PresentationMaybe to start, just hand the floor to you for a few minutes, high-level overview, current state of affairs, where you are in the growth journey. Any highlights from the third quarter that you reported about a month ago? And we'll jump into questions from there.So just continuing on the third and final day of our Citi Global Healthcare Conference. I'm Traver Davis, health care sector specialist at Citi, and we're delighted to have Teva with us. From the company, we have Richard Francis, Presiden ...

Financial Data and Key Metrics Changes - The company has transitioned from a leading generics company to a biopharma company, showing significant progress in financials and business setup over three years [2] - AUSTEDO's peak sales forecast has increased from $1.4 billion to over $2 billion for the current year, with expectations of exceeding $3 billion in peak sales [2][3] - The gross margin is projected to grow from approximately 48% in Q1 2023 to around 54% by the end of the year, with further growth expected to reach 57% to 58% by 2027 [10][11] Business Line Data and Key Metrics Changes - The innovative product portfolio, including AUSTEDO, UZEDY, and AJOVY, has shown strong growth, with AUSTEDO growing at 33% in Q3 [11] - The generics business has stabilized and grown over the last three years, contributing to overall EBITDA growth [4] Market Data and Key Metrics Changes - The company anticipates losing over $1 billion in sales from the generic Revlimid next year, but is committed to growing EBITDA through innovative products and cost-saving programs [7][8] - The market for AUSTEDO remains largely untreated, with 85% of patients not receiving treatment, presenting a significant growth opportunity [23][27] Company Strategy and Development Direction - The company is focused on a "Pivot to Growth" strategy, emphasizing innovation and the development of high-margin products [2][4] - The launch of olanzapine is expected to be a significant growth driver, with a projected market size of $1.5 billion to $2 billion for the schizophrenia franchise [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow EBITDA despite the loss of Revlimid sales, highlighting the importance of innovative product launches [8][9] - The company is optimistic about the impact of the IRA on AUSTEDO, forecasting $2.5 billion in sales by 2027 [16][17] Other Important Information - The company is actively pursuing partnerships for biosimilars, aiming to establish a portfolio of 25 biosimilars to drive growth [58][59] - Management emphasized the importance of maintaining price discipline while ensuring access to innovative products [42][43] Q&A Session Summary Question: How should we think about 2026 in terms of pushes and pulls? - Management indicated that 2026 is crucial as the company will lose significant sales from Revlimid but is committed to growing EBITDA through innovative products and cost-saving measures [7][8] Question: What are the underlying drivers for the $2.5 billion guidance in 2027? - The company highlighted the large untreated market for AUSTEDO and the importance of patient education and adherence programs to drive growth [23][24] Question: How does the company view the competitive landscape for AUSTEDO? - Management stated that they prioritize long-term value over immediate access, maintaining discipline in pricing strategies [21][22] Question: What is the potential impact of the olanzapine launch? - The company expects olanzapine to be a significant growth driver, with a unique position in the market as the only long-acting treatment for schizophrenia [35] Question: How does the company plan to allocate capital moving forward? - Management emphasized the importance of efficient capital allocation to support innovation and growth, reducing investment in generics to focus on high-return opportunities [65][66]

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.

Core Insights - Teva Pharmaceutical Industries Ltd. reported third-quarter earnings that exceeded expectations, driven by strong sales of innovative therapies and an improved full-year outlook, resulting in a share price surge of over 17% in intra-day trading [1] Financial Performance - The company posted adjusted earnings of $0.78 per share, surpassing analyst forecasts of $0.68 [1] - Revenue increased by 3% year over year to $4.48 billion, exceeding the consensus estimate of $4.36 billion, with 1% growth in local currency [1] Innovative Medicine Portfolio - Teva's innovative medicine portfolio, including AUSTEDO, AJOVY, and UZEDY, saw segment revenue rise by 33% year over year in local currency to $830 million [2] - AUSTEDO was the primary driver of growth, achieving $618 million in global sales, reflecting a 38% increase in local currency [2] Future Outlook - Based on strong momentum, Teva raised its 2025 AUSTEDO revenue forecast by $50 million to $100 million, establishing a new target range of $2.05 billion to $2.15 billion [3] - The company tightened its full-year revenue guidance to a range of $16.8 billion to $17.0 billion and raised the low end of its adjusted EPS range to $2.55–$2.65 from $2.50–$2.65 [3] Operational Efficiency - Teva's non-GAAP operating margin improved to 28.9%, an increase of 86 basis points from the previous year, keeping the company on track to achieve its 30% target by 2027 under its "Pivot to Growth" strategy [4]

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]

Q3 2025 Financial Performance - Revenues reached $4480 million, a 3% increase year-over-year[21, 93] - Adjusted EBITDA was $1400 million, up by 6% compared to the previous year[21] - Non-GAAP EPS increased by 14% to $078[21] - Free Cash Flow was $500 million[21] AUSTEDO Performance and Outlook - AUSTEDO U S revenues grew by 38% year-over-year to $601 million in Q3 2025[32] - AUSTEDO global revenues grew by 38% year-over-year to $618 million in Q3 2025[25] - The company reaffirmed its 2027 sales target for AUSTEDO at over $25 billion[29, 58] Pipeline and Strategic Updates - UZEDY revenues in Q3 2025 reached $43 million, a 24% increase year-over-year[25, 36] - The company reaffirmed its 2025 revenue outlook for UZEDY at $190 million - $200 million[35] - Global revenues for AJOVY reached $168 million in Q3 2025, a 19% increase year-over-year[25, 46] - The company is targeting olanzapine LAI FDA submission in Q4 2025[48, 63]

