0.93, ahead of the Street's $0.77. Global revenues for multiple sclerosis drug Copaxone glatiramer acetate fell to $821 million from $1 billion in 4Q16. The figure easily beat the consensus estimate of $611 million.