Shares of Teva Pharmaceutical Industries fell Tuesday after a federal court in Delaware rejected four of the drugmaker's claims of patent infringement on its top-selling multiple sclerosis medicine.
The patents cover a 40 milligram injection of Copaxone that patients administer three times a week. The U.S. District Court of Delaware ruled that Teva's claims were invalid, seen as a step toward likely generic competition.
Israel-based Teva, with its North America headquarters in North Wales, Montgomery County, said it would appeal.
Teva's shares were down 9 percent in after-hours trading Monday, but bounced back Tuesday. The stock closed down 3 percent, or $1.09, to $33.43.
Credit Suisse analyst Vamil Divan said he expects Teva will request a preliminary injunction to prevent the launch of a generic version until legal decisions on all of Teva's outstanding patents are resolved.
In addition to the four patents in the Delaware case, Teva has sued potential competitors on a fifth and sixth patent, Divan said in a client note.
Before generics can come on the market, they will need to win Food and Drug Administration (FDA) approval. Still, Divan's note said he thinks Novartis and partner Momenta Pharmaceuticals and "potentially one other competitor" will launch later this year and "lead to pricing pressure" on Teva's brand.
Teva's original 20 milligram formulation of Copaxone already has generic competition. The 40 milligram formulation, approved in March 2014, reduces the frequency of injections from daily to three times a week.
"An important point for the public to know is that drug products are almost never protected by only one patent," said Rutgers law student Carl J. Minniti, who has researched the pharmaceutical industry, antitrust, and intellectual property law.
"Companies often obtain patents long into the life of the drug," covering secondary aspects such as the methods of treatment for indications discovered later, or new formulations and processes, Minniti said.
The original Copaxone approval was issued in December 1996, but patents asserted against generic competitors of the 40 milligram version were issued for several years after the initial drug was patented. The notion that drug products are protected only for a limited period of time is "often misinformed," Minniti said, in an interview.
Earlier this month, Teva said it expected Copaxone to have sales of $3.8 billion to $3.9 billion in 2017, if there were no new generic competitors.