Quarterly Report • Jul 31, 2024
Quarterly Report
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Washington, D.C. 20549
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) July 31, 2024
(Exact name of registrant as specified in its charter)
Israel 001-16174 00-0000000 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.)
124 Dvora Hanevi'a Street Tel Aviv 6944020, Israel (Address of Principal Executive Offices, including Zip Code)
+972-3-914-8213
(Registrant's Telephone Number, including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Securities registered pursuant to Section 12(b) of the Act: | ||
|---|---|---|
| Title of each class | Trading Symbol(s) |
Name of each exchange on which registered |
| American Depositary Shares, each representing one Ordinary Share |
TEVA | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
On July 31, 2024, Teva Pharmaceutical Industries Ltd. issued a press release announcing its financial results for the period ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and the information contained therein is incorporated herein by reference.
The information included in this Item 2.02 is being furnished to the Securities and Exchange Commission and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
(d) Exhibits
Exhibit No. Description of Document 99.1 Teva Reports 2024 Second Quarter Financial Results
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: July 31, 2024 By:/s/ Eli Kalif
Name:Eli Kalif Title: Executive Vice President, Chief Financial Officer
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| IR Contacts |
|---|
IR Contacts Ran Meir (215) 591-8912
Yael Ashman Sanjeev Sharma +972 (3) 914 8262 (267) 658-2700
PR Contacts Kelley Dougherty Eden Klein
(973) 832-2810 +972 (3) 906 2645 Tel Aviv, July 31, 2024 – Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today reported results for the quarter ended June 30, 2024.
Mr. Richard Francis, Teva's President and CEO, said, " In the second quarter of 2024, we are encouraged by the positive momentum across each of the four pillars of our Pivot to Growth strategy. Teva's global revenues of \$4.2 billion increased by 7% in U.S. dollars, or 11% in local currency terms compared to the second quarter of 2023, delivering strong growth driven mainly by our generics and innovative business, with AUSTEDO growing 32% in the U.S. compared to Q2 2023."
Mr. Francis continued, "We are also showing significant progress in on our late-stage innovative pipeline, underscored by the acceleration of the development timeline of duvakitug (Anti-TL1A), with top-line results now expected in the fourth quarter of 2024, and full data expected next year.
With these robust results, we are raising our financial guidance for 2024."
In May 2023, we introduced our "Pivot to Growth" strategy, which is based on four key pillars: (i) delivering on our growth engines, mainly AUSTEDO, AJOVY, UZEDY® and our late-stage pipeline of biosimilars; (ii) stepping up innovation through delivering on our late-stage innovative pipeline assets as well as building up our early-stage pipeline organically through business development activities; (iii) sustaining our generics medicines powerhouse with a global commercial footprint, focused portfolio, pipeline and manufacturing footprint; and (iv) focusinq our business by optimizing our portfolio and qlobal manufacturing footprint to enable strategic capital deployment to accelerate our near and long-term growth engines and reorganizing certain of our business units to a more optimal structure, while also reorganizing key business units to enhance operational efficiency.
Revenues in the second quarter of 2024 were \$4,164 million, an increase of 7% in U.S. dollars or 11% in local currency terms compared to the second quarter of 2023. This increase was mainly due to higher revenues from generic products in all our seqments, and from AUSTEDO in our United States and International Markets segments.
Exchange rate movements during the second quarter of 2024, including hedging effects, neqatively impacted overall revenues by \$122 million compared to the second quarter of 2023. Exchange rate movements during the second quarter of 2024, including hedging effects, neqatively impacted our operating income and non-GAAP operating income each by \$56 million compared to the second quarter of 2023.
Gross profit in the second quarter of 2024 was \$2,024 million, an increase of 13% compared to \$1,796 million in the second quarter of 2023. Gross profit marqin was 48.6% in the second quarter of 2024, compared to 46.3% in the second quarter of 2023. Non-GAAP gross profit was \$2,205 million in the second quarter of 2024, an increase of 9% compared to \$2,023 million in the second quarter of 2023. Non-GAAP gross profit margin was 52.9% in the second quarter of 2024, compared to 52.2% in the second quarter of 2023. The increase in both gross profit margin and non-GAAP gross profit marqin was mainly due to a favorable mix of products, primarily driven by growth in AUSTEDO revenues.
Research and Development (R&D) expenses, net in the second quarter of 2024 were \$269 million, an increase of 12% compared to \$240 million in the second quarter of 2023 as we continue to execute on our Pivot to Growth Strateqy. Our higher R&D expenses, net in the second quarter of 2024, compared to the second quarter of 2023, were mainly due to an increase related to our late-stage innovative pipeline in immunology, as well as related to immuno-oncology and neuroscience projects.
Selling and Marketing (S&M) expenses in the second quarter of 2024 were \$656 million, an increase of 9% compared to the second quarter of 2023. This increase was mainly due to promotional activities in our innovative products.
General and Administrative (G&A) expenses in the second quarter of 2024 were \$283 million, a decrease of 8% compared to the second quarter of 2023, mainly due to lower litigation costs in the second quarter of 2024.
Other income in the second quarter of 2024 was \$2 million, compared to \$33 million in the second quarter of 2023. Other income in the second quarter of 2023 included a capital gain from the sale of assets related to our International Markets segment.
Operating loss in the second quarter of 2024 was \$5 million, compared to an operating loss of \$654 million in the second quarter of 2023. Operating loss as a percentage of revenues was 0.1% in the second quarter of 2024, compared to 16.9% of revenues in the second quarter of 2023. The higher operating loss in the second quarter of 2023 was mainly due to higher legal settlements and loss contingencies as well as higher goodwill impairment charges. Non-GAAP operating income in the second quarter of 2024 was \$1,056 million representing a non-GAAP operating margin of 25.3% compared to non-GAAP operating income of \$1,011 million representing a non-GAAP operating marqin of 26.1% in the second quarter of 2023. The decrease in non-GAAP operating margin in the second quarter of 2024 was mainly due to higher operational expenses as a percentage of revenues, partially offset by higher gross profit margin.
Financial expenses, net in the second quarter of 2024 were \$241 million, mainly comprised of netinterest expenses of \$233 million. In the second quarter of 2023, financial expenses, net were \$268 million, mainly comprised of net-interest expenses of \$240 million.
