What Approval For Generic Copaxone Means For Mylan

Shares of Mylan N.V. (NASDAQ: MYL) traded higher by more than 13 percent Wednesday morning after the U.S. Food and Drug Administration granted approval for the company's generic version of Teva Pharmaceutical Industries Ltd (ADR) (NYSE: TEVA)'s Copaxone.

Copaxone, a therapy that is intended to prevent the relapse of multiple sclerosis, is the most prescribed treatment for relapsing forms of MS with sales in the billions, PharmaTimes reported. The approval of Mylan's generic version of Copaxone was widely expected by Wall Street analysts, although many experts disagreed on the exact timing of approval.

Shares of Teva were trading lower by more than 13 percent in reaction to a new competitor entering the market.

The approval of Mylan's generic therapy is "important" for the stock, Citi's Liav Abraham commented in a brief report. The approval will not only offer visibility towards upside to estimates but validates Mylan's pipeline, especially in complex generics. In fact, the approval will also "lend investor credibility" to other complex products in the pipeline, including generic Advair, Estrace cream, Restasis, and biosimilar products.

Finally, given Teva's sales of Copaxone in the U.S. stands at around $3.8 billion annually, the financial impact on Mylan "is not immaterial," the analyst concluded.

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