TEVA's Q4 Earnings Beat, Branded Drugs Drive Revenue Growth

Core Insights - Teva Pharmaceutical Industries (TEVA) reported fourth-quarter 2025 adjusted earnings of 96 cents per share, significantly surpassing the Zacks Consensus Estimate of 65 cents, with a year-over-year increase of 35.2% driven by higher gross profit and tax benefits [1][6] - Revenues for the fourth quarter reached $4.71 billion, exceeding the Zacks Consensus Estimate of $4.34 billion, marking an 11% increase from the previous year on a reported basis and a 9% increase on a constant currency basis [1][6] Revenue Drivers - The fourth-quarter top line was primarily boosted by a $500 million milestone payment from Sanofi related to the development of duvakitug, alongside strong sales from branded drugs such as Austedo, Ajovy, and Uzedy [2][6] - U.S. segment sales were $2.64 billion, up 34% year over year, driven by higher revenues from Austedo and the milestone payment from Sanofi, surpassing the Zacks Consensus Estimate of $2.14 billion [7] Product Performance - Austedo recorded U.S. sales of $725 million, a 40% year-over-year increase, driven by volume growth and the launch of Austedo XR, exceeding the Zacks Consensus Estimate of $585 million [8] - Ajovy sales reached $105 million, up 68% year over year, also surpassing the Zacks Consensus Estimate of $71 million [9] - Uzedy generated sales of $55 million in the fourth quarter, up 28% year over year, primarily due to volume growth [9] International Market Performance - The Europe segment reported revenues of $1.31 billion, down 3% year over year, with a 10% decline on a constant currency basis, slightly missing the Zacks Consensus Estimate of $1.32 billion [11] - The International Markets segment recorded revenues of $528 million, down 20% year over year, missing the Zacks Consensus Estimate of $625 million, primarily due to the divestment of Teva's business venture in Japan [12] Margin and Operating Income - Adjusted gross margin was 60.3%, up 550 basis points year over year, driven by the milestone from Sanofi and higher Austedo revenues [14] - Adjusted operating income rose 31% year over year to $1.53 billion, with an adjusted operating margin of 32.5%, an increase of 490 basis points [15] Full Year Results and Guidance - For the full year 2025, revenues were $17.3 billion, a 4% year-over-year increase, exceeding the guided range of $16.8-$17.0 billion [17] - Teva expects total revenues for 2026 to be in the range of $16.4-$16.8 billion, reflecting continued strong momentum in its innovative portfolio [18] - Projected sales for Austedo in 2026 are estimated to be between $2.40-$2.55 billion, with Ajovy sales expected at approximately $750-$790 million [19]