In the second quarter of 2024, we recognized a tax expense of \$630 million, on a pre-tax loss of \$246 million. Our tax rate for the second quarter of 2024 was mainly affected by a settlement agreement with the Israeli Tax Authorities ("ITA") and impairment agreement with the ITA resulted in an increase of \$506 million in Teva's total income taxes in the second quarter of 2024, as certain elements had been recognized in previous periods. For additional information on the settlement agreement, see our Current Report on Form 8-K filed with the SEC on June 25, 2024. In the second quarter of 2023, we recognized a tax benefit of \$16 million, on a pre-tax loss of \$923 million. Our tax rate for the second quarter of 2023 was mainly affected by impairments, legal settlements, amortization, and interest expense disallowances. Non-GAAP tax rate in the second quarter of 2024 was 15.4%, compared to 15.2% in the second quarter of 2023. Our non-GAAP tax rate in the second quarter of 2024 was mainly affected by the generation of profits in various jurisdictions with different tax rates, tax benefits in Israel and other countries, as well as infrequent or non-recurring items. Our non-GAAP tax rate in the second quarter of 2023 was mainly affected by the generation of profits in various jurisdictions with different tax rates, interest expense disallowances, tax benefits in Israel and other countries, as well as infrequent or non-recurring items.
We expect our annual non-GAAP tax rate for 2024 to be between 14%-17%, higher than our non-GAAP tax rate for 2023, which was 13%, mainly due to a reduced net tax benefit related to deferred tax resulting from intellectual property related integration plans in 2024 compared to 2023.
Net loss attributable to Teva and loss per share in the second quarter of 2024 were \$846 million and \$0.75, respectively, compared to net loss attributable to Teva and loss per share of \$872 million and \$0.78, respectively, in the second quarter of 2023. The lower net loss in the second quarter of 2024 was mainly due to lower operating loss, partially offset by higher income taxes, as discussed above. Non-
(1)
As part of the previously announced shift in executive management responsibilities and in line with our Pivot to Growth strategy, commencing January 1, 2024, Canada is reported as part of our International Markets segment. Prior period amounts were recast to reflect this change.
The following table presents revenues, expenses and profit for our United States seqment for the three months ended June 30, 2024 and 2023:
| Three months ended June 30, | |||||||
|---|---|---|---|---|---|---|---|
| 2024 | 2023 | ||||||
| (U.S. \$ in millions / % of Segment Revenues) | |||||||
| Revenues \$ | 2,110 | 100% | റ | 1,892 | 100% | ||
| Gross profit | 1,167 | 55.3% | 1,017 | 53.8% | |||
| R&D expenses | 170 | 8.1% | 156 | 8.2% | |||
| S&M expenses | 270 | 12.8% | 250 | 13.2% | |||
| G&A expenses | 100 | 4.7% | 101 | 5.3% | |||
| Other income | (1) | ഗ | (1) | ഗ് | |||
| Seqment profit* S | 629 | 29.8% | રે | 511 | 27.0% |
* Segment profit does not include amortization and certain other items.
§ Represents an amount less than 0.5%.
Revenues from our United States segment in the second quarter of 2024 were \$2,110 million, an increase of \$218 million, or 12%, compared to the second quarter of 2023. This increase was mainly due to higher revenues from generic products, AUSTEDO and COPAXONE®, partially offset by lower revenues from certain innovative products, primarily BENDEKA® and TREANDA®, as well as from Anda, our distribution business.
The following table presents revenues for our United States segment by major products and activities for the three months ended June 30, 2024 and 2023:
| Three months ended June 30, |
Percentage Change |
|||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024-2023 | ||||||
| (U.S. \$ in millions) | ||||||||
| Generic products \$ | 1,023 | S | 884 | 16% | ||||
| AJOVY | 42 | 52 | (20%) | |||||
| AUSTEDO | 407 | 308 | 32% | |||||
| BENDEKA and TREANDA | 41 | 67 | (39%) | |||||
| COPAXONE | 81 | 56 | 44% | |||||
| Anda | 373 | 392 | (5%) | |||||
| Other | 144 | 131 | 9% | |||||
| Total | 2,110 | ഗ | 1,892 | 12% |
Generic products revenues in our United States seqment (including biosimilars) in the second quarter of 2024 were \$1,023 million, an increase of 16% compared to the second quarter of 2023, the majority of which was driven by higher revenues from lenalidomide capsules (the generic version of Revlimid®), and the remaining primarily by the launch of liraglutide injection 1.8mg (an authorized generic of Victoza®), partially offset by increased competition to other generic products.
Among the most significant generic products we sold in the United States in the second quarter of 2024 were lenalidomide capsules (the generic version of Revlimid®), epinephrine injectable solution (the qeneric version of EpiPen® and EpiPen Jr®), liraqlutide injection (an authorized qeneric of Victoza®), and Truxima® (the biosimilar to Rituxan®). In the second quarter of 2024, our total prescriptions were approximately 303 million (based on trailing twelve months), representing 7.9% of total U.S. generic prescriptions, compared to approximately 319 million (based on trailing twelve months), representing 8.4% of total U.S. generic prescriptions in the second quarter of 2023, all according to IQVIA data.
On February 24, 2024, Alvotech and Teva announced that the FDA approved SIMLANDI (adalimumabryvk) injection, as an interchangeable biosimilar to Humira®, for the treatment of adult rheumatoid arthritis, juvenile idiopathic arthritis, adult psoriatic arthritis, adult ankulosing spondulitis, Crohn's disease, adult ulcerative colitis, adult plaque psoriasis, adult hidradenitis suppurativa and adult uveitis. On April 17, 2024, Alvotech and Teva amended their collaboration agreement to enable the purchase by Quallent of a private label adalimumab-ryvk injection from Alvotech for the U.S. market, with Alvotech sharing profits with Teva on the private label sales. On May 20, 2024, Alvotech and Teva announced that SIMLANDI is available in the United States.
On April 16, 2024, Alvotech and Teva announced that the FDA has approved SELARSDI (ustekinumabaekn) injection for subcutaneous use, as a biosimilar to Stelara®, for the treatment of moderate to severe plaque psoriasis and for active psoriatic arthritis in adults and pediatric patients six years and older.
On June 24, 2024, Teva announced the launch of liraglutide injection 1.8mg (an authorized generic of Victoza®) in the United States. Liraglutide injection is indicated to improve glycemic control in adults and pediatric patients aged 10 years and older with type 2 diabetes mellitus and reduce the risk of cardiovascular events in adults with type 2 diabetes mellitus and established cardiovascular disease.
AJOVY revenues in our United States segment in the second quarter of 2024 were \$42 million, a decrease of 20% compared to \$52 million in the second quarter of 2023, mainly due to an increase in sales allowance due to a non-recurring item, partially offset by higher demand. In the second quarter of 2024, AJOVY's exit market share in the United States in terms of total number of prescriptions was 28.6% compared to 25.1% in the second quarter of 2023.
AUSTEDO revenues in our United States segment in the second quarter of 2024 increased by 32%, to \$407 million, compared to \$308 million in the second quarter of 2023, mainly due to growth in volume, as well as expanded access for patients and increased investment to support higher demand.
