By Steven Scheer
JERUSALEM (Reuters) -Teva Pharmaceutical Industries will collaborate with French drugmaker Sanofi (EPA:SASY) to develop a treatment for inflammatory bowel disease it hopes will become a blockbuster drug.
Sanofi, a leader in immunology, will invest $1.5 billion in the development of Teva's anti-TL1A drug, the companies said on Wednesday. The drug is still in phase 2 trials, with interim results not expected until the second half of 2024,
Phase 3 trials are expected to begin in 2025 and Teva chief executive Richard Francis said the best case scenario for the commercial launch of the drug -- which will target both Crohn's disease and ulcerative colitis -- would be around 2028.
"The fact that they've done their due diligence on our anti-TL1A asset ... and to put up $1.5 billion, as well as allow Teva to retain 50% of the worldwide economics once it's launched, I think shows that they believe in the asset," Francis told Reuters.
Paul Hudson, Sanofi's CEO, said anti-TL1As are a promising class of therapies and that Teva's version could emerge as a best-in-class option for people living with serious gastrointestinal diseases.
"This collaboration strengthens our commitment to advancing innovative treatment options for inflammatory conditions with a high unmet need and bolsters our goal to be an industry leader in immunology," Hudson said.
Teva shares were down 3% in midday trade in Tel Aviv, with the broader market also lower, while Sanofi's shares were up 1% in Paris.
Israel-based Teva, the world's largest generics drugmaker, has struggled to recover from the loss of exclusivity to its multiple sclerosis drug Copaxone, and to cut $35 billion of debt as it fought a spate of lawsuits alleging it helped fuel the U.S. opioid epidemic.
But Teva has started to show signs of recovery and is betting a trio of the group's branded drugs - Austedo, migraine product Ajovy and schizophrenia drug Uzedy - will help the company bounce back. Teva also has a number of biosimilars in its pipeline.
"We want to get Teva back to growth," Francis said, noting it raised its 2023 revenue outlook in August. "To continue that growth, we've got to drive our products in the market forward."
LONG-TERM GROWTH
Francis estimated the IBD market was worth nearly $30 billion and said many patients do not respond to current treatments.
With TL1A viewed as a long-term growth driver, Francis said it needed a "world class partner" such as Sanofi to help it develop and market the drug.
Under the terms of the deal, Teva will receive an upfront payment of $500 million in cash once the transaction closes, which is expected by the end of 2023, and up to $1 billion in development and launch milestones.
Both companies will equally share the development costs globally and net profits and losses in major markets, with other markets subject to a royalty arrangement. Sanofi will lead the development of the phase 3 clinical trials, Teva said.
Teva, which will report third-quarter results on Nov. 8, will lead commercialization of the product in Europe, Israel and specified other countries, and Sanofi will lead commercialization in North America, Japan, other parts of Asia and the rest of the world.
($1 = 0.9555 euros)