Teva and Sanofi: Encouraging Readout from Bowel Disease Drug Update Excites Investors

No-moat Teva announced that the phase 2b study for duvakitug met its primary efficacy endpoints in Crohn’s disease and ulcerative colitis. It reported the highest placebo-adjusted efficacy data so far in Phase 2 trials among the TL1A drug class. For Teva, we raise our fair value estimate to $24 per share from $21 after raising our sales forecast for the drug. For wide-moat Sanofi, its commercial partner, we maintain our fair value estimates of EUR 117 and $63 for the ordinary shares and ADRs. We think this is a positive development, but given Sanofi’s size, adding this asset to our model does not significantly affect our valuation.