It's Not Over For Teva Just Yet After J-Code Rejection, Citi Says

The request by Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA) for a separate J-code for Bendeka, the low-volume, short-infusion formulation of Treanda, has been preliminarily rejected by CMS.

Citi’s Liav Abraham maintained a Buy rating for the company, with a price target of $75. The analyst believes the rejection was not surprising, given the broad language of the existing J-code for Treanda, which is applicable to Bendeka as well.

The lack of a J-code for Bendeka implies downside to the company’s Treanda franchise revenues, only if generic competition to Treanda enters the market later this year. “However this will be determined by the ongoing IP litigation, with a District Court decision in this regard expected over the near term,” analyst Liav Abraham pointed out.

Focus On Treanda’s IP Case

The analyst mentioned that while Teva can seek a separate code for Bendeka again, it is unlikely that the company will be able to convince the CMS to do so. This shifts the focus to Treanda’s IP Case.

In case the IP for Treanda is upheld by the court, generic filers will be precluded from launching generic versions of Treanda, thereby rendering the issue of a separate J-code for Bendeka moot, Abraham said. He added that the court’s decision is expected very soon.