TEVA(US:TEVA)2024-07-31 18:02Financial Data and Key Metrics Changes - Revenue increased to $4.2 billion, up 11% year-over-year [6][18] - Adjusted EBITDA rose to $1.2 billion, a 4% increase [6] - Non-GAAP EPS increased to $0.61, up 9% [6][21] - GAAP operating loss improved to $5 million from a loss of $654 million in the same quarter last year [18] - GAAP net loss was $846 million, compared to a net loss of $872 million in Q2 2023 [18] Business Line Data and Key Metrics Changes - Innovative business continued to grow rapidly, contributing significantly to overall revenue [6] - Generics business grew by 14%, with strong performance across all regions [6][11] - TAPI API segment grew by 5%, marking the second consecutive quarter of growth [6][11] Market Data and Key Metrics Changes - AUSTEDO revenue reached $407 million, reflecting a 32% growth [7] - AJOVY grew by 12%, driven primarily by European and international markets [7] - UZEDY showed strong momentum with a favorable product profile attracting new physicians [8] Company Strategy and Development Direction - The company is focused on a "pivot to growth" strategy with four pillars: delivering on growth engines, stepping up innovation, sustaining generics powerhouse, and focusing the business [4][5] - The strategy has resulted in six consecutive quarters of growth, with a strong emphasis on innovative products and generics [5][27] - The company plans to launch additional biosimilars, including a biosimilar of Stelara in February 2025 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong performance from AUSTEDO, UZEDY, AJOVY, and the generics business [27] - The company is committed to achieving mid-single-digit revenue growth and a 30% operating margin by 2027 [27] - Management acknowledged the dynamic nature of the biosimilars market and the need for strategic positioning [48] Other Important Information - Free cash flow for Q2 2024 was $324 million, down from $632 million in Q2 2023 [23] - The company is reframing its 2024 free cash flow guidance to a range of $1.7 billion to $2 billion [23][25] - Net debt at the end of Q2 2024 was $16.4 billion, with gross debt decreasing to $18.6 billion [24] Q&A Session Summary Question: Can you talk about the composition of the API business? - Management highlighted that TAPI works across all technologies and platforms, making it the second-largest API manufacturer globally [29][30] Question: Do you expect to be on the CMS list for 2027 regarding AUSTEDO? - Management indicated that the $2.5 billion target for AUSTEDO in 2027 accounts for potential changes in the payer landscape [30] Question: What is working for AUSTEDO and where is there room for improvement? - Management credited a strong team and effective execution for AUSTEDO's momentum, with ongoing efforts to increase diagnosis and patient adherence [32][33] Question: Can you quantify the impact of SIMLANDI? - Management noted significant interest and coverage from payers for SIMLANDI, with expectations for market share growth in Q3 and Q4 [32][33] Question: Can you discuss operating leverage and long-term spending? - Management emphasized the importance of investing in growth while maintaining a focus on operational efficiency to achieve significant operating leverage [36][37] Question: How does M&A fit into the neuroscience business? - Management stated that while they are open to M&A, they are selective and focused on complementary assets that align with their growth strategy [38] Question: What is the outlook for generic Revlimid? - Management acknowledged the need to replace revenue from Revlimid post-2026 and is focusing on launching high-value complex generics [40][41] Question: What is the current state of the biosimilars market in the US? - Management observed a growing appetite among payers for biosimilars, indicating a shift in market dynamics [45][48]