Teva Pharmaceutical Industries FY Conference Summary Company Overview - **Company**: Teva Pharmaceutical Industries (NYSE: TEVA) - **Conference Date**: March 10, 2026 - **Key Speaker**: Richard Francis, President and CEO Key Highlights from 2025 - Transition from a pure play generics company to a biopharma company began in 2023 with the "Pivot to Growth" strategy [3] - Innovative portfolio exceeded $3 billion, growing at 35% [3] - Significant growth in leading brands: AUSTEDO, UZEDY, and AJOVY [5] - Gross margin improvement and increased EBITDA and EPS contributing to shareholder value [5] - Seven key milestones expected in 2026, indicating a breakout year [5] Pipeline Developments - Upcoming data releases in 2026 include: - Duvakitug maintenance data [6] - Anti-IL-15 data in vitiligo and celiac disease [6] - Launch of long-acting Olanzapine for schizophrenia [6] - First-in-human data on PD-1/IL-2 [6] - Emphasis on the importance of executing the pipeline effectively to drive growth [102] Brand Performance - AUSTEDO achieved 30% growth for three consecutive years, with a potential to exceed $2.5 billion by 2027 [23][28] - UZEDY, a long-acting risperidone for schizophrenia, projected to reach $280 million in revenue [58] - AJOVY, a CGRP injectable, continues to grow over 20% despite a competitive market [62] Generics Business Insights - Teva's generics business has shown mid-single-digit CAGR over three years [80] - A biosimilar portfolio of 28, with 10 launched and 6 more expected by 2027 [80] - Transitioning to biosimilars is expected to enhance growth and efficiency in the generics segment [83] Financial Guidance and Projections - EBITDA expected to reach $5 billion in 2026, despite losing $1.1 billion from generic Revlimid [141] - Gross margin projected to improve to around 55% by the end of 2026 [142] - Anticipated free cash flow of over $3.5 billion by 2030 [146] Strategic Partnerships - Partnerships with Sanofi and Blackstone aimed at accelerating pipeline development and market entry [96][98] Market Dynamics and Competitive Landscape - The dual-action rescue inhaler for asthma is positioned to meet a significant market need, with a pediatric indication as a key differentiator [121] - Competitive dynamics in the asthma market are being shaped by existing players like AstraZeneca [120] Conclusion - Teva is focused on transitioning its portfolio, enhancing shareholder value through strategic cost management and capital allocation [146] - The company is optimistic about its future growth trajectory, emphasizing the importance of execution and market readiness for new products [146]

Core Insights - The company has been implementing a "Pivot to Growth" strategy for three years, aimed at reversing a trend of decline and transitioning from a generics-focused business to a biopharmaceutical leader [2]. Group 1: Strategy Overview - The "Pivot to Growth" strategy consists of three phases: returning to growth, accelerating growth, and transforming the company into a world-class biopharma entity. The company is currently in the acceleration phase [2]. - The strategy is built on four pillars: enhancing the growth engine through increased sales of innovative products, stepping up innovation to expedite product market entry, creating a generics powerhouse, and focusing on capital allocation [3].