Core Insights - Teva Pharmaceutical Industries Ltd. reported Q3 2025 revenues of $4.5 billion, a 3% increase year-over-year in U.S. dollars, or 1% in local currency [2] - The company is on track to achieve a non-GAAP operating profit margin target of 30% by 2027 as part of its Pivot to Growth strategy [4][5] Financial Performance - Revenues increased by 5% in U.S. dollars, or 3% in local currency, when excluding Japan BV from Q3 2024 [2] - GAAP operating income margin was 19.7%, while non-GAAP operating income margin was 28.9%, reflecting an 86 basis points increase year-over-year [2] - Net income attributable to Teva was $433 million, with diluted earnings per share of $0.37, compared to a net loss of $437 million and loss per share of $0.39 in Q3 2024 [22] Segment Performance - The United States segment saw revenues of $2.48 billion, a 12% increase compared to Q3 2024, driven by key innovative products like AUSTEDO [30][32] - The Europe segment reported revenues of $1.24 billion, a decrease of 2% compared to Q3 2024, primarily due to lower revenues from generic products [46] - The International Markets segment experienced a 9% decrease in revenues to $557 million, largely due to the divestment of the business venture in Japan [58] Key Product Performance - AUSTEDO revenues grew by 38% year-over-year to $601 million, with an increased revenue outlook for 2025 [2][7] - AJOVY revenues increased by 19% to $168 million, reaffirming the 2025 revenue outlook of $630 million to $640 million [2][7] - UZEDY revenues reached $43 million, a 24% increase, with a reaffirmed 2025 revenue outlook of $190 million to $200 million [2][7] Research and Development - R&D expenses in Q3 2025 were $256 million, a 7% increase compared to Q3 2024, driven by immunology projects [12] - The innovative pipeline achieved key milestones, including Phase 3 trial data for olanzapine LAI and FDA Fast Track designation for emrusolmin [8][12] Strategic Initiatives - Teva is focused on transforming and modernizing its business through the Teva Transformation programs, aiming for ~$700 million in net savings by 2027 [5][15] - The company has terminated exclusive discussions with a selected buyer regarding the sale of its API business and is initiating a renewed sales process [15][70]

Core Thesis - Teva Pharmaceutical Industries Limited is transitioning from a debt-laden generics company to a focused branded and specialty firm, with significant momentum in neuroscience and a bullish outlook from institutional investors [2][6]. Financial Performance - Teva's projected revenues for 2025 are near $17 billion, with earnings per share (EPS) around $2.60 and EBIT margins approaching 27%. The company has reduced net debt from over $18 billion to approximately $11 billion, with expectations for further deleveraging [5]. Product Pipeline - Ajovy, Teva's anti-CGRP therapy for migraine prevention, is expected to generate quarterly sales of around $70 million, establishing a strong presence in the expanding migraine market [3]. - The long-acting injectable olanzapine program, TEV-749, has shown robust efficacy in Phase 3 trials and could potentially generate peak sales of $1.5–2.0 billion, reshaping Teva's psychiatry franchise [4]. Market Positioning - Teva's stock has recovered past $20, holding above key moving averages, indicating a constructive technical setup. The convergence of pipeline progress, technical strength, and improving fundamentals positions the stock for a potential re-rating [2][6]. Historical Context - Since a previous bullish thesis in May 2025, Teva's stock price has appreciated approximately 20%, with ongoing momentum in neuroscience and emphasis on TEV-749 as a new catalyst [7].

Core Insights - Teva Pharmaceutical Industries Limited has received FDA approval for an expanded indication of UZEDY for the maintenance treatment of bipolar I disorder (BD-I) in adults [1][3] - UZEDY is a long-acting formulation of risperidone that utilizes proprietary technology to control the steady release of the medication, reaching therapeutic blood concentrations within 6-24 hours [2] Product Details - UZEDY is now approved with three once-monthly dosing options: 50 mg, 75 mg, and 100 mg for the newly approved BD-I indication [3] - The drug was previously approved for the treatment of schizophrenia in adults, with dosing options available every one or two months [3] Market Context - BD-I affects an estimated 1% of US adults, translating to over 3.4 million individuals, highlighting the significant unmet needs in this patient population [2] - Teva operates in the development, manufacturing, marketing, and distribution of generic and biopharmaceutical products across various regions including the US, Europe, and Israel [4]

Core Insights - Teva Pharmaceutical Industries Limited is recognized as a promising stock under $100, with BofA raising its price target to $24 from $22 while maintaining a Buy rating [1] - The company has achieved its 10th consecutive quarter of year-over-year revenue growth, driven by its Pivot to Growth Strategy, targeting a 30% operating profit margin by 2027 [2] - Teva's innovative product portfolio has seen significant growth, with total revenues for Q2 2025 reaching $4.2 billion, marking a ~1% increase in local currency [2][3] Financial Performance - Teva's innovative portfolio collectively grew by ~26%, leading to an increased revenue outlook for key products [3] - AUSTEDO revenues were $498 million globally in Q2, up ~19% globally and ~22% in the US, with the 2025 revenue outlook raised to $2,000 to $2,050 million [3] - AJOVY global revenues reached $155 million, up ~31%, with the outlook increased to $630 to $640 million [3] - UZEDY revenues accelerated by ~120% to $54 million, with the outlook raised to $190 to $200 million [3] Strategic Initiatives - Teva is executing its Pivot to Growth Strategy, which has been a key driver of its recent revenue growth [2][3] - The company is focused on achieving a 30% operating profit margin by 2027 as part of its long-term strategy [2]