AUSTEDO XR (deutetrabenazine) extended-release tablets was approved by the FDA on February 17, 2023, and became commercially available in the U.S. in May 2024, the FDA approved AUSTEDO XR as a one pill, once-daily treatment option in doses of 30, 36, 42, and 48 mg. In July 2024, the FDA approved the 18 mq dosage for AUSTEDO XR makinq it a one pill, once-daily for all available doses. AUSTEDO XR is a once-daily formulation indicated in adults for tardive dyskinesia and chorea associated with Huntington's disease, which is additional to the currently marketed twice-daily AUSTEDO. AUSTEDO XR is protected by ten Oranqe Book patents expiring between 2031 and 2041.
UZEDY (risperidone) extended-release injectable suspension was approved by the FDA on April 28, 2023 for the treatment of schizophrenia in adults, and was launched in the U.S. in May 2023. UZEDY is a subcutaneous, long-acting formulation of risperidone that controls the steady release of risperidone. UZEDY is protected by nine Orange Book patents expiring between 2025 and 2033. We are moving forward with plans to launch UZEDY in other countries around the world. UZEDY faces competition from multiple other products.
BENDEKA and TREANDA combined revenues in our United States segment in the second quarter of 2024 were \$41 million, a decrease of 39% compared to \$67 million in the second quarter of 2023, mainly due to generic bendamustine products entry into the market. The orphan druq exclusivity that had attached to bendamustine products expired in December 2022.
COPAXONE revenues in our United States segment in the second quarter of 2024 were \$81 million, an increase of 44% compared to \$56 million in the second quarter of 2023, mainly due to a decrease in sales allowance due to a non-recurring item.
Anda revenues from third-party products in our United States segment in the second quarter of 2024 were \$373 million, a decrease of 5% compared to \$392 million in the second quarter of 2023, mainly due to lower demand in the second quarter of 2024. Anda, our distribution business in the United States, distributes generic and innovative medicines and OTC pharmaceutical products from Teva and various third-party manufacturers to independent retail pharmacy retail chains, hospitals and physician offices in the United States. Anda is able to compete in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.
Gross profit from our United States segment in the second quarter of 2024 was \$1,167 million, an increase of 15%, compared to \$1,017 million in the second quarter of 2023.
Gross profit margin for our United States segment in the second quarter of 2024 increased to 55.3%, compared to 53.8% in the second quarter of 2023. This increase was mainly due to a favorable mix of products primarily driven by higher revenues from lenalidomide capsules (the qeneric version of Revlimid®) and AUSTEDO.
Profit from our United States segment consists of gross profit less R&D expenses, G&A expenses and any other income related to this seqment profit does not include amortization and certain other items.
Profit from our United States seqment in the second quarter of 2024 was \$629 million, an increase of 23% compared to \$511 million in the second quarter of 2023. This increase was mainly due to higher gross profit, partially offset by higher operational expenses.
Our Europe segment includes the European Union, the United Kingdom and certain other European countries.
The following table presents revenues, expenses and profit for our Europe segment for the three months ended June 30, 2024 and 2023:
| Three months ended June 30, | ||||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||
| (U.S. \$ in millions / % of Segment Revenues) | ||||||
| Revenues S | 1,213 | 100% 5 | 1.163 | 100% | ||
| Gross profit | 677 | 55.8% | 640 | 55.0% | ||
| R&D expenses | 62 | 5.1% | 53 | 4.5% | ||
| S&M expenses | 209 | 17.2% | 194 | 16.7% | ||
| G&A expenses | 64 | 5.3% | 61 | 5.2% | ||
| Other income | ഗ | ഗ | (1) | ഗ | ||
| Segment profit* \$ | 28.2% \$ | 334 | 28.7% |
* Segment profit does not include amortization and certain other items.
§ Represents an amount less than \$0.5 million or 0.5%, as applicable.
Revenues from our Europe segment in the second quarter of 2024 were \$1,213 million, an increase of 4%, or \$50 million, compared to the second quarter of 2023. In local currency terms, revenues increased by 5% compared to the second quarter of 2023, mainly due to higher revenues from generic products and AJOVY.
The following table presents revenues for our Europe segment by major products and activities for the three months ended June 30, 2024 and 2023:
| Three months ended June 30, |
Percentage Change |
||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024-2023 | |||
| (U.S. \$ in millions) | |||||
| Generic products | 970 | ഗ | 909 | 7% | |
| AJOVY | 52 | 39 | 33% | ||
| COPAXONE | 53 | 60 | (11%) | ||
| Respiratory products | 57 | ୧୧ | (14%) | ||
| Other | 81 | 89 | (10%) | ||
| Total | 1,213 - | ഗ | 1,163 | 4% |
Generic products revenues (including OTC and biosimilar products) in our Europe segment in the second quarter of 2024, increased by 7% to \$970 million, compared to the second quarter of 2023. In local currency terms, revenues increased by 8%, mainly due to price increases as a result of market conditions such as inflationary pressures in certain markets, as well as higher revenues from recently launched products.
AJOVY revenues in our Europe segment in the second quarter of 2024 increased by 33% to \$52 million, compared to \$39 million in the second quarter of 2023. In local currency terms revenues increased by 34%, mainly due to growth in European countries in which AJOVY had previously been launched.
COPAXONE revenues in our Europe segment in the second quarter of 2024 were \$53 million, a decrease of 11% compared to the second quarter of 2023. In local currency terms, revenues decreased by 9%, due to price reductions and a decline in volume resulting from competing glatiramer acetate products and availability of alternative therapies.
Respiratory products revenues in our Europe seqment in the second quarter of 2024 were \$57 million, a decrease of 14% compared to the second quarter of 2023. In local currency terms, revenues decreased by 13% compared to the second quarter of 2023, mainly due to net price reductions and lower volumes.
Gross profit from our Europe segment in the second quarter of 2024 was \$677 million, an increase of 6% compared to \$640 million in the second quarter of 2023.
Gross profit margin for our Europe segment in the second quarter of 2024 increased to 55.8%, compared to 55.0% in the second quarter of 2023. This increase was mainly due to price increases of generic products as a result of market conditions such as inflationary pressures in certain markets.
Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment profit does not include amortization and certain other items.
Profit from our Europe segment in the second quarter of 2024 was \$342 million, an increase of 2%, compared to \$334 million in the second quarter of 2023. This increase was mainly due to higher gross profit, as described above.
Our International Markets seqment includes all countries in which we operate other than the United States and the countries included in our Europe segment. The International Markets segment includes more than 35 countries, covering a substantial portion of the global pharmaceutical industry.
As part of the previously announced recent shift in executive management responsibilities, commencinq January 1, 2024, Canada is reported under our International Markets segment and is no longer included as part of our United States segment. Prior period amounts were recast to reflect this change.
The following table presents revenues, expenses and profit for our International Markets segment for the three months ended June 30, 2024 and 2023:
| Three months ended June 30. | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | |||||||
| (U.S. \$ in millions / % of Segment Revenues) | ||||||||
| Revenues \$ | ਦੇਰੇਤ | 100% | ഗ | 578 | 100% | |||
| Gross profit | 286 | 48.3% | 283 | 49.0% | ||||
| R&D expenses | 30 | 5.1% | 23 | 4.0% | ||||
| S&M expenses | 145 | 24.5% | 125 | 21.6% | ||||
| G&A expenses | 38 | 6.4% | 34 | 5.9% | ||||
| Other income | ന | ഗ | (31) | (5.4%) | ||||
| Seqment profit* \$ | 73 | 12.3% \$ | 132 | 22.8% |
* Segment profit does not include amortization and certain other items.
