Teva produces and sells more than 300 generic drugs in North America, Israel, and Europe, including anti-infective, heart, pain and other drugs.The big news on the business pages this week may be that Israeli pharmaceutical giant Teva Pharmaceutical Industries Ltd. has signed a deal to acquire American competitor Ivax Corp making it the world’s largest producer of generic drugs as well as the number one supplier of generic medicines in the world. But for American consumers, the news is that the cost of their prescription drugs should continue to remain low.
Teva, based in Petah Tikva near Tel Aviv, is already America’s largest drug supplier, producing one in every 15 prescriptions in the US. As a manufacturer of generics, Teva manufactures versions of pharmaceuticals produced by Roche, Pfizer, Eli Lilly, Merck and other makers of name-brand drugs after their patents expire. Brand-name drugs generally have 20 years of protection before patents expire. After that, generics, which are required under US law to be the equivalent of the original drug, can be introduced that can provide savings of a whopping 50 to 80 percent.
Teva CEO and President Israel Markov said the consolidation of the two companies would create the largest company in the copy-cat drug industry, “which will generate real value for its shareholders, employees and customers.”
Teva produces and sells more than 300 generic drugs in North America, Israel, and Europe, including anti-infective, heart, pain and other drugs. About a third of Teva’s products are produced in Israel, but more importantly, most of their research and development is done at their Israel headquarters as well. Specifically, Teva’s R&D focus has been on the central nervous system and autoimmune diseases, and the results have been outstanding.
Teva has developed its own brand-name drugs, like Copaxone, its proprietary treatment for multiple sclerosis, a disease where the nerves of the brain and spinal cord are damaged by one’s own immune system resulting in loss of muscle control, vision, balance, sensation (such as numbness) or thinking ability.
Over 400,000 Americans suffer from multiple sclerosis and Copaxone has been prescribed by American doctors since 1997 as a treatment for the earlier stages of the disease. Michal Schwartz, a professor in the Neurobiology Department of the Weizmann Institute of Science in Rehovot has showed that Copaxone, can also be used as a vaccine that protects the optic nerve from neuronal degeneration. Teva recently has signed an agreement with Israeli company Proneuron to explore the use of Copaxone for glaucoma and other neuro-degenerative diseases.
Another Teva produced drug, Rasagiline, has the ability to slow the progress of Parkinson’s disease, a neurological disorder that affects over one million Americans. Marketed as Azilect, the drug is a type-B (MAO-B) inhibitor that blocks the breakdown of dopamine, a substance in the brain needed to facilitate movement. Azilect has been recently approved for marketing in the EU and Israel and is in advanced stages of regulatory review in the US.
The deal by which Teva agreed to buy Ivax Corp., its biggest US rival, for $7.4 billion will keep the Israeli company ahead of Novartis AG in the $58 billion worldwide market for generic drugs. Among the generic drugs that Teva is known for are versions of the ulcer drug Prilosec and the painkiller Oxycontin. The deal will give them Ivax’s rights to copycats of Pfizer Inc.’s Zoloft antidepressant and GlaxoSmithKline Plc’s Zofran for nausea.
An analyst for Merril Lynch crowned Teva a “global powerhouse” as a result of the acquisition. “The combination of the two companies would create a global powerhouse and strengthen Teva’s already-dominant position in the US generics market,”
North America and Europe account for 91 percent of Teva’s sales which totaled $4.8 billion in 2004. The company has 14,000 employees worldwide and production facilities in Israel, North America, Europe and Mexico.