Teva Shares Near Highs on FDA Filing for Key Schizophrenia Drug
Submission for its long-acting injectable TEV-749, designed to avoid a critical safety issue of a rival drug, marks a pivotal moment in the company's growth strategy.
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) shares traded near a 52-week high on Tuesday after the company announced it had submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration for its once-monthly schizophrenia treatment, TEV-749. The filing marks a significant milestone in Teva's strategy to bolster its pipeline of innovative drugs and represents a potentially disruptive entry into the lucrative market for long-acting antipsychotics.
The stock held steady around $28.33 in morning trading, just shy of its 52-week peak of $28.74. The submission has capped a strong rally for the company, with its stock surging approximately 38% since early November, fueled by investor optimism over its evolving drug pipeline.
TEV-749 is an extended-release injectable suspension of olanzapine, a well-established and effective antipsychotic medication. The key innovation lies in its delivery. Developed in partnership with Medincell, the treatment is designed to be administered just once a month, improving patient adherence, which is a major challenge in managing schizophrenia.
More critically, Teva's candidate may have solved a significant safety concern that has plagued a rival long-acting olanzapine product. In its pivotal Phase 3 SOLARIS trial, TEV-749 demonstrated no instances of post-injection delirium/sedation syndrome (PDSS), according to company announcements. This severe side effect, characterized by sedation and delirium, has required mandatory patient observation for several hours after injection for Eli Lilly's competing drug, Zyprexa Relprevv, limiting its clinical use.
"The submission of the NDA for TEV-749 is a crucial step forward in our efforts to bring a new, effective, and safe treatment option to patients living with schizophrenia," said Dr. Eric Hughes, Executive Vice President of Global R&D and Chief Medical Officer at Teva. "We believe TEV-749 has the potential to become a leading treatment choice by addressing the unmet need for a long-acting olanzapine that minimizes the burden of post-injection observation."
The filing is a key validation of the "Pivot to Growth" strategy championed by CEO Richard Francis, which focuses on developing and commercializing branded, innovative therapies to complement Teva's massive generics business. Success with TEV-749 would provide a durable revenue stream and strengthen the company's position in central nervous system (CNS) disorders, a core therapeutic area for Teva.
The market for long-acting injectable (LAI) antipsychotics is substantial and growing, with some analysts projecting it to reach $8.9 billion by 2033. While the space is competitive, with established treatments like Johnson & Johnson's Invega Sustenna and Otsuka's Abilify Maintena, a favorable safety profile could allow TEV-749 to carve out a significant niche.
Analysts have responded positively to the drug's potential. Projections for annual peak sales for TEV-749 range from $200 million to $500 million globally, with some forecasts suggesting it could capture 5-10% of the LAI market within five years of its potential launch. One forecast from GlobalData anticipates U.S. sales reaching $315 million by 2030, underscoring the drug's commercial importance.
With the application now officially submitted, Teva and its investors will await the FDA's acceptance for review and the eventual assignment of a Prescription Drug User Fee Act (PDUFA) date, which will set the target for a decision. The successful development and commercialization of TEV-749 would be a major catalyst for Teva, further cementing its transformation into a more balanced and growth-oriented pharmaceutical company.