The Zacks Analyst Blog Highlights: Teva Pharmaceutical, Mylan, Momenta Pharmaceuticals, General Electric and A123 Systems

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Jul 13, 2012, 09:30 ET

CHICAGO, July 13, 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), Mylan (Nasdaq:MYL), Momenta Pharmaceuticals, Inc. (Nasdaq:MNTA), General Electric Company (NYSE:GE) and A123 Systems Inc. (Nasdaq:AONE).

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Here are highlights from Thursday's Analyst Blog:

Another Copaxone Win for Teva

Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) recently announced another favorable decision regarding its Copaxone patent. The company said that the United Kingdom High Court of Justice ruled in its favor in its patent litigation against Mylan's (Nasdaq:MYL) subsidiary, Generics (UK) Limited.

Generics (UK) Limited had asked the Court to revoke Copaxone's European Patent (UK) 762,888, which is scheduled to expire on May 23, 2015. Generics (UK) Limited was also seeking to get a declaration that its generic version of Copaxone would not infringe on the '888 patent.

The Court not only ruled that the '888 patent is valid, but it also refused to state that Generics UK's generic version of Copaxone would not infringe on it.

The favorable UK ruling comes just a few weeks after the US District Court for the Southern District of New York ruled in the company's favor in its Copaxone patent infringement lawsuit. Teva had filed a patent infringement lawsuit against Momenta Pharmaceuticals, Inc. (Nasdaq:MNTA)/Sandoz Inc. and Mylan/Natco Pharmaceuticals, which 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.

Given the US court 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 rulings are a major positive for Teva. With Copaxone contributing 19.5% to total revenues in 2011, the earlier-than-expected entry of generic versions 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 rulings have 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).

GE Expands Industrial Battery Business

General Electric Company (NYSE:GE) intends to expand its growing industrial-battery business in order to generate $1 billion in annual revenue by the end of 2020. This expansion plan also reflects CEO Jeff Immelt's goal of generating $500 million a year from the industrial battery business by 2015/2016.

The global battery market values approximately $50 billion, out of which the U.S. is the single biggest market in the world with a market size of $5 billion annually. Demand is expected to grow substantially in the next five years.

The industrial battery business is a market with good potential. Since customers generally order in bulk for ongoing production activity, customer acquisition is a focus area. A few good customers ensure a steady revenue stream, allowing better alignment with the fixed cost structure, which in turn allows better cost absorption. GE has already received its first order for batteries from a South African engineering company, Megatron Federal, which requires 6,000 pieces for use as backup power supplies at telecommunications sites.

GE now plans to invest $170 million in a new factory, which is up from the $100 million it initially expected to spend on the manufacture of batteries.

The new plant is located in New York and will employ approximately 450 people. For construction of the plant, GE received $15 million from New York State authorities and $5 million from local officials.

However, the new factory is not GE's only investment in battery technology. The company also has a stake in A123 Systems Inc. (Nasdaq:AONE), a maker of lithium-ion batteries used in electric and hybrid cars.

General Electric currently holds a Zacks Rank of #3, which implies a short term Hold rating on the stock.

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