Core Viewpoint - Teva Pharmaceutical Industries reported mixed first-quarter 2025 results, beating earnings estimates but missing revenue expectations, with adjusted earnings of 52 cents per share and revenues of $3.89 billion [1][16]. Financial Performance - Adjusted earnings increased by 8% year over year, driven by higher operating profits [1]. - Total revenues rose 2% year over year on a reported basis and 5% on a constant currency basis [1]. - U.S. segment sales reached $1.91 billion, an 11% increase year over year, surpassing estimates [2]. Product Performance - Revenues from generic products in the U.S. rose 5% to $849 million, primarily due to the launch of Simlandi, a generic version of Humira [3][4]. - Sales of Austedo, a Huntington's disease drug, increased by 40% year over year to $396 million, exceeding estimates [6]. - Ajovy sales grew 18% year over year to $53 million, while Uzedy generated $39 million in sales [7]. Regional Performance - Europe segment revenues declined 6% year over year to $1.19 billion, missing estimates [9][10]. - International Markets segment sales decreased 2% year over year to $582 million, also missing estimates [11]. Guidance and Future Outlook - Teva expects total revenues for 2025 to be between $16.8 billion and $17.2 billion, slightly lowering the upper end of the previous guidance [13]. - Adjusted EPS guidance for 2025 was raised to a range of $2.45-$2.65 per share [13]. - The company anticipates $700 million in cost savings by 2027, with an adjusted operating margin target of 30% [15]. Market Reaction - Following the earnings release, Teva's stock rose over 9%, despite a year-to-date decline of 20.1% compared to the industry decline of 17.6% [19].

Revenue Performance - Revenues in Q1 2025 were $3,891 million, a 2% increase in U.S. dollars or 5% in local currency compared to Q1 2024, driven by higher revenues from AUSTEDO, generic products, AJOVY, and UZEDY [279]. - The United States segment generated revenues of $1,910 million, an 11% increase, and segment profit of $532 million, a 52% increase compared to Q1 2024 [279]. - The Europe segment reported revenues of $1,194 million, a 6% decrease in U.S. dollars, and segment profit decreased by 22% compared to Q1 2024 [279]. - The International Markets segment generated revenues of $582 million, a 2% decrease in U.S. dollars, while segment profit decreased by 17% compared to Q1 2024 [279]. - Total revenues for the company in Q1 2025 were $3,891 million, an increase of 2% in U.S. dollars compared to Q1 2024 [359]. Profitability Metrics - Gross profit margin improved to 48.2% in Q1 2025, up from 46.4% in Q1 2024 [279]. - Gross profit in Q1 2025 was $1,877 million, a 6% increase from $1,771 million in Q1 2024, with a gross profit margin of 48.2% compared to 46.4% [361]. - Profit from the U.S. segment in Q1 2025 was $532 million, a 52% increase from $350 million in Q1 2024, primarily due to higher gross profit [319]. - Profit from the International Markets segment was $97 million in Q1 2025, a decrease of 17% from $117 million in Q1 2024 [355]. - Net income attributable to Teva in Q1 2025 was $214 million, compared to a net loss of $139 million in Q1 2024 [389]. Research and Development (R&D) Expenses - R&D expenses in Q1 2025 were $247 million, a 2% increase from $242 million in Q1 2024 [279]. - R&D expenses for the U.S. segment in Q1 2025 were $154 million, unchanged from Q1 2024 [316]. - R&D expenses for the Europe segment were $60 million in Q1 2025, an increase of 9% from $56 million in Q1 2024 [332]. - R&D expenses in Q1 2025 were $247 million, up 2% from $242 million in Q1 2024, representing 6.3% of revenues, unchanged from the previous year [366][369]. Cash Flow and Debt Management - Free cash flow generated in Q1 2025 was $107 million, significantly up from $32 million in Q1 2024, mainly due to higher proceeds from divestitures [284]. - Cash flow used in operating activities was $105 million in the first quarter of 2025, a decrease from $124 million in the same period of 2024, attributed