Teva Pharmaceutical Industries Conference Summary Company Overview - **Company**: Teva Pharmaceutical Industries (NYSE: TEVA) - **Focus**: Transitioning from a generics company to a biopharma company through the "Pivot to Growth" strategy initiated three years ago [2][3] Key Points Pivot to Growth Strategy - **Phases**: The strategy consists of three phases: return to growth, accelerate growth (current phase), and transformation into a biopharma company [2][3] - **Pillars**: The strategy is based on four pillars: 1. Deliver on growth engine through innovative products 2. Step up innovation to expedite product market entry 3. Create a generics powerhouse 4. Focus on capital allocation [3] Innovative Products - **Current Growth**: Teva is experiencing growth with products like AUSTEDO, UZEDY, and AJOVY, with AJOVY projected to reach $1 billion in peak sales [3][4] - **Milestones**: Seven key milestones for innovative products are set for the year, including data releases for various treatments [4] Generics Business - **Market Focus**: The generics business has shifted focus from 100% coverage of products losing patent to 65%, concentrating on higher-value products [6][12] - **Biosimilars**: Teva has the second-largest biosimilar portfolio globally, with plans to launch 17 additional biosimilars by 2026 [6][7] - **Growth Projection**: The generics and biosimilars business is expected to grow at a CAGR of 1%-2% [7] Geographic Distribution - **Revenue Sources**: Less than 25% of Teva's generics revenue comes from the U.S., with Europe being the primary market [12][14] Macro Environment - **Israel Operations**: Less than 2% of revenue and 8% of manufacturing is based in Israel, indicating minimal impact from regional conflicts on business continuity [20][21] AUSTEDO Product Insights - **Sales Target**: AUSTEDO is projected to reach $2.5 billion in sales by 2027, with 85% of patients still untreated [22][28] - **Growth Drivers**: Growth is driven by patient compliance and adherence programs, with over 60% of new patients starting on the once-daily formulation [48][49] Pipeline Developments - **Upcoming Products**: Teva plans to launch olanzapine in Q4, with expectations of significant market potential [68][69] - **DARI Inhaler**: A dual-action rescue inhaler for asthma is set for a Phase 3 readout in Q4, with a unique pediatric indication [94][96] - **Vitiligo Treatment**: A quarterly injectable treatment for vitiligo is anticipated to be a game changer, with a market potential of $1 billion [126][131] Financial Outlook - **Gross Margin**: Teva currently operates at a 55% gross margin, with new product launches expected to enhance this [114] - **EBITDA and Cash Flow**: Focus on managing operating expenditures to grow EBITDA, free cash flow, and EPS [114] Business Development - **Strategic Partnerships**: Teva is actively seeking to license products that align with its growth strategy, focusing on low-risk opportunities [166][172] Conclusion Teva Pharmaceutical Industries is in a transformative phase, focusing on innovative products and a robust generics business. The company is well-positioned for growth with a strong pipeline and strategic initiatives aimed at enhancing market presence and financial performance.

Financial Data and Key Metrics Changes - Sales for Q4 2025 reached $947 million, a 15% increase year-over-year, with organic growth of 11% and contributions from the I&C Solutions acquisition [4][5] - Operating income increased by 14%, with an operating margin of 19.7% [5][6] - Diluted earnings per share grew by 16% year-over-year, driven primarily by higher A&D sales [5][6] - Free cash flow was strong at $315 million, up 13%, reflecting a 224% conversion rate [6] - For the full year 2025, diluted earnings per share increased by 21%, and adjusted free cash flow reached a record $554 million [7][8] Business Line Data and Key Metrics Changes - Aerospace & Industrial segment sales increased by 5%, with strong OEM sales growth in commercial aerospace [12][13] - Defense Electronics segment saw a 17% sales growth, driven by increased demand for tactical communications equipment and embedded computing revenues [14][15] - Naval & Power segment sales increased by 21%, primarily due to strong revenue growth in naval defense and contributions from the I&C Solutions acquisition [15][16] Market Data and Key Metrics Changes - A&D markets experienced a 16% growth, with commercial aerospace sales increasing by over 20% [5][9] - The overall order book reached a record of $4.1 billion, up 10% year-over-year, with a book-to-bill ratio of nearly 1.2 times [8][10] - Commercial nuclear market showed tremendous growth, driven by strong demand for aftermarket equipment and advancements in SMR designs [9][21] Company Strategy and Development Direction - The company continues to execute its "Pivot to Growth" strategy, focusing on operational and commercial excellence to drive sales and profitability [4][10] - Investments in research and development are being accelerated to support future organic growth, with a commitment to grow R&D faster than sales over time [7][10] - The company is well-positioned to benefit from increased global defense spending and the U.S. government's focus on nuclear energy dominance [32][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong performance in 2026, projecting organic sales growth of 6%-8% [10][11] - The outlook for A&D markets includes anticipated growth driven by U.S. defense budget priorities and increased demand for secure embedded computing solutions [18][20] - Management acknowledged potential headwinds in ground defense due to delays in orders but remains optimistic about future opportunities [8][19] Other Important Information - The company executed a record $465 million in share repurchases in 2025 and increased its annual dividend for the ninth consecutive year [10] - Capital expenditures are expected to increase by more than 25% year-over-year, reflecting ongoing investments to support growth [29][30] Q&A Session Questions and Answers Question: Exposure to missile programs and growth opportunities - The company has minor exposure to missile programs, primarily in telemetry and flight test instrumentation, but is well-positioned in related areas such as the Iron Dome [43][44] Question: Clarification on expected AP1000 orders - Orders could come from either European customers or the U.S., with Westinghouse as the primary customer; specifics on order size are not available at this time [46][47] Question: Free cash flow guidance and working capital dynamics - The company has improved working capital management, targeting a working capital percentage of sales of approximately 18% for 2026, which would be a record [55][57] Question: C-17 order timing and defense electronics bookings - The C-17 order is a Q1 order, and delayed bookings in defense electronics were noted, impacting the book-to-bill ratio [60] Question: Operational and commercial excellence initiatives - The Operational Growth Platform has contributed approximately $12 million to the P&L in 2025, with ongoing initiatives expected to continue driving margin expansion [68][72]

