Teva Pharmaceutical Industries Conference Summary Company Overview - **Company**: Teva Pharmaceutical Industries (NYSE: TEVA) - **Event**: UBS Global Healthcare Conference - **Date**: November 10, 2025 Key Highlights Industry and Company Strategy - Teva has implemented a "pivot to growth" strategy over the past three years, focusing on three phases: return to growth, accelerate growth, and maintain growth [3][4] - The company has achieved its 11th consecutive quarter of growth in Q3 2025, marking a significant turnaround after years of decline [3][4] Financial Performance - Innovative business sales exceeded $800 million in Q3 2025, representing a 33% increase year-over-year [4] - Specific product growth rates in Q3 2025: - Austedo: up 38% - Ajovy: up 19% - UZEDY: up 24% [4] - Gross margin improved from 48% in Q1 2023 to a projected range of 40%-55% due to efficiency drives and a shift in product portfolio [4][5] Product Development and Pipeline - Teva is transitioning from a generics-focused company to a biopharma company with a strong innovative portfolio [6] - Upcoming product launches include: - Olanzapine (expected launch in the second half of 2026) [38] - Duvakitug (phase three trials for ulcerative colitis and Crohn's disease) [39] - DARI (dual action rescue inhaler) with a planned market entry in 2027 [43] Market Dynamics and Competitive Landscape - Teva is focusing on increasing patient access to its products, particularly in the Austedo market, where 85% of patients are untreated [11][12] - The company is cautious about pricing strategies, maintaining discipline to avoid discounting unless necessary [30] - Teva is preparing for a more challenging payer market, emphasizing the importance of balancing value and access [12][13] Long-term Financial Guidance - Teva reiterated its 2027 revenue guidance of $2.5 billion to $3 billion for Austedo and $1.5 billion to $2 billion for its schizophrenia franchise [32][55] - The company aims for mid-single-digit compound annual growth rate (CAGR) in revenue despite the anticipated loss of Revlimid in 2026 [55] Capital Allocation and Strategic Decisions - Teva is reassessing its non-core assets, including the TAPI API business, to ensure alignment with its long-term biopharma strategy [57][58] - The company is committed to thoughtful capital allocation, focusing on investments that drive long-term value [19][61] Biosimilars and Generics - Teva is expanding its biosimilars portfolio through partnerships, aiming for over 30 biosimilars in the market [46] - The company views recent FDA simplifications in clinical trial requirements positively, believing it will not lead to a significant influx of competitors due to the high technical and financial barriers [45][46] Additional Insights - Teva's OTC business is seen as synergistic with its generics and innovative products, contributing to overall growth [60][61] - The company emphasizes the importance of understanding the patient journey and optimizing treatment pathways to enhance product uptake [9][36] This summary encapsulates the key points discussed during the conference, highlighting Teva's strategic direction, financial performance, product pipeline, and market positioning.

Financial Data and Key Metrics Changes - Teva reported Q3 2025 revenue of approximately $4.5 billion, representing a 3% increase compared to Q3 2024 [4][28] - Adjusted EBITDA increased by 6%, and non-GAAP EPS rose by 14% year over year [4][30] - Free cash flow for Q3 was $515 million, down from $922 million in Q3 2024, primarily due to timing of sales and higher legal settlement payments [30] - Net debt to EBITDA ratio improved to below three times for the first time since 2016, with expectations to reach around 2.8 by the end of the year [4][18] Business Line Data and Key Metrics Changes - Innovative products generated over $800 million in revenue for the quarter, growing 33% year on year [5] - Austedo revenue reached $618 million, up 38% year over year [5][7] - UZEDY revenues increased by 24% to $43 million, with TRx up 119% [9] - Ajovy grew 19% to $168 million [11] - Global generics revenues increased by 2%, while TAPI declined by 4% due to seasonal volatility [6][14] Market Data and Key Metrics Changes - US generics business grew by 7% in Q3, driven by strong performance in biosimilars and several launches [14] - European generics declined by 5% due to tough comparisons from the previous year [14] - International markets grew at 3%, or 12% on a two-year CAGR [14] Company Strategy and Development Direction - Teva's strategy focuses on four pillars: delivering growth engines, stepping up innovation, sustaining generics, and focusing the business [3] - The company aims for mid-single-digit growth by 2027, with a target of $2.5 billion in revenue for Austedo by that year [6][27] - Teva