Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) and Sanofi SA's (NASDAQ:SNY) Phase 2b RELIEVE UCCD study met its primary endpoints in patients with ulcerative colitis (UC) and Crohn's disease (CD).
In the RELIEVE UCCD study, 36.2% (low-dose) and 47.8% (high-dose) of patients with ulcerative colitis treated with duvakitug achieved clinical remission compared to 20.45% on placebo, placebo-adjusted rates were 15.7% (low dose) and 27.4% (high dose), at week 14.
BofA Securities raised the price target for Teva to $25 from $23 with a Buy rating, reflecting a strong Phase 2 data update for duvakitug in inflammatory bowel disorders (IBD).
Based on the strength of the data and the emerging product prole, the analyst forecasts nominal peak sales of ~$2 billion (booked by partner), with Teva booking half the profits.
Given the anticipated impact on profits by 2030, BofA factors in the long-term strength of Teva's innovative portfolio by applying a valuation multiple of 9.25x to 2025 estimated EV/EBITDA.
Partnership milestone payments provide reliable cash flow, and the analyst sees potential for the stock to gain value as the company shifts toward growth-focused execution.
The TL1a drug class has emerged over the last two years, led by Merck & Co Inc (NYSE:MRK) Prometheus' strong Phase 2 data, which was followed by similar data from Roche Holdings AG's (OTC:RHHBY) competitor asset.
BofA writes that TL1a was a class of drug that could offer a very good safety profile, on par with market-leading Takeda Pharmaceutical Co Ltd (NYSE:TAK) Entyvio, plus a high rate of efficacy across all major patient subgroups.
Data update from Teva in around 240 patients in Phase 2 showed 16%-27% placebo-adjusted MAYO remission scores in the UC population, with the high dose compared favorably to competitors.
TEVA Price Action: Teva Pharmaceutical stock is up 3.23% at $21.56 at publication Wednesday.
- Novo Nordisk's Ozempic Under Scrutiny For Potential Increased Risk Of Rare-Eye Disease
Photo: Courtey Teva Pharmaceutical Industries
