Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) halted its at-risk launch of its generic version of the drug for Gastroesophageal Reflux Disease, Protonix, three days after it was announced at the end of 2007. The company agreed on the suspension of its launch with the manufacturer of the ethical version of the drug, Wyeth (NYSE: WYE) after it transpired that certain patent issues still needed resolving before it could go ahead. The timeout will end this Tuesday, January 22.
Protonix has estimated annual sales of $2.5 billion. So what will happen on Tuesday? "I think that Teva will not resume the launch for the time being, should it not reach an agreement with Wyeth," says Clal Finance Batucha analysts Yisca Erez. "Teva managed to sell a quantity that will last for two to three months, so it has no reason to hurry. I believe there could be an agreement between the two companies. Once supplies at pharmacies run low, Teva will talk about resuming the launch."
Globes: What sort of agreement are the companies trying to reach?
Erez: "Wyeth can get the launch stopped by offering a Teva a certain sum, or they could decide that it will go ahead on an agreed date in exchange for royalties and a share of the revenue. They could also agree to delay the launch for the time being, although Teva will still launch its generic version before the others. As a rule, Teva does not disclose details about its contracts, but they usually include royalties."
Published by Globes [online], Israel business news - www.globes.co.il - on January 20, 2008
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