(Updates with Teva’s closing price in ninth paragraph.)
Jan. 24 (Bloomberg) -- Teva Pharmaceutical Industries Ltd. failed to win backing from the European Union drug regulator for a new multiple sclerosis pill, hurting the company’s effort to introduce a successor to its best-selling injection Copaxone.
The drug, laquinimod, shouldn’t be granted marketing approval in the EU, the European Medicines Agency’s Committee for Medicinal Products for Human Use said in a statement today. The panel was concerned that animal studies showed a higher occurrence of cancers and possible risk to unborn babies, the agency said. The product would have competed against oral medicines from Biogen Idec Inc., Novartis AG and Sanofi.
Laquinimod showed disappointing results in clinical trials in 2011. After talks with the Food and Drug Administration, Teva decided not to seek U.S. approval without another trial, the company said that year. Analysts have no sales estimates for the drug, which has the brand name Nerventra, according to data compiled by Bloomberg. Active Biotech AB, Teva’s partner on the drug, plunged the most in 2 1/2 years.
“Teva and Active Biotech are focusing on evaluating the CHMP’s review and will continue to liaise closely with the EMA in working to make Nerventra available as a new treatment option,” the companies said in a statement.
Teva, based in Petach Tikva, Israel, and Lund, Sweden-based Active Biotech remain committed to Nerventra’s development as a treatment for relapsing-remitting multiple sclerosis, they said. The companies also have studied the drug as a treatment for Crohn’s disease and lupus.
The risks of cancer and effects on unborn babies weren’t previously well known, said Peter Welford, an analyst at Jefferies International Ltd. The EMA committee also cited the drug’s modest effect on the relapse rate, and Welford said that was the rationale he expected for the refusal.
A new study, dubbed Concerto, is focusing on slowing a patient’s descent into disability. Laquinimod failed to beat competing products on the industry standard of reducing the rates at which people experience relapses of the disease. Teva expects the drug to enter the U.S. market in late 2017 or early 2018, the company said in September.
“We remain very confident on the data and the neuro- protective qualities of this drug,” Michael Hayden, Teva’s chief scientific officer, said on a conference call with analysts Dec. 10.
Teva’s American depositary receipts dropped 2.5 percent to close at $42.93 in New York. The Tel Aviv-listed shares aren’t trading today because the Israeli stock market is closed on Fridays. Active Biotech plunged 46 percent to close at 41.10 kronor in Stockholm, the biggest decline since Aug. 1, 2011.
The European Commission, the EU’s executive arm, usually follows the EMA committee’s recommendations.
Copaxone had sales of almost $4 billion in 2012, making it Teva’s biggest-selling product. A U.S. patent protecting the drug until 2015 was invalidated in July by a U.S. Court of Appeals, opening the way for cheaper generic competitors as soon as May. The U.S. Supreme Court refused last month to block the lower court’s ruling.
The product, which is a daily injection, already faces competition from new, easier-to-use pills that have come on the market in the past few years. Novartis’s Gilenya had sales of $518 million last quarter, while Biogen’s Tecfidera produced revenue of $286.4 million and Sanofi’s Aubagio had sales of 44 million euros ($60 million).
Teva Chief Executive Officer Jeremy Levin left the company in October after less than 18 months on the job in a dispute with Chairman Phillip Frost. The company on Jan. 9 chose board member Erez Vigodman to replace him.
--Editors: Kim McLaughlin, Alastair Reed