§ Represents an amount less than \$0.5 million or 0.5%, as applicable.
Revenues from our International Markets segment in the second quarter of 2024 were \$593 million, an increase of 3% compared to the second quarter of 2023. In local currency terms, revenues increased by 22% compared to the second quarter of 2023, mainly due to higher revenues from generic products in most markets, partially offset by requlatory price reductions and generic competition to off-patented products in Japan.
In the second quarter of 2024, revenues were negatively impacted by exchange rate fluctuations of \$114 million, including hedging effects, compared to the second quarter of 2023. Revenues in the second quarter of 2024 included \$5 million from a negative hedging impact, compared to a positive hedqinq impact of \$5 million in the second quarter of 2023, which are included in "Other" in the table below.
The following table presents revenues for our International Markets segment by major products and activities for the three months ended June 30, 2024 and 2023:
| Three months ended June 30, |
Percentage Change |
|||||
|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024-2023 | ||||
| (U.S. \$ in millions) | ||||||
| Generic products | ട് | 486 | ഗ് | 478 | 2% | |
| AJOVY | 22 | 14 | 58% | |||
| COPAXONE | 14 | 17 | (20%) | |||
| Other | 71 | eg | 2% | |||
| Total | ર | 593 | റി | 578 | 3% |
Generic products revenues (including OTC and biosimilar products) in our International Markets segment were \$486 million in the second quarter of 2024, an increase of 2% compared to the second quarter of 2023. In local currency terms, revenues increased by 22% compared to the second quarter of 2023, mainly due to higher revenues in most markets, largely driven by price increases as a result of higher costs due to inflationary pressure in certain markets and higher volumes, partially offset by requlatory price reductions and generic competition to off-patented products in Japan.
AJOVY revenues in our International Markets segment in the second quarter of 2024 were \$22 million, compared to \$14 million in the second quarter of 2023. AJOVY was launched in certain markets in our International Markets segment, including in Canada, Japan, Australia, Israel, South Korea, Brazil and others.
COPAXONE revenues in our International Markets seqment in the second quarter of 2024 were \$14 million compared to \$17 million in the second quarter of 2023.
AUSTEDO was launched in China and Israel in 2021 and in Brazil in 2022, for the treatment of chorea associated with Huntington's disease and for the treatment of tardive dyskinesia. In February 2024, we announced a strategic partnership for the marketing and distribution of AUSTEDO in China. We continue with additional submissions in various other markets.
Gross profit from our International Markets segment in the second quarter of 2024 was \$286 million, an increase of 1% compared to \$283 million in the second quarter of 2023.
Gross profit margin for our International Markets segment in the second quarter of 2024 decreased to 48.3%, compared to 49.0% in the second quarter of 2023. This decrease was mainly due to a neqative hedqinq impact, requlatory price reductions and generic competition to off-patented products in Japan, as well as higher costs due to inflationary and other macroeconomic pressures, partially offset by price increases largely as a result of inflationary pressures in certain markets and a favorable mix of products.
Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this seqment profit does not include amortization and certain other items.
Profit from our International Markets segment in the second quarter of 2024 was \$73 million, a decrease of 45%, compared to \$132 million in the second quarter of 2023. This decrease was mainly due to lower other income as well as higher S&M expenses in the second quarter of 2024.
We have other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our United States, Europe or International Markets segments described above.
On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale, which divestment is expected to be completed in the first half of 2025. The intention to divest is in alignment with our Pivot to Growth strategy. However, there can be no assurance reqarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all.
Revenues from other activities in the second quarter of 2024 were \$249 million, an increase of 2% in U.S. dollars and in local currency terms, compared to the second quarter of 2023.
API sales to third parties in the second quarter of 2024 were \$151 million, reflecting an increase of 5% in both U.S. dollars and local currency terms, compared to the second quarter of 2023, following a reallocation of an immaterial business within our other activities, in line with our intention to divest our API business.
| \$ billions, except EPS or as noted |
July 2024 Outlook | January 2024 Outlook | ||||
|---|---|---|---|---|---|---|
| Revenues* | \$16.0 - \$16.4 | \$15.7 - \$16.3 | ||||
| AUSTEDO (\$m)* | ~1,600 | ~1,500 | ||||
| AJOVY (\$m)* | ~500 | ~500 | ||||
| UZEDY (\$m)* | ~80 | ~80 | ||||
| COPAXONE (\$m)* | ~450 | ~400 | ||||
| Operating Income | 4.1 - 4.5 | 4.0 - 4.5 | ||||
| Adjusted EBITDA | 4.6 - 5.0 | 4.5 - 5.0 | ||||
| Finance Expenses (\$m) | ~1,000 | ~1,000 | ||||
| Tax Rate | 14% - 17% | 14% - 17% | ||||
| Diluted EPS (\$) | 2.30 - 2.50 | 2.20 - 2.50 | ||||
| Free Cash Flow** | 1.7 - 2.0 | 1.7 - 2.0 | ||||
| CAPEX* | ~0.5 | ~0.5 | ||||
| Foreign Exchange | Volatile swings in FX can negatively impact revenue and income |
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) announced today that it will issue a press release on its second quarter 2024 financial results on Wednesday, July 31, 2024, at 7:00 a.m. ET. Following the release, Teva will conduct a conference call and live webcast on the same day, at 8:00 a.m. ET.
In order to participate, please register in advance here to obtain a local or toll-free phone number and your personal pin.
A live webcast of the call will be available on Teva's website at: https://ir.tevapharm.com/Events-and-Presentations
Following the conclusion of the call, a replay of the webcast will be available within 24 hours on Teva's website.
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a global pharmaceutical leader with a cateqory-defying portfolio, harnessing our generics expertise and stepping up innovation to continue the momentum behind the discovery, delivery, and expanded development of modern medicine. For over 120 years, Teva's commitment to bettering health has never wavered. Today, the company's global network of capabilities enables its 37,000 employees across 58 markets to push the boundaries of scientific innovation and deliver quality medicines to help improve health outcomes of millions of patients every day. To learn more about how Teva is all in for better health, visit www.tevapharm.com.
Some amounts in this press release may not add up due to rounding. All percentages have been calculated using unrounded amounts.