Financial Performance - Teva Pharmaceutical Industries Ltd. reported total revenue of $4.71 billion for Q4 2025, exceeding analysts' expectations of $4.37 billion, with an 11% year-over-year increase in U.S. dollars or 9% in local currency [1] - The company achieved adjusted earnings of 96 cents per share, surpassing the consensus estimate of 68 cents and up from 71 cents reported a year ago [4] Revenue Drivers - The revenue increase was primarily driven by development milestone payments related to Phase 3 studies for duvakitug and higher revenues from key innovative products, partially offset by lower proceeds from certain product rights and reduced revenues from the International Markets segment due to a divestment in Japan [2] - Key brands collectively generated approximately $1 billion in revenues for the first time in Q4 2025, with Austedo sales increasing 34% to $2.26 billion, Ajovy sales reaching $673 million (+30% LC YoY), and Uzedy revenues at $191 million, up 63% [3][4] Future Outlook - For fiscal year 2026, Teva expects adjusted earnings of $2.57-$2.77 per share, compared to the Street estimate of $2.73 [5] - The company anticipates total sales between $16.4 billion and $16.8 billion, including specific revenue projections for Austedo, Ajovy, and Uzedy [6] - Teva's pipeline for 2026 includes multiple late-stage readouts across immunology and neurology, with potential value exceeding $10 billion [7]

Financial Data and Key Metrics Changes - Revenues increased by 5% to $1.7 billion, EBITDA grew by 12% to $5.3 billion, EPS rose by 19% to $2.93, and free cash flow was up 16% to $2.4 billion [7][28] - Net debt to EBITDA ratio improved to 2.5x, with a target of 2x by 2027 [8][28] Business Line Data and Key Metrics Changes - Innovative portfolio showed strong growth: AUSTEDO grew by 34% to $2.26 billion, UZEDY increased by 63% to $191 million, and AJOVY rose by 30% to $673 million [9][10][14] - Generics business remained flat, with U.S. growth at 2%, international markets at 1%, and Europe declining by 2% [16][17] Market Data and Key Metrics Changes - The U.S. generics market faced challenges, particularly with the loss of generic Revlimid revenue, impacting overall growth [34] - The biosimilars portfolio is expected to grow by $400 million by 2027, with 10 assets currently in the market and six additional launches planned [18] Company Strategy and Development Direction - The company is focused on its "Pivot to Growth" strategy, emphasizing innovation and a shift from generics to biopharma [4][28] - A target of $700 million in net savings by 2027 is set, with $70 million achieved in 2025 [29][33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term financial targets for 2030, with a focus on innovative products driving growth [28][41] - The company anticipates a gradual revenue increase in 2026, despite challenges from generic Revlimid [34][39] Other Important Information - The company is on track to achieve a non-GAAP operating margin target of 30% by 2027 [29][33] - Significant milestones in the pipeline are expected in 2026, including data releases for Duvakitug and Olanzapine LAI [43][44] Q&A Session Summary Question: Insights on AUSTEDO and UZEDY pricing dynamics - Management highlighted strong TRx growth for AUSTEDO and maintained a disciplined approach to pricing, expecting continued growth despite competitive pressures [50][51] - For UZEDY, management acknowledged the mix of Medicaid and Medicare affecting profitability but remains optimistic about continued momentum [53] Question: Disconnect between pipeline excitement and market perception - Management noted that the rapid development of the pipeline may have surprised investors, emphasizing the quality and potential of new products [57][59] Question: Funding R&D and balancing partnerships - Management stated that partnerships do not significantly impact economics, as new product launches enhance gross margins and EBITDA [65][66] Question: Expectations for TL1A maintenance data - Management expressed optimism about the upcoming maintenance data, citing the product's potency and selectivity as key advantages [70]

