Teva Pharmaceutical ( NYSE:TEVA ) Industries and Sanofi ( NASDAQ:SNY ) just dropped a game-changing update for investorstheir star drug duvakitug smashed expectations in Phase 2b trials, delivering clinical remission in nearly half of Crohn's disease patients at high doses. Conducted across the U.S., Europe, and Israel, the trial met its primary endpoints, showing 47.8% remission rates compared to 20.45% on placebo. The market loved it. Teva's stock skyrocketed 19%, while Sanofi saw a tidy 4% bump, and for good reasonthis positions duvakitug to claim a big slice of the $28 billion inflammatory bowel disease (IBD) market.

Duvakitug isn't just another drug in Teva's pipelineit's the drug. With consistent efficacy across patient groups and no major safety hiccups, this TL1A antibody therapy is now a frontrunner in the fight against ulcerative colitis and Crohn's. Teva's R&D chief, Eric Hughes, didn't hold back, calling the results beyond expectations, while Sanofi's head of R&D, Houman Ashrafian, described the drug as a frontier in treating IBD. In a world where 10 million people still suffer from chronic intestinal inflammation, duvakitug could offer a lifelineand drive massive growth for Teva and Sanofi.

Let's talk numbers. Sanofi already shelled out $500 million upfront for this partnership, with $1 billion more in milestones up for grabs$600 million just for kicking off Phase 3 trials. Both companies are splitting costs and profits, with Sanofi owning the U.S. and Asia while Teva dominates Europe and Israel. Phase 3 trials are set for 2025, with a commercial launch expected toward the end of the decade. As competition from Roche and Merck ( NYSE:MRK ) heats up, duvakitug is shaping up to be the ace in Teva's decka high-stakes bet that could redefine the IBD treatment landscape and cement Teva's resurgence in the pharma big leagues.

This article first appeared on GuruFocus .