Teva Short PDUFA Delay for Migraine Drug Could Be ‘Viewed Positively,” Says Guggenheim

Guggenheim's Rohit Vanjani is not fazed by the updated PDUFA date for Teva's fremanezumab- as long as the Celtrion facility re-inspection goes off without a hitch,

Teva Pharmaceutical Industries Ltd (NYSE:TEVA) may have just unveiled a stalled PDUFA date for chronic migraine asset fremanezumab, but Guggenheim analyst Rohit Vanjani believes this temporary 3-month delay could ultimately be a positive; especially if the re-inspection of the Celtrion facility proceeds smoothly. The new PDUFA date has been revised from June 16th to September 16th of this year.

That said, for now, the analyst plays it safe on the challenged biotech giant, reiterating a Neutral rating on TEVA stock without listing a price target. (To watch Vanjani’s track record, click here)

Vanjani believes, “The extension should not come as a surprise to investors, as Teva had communicated during its 1Q18 earnings call that it had moved expectations of a launch to ‘before the end of 2018.’ Provided that the re-inspection of the Celtrion facility goes well, we believe that the short delay of a 3-month extension will be viewed positively by investors.”

“The update compares with launch timing expectations of ‘before year-end 2018′ announced on the 1Q18 earnings call. Beyond the PAI and warning letter re-inspection, TEVA indicated that there are no additional data requests from the FDA,” continues the analyst, adding: “Although TEVA updated investors on its 1Q18 call, indicating that management expected a PAI to go hand-in-hand with a warning letter re-inspection in the coming months, we believe that the short 3-month extension to fremanezumab’s PDUFA will largely be viewed as a positive by investors, and more or less in line with the original action date.”

Regarding rivalry, Vanjani pays attention to Amgen and Novartis’ Aimovig, which just won a nod from the FDA last Thursday, set for a list price of $6,900 annually for the 70mg and 140mg doses. For context, sell-side analysts had been anticipating a more expensive price tag of $8,500 annually, according to ICER. Lilly also has a chronic migraine drug, with galcanezumab looking at a PDUFA date come the third quarter of this year. Finally, Vanjani draws awareness to Alder Biopharmaceuticals postponing its BLA submission timing for Eptinezumab from the back half of this year to the first half of 2019.

While the TEVA team still anticipates FDA victories for Celtrion-manufactured biosimilar Rituxan (CT-P10) and Herceptin (CT-P6) by the close of the year, this marks a delay compared to previous expectations for regulatory action dates in the first half of this year. However, Vanjani explains that considering the company did not intend for product launches on those drugs until next year regardless, Teva is not looking for a financial impact this year.

TipRanks suggests caution weighs heavily on this beleaguered biotech giant. Out of 12 analysts polled in the last 3 months, 2 are bullish on TEVA stock, 9 remain sidelined, while 1 is bearish on the stock. With a loss potential of 7%, the stock’s consensus target price stands at $19.93.

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