Teva Pharmaceutical Industries Ltd. has entered into a financing agreement with Royalty Pharma plc designed to advance the clinical development of TEV-408, an investigational anti-IL-15 antibody targeting autoimmune diseases. The agreement enables Teva to access up to $500 million in capital dedicated to progressing this promising therapeutic candidate, particularly for vitiligo, a chronic autoimmune skin condition marked by loss of melanocytes which results in depigmented patches appearing anywhere on the body.
IL-15, the cytokine targeted by TEV-408, plays a pivotal role in immune system-mediated pathways implicated in multiple autoimmune disorders. Initial Phase 1b data derived from ongoing TEV-408 trials in vitiligo patients offer preliminary evidence supporting IL-15 as a viable therapeutic target for this skin disease and potentially a wider range of autoimmune conditions.
Teva plans to disseminate additional clinical trial data for TEV-408 throughout 2026, which will inform future development strategies. Beyond vitiligo, the compound is currently being assessed in a Phase 2a study focusing on celiac disease, another autoimmune disorder where TEV-408 has received Fast Track designation from the U.S. Food and Drug Administration as of May 2025. This regulatory status could facilitate an expedited development and review process.
Under the terms of the funding transaction, Royalty Pharma will provide Teva with up to $500 million specifically earmarked for ongoing trial expenditures related to TEV-408 in vitiligo. Within this arrangement, $75 million is allocated as co-funding to support a Phase 2b clinical study that Teva anticipates initiating in 2026. Subsequent to the Phase 2b trial outcomes, Royalty Pharma may exercise an option to contribute an additional $425 million to co-fund the Phase 3 clinical development program.
If TEV-408 successfully navigates regulatory approval and launches commercially, Teva will be obligated to remit to Royalty Pharma predetermined milestone payments as well as royalties based on global net sales of the therapy.
From a corporate financial perspective, Teva has provided a 2026 outlook indicating expectations for flat to slightly declining sales compared to 2025, followed by low single-digit sales growth in 2027, and a mid-single-digit compound annual growth rate projected through 2030. Furthermore, operating profit and adjusted EBITDA for 2026 are forecasted to surpass the 2025 levels. The company aims for operating profit margins approximating 30% in 2026 with further expansion beyond 30% anticipated in 2027.
Teva updated its fiscal 2025 financial guidance, affirming adjusted earnings per share ranging from $2.55 to $2.65, a modest increase from the prior estimate of $2.50 to $2.60, broadly aligning with analyst consensus of $2.58. The sales guidance was slightly narrowed to $16.8 billion to $17 billion, compared with previous estimates of $16.8 billion to $17.2 billion and market consensus of $16.89 billion.
Credit rating agencies have recently revised their assessments on Teva. S&P Global Ratings upgraded Teva’s long-term issuer credit rating to BB+ from BB, assigning a stable outlook, while Moody’s reaffirmed its Ba1 rating and improved the outlook to positive, signaling enhanced confidence in the company's credit profile.
Market reaction to these developments has been positive, with Teva’s stock price rising by approximately 2.37 percent to $32.77 as of Monday’s market open.