Shares in the Israeli firm Teva Pharmaceutical Industries, which is also listed on the Nasdaq, have taken a tumble after a US court prevented it from selling a version of Abbott Laboratories’ blockbuster antibiotic, Biaxin XL (extended-release clarithromycin).
A judge in Illinois granted Abbott’s motion for a preliminary injunction related to Teva’s generic, which is a massive blow for the company as it received approval for a 500mg extended-release version of Biaxin from the US Food and Drug Administration in May, and the agency has just given the go-ahead for Teva to market 250mg and 500mg tablets containing clarithromycin [[03/06/05f]].
Teva intends to appeal the ruling but, because of the delay, says that it now expects its second quarter earnings to be reduced by about $0.04. The firm says it “will continue to evaluate its expectations for the year in light of this decision.”
Analysts were alarmed by the judgment and, in a research note, analyst Corey Davis at JP Morgan said that the decision “sets a bad precedent for generics.” He added that “this miss is a harbinger of what we think will be more from the sector this quarter and will strain the market’s psychological struggle with whether it will tolerate a weak 2005.”