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Teva will not be able to market a generic version of Zisapel’s drug

Tel Aviv District Court Judge Tzila Tzfat recently issued a temporary injunction prohibiting Teva Pharmaceuticals from launching a generic version of the drug Circadin, which treats sleep disorders, until completion of the proceedings in the lawsuit filed against it in this regard.

17.04.18 | Zohar Shahar Levi and Dror Reich


Tel Aviv District Court Judge Tzila Tzfat recently issued a temporary injunction prohibiting Teva Pharmaceuticals from launching a generic version of the drug Circadin, which treats sleep disorders, until completion of the proceedings in the lawsuit filed against it in this regard.

Last November, Neurim Pharmaceuticals, controlled by Prof. Nava Zisapel and Yehuda Zisapel, who are among the founders of the RAD Group, filed a lawsuit against Teva in the matter of the drug Circadin. The great advantage of the medication is that it is not addictive.

Neurim, through attorneys Gabi Moyal-Maor and Eleanor Stark of law firm Hamburger Evron & Co., claimed that Teva acted in bad faith in order to steal its intellectual property and launch a generic version of the drug. “Teva’s actions,” stated the lawsuit submitted to the Tel Aviv District Court, “are being conducted in shameful exploitation of its status as the exclusive marketer and distributor of the drug in Israel for almost a decade, under the auspices of which it is exposed to all the confidential information related to the drug and its development. Now, in violation of the agreement, Teva has set itself the objective of appropriating the generic drug which will compete against Circadin worldwide to the point of mortal damage to it.”

Neurim was founded and is managed by Prof. Nava Zisapel, a professor of neuro-biology and inventor of Circadin, which is marketed in Israel and in 45 countries. In the lawsuit, Neurim claims that in the framework of agreements with Teva, the company gave it confidential and sensitive information about Circadin, and that Teva had been exposed to the future development plans for the drug, and marketed it exclusively. Recently, however, so it is alleged, Teva violated the agreements and its obligations to it (Neurim), when in September 2017, it learned that Teva had filed an application for approval of a generic version of Circadin.

A non-sweeping injunction

At the same time as the filing of the lawsuit, Neurim also requested an injunction that would prohibit Teva from marketing a competing generic drug, as well as desisting from any use of the pharmaceutical manufacturer’s confidential information. Judge Tzfat accepted the request and issued a temporary injunction, pending a ruling on the lawsuit. “As far as the balance of convenience is concerned in relation to the launch of the generic drug,” Tzfat wrote in her decision, “the scales are clearly tipped in favor of Neurim. The launch of a generic drug is likely to severely harm Neurim’s main asset, causing it serious and possibly irreversible damage. Given that violation of the agreement and a breach of trust are claimed, I don’t believe that Neurim should be placed in a situation in which it is dependent on Teva’s goodwill and the timetable it assigns to it.”

Tzfat also noted that at this stage of the hearing, Neurim had been able to show chances of prosecution based on prima facie evidence. “Its claims are reasonable,” she wrote, “and are not unrealistic or unfounded.” However, according to the court’s decision, during the time the order is in force, Teva will be able to challenge the patents or act vis-à-vis other regulatory authorities outside the country. This is because not allowing it to act in regulatory matters would cause it considerable damage.

Teva has been the exclusive marketer and distributor of the drug in Israel for almost a decade. Out of the additional 45 countries in which it markets Circadin, it has a local marketing arm only in Switzerland, and is tied through marketing and distribution agreements with international pharmaceutical companies. Circadin was approved for marketing in Israel in December 2008 and Teva enjoys exclusivity until March 2019. But now Teva covets the European market, where the drug is very popular.

Looking toward Europe

Neurim twice attempted to go public but failed to do so. In 2014, it met with foreign banks to promote a Nasdaq IPO at a company value of 250-300 million dollars. Prior to that, in 1998, Neurim sought to raise ILS 25 million on the stock exchange at a company value of ILS 100 million.

The market for sleep disorder drugs is estimated at 1.5-2 billion dollars a year. Neurim signed a distribution agreement with Lundbeck in Europe, with Japanese company Takeda in the East, and in Israel with Teva. According to estimates, around tens of millions of dollars’ worth of the drugs are sold worldwide, so that Teva’s share in Israel is relatively small.

Teva wanted to conquer Europe with the generic version – in Europe the drug has succeeded in capturing a good segment of the market, with Britain and Germany both having added the drug to the public drug basket. The drug also has a strong market in both Scandinavia and Greece.