Teva Pharmaceutical Industries Limited American Depositary Shares Study result

Good morning and good afternoon, everyone. Thank you for joining us for these celiac disease results for TEV-408, our anti-IL-15. The materials are posted to our website this morning in the investor relations section as always. Please see those. Before I turn the call over to Richard Francis, I would like to remind everyone that we will be making forward-looking statements on this call. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described in our earnings press release and our most recent Forms 10-Q and 10-K filed with the SEC. Any statements that we make are only as of today, and we undertake no obligation to update these statements subsequently.

Now, it is my pleasure to give you Richard Francis.

Thank you, Chris. Good afternoon and good morning, everybody, and I do appreciate you joining the call. Today marks another major step forward for Teva as we continue to execute on the Pivot to Growth strategy. A strategy that was launched three and a half years ago to transform Teva from a world-class, pure-play generics company into a world-class biopharma company. As many of you will know in the conversations and interactions we have had, a major part of this was expanding our innovative portfolio. In fact, that was pillar two of the four pillars of the strategy. This was about stepping up innovation. I think you will see today that we continue to make great progress on stepping up innovation here at Teva. If you go on to the next slide. We set out this year to have seven milestones.

But we had to update that, and it became 8 milestones as we had the transaction and ecopipam came into our pipeline. But for a world-class biopharmaceutical company, I think this is a very impressive lineup that we have here. We've made significant progress on executing on these milestones. Already, we've had the duvakitug maintenance data. As I mentioned, we've had ecopipam where NDA was accepted. We've had the top-line results of vitiligo. As of today, you'll be hearing from Eric about the celiac disease phase IIa top-line results. But I will remind you, there's still quite a lot more to come this year with the darme and emrusolmin, olanzapine LAI anticipated approval in Q4, and finally, the anti-PD-1 IL-2. So what does this all mean for Teva? If you go on to the next slide.

It means we have an opportunity to have 5 submissions in 5 years. It's worth pointing out that these products, these programs, and their indications have the potential to generate over $10 billion of sales for Teva going forward. Now, for any company, that would be significant. But for a company of Teva's size, I think this really creates an opportunity to create a biopharma company that has a growth trajectory for many years to come and create real shareholder value. I'd also like to point out that 2 of the assets on this chart, duvakitug anti-TL1A and anti-IL-15, are products where we have multiple indications, so often referred to as a pipeline in a product.

We've clearly shown this is possible with the 2 new indications that were announced earlier this year for duvakitug, and now we have the second data for anti-IL-15 on celiac backing up the data we gave you a quarter ago with vitiligo. So lots to be excited about. 5 submissions in 5 years of assets that all have the potential to achieve over $1 billion in peak sales and some considerably more. So it's a really exciting time for Teva to continue on this growth trajectory, both on top and bottom line. But I know you want to get into the data, so without further ado, I'm going to hand you over to Dr. Eric Hughes, head of R&D and head of our CMO.

Over to you, Eric. Thank you, Richard.

It's great to be here and have the chance to talk about some new data in our pipeline. I'm really excited to be here and talk about this next step in our IL-15 program. Just to start off first, celiac disease, it's a very important disease. 1% of the population in the U.S. and E.U. are affected, and that's up to 5.1 million people. But most importantly, 50% of these people, even if they can strictly adhere to a gluten-free diet, still have symptoms. There's currently no therapies for these folks. So this is a very important disease, and I think it's unmet medical need, and it's something that is highly overlooked, I think, and underserved at this point.

We'll talk a lot about a normal gut villi that you see here on the right of the slide, where you have nice normal villi, where there's a high surface area to absorb nutrients. But in celiac disease, this architecture is highly blunted in the gut, and this is the basic pathophysiology of the disease. Moving on, give you a little bit more flavor to understand the data we'll talk about today. As I mentioned, there's normal gut villi with these finger-like projections. The basic pathology in the disease process is the exposure to gluten, which causes a stress response in the epithelium of the gut lining. This leads to a release of IL-15, a key cytokine in the pathogenesis of the disease. That release drives the migration and proliferation of pathogenic intraepithelial lymphocytes.

These are the cells that rush into the gut lining and cause the inflammation, and ultimately the destruction of the villi. You can see on the right-hand side, again, a gut epithelium that's blunted with its villi, lower surface area, poor ability to absorb nutrients, and infiltrated with many different lymphocytes. That's the basic pathology, and I think it's a very important aspect to remember, because one of the things I'll harp on today is that these anti-IL-15 therapies, including ours, are really driving at a disease modification. We are, by definition, changing the course of the disease with these treatments. Moving on to the first slide of our data. I just want to start from the beginning. This again, as Richard mentioned, a homegrown antibody from the labs of Teva.

Just like our duvakitug program, it's the same scientists who do a great job at designing these antibodies. Just like duvakitug, we're focusing on the fundamentals of drug development throughout the process. We start with our antibody. How does it compare to other antibodies we've created in our labs based on the IP of other competitors? You can see here that we're more potent by two different assays, considerably up to 50 times more potent when you look at different assays. On the bottom, in a transgenic IL-15 mouse, we can suppress IL-15 in a greater extent in a directional comparison to these other antibodies. Again, the fundamentals of the antibody is higher affinity, better suppression, pre-clinically. Teva also did something completely unique in the field right now.

Years ago, we took a population of macaques, non-human primates, and about 1% of macaques actually spontaneously develop celiac disease. That was a great opportunity in a non-human primate pre-clinical model to see what effect does anti-IL-15 therapies do. You can see here quite clearly on the left, there's some histology of the gut on monkeys that were challenged with gluten and either treated with placebo or TEV-408. You can see quite clearly that the normal architecture that you see on the lower part is dysregulated and disturbed on the top. You can see in a quantitative fashion that that villous height to crypt depth, that actual measure of the blunting of the histology in the monkeys really showed a strong effect. We also showed that the intraepithelial lymphocytes were in a statistical fashion also decreased.

In the monkeys, you also actually saw a decrease in the serology of the anti-gluten antibodies and transglutaminase antibodies. A really strong pre-clinical signal that in fact, anti-IL-15 really is a disease-modifying antibody. Now, moving on to some human data. When we started our phase I program, which is pretty extensive, you can see that we looked at a nice PK profile from low to high doses. We observe a half-life of approximately 38 days, which really extends the capability of the molecule to be in a more broad schedule, out to 3 months. You can also see on the right-hand side, when you look at the 2 top doses, we suppress the free IL-15 considerably, almost below, well, essentially below the level of detection out to 80 or 90 days. Again, the fundamentals of the antibody are strong.