This press release contains certain financial information that differs from what is reported under accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures, including, but not limited to, non-GAAP operating income, non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross profit margin, Adjusted EBITDA, free cash flow, non-GAAP tax rate, non-GAAP net income (loss) attributable to Teva and non-GAAP diluted EPS, are presented in order to facilitate investors' understanding of our business. We utilize certain non-GAAP financial measures to evaluate performance, in conjunction with other performance metrics. The following are examples of how we utilize the non-GAAP measures: our management and board of directors use the non-GAAP measures to evaluate our operational performance, to compare against work plans and budgets, and ultimately to evaluate the performance of management; our annual budgets are prepared on a non-GAAP basis; and senior management's annual compensation is derived, in part, using these non-GAAP measures. See the attached tables for a reconciliation of the GAAP results to the adjusted non-GAAP measures. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP. We are not providing forward looking guidance for GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measure because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items including, but not limited to, the amortization of purchased intangible assets, legal settlements and loss contingencies, impairment of long-lived assets and goodwill impairment, without unreasonable effort. These items are uncertain, depend on various factors, and could be material to our results computed in accordance with GAAP.
;
| Three months ended June 30, |
Six months ended | |||
|---|---|---|---|---|
| June 30, | ||||
| 2024 | 2023 | 2024 | 2023 | |
| Net revenues | 4,164 | 3,878 | 7,983 | 7,539 |
| Cost of sales | 2,140 | 2,082 | 4,188 | 4,161 |
| Gross profit | 2,024 | 1,796 | 3,795 | 3,378 |
| Research and development expenses | 269 | 240 | 511 | 473 |
| Selling and marketing expenses | 656 | 603 | 1,265 | 1,149 |
| General and administrative expenses | 283 | 307 | 561 | 602 |
| Intangible assets impairments | 61 | 63 | 141 | 241 |
| Goodwill impairment | 400 | 700 | 400 | 700 |
| Other asset impairments, restructuring and other items | 280 | 108 | 954 | 218 |
| Legal settlements and loss contingencies | 83 | 462 | 188 | 695 |
| Other income | (2) | (33) | (1) | (34) |
| Operating income (loss) | (5) | (654) | (223) | (667) |
| Financial expenses, net | 241 | 268 | 491 | 528 |
| Income (loss) before income taxes | (246) | (923) | (713) | (1,195) |
| Income taxes (benefit) | 630 | (16) | 578 | (35) |
| Share in (profits) losses of associated companies, net | (2) | (1) | 2 | (1) |
| Net income (loss) | (874) | (906) | (1,294) | (1,159) |
| Net income (loss) attributable to non-controlling interests | (29) | (35) | (309) | (68) |
| Net income (loss) attributable to Teva | (846) | (872) | (985) | (1,091) |
| Earnings (loss) per share attributable to Teva: | Basic (\$) | (0.75) | (0.78) | (0.87) | (0.98) |
|---|---|---|---|---|---|
| Diluted (\$) | (0.75) | (0.78) | (0.87) | (0.98) | |
| Weighted average number of shares (in millions): | Basic | 1,133 | 1,120 | 1,128 | 1,118 |
| Diluted | 1,133 | 1,120 | 1,128 | 1,118 | |
| Non-GAAP net income attributable to Teva for diluted earnings per share:* | 697 | 629 | 1,245 | 1,085 | |
| Non-GAAP earnings per share attributable to Teva:* | Diluted (\$) | 0.61 | 0.56 | 1.09 | 0.96 |
| Non-GAAP average number of shares (in millions): | Diluted | 1,151 | 1,129 | 1,146 | 1,127 |
Amounts may not add up due to rounding.
* See reconciliation attached.
(U.S. dollars in millions, except for share data) (Unaudited)
| June 30, 2024 |
December 31. 2023 |
||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | S | 2,258 | ಲ್ಲಿ ಮಾ | 3,226 | |
| Accounts receivables, net of allowance for credit losses of \$95 million as of | |||||
| June 30, 2024 and as of December 31, 2023. | 3,766 | 3,408 | |||
| Inventories | 3,927 | 4,021 | |||
| Prepaid expenses | 1,096 | 1,255 | |||
| Other current assets | 517 | 504 | |||
| Assets held for sale | 69 | 70 | |||
| Total current assets | 11,632 | 12,485 | |||
| Deferred income taxes | 2,000 | 1,812 | |||
| Other non-current assets | 434 | 470 | |||
| Property, plant and equipment, net | 5.573 | 5,750 | |||
| Operating lease right-of-use assets, net | 358 | 397 | |||
| Identifiable intangible assets, net | 4,853 | 5,387 | |||
| Goodwill | 16,488 | 17,177 | |||
| Total assets | ਦੇ ਦੇ | 41,338 | રેને | 43,479 | |
| LIABILITIES AND EQUITY | |||||
| Current liabilities: | |||||
| Short-term debt | સ્ક્ર | 2,094 | ર્ભને | 1,672 | |
| Sales reserves and allowances | 3,700 | 3,535 | |||
| Accounts payables | 2,366 | 2,602 | |||
| Employee-related obligations | 492 | 611 | |||
| Accrued expenses | 2,840 | 2,771 | |||
| Other current liabilities | 1,191 | 1,044 | |||
| Liabilities held for sale | 356 | 13 | |||
| Total current liabilities | 13,037 | 12,247 | |||
| Long-term liabilities: | |||||
| Deferred income taxes | 553 | 606 | |||
| Other taxes and long-term liabilities | 4,356 | 4,019 | |||
| Senior notes and loans | 16,547 | 18,161 | |||
| Operating lease liabilities | 281 | 320 | |||
| Total long-term liabilities | 21,737 | 23,106 | |||
| Equity: | |||||
| Teva shareholders' equity: | 6,359 | 7,506 | |||
| Non-controlling interests | 204 | 620 | |||
| Total equity | 6,563 | 8,126 | |||
| Total liabilities and equity | ર્સ્વે | 41,338 | રેને | 43,479 |
Amounts may not add up due to rounding.
