Crunch Time at Teva

The company could hear word today on its new treatment for Parkinson's disease.
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Teva Pharmaceutical

(TEVA) - Get Report

may hear today from the Food and Drug Administration on a new treatment for the symptoms of Parkinson's disease.

For the generic-drug giant, FDA approval would give it a second brand-name neuroscience drug -- joining Copaxone for multiple sclerosis -- as it tries to diversify its product line.

For patients, the drug, Agilect, offers another medication to ease the symptoms of this progressive neurological disorder. There are many drugs on the market, including generic brands, but none can reverse the damage of a disease that affects 1 million people in the U.S. and 3 million in the rest of the world.

At best, drugs like Agilect can address symptoms, such as tremors and a lack of balance, to help patients live as normally and as long as possible.

"At this time no treatment has been shown to slow or stop the progression of this disease," says the National Parkinson Foundation. "There is no standard or 'best' treatment." As their disease gets worse, patients often take more than one drug. In some severe cases, doctors recommend brain surgery.

Because there's no dominant treatment, Parkinson's disease remains a popular research subject with several compounds now in mid- to late-stage clinical trials, says Sagient Research Systems of San Diego. A recent report by Sagient's BioMedTracker, which analyzes trends in biotechnology, says, "in early disease, there are no new drugs with both impressive efficacy and side effect profiles, but we believe Agilect will have modest

market penetration."

No Cures

Named for the British physician who discovered it in 1817, Parkinson's disease is caused by the death of or damage to certain nerve cells in the brain. The cells produce dopamine, which help regulate movement and balance. When the dopamine-secreting cells die, the other movement-control centers in the brain become unregulated.

As the disease becomes more severe, patients will need the strongest drug, levodopa, which has been available for nearly 40 years. Levodopa is converted into dopamine by an enzyme in the brain. Levodopa is usually combined with carbidopa, which slows the conversion of levodopa into dopamine once the compound enters the brain. As the disease worsens, patients need more levodopa to reduce muscle rigidity and tremors. But the drug can produce profound side effects such as severe nausea and vomiting.

Before patients start using levodopa, physicians prescribe medications including selegiline, which is part of a class of drugs known as selective irreversible monoamine oxidase type B inhibitors, or MAO-B inhibitors. MAO-B is an enzyme that breaks down dopamine, so a MAO-B inhibitor tries to thwart the enzyme from playing havoc with dopamine.

Sagient Research says that as Parkinson's disease worsens, selegiline's impact "appears to wane after seven to eight months."

Teva's Agilect is an MAO-B inhibitor. So is Zelapar from

Valeant Pharmaceuticals

(VRX)

, which is awaiting FDA approval, too.

European Sales

Teva's once-a-day medication was launched in the U.K. in late June as a treatment for early-stage Parkinson's and as an adjunct treatment with levodopa for moderate to advanced stages. Teva expects other European countries to start selling the drug this year and early next year.

Teva submitted its Agilect application to the FDA in September 2003. The FDA granted conditional approval in July 2004. Teva declined to discuss the conditions set by the FDA or a timetable for meeting those conditions.

Wall Street has mixed opinions on the prospects for the Teva and Valeant drugs. "I don't know whether Agilect and Zelapar will grow the Parkinson's disease market, but I think Agilect has a better chance of being a more meaningful product," says Richard Watson of the William Blair & Co. investment-banking firm. "It offers a modest but meaningful advance."

He expects Agilect to win FDA approval as a single early-stage medication and as part of combination later-stage treatments.

Watson views Agilect as a next-generation drug, but he says Zelapar is basically a reformulation of selegiline. Valeant is seeking FDA approval for Zelapar as a combination treatment with levodopa.

Watson has buy ratings on Teva and Valeant. He doesn't own shares in either company, but his firm says it plans to receive or seek investment-banking compensation from both companies in the next three months.

Each drug will have modest U.S. sales due to "significant generic competition," says Andrew McDonald of ThinkEquity Partners. "It's hard to imagine more than $50 million a year in peak sales."

McDonald notes that Valeant inherited Zelapar when it acquired the U.S. division of another company last year. Valeant has had to conduct additional tests on the drug. He has a sell rating on Valeant. He doesn't own shares, and his firm doesn't have an investment-banking relationship.

Sagient Research predicts that Agilect's peak annual revenue in the U.S. could be $201 million ($500 million worldwide) and that Zelapar's peak U.S. sales could be $163 million ($412 million worldwide).

Many Choices

If these drugs reach the market, they'll have plenty of competition.

Dopamine agonists, which stimulate the dopamine receptors in the brain, have been available for about 30 years. Brand names include Mirapex from Boehringer Ingleheim and

Pfizer

(PFE) - Get Report

, and Requip from

GlaxoSmithKline

(GSK) - Get Report

.

Another class is COMT inhibitors, which block an enzyme from breaking down levodopa and dopamine.

Novartis

(NVS) - Get Report

offers two COMT inhibitors -- Comtan and Stalevo, which combines Comtan with levodopa/carbidopa.

Several companies are conducting clinical trials of adenosine A2a receptors, compounds that try to modulate side effects experienced by patients who now take the strongest drugs. Major players include

Schering-Plough

(SGP)

,

Biogen Idec

(BIIB) - Get Report

and Japan's

Kyowa Hakko Kogyo.

.

And there's more. By Sagient Research's count, there are eight other experimental drugs for Parkinson's in late-stage clinical trials or midstage clinical trials. Unfortunately, none looks it can slow or stop the disease.