Teva Pharmaceutical Industries Ltd.’s (TEVA) Neutroval failed to receive first-round approval in the US with the Food and Drug Administration (FDA) recently issuing a complete response letter (CRL) for the company’s Biologic License Application (BLA) for the candidate.
 
Teva was looking to get the product approved for the reduction in the duration of severe neutropenia and the incidence of febrile neutropenia in patients treated with established myelosuppressive chemotherapy for cancer. Teva’s Biologic License Application for Neutroval was based on results from a clinical program consisting of five studies with more than 680 patients.
 
According to the complete response letter issued by the FDA, Teva needs to provide several items to the agency. However, we are pleased to note that the company will not have to conduct additional studies to gain approval. This would have involved significant time and additional costs. Teva said that it is currently reviewing the CRL and intends to work with the FDA to determine the regulatory path forward.
 
Neutroval is similar to Amgen’s (AMGN) Neupogen and will compete directly with Neupogen once launched. Neutroval is already approved in the European Union where it is available in several markets under the name TevaGrastim.
 
Delay Good for Amgen
 
The delay in Neutroval’s US approval is good news for Amgen as the launch of Neutroval in the US would have had a negative impact on Amgen’s top-line. Amgen’s granulocyte colony-stimulating factor (G-CSF) franchise, which consists of Neupogen/Neulasta, contributed 32% to revenues in 2009.
 
Neutral on Teva
 
We currently have a Neutral recommendation on Teva, which is supported by a Zacks #3 Rank (Hold). While we expect the company to continue performing well thanks to new product launches, both generic and branded, we remain concerned about the intense competition and pricing pressure in the generics market. Moreover, the Copaxone patent challenge remains a matter of concern. With Copaxone contributing more than 20% to total revenue in 2009, the entry of generic versions would have be a major setback for the company.

 
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