Teva Secures $100M Funding to Expedite Schizophrenia Drug Development

Teva has tapped into royalty funding to speed up the development of an antipsychotic medicine in its creative pipeline, a key component of CEO Richard Francis’s “pivot to growth” strategy.

On Monday, the Israeli pharmaceutical giant said that it had raised $100 million to finance the clinical testing of olanzapine LAI, a longer-acting variant of Eli Lilly’s schizophrenia medicine Zyprexa.

The funding comes from Royalty Pharma, and in the future, the two businesses may decide to boost it to $125 million. If Teva’s medication TEV-‘749 is approved by the FDA, the company’s investment in Royalty will be repaid over a five-year period. In addition, Royalty is eligible for royalty payments of small to moderate percentage of all medicine sales.

The financial collaboration arrives as Teva’s newly appointed CEO, Richard Francis, aims to reinvent the generics behemoth by concentrating more on complicated therapies such as novel medications, biosimilars, drug-device combos and long-act injectables.

Neuroscience is one of Teva’s major therapeutic fields, with tardive dyskinesia and Huntingon’s therapy, Austedo, generating the greatest amount of growth at the firm. And olanzapine LAI is now the most developed pipeline program in Teva’s neuroscience branch.

Teva proposes olanzapine LAI would be administered subcutaneously once per month, in contrast to Zyprexa, which is taken orally once per day. Zyprexa Relprevv is an intramuscular injectable that can be administered as often as once every four weeks. However, a warning concerning post-injection delirium/sedation condition was included in the box because of the long-acting version’s high penetration. Teva thinks that this won’t be an issue if their formulation is administered subcutaneously.

Teva’s medication employs MedinCell’s copolymer technology, SteadyTeq, which is already integrated into Teva’s Uzedy. Uzedy, an extended-release injectable solution, obtained FDA approval in April for the treatment of schizophrenia.

About 20% of individuals using an oral medication for schizophrenia take olanzapine. According to Teva, success for a long-acting version of Zyprexa might be possible if it had a safer side-effect profile than Zyprexa Relprevv.

Teva’s Chief Medical Officer, Eric Hughes, M.D., Ph.D., stated on the firm’s earnings conference call last week that the company has recently advanced the phase 3 study for olanzapine LAI in preparation for this possible future growth driver. Teva now anticipates a readout in the second half of 2024 because of the faster-than-anticipated accumulation of enrollment.

Teva has over $20 billion in debt as of the end of September and $2.25 billion in cash and equivalents.

As conventional fundraising becomes more challenging due to a general cooling of the biotech market, interest in royalty financing has increased. Blackstone’s strategic financing of Alnylam is probably the best known such instance. In 2020, Blackstone offered Alnylam, an expert in RNA manipulation, a maximum of $2 billion in return for 50% of the royalties due to Alnylam on worldwide sales of Novartis’ PCSK9 cholesterol medication Leqvio.  

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