FRANCE — Sanofi is set to pay Teva Pharmaceutical US$500 million for a groundbreaking partnership aimed at developing an experimental treatment for gut diseases.
This bold collaboration is a testament to the potential of the medicine, which could become a top-selling product in the fiercely competitive realm of pharmaceutical drug development.
But that’s not all – the deal could potentially be worth up to an additional US$1 billion for Teva if certain developmental or launch milestones are successfully met.
Under the terms of this groundbreaking partnership, both companies will shoulder the development costs and share any profits in major markets.
Additionally, they will take the lead in marketing the therapy in different countries, forging a synergistic approach to bring this innovative treatment to patients worldwide.
The focal point of this collaboration is a drug known as TEV’574, currently under rigorous testing as a treatment for two types of inflammatory bowel disease: ulcerative colitis and Crohn’s disease.
This drug belongs to a class of medications targeting a protein called TL1A. Interestingly, this class of drugs has captured the attention of the pharmaceutical industry as they hunt for the next blockbuster in inflammatory disease treatment.
Teva initially had TEV’574 in development for asthma, but their course changed following disappointing results in a mid-stage study.
The drug was then redirected into Phase 2 testing specifically for inflammatory bowel disease, coinciding with the rising interest in similar drugs from competitors like Prometheus Biosciences (later acquired by Merck & Co.) and a joint effort by Pfizer and Roivant Sciences.
While the data from Teva’s Phase 2 trial won’t be available until next year, both Teva and Sanofi are optimistic about the drug’s potential to be a strong contender in the market.
Sanofi’s CEO, Paul Hudson, expressed his belief in the drug’s promise, stating, “Anti-TL1As are a promising class of therapies, and we believe that TEV’574 could emerge as a best-in-class option for people living with serious gastrointestinal diseases.”
It’s worth noting that Sanofi’s upfront payment of US$500 million may seem modest compared to Merck’s acquisition of Prometheus for a whopping US$11 billion.
However, Merck’s decision was bolstered by already positive mid-stage data. Analysts, such as Umer Raffat from Evercore ISI, suggest that Teva’s choice of partner holds distinct advantages. Sanofi is a major player in immunology and boasts Dupixent, a highly lucrative inflammatory disease drug.
Raffat elaborates on this, stating, “The fact that Teva landed the biggest immunology player… will pay dividends from a commercial perspective.”
He further predicts that, with the backing of a major immunology player, TEV’574 could potentially reach US$4-5 billion, far exceeding earlier estimates.
Inflammatory bowel disease is characterized by chronic inflammation of the gut, leading to long-term damage to the gastrointestinal tract.
Sanofi and Teva estimate that approximately 10 million people worldwide suffer from this condition.
While biologic drugs like Humira, Stelara, and Entyvio can be used to treat both ulcerative colitis and Crohn’s, pills like Xeljanz and Rinvoq are cleared for the former condition.
Following the announcement of this partnership, Teva’s shares experienced a minor dip of 2% in Wednesday morning trading.
Teva had previously considered a sale or partnership for TEV’574, and the high level of interest in this deal is a testament to the drug’s potential to revolutionize the treatment of inflammatory bowel disease.
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