Teva Shares Climb on European Approval for Biosimilars
The approvals for PONLIMSI and DEGEVMA position Teva to challenge Amgen's $6.6 billion bone disease franchise, marking a key win for its growth strategy.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) saw its shares rise in Tuesday trading after the company announced it had received European Commission marketing authorizations for two key biosimilar drugs, positioning it to compete in a market worth over $6.6 billion annually.
The approvals cover PONLIMSI, a biosimilar to Amgen's osteoporosis treatment Prolia, and DEGEVMA, a biosimilar to Amgen's cancer-related bone treatment Xgeva. Shares of Teva climbed 2.3% to $24.77 following the news, reflecting investor optimism about the new revenue streams.
The decision is a significant victory for Teva's "Pivot to Growth" strategy, which leans heavily on expanding its portfolio of high-value biosimilars and innovative branded drugs. The company has posted 11 consecutive quarters of growth, and this approval provides a tangible catalyst to build on that momentum.
"The approvals of PONLIMSI and DEGEVMA in Europe mark another important milestone in the delivery of our Pivot to Growth strategy and our commitment to improving the lives of patients," said Richard Francis, CEO of Teva, in a statement. "We are incredibly pleased to be able to broaden our biosimilar portfolio into the oncology and osteoporosis areas."
The market opportunity is substantial. Amgen's Prolia and Xgeva are blockbuster drugs with combined global sales of $6.6 billion in 2024, according to company filings. The active ingredient in both, denosumab, has become a standard of care for treating osteoporosis in postmenopausal women and preventing skeletal-related events in cancer patients.
Teva's entry into the European market is expected to introduce significant price competition. Amgen itself has acknowledged the looming threat, forecasting sales erosion for both drugs in 2025 as biosimilar competitors launch. The European approval allows Teva to begin commercializing the drugs in key markets there in the coming months.
This development is the latest in a series of positive steps for Teva's biosimilar program. In October, the company announced that both the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA) had accepted for review its applications for another denosumab biosimilar candidate, with decisions anticipated in the second half of 2025.
Wall Street has responded positively to Teva's strategic execution over the past year. The stock has more than doubled from its 52-week low of $12.47. Of the analysts covering the stock, the consensus rating is a "Strong Buy," with an average price target of $27.90, suggesting further potential upside. Teva's recent Q3 earnings report in early November handily beat analyst expectations, driven by strong performance from its innovative drugs like Austedo.
Teva is not the only company targeting this lucrative market. Sandoz and Accord Healthcare have also secured approvals for their own denosumab biosimilars, setting the stage for a competitive battle in both Europe and the United States. However, Teva's established commercial footprint and extensive experience in the generics and biosimilars space position it as a formidable challenger.
The successful launch of PONLIMSI and DEGEVMA in Europe will be a critical test for Teva as it aims to capture market share from Amgen. Investors will be closely watching the initial sales figures and the company's ability to navigate the complex European payer landscape as it seeks to turn these regulatory approvals into meaningful financial results.