Israeli Teva Partners with French Giant Sanofi to Develop Promising Autoimmune Disease Drug

Teva, the Israeli pharmaceutical company managed by Richard Francis, has announced a strategic collaboration with the French pharmaceutical giant Sanofi. This partnership marks a crucial step for Teva in realizing the potential of its most promising drug, TEV-48574, aimed at treating autoimmune diseases of the digestive system, including Crohn's disease and ulcerative colitis.

Approximately 10 million people worldwide suffer from these debilitating conditions, characterized by symptoms such as persistent diarrhea, rectal bleeding, abdominal pain, fatigue, and weight loss. Richard Francis, Teva's management, emphasized that the current drug treatments for these diseases fall short, and he estimates that TEV-48574 will target a market worth approximately $28 billion by 2028.

Francis also pointed out that this drug plays a pivotal role in Teva's growth strategy beyond 2028. In the short term, Teva's growth will be driven by drugs like Austedo, used to treat motor disorders caused by the continuous use of antipsychotic drugs, and Uzedy for the treatment of schizophrenia.

TEV-48574 is an antibody-based therapy designed to block the TL1A protein, which is implicated in the development of autoimmune diseases in the digestive system. Under the terms of the agreement, Sanofi will initially make a one-time payment of 469 million euros (approximately $500 million) to Teva, followed by additional payments of up to 940 million euros (about $1 billion) for reaching development and regulatory milestones. These milestones include meeting clinical trial objectives and obtaining marketing approvals in North America, Europe, and Japan. Currently, TEV-48574 is in the second phase of clinical trials.

Both Teva and Sanofi will equally share the drug's development expenses and profits from its global marketing. Sanofi, considered a global leader in immunology, will oversee the crucial third phase of clinical trials and will be responsible for commercializing the drug in North America, Japan, and various Asian regions. Teva will handle commercialization in Europe, Israel, and other countries specified in the agreement.

Francis noted in a conversation with TheMarker that Teva's drug will compete with two other medications that also target the TL1A protein mechanism. One of these competitors is Prometheus, acquired by the American pharmaceutical giant Merck for $10.8 billion in June 2023, while the second is produced by Roivant, valued at $8.2 billion and previously led by Vivek Ramaswamy, who is now a candidate in the Republican primaries for the U.S. presidency.

In contrast to the Merck-Prometheus deal, Teva will retain 50% of the drug's future profits. Francis has expressed optimism, stating that TEV-48574 has the potential to become the leading drug in its category. This is attributed to its unique ability to bind to the DR3 receptor, which the TL1A protein targets, thereby interrupting the chain of events responsible for colitis and Crohn's disease. Additionally, the molecule demonstrates high efficacy, with a low amount of antibodies required to neutralize its activity.

According to Teva's presentation to analysts, in the U.S., 2.3 million people have been diagnosed with ulcerative colitis or Crohn's disease, and an additional 1.8 million cases exist outside the U.S. Within the U.S., only 245,000 patients receive specialized treatment, while outside the U.S., 530,000 patients undergo specialized treatment, indicating a significant unmet medical need.

Francis highlighted that Sanofi's expertise in the development of immunological drugs will enable Teva to expand the application of TEV-48574 beyond digestive system diseases, potentially including inflammatory diseases and asthma. Scientific estimates suggest that the TL1A protein blocked by the drug is involved in a cascade of events leading to various autoimmune diseases beyond those affecting the digestive tract.

This collaboration between Teva and Sanofi holds the promise of delivering groundbreaking treatments to patients suffering from debilitating autoimmune diseases and marks a significant milestone in Teva's growth strategy.