Dive Brief:
- Teva Pharmaceutical is wagering up to $900 million on a biotechnology company built around a potential treatment for Tourette syndrome.
- Through an acquisition announced Wednesday, Teva will take control of privately held Emalex Biosciences and its drug ecopipam, which is in late-stage clinical testing. Ecopipam is meant to inhibit “D1,” a kind of dopamine-regulating protein that research suggests may play a role in the involuntary movements, or tics, associated with Tourette’s. The antipsychotics often used to treat this disorder target a different but related protein, D2.
- The companies expect their deal to close sometime between July and the end of September. Terms hold that Teva will pay $700 million up front and possibly as much as $200 million more if ecopipam hits certain commercial goals. Emalex shareholders will be eligible to receive sales-based royalties as well.
Dive Insight:
Three years ago, Teva introduced a strategy to transform the company from a generics giant paying down a mountain of debt to an innovative drug developer geared toward expansion. One key pillar of this “Pivot to Growth” plan was ensuring the continued success of newer, branded products like the migraine prevention treatment Ajovy and the movement disorder therapy Austedo.
Another pillar was to flesh out the company’s more advanced research programs. As Teva’s largest deal in a decade, Emalex represents the most significant effort yet to deliver on this promise. It’s a “prime example” of the “focused, capital-efficient agreements that expand our late-stage innovative pipeline and commercial portfolio,” Teva CEO Richard Francis said in a statement.
Dennis Ding, an analyst at Jefferies, described the acquisition as an “interesting” one that “makes sense” given the synergies between ecopipam and Teva’s existing portfolio of neurology drugs.
Israel-based Teva announced the deal alongside a first-quarter earnings report in which the company recorded approximately $4 billion in revenue — reflecting a 2% increase year-over-year in U.S. dollar terms but a 3% decrease in local currency. Earnings were lifted by Ajovy, Austedo and the antipsychotic medicine Uzedy, which respectively posted gains (in local currency) of 35%, 41% and 62% compared to the same three-month period in 2025. The report was “strong,” according to Ding.
In a note to clients, the analyst wrote that investors’ perception of Teva has been improving ahead of multiple “near-term catalysts.” Those include an early-stage study of a vitiligo drug, which is on track to produce data in the back half of this year, as well as Phase 3 results for an immune system-regulating therapy called duvakitug. That readout is expected to come sometime in 2028.
Duvakitug targets “TL1A,” a pro-inflammatory protein that has drawn significant interest and investment over the past few years. Just last month, Blackstone Life Sciences committed $400 million to support Teva and its development partner Sanofi as they evaluate duvakitug for the treatment of a couple gut diseases. Blackstone, in exchange, will receive a milestone payment if the medicine secures Food and Drug Administration approval. It could also get additional payouts and royalties.
Teva shares were up 11%, to just over $35 apiece, in late morning trading Wednesday.