to higher profits in the U.S. segment [417]. - As of March 31, 2025, total debt was $16,651 million, a decrease from $17,783 million as of December 31, 2024 [284]. - The company's financial leverage ratio improved to 73% as of March 31, 2025, down from 77% as of December 31, 2024 [412]. - The portion of total debt classified as short-term decreased to 3% as of March 31, 2025, from 10% as of December 31, 2024 [412]. Segment-Specific Revenue Highlights - AUSTEDO revenues in the U.S. segment for Q1 2025 were $396 million, a 40% increase from $282 million in Q1 2024, driven by volume growth and the approval of AUSTEDO XR [294]. - UZEDY revenues in the U.S. segment for Q1 2025 were $39 million, a 156% increase compared to Q1 2024, primarily due to volume growth [298]. - Combined revenues for BENDEKA and TREANDA in the U.S. segment for Q1 2025 were $36 million, a 20% decrease from Q1 2024, attributed to competition from alternative therapies and generic products [300]. - AJOVY revenues in the Europe segment increased by 14% to $58 million in Q1 2025, compared to $51 million in Q1 2024 [326]. - AJOVY revenues in the International Markets segment increased by 65% to $28 million in Q1 2025, compared to $17 million in Q1 2024 [346]. Operating Expenses - S&M expenses for the U.S. segment in Q1 2025 were $273 million, a 5% increase from $261 million in Q1 2024, driven by promotional activities for AUSTEDO [317]. - G&A expenses for the U.S. segment in Q1 2025 were $96 million, a 3% increase compared to $93 million in Q1 2024 [318]. - S&M expenses in Q1 2025 were $622 million, a 2% increase from $610 million in Q1 2024, accounting for 16.0% of revenues compared to 15.9% in Q1 2024 [373][374]. - G&A expenses in Q1 2025 were $297 million, a 7% increase from $278 million in Q1 2024, representing 7.6% of revenues compared to 7.3% in Q1 2024 [375][376]. Balance Sheet and Equity - Total balance sheet assets as of March 31, 2025, were $38,415 million, down from $39,326 million as of December 31, 2024 [400]. - Cash and cash equivalents as of March 31, 2025, were $1,697 million, a decrease from $3,300 million as of December 31, 2024 [405]. - Total equity increased to $6,269 million as of March 31, 2025, compared to $5,380 million as of December 31, 2024, driven by a positive impact from exchange rate fluctuations of $467 million and a net income of $214 million attributable to the company [413]. Earnings Per Share - Diluted earnings per share in Q1 2025 were $0.18, compared to a diluted loss per share of $0.12 in Q1 2024 [390]. - The non-GAAP diluted EPS for the three months ended March 31, 2025, was $0.52, an increase from $0.48 in the same period of 2024 [427].

Core Viewpoint - Teva Pharmaceutical's shares are experiencing a significant increase following the release of strong Q1 earnings and an upward revision of its full-year profit guidance [1][5]. Financial Performance - Teva reported Q1 adjusted earnings per share (EPS) of $0.52, surpassing Wall Street's expectation of $0.48 [2]. - The company reported quarterly sales of $3.89 billion, missing the anticipated $4 billion [2]. - Despite the revenue miss, Teva's margins expanded to 48.2%, up from 46.4% a year ago, attributed to a higher proportion of specialty drugs in overall sales [2]. Product Performance - The drug Austedo, used for treating movement disorders, generated worldwide revenue of $411 million for the quarter, reflecting a 39% increase compared to the same period last year [3]. Guidance Update - Teva raised its fiscal 2025 adjusted EPS guidance from a range of $2.35 to $2.65 to a new range of $2.45 to $2.65, with the new midpoint exceeding the consensus estimate of $2.55 [5]. Strategic Direction - CEO Richard Francis highlighted that Teva is entering the "Acceleration Phase" of its "Pivot to Growth Strategy," focusing on innovative growth, strengthening its generics business, and optimizing operations [6]. - The company's growth plan appears to be resonating well with investors, supported by efficiency measures and product growth [6][7].

