The Zacks Analyst Blog Highlights: Teva Pharmaceutical, Momenta Pharmaceuticals, Mylan, Sunoco Logistics Partners and Sunoco
CHICAGO, June 26, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Teva Pharmaceutical Industries Ltd. (NYSE: TEVA), Momenta Pharmaceuticals, Inc. (Nasdaq: MNTA), Mylan (Nasdaq: MYL), Sunoco Logistics Partners L.P. (NYSE: SXL) and Sunoco Inc. (NYSE: SUN).
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Here are highlights from Monday's Analyst Blog:
Favorable Ruling for Teva on Copaxone
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) recently received good news on the Copaxone front with the US District Court for the Southern District of New York ruling in the company's favor in its patent infringement lawsuit. Teva had filed a patent infringement lawsuit against Momenta Pharmaceuticals, Inc. (Nasdaq: MNTA)/Sandoz Inc. and Mylan (Nasdaq: MYL)/Natco Pharmaceuticals, who were looking to launch their generic versions of Copaxone.
Copaxone is approved for the reduction of the frequency of relapses in relapsing-remitting multiple sclerosis (RRMS), including patients who have experienced a first clinical episode and have MRI features consistent with multiple sclerosis.
The court ruled that the claims made by Momenta/Sandoz and Mylan/Natco about the Copaxone patents being invalid and unenforceable were unfounded. Moreover, the court ruled that the generic versions for which the companies were seeking Food and Drug Administration (FDA) approval would infringe the Copaxone patents.
Impact of the Ruling
With this ruling, Copaxone should be protected from generic competition in the US until May 24, 2014, when the Orange Book patents are scheduled to expire. Teva believes that the protection could extend up to September 1, 2015, when the process patent is slated to expire.
The favorable ruling is a major positive for Teva. With Copaxone contributing 19.5% to total revenues in 2011, the earlier-than-expected entry of generic versions of Copaxone would have been a major setback for the company. Teva can now focus on extending Copaxone's life cycle.
The company recently announced positive top-line results on Copaxone from a phase III study, GALA, which was conducted to evaluate the efficacy, safety and tolerability of Copaxone (40mg) administered thrice a week compared to placebo in patients with RRMS. The 40mg dose being evaluated in the GALA study is a higher strength compared to the 20mg dose currently available (daily injection). Results showed that Copaxone 40mg significantly reduced disease activity. The safety and tolerability profile was also found to be favorable.
The positive ruling has removed a major overhang on the shares. We currently have a Neutral recommendation on Teva, which carries a Zacks #3 Rank (short-term Hold rating).
Sunoco Logistics' New Pipeline Plan
Sunoco Logistics Partners L.P. (NYSE: SXL) – a master limited partnership (MLP) – has launched the Permian Express pipeline project, with the target to increase the flow of crude oil from west Texas to Gulf Coast markets. The project will be divided into two phases.
The partnership will start the first part of Phase I within 6 to 9 months with an initial capacity of 90,000 barrels per day of crude transporting from Wichita Falls, Texas to the Nederland/Beaumont, Texas markets.
The 150,000 barrels per day full capacity of the pipeline is expected to be reached within 12 to 18 months. The transportation capacity of Permian Express is expandable up to 350,000 barrels per day.
Sunoco Logistics also plans to reverse its Wortham-to-Wichita Falls pipeline, in order to generate uninterrupted pipeline service from Wichita Falls to Nederland. The partnership will take in account the excess capacity on the southern leg of its West Texas Gulf pipeline system for this development.
To offer the services of the pipeline to customers, Sunoco Logistics will commence the Open Season for Phase I within the next few days. The partnership is offering commitment terms of three, five or seven years for better customer flexibility.
Sunoco Logistics will have Phase II of Permian Express operational in the second half of 2014, with an initial daily takeaway capacity of approximately 200,000 barrels. This phase will witness the delivery of crude oil to the extended eastern refining centers St. James, Louisiana via a network of new and existing pipelines.
As part of Phase II, Sunoco Logistics will likely couple a 300-mile-long pipeline from Colorado City to Wortham, parallel to the existing West Texas Gulf pipeline.
Sunoco Logistics stated that the Permian Express project, although separate, will complement the partnership's earlier-announced initiatives to boost the West Texas Gulf Pipeline's daily crude oil supply by at least 100,000 barrels.
Combining this current venture, the crude oil takeaway capacity from West Texas will be expanded by at least 450,000 barrels per day.
We believe that the Permian Express project, along with an extensive and diverse portfolio of refined product and crude oil pipelines and terminal facilities of Sunoco Logistics, will provide the West Texas producers and Gulf Coast refiners a cost effective and flexible operational structure.
Sunoco Logistics Partners L.P. – whose 34% interest, including a 2% general partner interest is owned by Sunoco Inc. (NYSE: SUN), which currently maintains a Zacks #1 Rank, equivalent to a short-term Strong Buy rating. We are maintaining our Outperform recommendation on the stock over the longer term.
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