Teva seeking faster FDA OK for copycat drug

Teva Pharmaceutical (Nasdaq: TEVA) has tired of waiting for the U.S. government to establish a pathway for approval of generic versions of biologic drugs. Instead, it’s asking for approval for its copy of Amgen’s Neupogen under the normal branded-drug process.

Generic drugmakers can get versions of small-molecule drugs approved through an Abbreviated New Drug Application (ANDA). If they prove that their version is similar enough to the branded drug, the Food and Drug Administration can use the original data from the branded drug’s New Drug Application (NDA) to establish safety and effectiveness.

The NDA equivalent for biologic drugs is a Biologic License Application (BLA), but Congress and the FDA never established the equivalent abbreviated application for generics – an ABLA, if you will.

Thus, Teva has just submitted a BLA for XM02, its copycat of Neupogen – a drug that stimulates the production of a type of white blood cells in cancer patients. XM02 is already on the market in Europe, where a pathway to approve biosimilar drugs exists.

But does Teva have enough data to support BLA approval? It doesn’t mention having tested XM02 in acute myeloid leukemia or severe chronic neutropenia (approved indications for Neupogen). It’s likely settling for fewer patients in exchange for a more restrictive label. Interested investors should learn the FDA’s decision soon.

Ask the Fool

Q: Is this a good time to start contributing to a 401(k) account at work? – G.W., online

A: When it comes to retirement savings, most of us should be regularly saving and investing, without much regard for the state of the economy. When the market is down, our dollars will buy more shares, and vice versa. (That’s “dollar-cost averaging.”) As we dig out of a recession, now is actually a particularly promising time to invest. Many of us should be saving and investing aggressively, too, not just socking away 3 percent of our salaries. Crunch some numbers, and see how much you’ll need in retirement and how much you’ll need to save. You might want to invest 10 or 15 percent of your income.

Q: I found a company that seems to be doing everything right: Sales are up 47 percent, income is up 64 percent, there’s no debt … and yet the stock keeps going down. Am I missing something really obvious? – A.P.W., online

A: Well, you need to look at more numbers. Even high numbers may be down from previous levels – perhaps, for example, sales were up 60 percent last year and their growth rate is slipping. Check out expectations, too. If the company and/or Wall Street analysts expect slower growth in the future, that can dampen enthusiasm for a stock, sending it down. Perhaps competitors are fast advancing on the company.

Then there’s the stock price itself. Since the company has been growing briskly, investors may have bid up the stock to lofty heights, well above its intrinsic value, and the price may now be settling back to more reasonable levels.

Always look at a company’s big picture.

My dumbest investment

In 1957, I received a “cold call.” An unknown solicitor presented me with a “hot tip” about an oil and gas company, and I ended up buying my first shares of common stock. Later, when I tried to sell my 100 shares, I discovered there was no market for them. I lost $125. I learned that if you deal with “doo-doo” stocks (or people), you’ll receive doo-doo, and that it’s critical to do your homework first when thinking about investing in something. – D.E.F., Sacramento, Calif.

The Fool responds: You learned some valuable lessons. Cold calls are indeed dangerous – if an investment is really so compelling, no one will have to call strangers at night to try to sell it. Even the Securities and Exchange Commission has warned investors against cold calls – learn more at www.sec.gov/investor/ pubs/coldcall.htm. Note, too, that the shares cost you around a dollar apiece, meaning they were penny stocks, which tend to be extra volatile and risky. In general, avoid stocks trading for $5 or less per share.