The two-year study found that patients experienced a statistically significant reduction in relapse rate and a significant reduction in the progression of the disease. Additional results of the study will be released by Teva and its partner, Active Biotech (ATVBF)
Shares of Teva finished Thursday up 6.8% and are trading Monday at $53.52. Shares of Active Biotech were up almost 80% on the day and are at $23.40.
Laquinimod received fast-track designation from the U.S. Food and Drug Administration in February 2009. A second Phase III trial is still in progress, with results anticipated in the third quarter of 2011. The companies expect to submit the drug to regulators in the United States and the European Union shortly after that.
Teva, the world's largest maker of generic drugs, submitted a patent application for laquinimod after the test results were released. Post continues after video:
Needless to say, the successful development of laquinimod would be a huge boost for Teva's ambitions to become a developer of new drugs as well as the leading generic-drug company. That's especially true if laquinimod's mechanism of action, which includes neuroprotective properties, according to Teva, works with other diseases.
The drug is also in Phase II trials for Crohn's disease and lupus, and the companies are looking at applications for other autoimmune diseases.
Multiple sclerosis is the leading cause of neurological disability in young adults, with an estimated 400,000 people in the U.S. and an estimated 2 million worldwide affected.
There is no known cure for multiple sclerosis. Regulators have approved five disease-modifying drugs that have effectiveness that varies from patient to patient and that can come with serious side effects. Several require injections on a frequency ranging from daily to weekly. Laquinimod is delivered orally, and the frequencies of adverse events reported in the recent Phase III trials were equivalent to those among trial participants receiving placebos.
Until Thursday's news, Teva shares had been drifting around support at $50 a share. I own the shares in Jubak's Picks
. As of Dec. 10 I'm raising my target price to $63 a share by June 2011 from a prior target price of $61 for May 2011.
At the time of this writing, Jim Jubak didn't own shares of any companies mentioned in this post in personal portfolios. The mutual fund he manages, Jubak Global Equity Fund (JUBAX), may or may not own positions in any stock mentioned. The fund did own shares of Teva Pharmaceutical Industries as of the end of the September quarter. For a full list of the stocks in the fund as of the end of the most recent quarter, see the fund's portfolio here.
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