Core Viewpoint - Teva Pharmaceutical Industries Ltd reported its Q1 2025 financial results, showing a revenue increase but missing analyst expectations, while also providing an optimistic outlook for future earnings and operational efficiency [1][3][4]. Financial Performance - Teva's revenue for Q1 2025 was $3.89 billion, a 5% increase year-over-year, but below the analyst estimate of $4.00 billion [1]. - Adjusted earnings per share were 52 cents, surpassing estimates of 48 cents [3]. - Gross profit margin improved to 48.2% from 46.4% year-over-year, with adjusted gross profit margin rising to 52.8% from 51.4% [3]. Product Performance - Austedo's worldwide revenues reached $411 million in Q1 2025, marking a 39% increase in local currency compared to Q1 2024, with U.S. revenues growing by 40% to $396 million [1]. - Ajovy's global revenues were $139 million, a 26% increase in local currency terms compared to Q1 2024 [2]. - Uzedy's global revenues were $39 million in Q1 2025 [6]. Guidance and Outlook - Teva raised its fiscal 2025 adjusted earnings per share guidance from $2.35-$2.65 to $2.45-$2.65, aligning closely with the consensus of $2.55 [3][4]. - The company narrowed its 2025 sales guidance from $16.8 billion-$17.4 billion to $16.8 billion-$17.2 billion, compared to the consensus of $17.24 billion [4]. - Teva increased its Austedo 2025 sales outlook from approximately $1.9-2.05 billion to $1.95-2.05 billion [4]. Operational Strategy - Teva's CEO highlighted the company's transition into the "Acceleration Phase" of its Pivot to Growth Strategy, aiming for a 30% operating margin and $700 million in net savings by 2027 [3]. - The generics business showed growth across all regions, with a 5% increase in the U.S., 1% in Europe, and 2% in International Markets, all in local currency terms compared to Q1 2024 [6].

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Core Insights - Teva Pharmaceutical Industries Ltd. reported $3.89 billion in revenue for Q1 2025, a year-over-year increase of 1.9% and an EPS of $0.52, up from $0.48 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $3.97 billion by 1.92%, while the EPS exceeded the consensus estimate of $0.47 by 10.64% [1] Financial Performance - Teva's shares have returned +18.6% over the past month, outperforming the Zacks S&P 500 composite's +10.6% change [3] - The company currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3] Geographic Revenue Breakdown - United States: Revenue of $1.91 billion, exceeding the average estimate of $1.87 billion, with a year-over-year change of +10.7% [4] - Europe: AJOVY generated $58 million, slightly above the average estimate of $56.74 million, reflecting a +13.7% year-over-year change [4] - International Markets: COPAXONE revenue was $10 million, below the estimate of $10.67 million, representing a -16.7% change year-over-year [4] - Generic products in International Markets generated $468 million, slightly below the estimate of $487.47 million, with a -1.9% year-over-year change [4] - Europe: COPAXONE revenue was $42 million, below the estimate of $43.68 million, indicating a -26.3% year-over-year change [4] - Europe: Generic products revenue was $989 million, slightly below the estimate of $991.61 million, with a -1.5% year-over-year change [4] - Europe: Other products generated $50 million, significantly below the estimate of $95.70 million, reflecting a -46.8% year-over-year change [4] - Europe: Respiratory products revenue was $55 million, below the estimate of $60.84 million, indicating a -16.7% year-over-year change [4] - International Markets: Other products generated $61 million, below the estimate of $94.61 million, representing a -33% year-over-year change [4] - Total revenue from COPAXONE was $106 million, exceeding the estimate of $84.97 million, with a +7.1% year-over-year change [4] - API sales to third parties amounted to $130 million, surpassing the estimate of $115.17 million, reflecting a +1.6% year-over-year change [4]

Financial Data and Key Metrics Changes - Revenue increased by 5% to GBP 3.9 billion, adjusted EBITDA rose by 3%, and non-GAAP EPS increased by 8% to $0.52 [6][26][30] - Non-GAAP gross margin improved by 140 basis points year over year to 52.8% [27] - Net debt to EBITDA ratio remained just above 3 times [30] Business Line Data and Key Metrics Changes - Innovative brands generated $589 million in sales, a 45% increase year over year, driven by AUSTEDO (up 39%), AJOVY (up 26%), and UZEDI (doubled to $39 million) [8][12][13] - Generics business grew by 3% year on year, with 5% growth in the U.S. [15][16] - Biosimilars launched two products in the U.S. and have five more planned for 2025 to 2027 [17][18] Market Data and Key Metrics Changes - U.S. business for AUSTEDO increased by 40%, with over 60% of new patients on AUSTEDO XR [9][10] - UZEDI gained over 60% market share in the long-acting risperidone market [12] - AJOVY confirmed