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Why Teva’s Generic EpiPen Contribution Could Be Modest in 2018

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Analysts’ views on the FDA approval of Teva’s generic EpiPen

Teva Pharmaceutical Industries (TEVA) received FDA (U.S. Food and Drug Administration) approval for its generic version of Mylan’s EpiPen, an epinephrine auto-injector. Several Wall Street analysts weighed in on how the first generic EpiPen approval could affect Teva.

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Will Teva fill in the supply gaps for EpiPen?

As per Leerink analyst Ami Fadia, the competitive landscape in the near term for Teva’s generic version of EpiPen is “certainly favorable for Teva, as both Mylan and Amneal have experienced inconsistent supply on their products throughout the year.” She added, “the longer-term contribution from this product may not be significant for Teva should supply for both Mylan and Amneal eventually be stabilized. But in the near term, we could see generic EpiPen providing an additional boost to Teva’s 2018 numbers.” She expects the generic to contribute $5 million to Teva’s 2018 sales. The company has 2018 sales guidance of $18.5 billion to $19 billion. Wall Street sales estimates for Teva in 2018 are provided in the chart above.

However, as per a report by Credit Suisse analyst Vamil Divan, Teva plans to launch its EpiPen generic in the coming months. As per Vamil Divan, Teva “needs some time for launch preparations, suggesting a (fourth quarter) launch. As a result, we expect EpiPen to benefit Teva in 2019 significantly more than 2018.” According to the analyst, if no other EpiPen generics are launched in 2018, Teva could capture ~40% of the market share. The analyst expects the product to add five to six cents to the company’s 2019 EPS.

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