Financial Data and Key Metrics Changes - Revenues increased by 5% to $1.7 billion, EBITDA grew by 12% to $5.3 billion, EPS rose by 19% to $2.93, and free cash flow was up 16% to $2.4 billion [5][6][26] - Net debt to EBITDA ratio improved to 2.5 times, with a target of 2 times by 2027 [6][26] Business Line Data and Key Metrics Changes - Innovative portfolio showed strong growth: AUSTEDO grew by 34% to $2.26 billion, UZEDY increased by 63% to $191 million, and AJOVY rose by 30% to $673 million [7][8][12] - Generics business remained flat, with U.S. growth at 2%, international markets at 1%, and Europe declining by 2% [15] Market Data and Key Metrics Changes - The U.S. generics market faced challenges, particularly with the loss of generic Revlimid revenue, impacting overall revenue guidance for 2026 [33] - The innovative products are expected to drive growth, with Otezla, AJOVY, and UZEDY showing strong momentum [28][33] Company Strategy and Development Direction - The company is focused on its "Pivot to Growth" strategy, aiming for $700 million in net savings by 2027 and a 30% non-GAAP operating margin [4][26][31] - The pipeline includes multiple products with significant market potential, with a focus on addressing unmet medical needs [18][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving long-term financial targets for 2030, with a focus on innovative growth and transformation programs [26][40] - The company anticipates continued strong performance in its innovative portfolio, despite challenges in the generics market [33][34] Other Important Information - The company has made significant progress in its biosimilars portfolio, with plans to launch six additional assets by 2027 [15][16] - The innovative pipeline is expected to generate over $10 billion in peak sales potential [14] Q&A Session Summary Question: Insights on AUSTEDO and UZEDY pricing dynamics - Management highlighted strong TRX growth and maintained a disciplined approach to pricing, expecting continued growth despite competitive pressures [49][50][52] Question: Disconnect between pipeline excitement and market perception - Management noted that the rapid development of the innovative pipeline may have surprised investors, emphasizing the quality and potential of upcoming products [56][59] Question: Funding R&D and balancing partnerships - Management stated that partnerships do not significantly impact economics, as the innovative products are expected to enhance gross margins and EBITDA [65][66] Question: Expectations for TL1A maintenance data - Management expressed optimism about the upcoming maintenance data, citing the product's potency and selectivity as key factors for positive outcomes [70]

Teva Pharmaceutical Industries Ltd. This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management's current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. Important factors that could cause or contrib ...

Core Viewpoint - Teva Pharmaceutical Industries Ltd. will present at the 44th Annual J.P. Morgan Healthcare Conference on January 13, 2026, at 8:15 A.M. Pacific Time [1] Company Overview - Teva is transforming into a leading innovative biopharmaceutical company, supported by a strong generics business, with over 120 years of commitment to improving health [3] - The company focuses on innovation in neuroscience and immunology, as well as providing complex generic medicines, biosimilars, and pharmacy brands globally [3] - Teva aims to address patients' needs both now and in the future, emphasizing their dedication to better health [3]

Core Viewpoint - Teva Pharmaceutical Industries Ltd. has received upgrades in its credit ratings from S&P Global Ratings and Moody's, indicating significant progress towards achieving investment-grade status [1][7]. Financial Performance - S&P upgraded Teva's long-term issuer credit rating to 'BB+' from 'BB', with a stable outlook, while Moody's affirmed a B1a rating and revised the outlook to positive from stable [1][7]. - Teva's adjusted leverage declined to 4.4x as of September 30, 2025, with expectations to fall below 4.25x in the coming quarters, meeting the threshold for a higher rating [2]. - Moody's noted expectations for leverage to decline toward 3.5x within 12–18 months, supporting the positive outlook [3]. Business Strategy - Teva's financial discipline and strong business performance have been highlighted, with a return to revenue growth after five years of declines, driven by robust performance in branded medicines and stabilization in generics [2]. - The company is focusing on its "Pivot to Growth" strategy, emphasizing cash flow management and capital allocation to support deleveraging and sustainable growth [4]. Product Development - Moody's cited strong momentum in Teva's branded franchises and upcoming product launches across both branded and biosimilar portfolios, which are expected to offset challenges in the generics segment [3].