guidance for $600 million in sales, with strong growth in Europe and international markets [14] Company Strategy and Development Direction - The company is focused on transforming from a generics powerhouse to a leading biopharmaceutical company, emphasizing innovative products and capital allocation [21][34] - The goal is to achieve a 30% operating margin by 2027, supported by a shift towards high-margin innovative products [23][34] - The company plans to modernize operations, reduce costs, and optimize procurement to drive growth [21][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2027 targets, driven by innovative product growth and effective cost management [19][20] - The company is navigating macroeconomic challenges, including tariffs, without significant impact on business [32][33] - Management highlighted the importance of maintaining a strong U.S. manufacturing footprint to mitigate risks [32][33] Other Important Information - The company has absorbed the impact of new U.S. tariffs in its updated guidance for 2025 [25][32] - The divestiture of the Japanese generics business has been completed, affecting revenue guidance for 2025 [37][38] Q&A Session Summary Question: Transition from generics to biopharma - Management clarified that the generics business remains a crucial part of the strategy, supporting innovation and cost discipline [60][61] Question: Future savings potential - Management indicated that the $700 million in savings is part of an ongoing journey, with continuous efforts to drive efficiencies [61] Question: Impact of Revlimid on EBITDA - Management confirmed that EBITDA will increase in absolute dollars in 2026, despite headwinds from generic Revlimid [76][78] Question: Tariff impact on pricing - Management stated that they have mitigated tariff impacts and have a strong U.S. manufacturing presence to support pricing strategies [70][72] Question: Resource allocation for investments - Management assured that cost reductions will not hinder investments in the innovative portfolio, emphasizing capital allocation efficiency [87][88]

Financial Performance & Outlook - Teva reported a 5% revenue increase in Q1 2025 compared to Q1 2024 [18] - Non-GAAP EPS increased by 8% in Q1 2025 compared to Q1 2024 [18] - Free cash flow saw a significant increase of 238% in Q1 2025 compared to Q1 2024 [18] - The company is on track to achieve a 30% operating profit margin (OPM) by 2027 [44, 93] - Teva is targeting ~$700 million in net savings by 2027 through modernization efforts [39, 95] Key Products & Growth Drivers - AUSTEDO U S revenue grew by 40% year-over-year in Q1 2025, reaching $396 million [24] - Global AUSTEDO revenue reached $411 million in Q1 2025, a 39% year-over-year increase [21, 24] - UZEDY revenues increased by 156% year-over-year in Q1 2025, reaching $39 million [21, 30] - AJOVY global revenues grew by 26% year-over-year in Q1 2025, reaching $139 million [21, 32, 33] Generics & Biosimilars - Global generics experienced a 3% growth in Q1 2025 [21, 34]

Revenue Performance - Q1 2025 revenues reached $3.9 billion, a 5% increase in local currency terms compared to Q1 2024, with a net foreign exchange impact of $100 million resulting in a 2% growth in reported revenues [3]. - AUSTEDO generated worldwide revenues of $411 million in Q1 2025, reflecting a 39% increase in local currency terms year-over-year, with the full-year revenue outlook raised to $1.95-2.05 billion [3]. - AJOVY's global revenues were $139 million in Q1 2025, a 26% increase in local currency terms compared to Q1 2024, reaffirming a $600 million revenue outlook for 2025 [3]. - Revenues from the United States segment in Q1 2025 were $1,910 million, an increase of $184 million, or 11%, compared to Q1 2024 [28]. - Revenues from the Europe segment in Q1 2025 were $1,194 million, a decrease of 6% compared to Q1 2024 [44]. - Revenues from the International Markets segment in Q1 2025 were $582 million, a decrease of 2% compared to Q1 2024, but increased by 5% in local currency terms [57]. - Revenues from other activities in Q1 2025 were $206 million, a decrease of 9% in U.S. dollars compared to Q1 2024 [70]. - The outlook for total revenues in 2025 is projected to be between $16.8 billion and $17.2 billion [72]. - AUSTEDO revenues are expected to be between $1.950 billion and $2.050 billion in 2025 [72]. - Net revenues for Q1 2025 were $3,891 million, a 1.9% increase from $3,819 million in Q1 2024 [81]. Profitability Metrics - Non-GAAP diluted EPS for Q1 2025 was $0.52, an 8% increase year-over-year, while GAAP diluted EPS was $0.18 [3]. - Operating income for Q1 2025 was $519 million, representing a 13.3% margin, compared to an operating loss of $218 million in Q1 2024 [14]. - Gross profit for Q1 2025 was $1,877 million, up from $1,771 million in Q1 2024, reflecting a gross margin improvement [83]. - Net income attributable to Teva for Q1 2025 was $214 million, compared to