(U.S. dollars in millions)
| (Unaudited) | |||||
|---|---|---|---|---|---|
| Three months ended June 30, |
Six months ended June 30, |
||||
| 2024 | 2023 | 2024 | 2023 | ||
| Operating activities: | |||||
| Net income (loss) \$ | (874) | (906) \$ | (1,294) | (1,159) | |
| Adjustments to reconcile net income (loss) to net cash provided by operations: | |||||
| Depreciation and amortization | 259 | 300 | 531 | 604 | |
| Impairment of goodwill | 400 | 700 | 400 | 700 | |
| Impairment of long-lived assets and assets held for sale | 130 | 74 | 809 | 262 | |
| Net change in operating assets and liabilities | (10) | 212 | (507) | (137) | |
| Deferred income taxes – net and uncertain tax positions | (424) | (44) | (613) | (150) | |
| Stock-based compensation | 32 | 30 | 60 | 62 | |
| Other items * | 592 | (12) | 594 | 23 | |
| Net loss (gain) from investments and from sale of long lived assets | (1) | (30) | (1) | (26) | |
| Net cash provided by (used in) operating activities | 103 | 324 | (21) | 179 | |
| Investing activities: | |||||
| Beneficial interest collected in exchange for securitized trade receivables | 317 | 371 | 612 | 694 | |
| Purchases of property, plant and equipment and intangible assets | (97) | (119) | (221) | (258) | |
| Proceeds from sale of business and long lived assets | 1 | 56 | 1 | 58 | |
| Acquisition of businesses, net of cash acquired | - | - | (15) | - | |
| Purchases of investments and other assets | (43) | (2) | (55) | (6) | |
| Other investing activities | - | (4) | - | (5) | |
| Net cash provided by (used in) investing activities | 178 | 302 | 322 | 483 | |
| Financing activities: | |||||
| Purchase of shares from non-controlling interests | - | - | (64) | - | |
| Dividends paid to non-controlling interests | - | - | (78) | - | |
| Repayment of senior notes and loans and other long term liabilities | (956) | - | (956) | (3,152) | |
| Proceeds from senior notes, net of issuance costs | - | - | - | 2,451 | |
| Other financing activities | (10) | (55) | (19) | (60) | |
| Net cash provided by (used in) financing activities | (966) | (55) | (1,117) | (761) | |
| Translation adjustment on cash and cash equivalents | (49) | (77) | (153) | (65) | |
| Net change in cash, cash equivalents and restricted cash | (733) | 494 - |
(969) | (164) | |
| Balance of cash, cash equivalents and restricted cash at beginning of period | 2,991 | 2,176 | 3,227 | 2,834 | |
| Balance of cash, cash equivalents and restricted cash at end of period \$ | 2,258 | 2,670 \$ | 2,258 | 2,670 | |
| Cash and cash equivalents | 2,258 | 2,669 | 2,258 | 2,669 | |
| Restricted cash included in other current assets | — | 1 | — | 1 | |
| Total cash, cash equivalents and restricted cash shown in the statement of cash flows | 2,258 | 2,670 | 2,258 | 2,670 | |
| Non-cash financing and investing activities: | |||||
| Beneficial interest obtained in exchange for securitized accounts receivables | \$ 320 |
380 \$ | 632 | 714 | |
* Adjustment in the three months period ended June 30, 2024 mainly relate to an agreement with the Israeli Tax Authorities.
The accompanying notes are an integral part of the financial statements. Amounts may not add up due to rounding
| (Unaudited) | |||||
|---|---|---|---|---|---|
| Three months ended | Six months ended | ||||
| June 30, | June 30, | ||||
| (\$ in millions) | 2024 | 2023 | 2024 | 2023 | |
| Gross profit | \$ | 2,024 | 1,796 | \$ 3,795 |
3,378 |
| Gross profit margin | 48.6% | 46.3% | 47.5% | 44.8% | |
| Increase (decrease) for excluded items: | |||||
| Amortization of purchased intangible assets | 136 | 145 | 273 | 290 | |
| Equity compensation | 7 | 5 | 13 | 10 | |
| Accelerated depreciation | 0 | 24 | 7 | 49 | |
| Other non-GAAP items (1) | 37 | 52 | 80 | 91 | |
| Non-GAAP gross profit | \$ | 2,205 | 2,023 | \$ 4,168 |
3,819 |
| Non-GAAP gross profit margin (2) | 52.9% | 52.2% | 52.2% | 50.7% |
(1) Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs and other unusual events.
(2) Non-GAAP gross profit margin is non-GAAP gross profit as a percentage of revenue.
(Unaudited)
| Three months ended June 30, |
Six months ended June 30, |
||||||
|---|---|---|---|---|---|---|---|
| (\$ in millions) | 2024 | 2023 | 2024 | 2023 | |||
| Operating income (loss)(1) | (\$) | (5) | (654) | (\$) | (223) | (667) | |
| Operating margin | (0.1%) | (16.9%) | (2.8%) | (8.8%) | |||
| Increase (decrease) for excluded items: | |||||||
| Amortization of purchased intangible assets | 146 | 162 | 298 | 326 | |||
| Legal settlements and loss contingencies(2) | 83 | 462 | 188 | 695 | |||
| Goodwill impairment(3) | 400 | 700 | 400 | 700 | |||
| Impairment of long-lived assets(4) | 130 | 74 | 809 | 262 | |||
| Restructuring costs | 18 | 10 | 31 | 66 | |||
| Equity compensation | 32 | 30 | 60 | 62 | |||
| Contingent consideration(1)(5) | 192 | 78 | 271 | 113 | |||
| Accelerated depreciation | 0 | 24 | 7 | 49 | |||
| Other non-GAAP items(6) | 59 | 125 | 106 | 189 | |||
| Non-GAAP operating income (loss) | (\$) | 1,056 | 1,011 | (\$) | 1,948 | 1,796 | |
| Non-GAAP operating margin(3) | (\$) | 25.3% | 26.1% | (\$) | 24.4% | 23.8% |
(1) The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
(2) Adjustments for legal settlements and loss contingencies in the second quarter of 2023 were mainly related to a provision of \$200 million in connection with the U.S. DOJ criminal antitrust charges on the marketing and pricing of certain Teva USA generic products and an update to the estimated settlement provision of \$170 million related to some of the remaining opioid cases including an agreement in principle on private hospital cases. Adjustments for legal settlements and loss contingencies in the first six months of 2023 were mainly related to an update to the estimated settlement provision of \$206 million related to the remaining opioid cases, the provision of \$210 million relating to the U.S. DOJ criminal antitrust charges on the marketing and pricing of certain Teva USA generic products, an update to the estimated provision of \$102 million related to the DOJ patient assistance program litigation, and the provision of \$100 million related to the settlement of the reverse-payment antitrust litigation over certain HIV medicines.
(3) A goodwill impairment charge of \$400 million related to our Teva's API reporting unit was recognized in the three and six months ended June 2024, compared to a goodwill impairment charge of \$700 million related to our International Markets reporting unit recognized in the three and six months ended June 2023.
(4) Adjustments for impairment of long-lived assets, for the six months ended June 30, 2024, primarily consisted of \$644 million related to the classification of our business venture in Japan as held for sale.
(5) Adjustments for contingent consideration primarily related to a change in the estimated future royalty payments to Allergan in connection with lenalidomide capsules (the generic version of Revlimid®), of \$174 million and \$238 million, respectively for the three and six months ended June 30, 2024, and of \$64 million and \$88 million, respectively for the three and six months ended June 30, 2023.