is on track to achieve approximately $700 million in net savings by 2027 through transformation programs [31][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 growth targets of 3%-4% and reiterated the 2027 revenue targets [18][27] - The company highlighted the significant unmet need in treating tardive dyskinesia, which supports the growth potential for Austedo [42] - Management remains optimistic about the innovative pipeline and the potential for future growth drivers [13][39] Other Important Information - Teva is initiating a renewed sale process for TAPI after previous discussions did not align with long-term priorities [32] - The company is focused on maintaining a disciplined capital allocation approach while reducing debt and investing in growth [37] Q&A Session Summary Question: Insights on Austedo and IRA negotiations - Management confirmed that the negotiated price for Austedo was in line with internal expectations, supporting confidence in achieving $2.5 billion in revenue [41][42] Question: Pricing structure of Austedo XR and access implications - Management emphasized that Austedo's growth is driven by addressing an underserved market and maintaining access while managing pricing effectively [44][46] Question: OpEx expectations for 2026 - Management indicated that the majority of cost savings from the transformation program will impact OpEx, maintaining a range of 27%-28% [47][49] Question: EU generics market dynamics - Management noted that the EU generics business is expected to grow at a 2% CAGR, with future growth driven by biosimilars [50][52] Question: TAPI divestment process - Management explained that TAPI is considered strategic for sourcing API, leading to the decision to restart the sales process [54][55]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $4.2 billion, a decrease of 5% compared to Q4 2023. Excluding a one-time payment from Sanofi, revenue increased by 7% [41][42] - Adjusted EBITDA for the year was $4.8 billion, up 9%, and non-GAAP EPS was $2.49, up 10% [9][39] - Free cash flow increased by 10% to $2.1 billion, and net debt to EBITDA ratio improved to approximately 3 times [9][50] Business Line Data and Key Metrics Changes - The Innovative business grew significantly, with AUSTEDO up 36% to nearly $1.7 billion, AJOVY up 18% to over $500 million, and Uceti reaching $117 million, exceeding guidance [10][12][14] - The Generics business saw an 11% increase, totaling approximately $9.5 billion, while the API business grew by 3% [10][20] Market Data and Key Metrics Changes - The U.S. market for AUSTEDO showed a 34% growth, contributing significantly to the overall performance [11] - International markets delivered a 15% growth, while Europe experienced mid-single-digit growth [22] Company Strategy and Development Direction - The company is focused on its "Pivot to Growth" strategy, which includes four pillars: delivering on growth engines, stepping up innovation, creating a sustainable generics powerhouse, and focusing the business [5][4] - Plans for 2025 include launching seven biosimilars in the U.S. and four in Europe, alongside a commitment to improve operational efficiency [19][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 5% CAGR by 2027, citing strong growth in innovative products and a return to growth in the generics business [8][51] - The company is mindful of industry dynamics, including the Inflation Reduction Act's impact on the U.S. market, and is adjusting its financial guidance accordingly [54][56] Other Important Information - The company received a one-time payment of $500 million from Sanofi in Q4 2023, which positively impacted revenue and adjusted EBITDA [40] - Credit ratings agencies have upgraded the company's ratings, reflecting improved growth prospects and a strengthened balance sheet [51] Q&A Session Summary Question: What is the EBITDA trajectory going forward? - Management indicated that the partnership with Sanofi involves a 50-50 share of operational expenses, which will support the Duvequito program. They aim to grow EBITDA while investing in key areas [64][66] Question: Can you clarify the guidance for AUSTEDO and the impact of the IRA? - Management acknowledged that the IRA redesign affects AUSTEDO and noted that while they expect strong prescription growth, they must navigate the immediate impacts of the redesign [80][82] Question: How will the company address the loss of Revlimid sales? - Management plans to offset Revlimid's decline with new product launches, including 16 complex generics and several biosimilars, while maintaining growth in the innovative business [94][96] Question: Any updates on the lawsuit against CMS? - Management stated they cannot provide specific details due to ongoing litigation but will share updates as they become available [97]