Teva Pharmaceutical Industries Ltd. (TEVA) just landed a significant funding partner for one of its most promising experimental drugs. The Israeli pharma giant announced Sunday it's teaming up with Royalty Pharma plc (RPRX) on a deal worth up to $500 million to push forward TEV-408, an antibody being tested to treat vitiligo and celiac disease.
Here's what makes this interesting: TEV-408 targets IL-15, a cytokine that plays a central role in how the immune system misfires in various autoimmune conditions. Early Phase 1b data from the ongoing vitiligo study suggest that blocking IL-15 could be a viable approach for treating not just vitiligo, but potentially a wide range of autoimmune disorders.
Vitiligo, for context, is a chronic autoimmune skin disease where the body attacks its own pigment-producing cells called melanocytes. The result is white patches that can show up anywhere on the body. Beyond vitiligo, TEV-408 is also being evaluated in a Phase 2a trial for celiac disease and earned Fast Track designation from the FDA in May 2025.
How the Money Flows
The financial structure here is pretty straightforward. Royalty Pharma will provide Teva with $75 million upfront to co-fund a Phase 2b study in vitiligo, which is targeted to kick off in 2026. Teva expects to share results from the TEV-408 trials sometime during 2026.
But the real commitment comes later. If those Phase 2b results look promising, Royalty Pharma has the option to pony up an additional $425 million to co-fund the entire Phase 3 development program. And if TEV-408 eventually gets approved and launched, Teva will pay Royalty Pharma a milestone payment plus royalties on worldwide sales.
Teva's Broader Financial Picture
Beyond the TEV-408 deal, Teva shared its outlook for the next few years, and it's a mixed bag in the near term with optimism building further out. The company expects fiscal 2026 sales to be flat to slightly down compared to 2025, followed by low-single digit growth in fiscal 2027, and then accelerating to mid-single digit compound annual growth by fiscal 2030.
The profitability story looks stronger. Teva anticipates operating profit and adjusted EBITDA will increase versus 2025, with operating profit margins hitting around 30% in 2026 and climbing above 30% in 2027.
For 2025, the company raised its adjusted earnings guidance from a range of $2.50-$2.60 per share to $2.55-$2.65 per share, compared to analyst consensus of $2.58. Meanwhile, it narrowed its 2025 sales guidance from $16.8 billion-$17.2 billion down to $16.8 billion-$17 billion, versus the consensus of $16.89 billion.
Credit rating agencies are taking notice of Teva's improving financial position. In December 2025, S&P Global Ratings upgraded its long-term issuer credit rating for Teva to BB+ from BB with a stable outlook. Moody's affirmed its Ba1 rating and revised the outlook to positive.
Price Action: TEVA stock traded up 2.37% at $32.77 on Monday at publication.