(6) Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events.
| Three months ended June 30, |
Six months ended June 30, |
||||||
|---|---|---|---|---|---|---|---|
| (\$ in millions except per share amounts) | 2024 | 2023 | 2024 | 2023 | |||
| Net income (Loss) attributable to Teva(1) | (\$) | (846) | (872) | (\$) | (985) | (1,091) | |
| Increase (decrease) for excluded items: | |||||||
| Amortization of purchased intangible assets | 146 | 162 | 298 | 326 | |||
| Legal settlements and loss contingencies(2) | 83 | 462 | 188 | 695 | |||
| Goodwill impairment(3) | 400 | 700 | 400 | 700 | |||
| Impairment of long-lived assets(4) | 130 | 74 | 809 | 262 | |||
| Restructuring costs | 18 | 10 | 31 | 66 | |||
| Equity compensation | 32 | 30 | 60 | 62 | |||
| Contingent consideration(1)(5) | 192 | 78 | 271 | 113 | |||
| Accelerated depreciation | - | 24 | 7 | 49 | |||
| Financial expenses | 12 | 16 | 24 | 39 | |||
| Items attributable to non-controlling interests(4) | (33) | (49) | (317) | (90) | |||
| Other non-GAAP items(6) | 59 | 125 | 106 | 189 | |||
| Corresponding tax effects and unusual tax items(7) | 503 | (131) | 353 | (235) | |||
| Non-GAAP net income attributable to Teva | (\$) | 697 | 629 | (\$) | 1,245 | 1,085 | |
| Non-GAAP tax rate(8) | 15.4% | 15.2% | 15.2% | 15.3% | |||
| GAAP diluted earnings (loss) per share attributable to Teva | (\$) | (0.75) | (0.78) | (\$) | (0.87) | (0.98) | |
| EPS difference(9) | 1.35 | 1.34 | 1.96 | 1.94 | |||
| Non-GAAP diluted EPS attributable to Teva(9) | (\$) | 0.61 | 0.56 | (\$) | 1.09 | 0.96 | |
| Non-GAAP average number of shares (in millions)(9) | 1,151 | 1,129 | 1,146 | 1,127 |
(1) The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
(2) Adjustments for legal settlements and loss contingencies in the second quarter of 2023 were mainly related to a provision of \$200 million in connection with the U.S. DOJ criminal antitrust charges on the marketing and pricing of certain Teva USA generic products and an update to the estimated settlement provision of \$170 million related to some of the remaining opioid cases including an agreement in principle on private hospital cases. Adjustments for legal settlements and loss contingencies in the first six months of 2023 were mainly related to an update to the estimated settlement provision of \$206 million related to the remaining opioid cases, the provision of \$210 million relating to the U.S. DOJ criminal antitrust charges on the marketing and pricing of certain Teva USA generic products, an update to the estimated provision of \$102 million related to the DOJ patient assistance program litigation, and the provision of \$100 million related to the settlement of the reverse-payment antitrust litigation over certain HIV medicines.
(3) A goodwill impairment charge of \$400 million related to our Teva's API reporting unit was recognized in the three and six months ended June 30, 2024, compared to a goodwill impairment charge of \$700 million related to our International Markets reporting unit recognized in the three and six months ended June 2023.
(4) Adjustments for impairment of long-lived assets and items attributable to non-controlling interests for the six months ended June 30, 2024, primarily consisted of \$644 million and \$317 million, respectively, related to the classification of our business venture in Japan as held for sale.
(5) Adjustments for contingent consideration primarily related to a change in the estimated future royalty payments to Allergan in connection with lenalidomide capsules (the generic version of Revlimid®), of \$174 million and \$238 million, respectively for the three and six months ended June 30, 2024, and of \$64 million and \$88 million, respectively for the three and six months ended June 30, 2023.
(6) Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events.
(7) Adjustments for corresponding tax effects and unusual tax items for the three months ended June 30,2024 mainly related to the settlement agreement with the ITA to settle certain litigation with respect to taxes payable for the Company's taxable years 2008 through 2020, in an amount of \$495 million.
(8) Non-GAAP tax rate is tax expenses (benefit) excluding the impact of non-GAAP tax adjustments presented above as a percentage of income (loss) before income taxes excluding the impact of non-GAAP adjustments presented above. GAAP tax rate for the three and six months ended June 30, 2024 was 256% and 81% respectively and for the three and six months ended June 30, 2023 was 2% and 3% respectively.
(9) EPS difference and diluted non-GAAP EPS are calculated by dividing our non-GAAP net income attributable to Teva by our non-GAAP diluted weighted average number of shares.
(Unaudited)
| Three months ended | Six months ended | ||||||
|---|---|---|---|---|---|---|---|
| June 30, | June 30, | ||||||
| (\$ in millions) | 2024 | 2023 | 2024 | 2023 | |||
| Net income (loss)(1) | \$ (874) |
(906) | \$ | (1,294) (1,159) | |||
| Increase (decrease) for excluded items: | |||||||
| Financial expenses | 241 | 268 | 491 | 528 | |||
| Income taxes | 630 | (16) | 578 | (35) | |||
| Share in profits (losses) of associated companies –net | (2) | (1) | 2 | (1) | |||
| Depreciation | 113 | 138 | 233 | 278 | |||
| Amortization | 146 | 162 | 298 | 326 | |||
| EBITDA | 254 | (355) | 308 | (63) | |||
| Legal settlements and loss contingencies(2) | 83 | 462 | 188 | 695 | |||
| Goodwill impairment(3) | 400 | 700 | 400 | 700 | |||
| Impairment of long lived assets(4) | 130 | 74 | 809 | 262 | |||
| Restructuring costs | 18 | 10 | 31 | 66 | |||
| Equity compensation | 32 | 30 | 60 | 62 | |||
| Contingent consideration(5) | 192 | 78 | 271 | 113 | |||
| Other non-GAAP items (6) | 59 | 125 | 106 | 189 | |||
| Adjusted EBITDA | \$ 1,168 |
1,125 | \$ | 2,173 | 2,024 |
(1) The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
(2) Adjustments for legal settlements and loss contingencies in the second quarter of 2023 were mainly related to a provision of \$200 million in connection with the U.S. DOJ criminal antitrust charges on the marketing and pricing of certain Teva USA generic products and an update to the estimated settlement provision of \$170 million related to some of the remaining opioid cases including an agreement in principle on private hospital cases. Adjustments for legal settlements and loss contingencies in the first six months of 2023 were mainly related to an update to the estimated settlement provision of \$206 million related to the remaining opioid cases, the provision of \$210 million relating to the U.S. DOJ criminal antitrust charges on the marketing and pricing of certain Teva USA generic products, an update to the estimated provision of \$102 million related to the DOJ patient assistance program litigation, and the provision of \$100 million related to the settlement of the reversepayment antitrust litigation over certain HIV medicines.
(3) A goodwill impairment charge of \$400 million related to our Teva's API reporting unit was recognized in the three and six months ended June 2024, compared to a goodwill impairment charge of \$700 million related to our International Markets reporting unit recognized in the three and six months ended June 2023.
(4) Adjustments for impairment of long-lived assets, for the six months ended June 30, 2024, primarily consisted of \$644 million related to the classification of our business venture in Japan as held for sale
(5) Adjustments for contingent consideration primarily related to a change in the estimated future royalty payments to Allergan in connection with lenalidomide capsules (the generic version of Revlimid®), of \$174 million and \$238 million, respectively for the three and six months ended June 30, 2024, and of \$64 million and \$88 million, respectively for the three and six months ended June 30, 2023.
