On Friday, Teva Pharmaceuticals suffered a huge setback with a failed phase 3 trial in multiple sclerosis. Teva is in a huge bind considering that Copaxone lost its patent protection. There are many competitors that will likely affect Teva’s revenues in the multiple sclerosis space.

Failed Trial

Teva along with its partner Active Biotech announced results for the phase 3 trial treating patients with Relapse Remitting Multiple Sclerosis — RRMS. The trial named CONCERTO was using a drug known as laquinimod.

Patients in the trial were set up to either take 0.6 mg daily capsules of laquinimod or a placebo compound. The trial failed to meet the primary endpoint of the study. The primary endpoint was to evaluate the time to Confirmed Disability Progression — CDP — after three months. With the trial failing it cut hopes that Teva would be able to replace its Copaxone treatment.

Even with the trial failing in the RRMS space, there is a bright side. The good news is that the drug is still being tested in two other patients populations. These include both primary progressive MS and Huntington’s Disease. With the drug failing in the RRMS trial, the other two candidates will be tougher to get positive results in.

Patent Loss

One of the major things holding Teva together as a strong leader in the pharmaceutical industry is its flagship MS treatment Copaxone. The problem is that the patent has expired, and that has given the green light for genetics to start popping out. Generic drugmakers, copying the 40 mg Copaxone, has been a huge disaster for Teva.

Teva has been forced to fight the patents for its drug in court but has been losing. Whether it can win on appeals remains to be seen, but it doesn’t look good for the company. Why is Teva losing patent protection a major problem? That is because last year Copaxone produced just over $4 billion in revenue.

A majority of Teva’s profit comes from that drug. Generics starting to hit the market will likely have a huge negative effect on Copaxone sales. Analysts estimate that if generic versions of Copaxone launch, Teva could lose up to $1.3 billion in sales in 2017 alone.

Competitors

Another problem that Teva faces is that there are many other competitors in the MS space as well. One of the major players in the MS space is Biogen Idec. It has a treatment known as Tecfidera.

Tecfidera is one of the major oral drugs out there for MS patients. Last year, Biogen produced up to $4 billion in Tecfidera sales. However, there is a major difference between it and Copaxone. That is the fact that Tecfidera still has patent protection up to 2028. That means generics will be hard pressed to be able to copy Tecfidera and sell it on the market. It gets even worse for Teva and Biogen.

That is because Roche recently won approval for its MS drug known as Ocrevus. This drug treats both RRMS and primary progressive MS. With all these competitors it will be difficult for Copaxone going forward. Teva needed the phase 3 trial with laquinimod to succeed.

What Binary Options Traders Should Watch For

There are a few things that traders should watch.

The first of which is to see if the failed trial in RRMS, translates to a positive result in one of the other trials. If laquinimod can be successful in one of the other indications then it has a chance to take some market share.

The second item would be the patent loss. It would be a good idea to see if at least Teva can win some of the appeals with respect to the patent issue. It won’t win a majority of patent cases. Each case win, albeit small, would still be a win nonetheless.