Teva stands by its MS pill after yet another setback

European regulators recommended against Teva Pharmaceutical's ($TEVA) laquinimod, marring the Israeli company's odds of crossing the finish line with its once-promising multiple sclerosis treatment, a drug it hopes can dull the blow of the soon-to-go-generic Copaxone.

The European Medicines Agency's Committee for Medicinal Products for Human Use took issue with the drug's risk-benefit profile, pointing to safety risks that popped up in animal studies and weren't dispelled by human trials. Long-term exposure to the drug was tied to a higher occurrence of cancers and some dangers for pregnant women, CHMP said, and regulators weren't convinced by Teva's proposed safety measures. On the efficacy side, despite laquinimod's ability to slow the progression of MS-related disability, regulators were unimpressed with the drug's effect on relapses.

But Teva and partner Active Biotech aren't giving up, requesting a re-examination and planning to "liaise closely with the EMA" in hopes of salvaging laquinimod's future in Europe.

The rejection is the latest in a long line of woes for the oral drug, which endured two Phase III blemishes after failing to significantly reduce relapse rates in MS patients. In a third late-stage study, laquinimod met its primary endpoint of delaying disease progression, Teva said, but analysts remain skeptical on whether it can contend with Biogen Idec's ($BIIB) recently launched Tecfidera.

Teva has remained optimistic about the drug through and through, and the company believes it can secure FDA approval by 2018.

Meanwhile, Copaxone, Teva's $4-billion-a-year MS mainstay, is on the verge of generic competition, with patent protection set to expire next year.

- read Teva's release
- check out CHMP's statement (PDF)