Nessuah Zannex: Serono entry into MS-drug field will hurt Biogen, not Teva

Investment bank Nessuah Zannex believes that drug maker Teva Pharmaceuticals (Nasdaq:TEVA) will not be affected by the entry of Swiss drug-maker Serono into the multiple sclerosis drug market with Rebif.

Teva makes Coapxone, used for treating relapsing-remitting multiple sclerosis.

Analyst Haim Israel estimates that Rebif will capture a 20% U.S. market segment within five years, but that this expansion will primarily affect Biogen, maker of MS drug Avonex.

Given this, the analyst leaves unchanged his Buy rating and $79 price target, some 42% above the price that Teva share closed on Nasdaq on Friday.

On Friday, Serono announced that it has received U.S. Food and Drug Administration approval for Rebif. The drug was approved for sale in Europe in 1998. Its market segment comes to 38%, and in 2001 sales came to $379.6 million.

Despite the rival drug, the analyst remains optimistic and predicts that Copaxone sales in the United States will rise by 20% to 25% in each of the coming five years, and that the Copaxone customers will remain loyal. In 2001, Copaxone sales in the United States grew by some 34%.

The analyst said that Copaxone sales comprise 28% of the American market.

Israel estimates that by 2004 Teva will control a similar market segment in Europe, where annual sales are expected to come to $350 million.