Out of the Gate: Teva drops on Copaxone results

The late-stage study compared 20-mg and 40-mg doses of Copaxone, or glatiramer acetate. The larger dose proved no more effective than the standard 20-mg version, which has been approved for sale in 51 countries. But analysts said the company planned to use the larger dose to extend the Copaxone franchise after the original drug loses patent protection in 2014.

Shares of the Israeli company fell $3.05, or 6.5 percent, to $44.15 in morning trading. About 7.8 million shares changed hands by 10:15 a.m. Eastern time, compared to Teva's 100-day average trading volume of 5.3 million.

Wachovia analyst Michael Tong said the failure will have little effect on Teva's results in 2008 and 2009. But he wrote that Teva is unlikely to file a new drug application for the 40-mg dose this year.

Goldman Sachs analyst Randall Stanicky maintained a "Buy" rating on shares, and said price weakness creates an opportunity for investors. Although the study results were "disappointing," he thinks Teva's MS franchise is protected from competition since the patent doesn't expire for six years and as of yet, no generic firms have challenged the patents.

Global sales of Copaxone reached $542 million in the first quarter, including $311 million in the U.S. Teva took over U.S. and Canadian distribution of the drug in April under an agreement with French drug maker Sanofi-Aventis.

The drug treats the relapsing-remitting form of multiple sclerosis, which is characterized by the sudden occurrence of new symptoms or the worsening of old symptoms.

Rival MS drugs include Biogen Idec Inc.'s Avonex, and Biogen and Elan Corp. PLC's Tysabri. Mylan Inc. has the rights to sell a generic form of Copaxone in the U.S., major markets in Europe and elsewhere. Teva is also developing other MS treatments.

Teva did not immediately return calls seeking comment.