Either wait until he dives before slice him with your knife/ax, or wait until he tries his puke attack and hit him from behind. This may take a while, but you should not lose a life when fighting this Boss. There is a Health Glyph in the lower left corner. Do not kill the blue flying enemies, as they just respawn as soon as they die.

Enable the "All weapons" code and get a flamethrower. Use the flamethrower, stand in front of it, and burn it.

Play at least with two players, with one being Martyr. First, destroy all the benches for easier movement. Have Martyr get the bear's attention then run around in a circle. You are faster than the bear and he will chase you, but will not be able to hit. While he is chasing you, have your partner unload on him. When he gets down to low health, he might try to puke on you. Just get his attention again and repeat. If you run fast enough, you might be able to chase him, and hit him from behind.

As any character, you need to master using the Left Analog-stick and Right Analog-stick simultaneously to run backwards and fire your weapon at the same time. Run in circles around the room, picking up shotguns and machine guns. Picked up shotguns seem to do the most damage. Continue running backwards and firing the weapons you have picked up. Disregard the blue ghosts. As long as you are running, they cannot hit you. Using this technique, you can defeat the Teddy Bear without losing any lives or having to use the glyphs, relatively quickly.

The easiest and fastest way to kill the Teddy Bear is to have at least two people. Have one person go in front of him, with another person behind him. Both should use melee attacks on him. The person in front may get hurt with puking, however if they stand as close up against the bear as possible, the puke should go directly over their head. Another way to kill him is to continuously run around inside the church in a circular motion, then run backwards while shooting. It is also good to take out the blue ghost enemies; after killing each of them once or twice, they will not return. Martyr and Defender are recommended for this Boss; they are fast and can easily outrun him. However, Avenger's infinite shotgun is also strong and therefore very effective.