a net loss of $139 million in Q1 2024 [83]. - Non-GAAP net income attributable to Teva for diluted earnings per share was $602 million in Q1 2025, compared to $548 million in Q1 2024 [83]. - The company reported a total reportable segment profit of $958 million for Q1 2025, up from $890 million in Q1 2024 [103]. Cash Flow and Financial Position - Free cash flow generated in Q1 2025 was $107 million, compared to $32 million in Q1 2024, indicating improved cash generation capabilities [23]. - Cash and cash equivalents decreased to $1,697 million as of March 31, 2025, down from $3,300 million at the end of 2024 [87]. - Total assets decreased to $38,415 million as of March 31, 2025, from $39,326 million at the end of 2024 [88]. - Total current liabilities decreased to $11,157 million as of March 31, 2025, compared to $12,796 million at the end of 2024 [88]. - The company reported a net cash used in operating activities of $105 million for Q1 2025, compared to $124 million for Q1 2024 [90]. Research and Development - Research and Development expenses in Q1 2025 were $247 million, a 2% increase compared to Q1 2024, driven by immunology and oncology projects [12]. - The company is preparing for the Phase 3 program initiation for duvakitug in H2 2025, with an NDA submission for olanzapine LAI also expected in H2 2025 [3]. - Research and development expenses remained stable at $154 million for both Q1 2025 and Q1 2024, indicating consistent investment in innovation [101]. Segment Performance - Gross profit from the United States segment increased by 23% to $1,058 million in Q1 2025, with a gross profit margin of 55.4% [41]. - Segment profit from the United States segment was $532 million in Q1 2025, a 52% increase compared to $350 million in Q1 2024 [42]. - Gross profit from the Europe segment in Q1 2025 was $658 million, down 11% from $738 million in Q1 2024, with a gross profit margin of 55.1% [50]. - Profit from the Europe segment in Q1 2025 was $329 million, a decrease of 22% compared to $423 million in Q1 2024 [52]. - Gross profit from the International Markets segment in Q1 2025 was $278 million, a decrease of 6% compared to $297 million in Q1 2024 [65]. - Profit from the International Markets segment in Q1 2025 was $97 million, a decrease of 17% compared to $117 million in Q1 2024 [67]. Strategic Initiatives - The company expects to achieve a 30% operating profit margin by 2027 as part of its Pivot to Growth Strategy, with targeted net savings of approximately $700 million by that year [3]. - The company plans to divest its API business as part of its strategy to streamline operations and focus on core areas [82].

Core Insights - Teva Pharmaceutical Industries Ltd. reported Q1 2025 revenues of $3.9 billion, marking a 5% increase in local currency terms compared to Q1 2024, driven by strong performance in innovative products and generics [4][5][7] - The company is on track to achieve a 30% operating profit margin by 2027 as part of its Pivot to Growth Strategy, with a revised full-year 2025 revenue outlook of $16.8 to $17.2 billion [4][5][71] - Teva's innovative products, including AUSTEDO, AJOVY, and UZEDY, collectively generated revenues of $589 million, each growing over 25% year-over-year [5][8] Financial Performance - Q1 2025 net income attributable to Teva was $214 million, with diluted earnings per share of $0.18, compared to a net loss of $139 million and a loss per share of $0.12 in Q1 2024 [17] - Non-GAAP diluted EPS for Q1 2025 was $0.52, an increase of 8% year-over-year [4][17] - Adjusted EBITDA for Q1 2025 was $1.041 billion, a 4% increase from $1.005 billion in Q1 2024 [18] Segment Performance - In the United States segment, revenues increased by 11% to $1.91 billion, driven by higher sales of innovative products and generics [25][26] - The Europe segment saw a 6% decrease in revenues to $1.194 billion, primarily due to lower revenues from COPAXONE and mature innovative product rights [42][43] - The International Markets segment reported revenues of $582 million, a 2% decrease, impacted by regulatory price reductions and competition in Japan [54][56] Product Highlights - AUSTEDO revenues in Q1 2025 were $396 million, a 40% increase year-over-year, attributed to volume growth and the launch of AUSTEDO XR [32][33] - AJOVY revenues increased by 18% to $53 million, driven by volume growth and an increase in market share [31][47] - UZEDY revenues surged by 156% to $39 million, reflecting strong demand following its launch [35] Strategic Initiatives - Teva is focused on transforming into a modern biopharmaceutical company, targeting approximately $700 million in net savings by 2027 [4][5][8] - The company is actively pursuing the divestiture of its API business to streamline operations and enhance capital allocation [68][69] - Teva plans to host an Innovation & Strategy Day on May 29, 2025, to discuss its growth strategy and future initiatives [4][73]