Investment bank Merrill Lynch concurs with the management of Teva Pharmaceuticals (Nasdaq:TEVA): the alliance between Pfizer and Europe's Serono to distribute multiple sclerosis treatment Rebif in the United States poses no threat to the Israeli drugmaker's medication, Copaxone.
Analyst Paul Woodhouse reiterated a Strong Buy for Teva, and pooh-poohs assessments that Teva is "'over-represented' relative to other MS drugs in the generalist neurological segment" where Pfizer has clout.
The markets Teva and Pfizer aim at are not the same, Woodhouse pointed out. Teva focuses on high-volume prescriptions by MS specialist neurologists, he wrote, not the 'mass market' where Pfizer is active. He sees no head-to-head between interferon-based Rebif and Teva's non-interferon treatment Copaxone. Teva's marketing force for Copaxone, 90 to 95 people, is another factor in the Israeli company's favor.
Meanwhile, Copaxone's launch in Germany has gone "extremely well", Woodhouse wrote. It has achieved a 15% market share, well ahead of expectations.
In the near term, Woodhouse sees generic Augmentin becoming Teva's main revenue driver, selling $120 million to $200 million worth of the drug a year.