(6) Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events.
| United States Three months ended June 30, |
Europe Three months ended June 30, |
International Markets Three months ended June 30, |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| (U.S. \$ in millions) | (U.S. \$ in millions) | (U.S. \$ in millions) | |||||||||
| Revenues \$ | 2,110 | \$ | 1,892 | \$ | 1,213 | \$ | 1,163 | \$ | 593 | \$ | 578 |
| Gross profit | 1,167 | 1,017 | 677 | 640 | 286 | 283 | |||||
| R&D expenses | 170 | 156 | 62 | 53 | 30 | 23 | |||||
| S&M expenses | 270 | 250 | 209 | 194 | 145 | 125 | |||||
| G&A expenses | 100 | 101 | 64 | 61 | 38 | 34 | |||||
| Other income | (1) | (1) | § | (1) | § | (31) | |||||
| Segment profit \$ | 629 | \$ | 511 | \$ | 342 | \$ | 334 | \$ | 73 | \$ | 132 |
§ Represents an amount less than \$0.5 million.
| United States Six months ended June 30, |
Europe Six months ended June 30, |
International Markets Six months ended June 30, |
|||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | ||||||
| (U.S. \$ in millions) | (U.S. \$ in millions) | (U.S. \$ in millions) | |||||||||
| Revenues \$ 3,835 | \$ | 3,569 | \$ 2,485 | \$ | 2,347 | \$ 1,190 | \$ | 1,159 | |||
| Gross profit | 2,025 | 1,806 | 1,415 | 1,294 | 583 | 568 | |||||
| R&D expenses | 324 | 305 | 118 | 106 | 58 | 51 | |||||
| S&M expenses | 530 | 457 | 403 | 381 | 263 | 238 | |||||
| G&A expenses | 193 | 196 | 130 | 130 | 73 | 72 | |||||
| Other income | (1) | (1) | § | (1) | (1) | (33) | |||||
| Segment profit \$ | 979 | \$ | 850 | \$ | 764 | \$ | 679 | \$ | 190 | \$ | 240 |
§ Represents an amount less than \$0.5 million.
Unaudited
| Three months ended June 30, |
||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| (U.S.\$ in millions) | ||||
| United States profit | \$ | 629 | \$ | 511 |
| Europe profit | 342 | 334 | ||
| International Markets profit | 73 | 132 | ||
| Total reportable segment profit | 1,043 | 977 | ||
| Profit of other activities | 12 | 33 | ||
| 1,056 | 1,011 | |||
| Amounts not allocated to segments: | ||||
| Amortization | 146 | 162 | ||
| Other asset impairments, restructuring and other items* | 280 | 108 | ||
| Goodwill impairment | 400 | 700 | ||
| Intangible asset impairments | 61 | 63 | ||
| Legal settlements and loss contingencies | 83 | 462 | ||
| Other unallocated amounts | 91 | 170 | ||
| Consolidated operating income (loss) | (5) | (654) | ||
| Financial expenses - net | 241 | 268 | ||
| Consolidated income (loss) before income taxes* | \$ | (246) | \$ | (923) |
*The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
Unaudited
| Six months ended | |||||
|---|---|---|---|---|---|
| June 30, | |||||
| 2024 | 2023 | ||||
| (U.S.\$ in millions) | |||||
| United States profit | \$ | 979 | \$ | 850 | |
| Europe profit | 764 | 679 | |||
| International Markets profit | 190 | 240 | |||
| Total reportable segment profit | 1,933 | 1,769 | |||
| Profit of other activities | 15 | 27 | |||
| Total segment profit | 1,948 | 1,796 | |||
| Amounts not allocated to segments: | |||||
| Amortization | 298 | 326 | |||
| Other asset impairments, restructuring and other items* | 954 | 218 | |||
| Goodwill impairment | 400 | 700 | |||
| Intangible asset impairments | 141 | 241 | |||
| Legal settlements and loss contingencies | 188 | 695 | |||
| Other unallocated amounts | 190 | 282 | |||
| Consolidated operating income (loss) | (223) | (667) | |||
| Financial expenses - net | 491 | 528 | |||
| Consolidated income (loss) before income taxes* | \$ | (713) | \$ | (1,195) |
The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K.
(Unaudited)
| Percentage Change |
|||||
|---|---|---|---|---|---|
| 2024 2023 |
2023-2024 | ||||
| \$ | 1,023 | \$ | 884 | 16% | |
| 42 | 52 | (20%) | |||
| 407 | 308 | 32% | |||
| 41 | 67 | (39%) | |||
| 81 | 56 | 44% | |||
| 373 | 392 | (5%) | |||
| 144 | 131 | 9% | |||
| 2,110 | 1,892 | 12% | |||
| June 30, | Three months ended (U.S.\$ in millions) |
| June 30, | Percentage Change 2023-2024 |
||||
|---|---|---|---|---|---|
| 2024 2023 |
|||||
| (U.S.\$ in millions) | |||||
| Europe segment | |||||
| Generic products | \$ | 970 | \$ | 909 | 7% |
| AJOVY | 52 | 39 | 33% | ||
| COPAXONE | 53 | 60 | (11%) | ||
| Respiratory products | 57 | 66 | (14%) | ||
| Other | 81 | 89 | (10%) | ||
| Total | 1,213 | 1,163 | 4% |
| Percentage Change |
|||
|---|---|---|---|
| 2023-2024 | |||
| \$ 486 |
\$ | 478 | 2% |
| 22 | 14 | 58% | |
| 14 | 17 | (20%) | |
| 71 | 69 | 2% | |
| 593 | 578 | 3% | |
| 2024 | June 30, | 2023 (U.S.\$ in millions) |
| Percentage Change |
||||
|---|---|---|---|---|
| 2024 2023 |
2024-2023 | |||
| 1,831 | \$ | 1,631 | 12% | |
| 87 | 98 | (12%) | ||
| 689 | 478 | 44% | ||
| 87 | 129 | (33%) | ||
| 111 | 127 | (13%) | ||
| 754 | 816 | (8%) | ||
| 276 | 289 | (4%) | ||
| 3,835 | 3,569 | 7% | ||
| \$ | Six months ended June 30, (U.S.\$ in millions) |
| Six months ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | Percentage Change |
|||||
| 2024 | 2023 | 2024-2023 | ||||
| (U.S.\$ in millions) | ||||||
| Europe segment | ||||||
| Generic products | \$ | 1,974 | \$ | 1,841 | 7% | |
| AJOVY | 102 | 74 | 37% | |||
| COPAXONE | 110 | 119 | (7%) | |||
| Respiratory products | 123 | 134 | (8%) | |||
| Other | 175 | 178 | (2%) | |||
| Total | 2,485 | 2,347 | 6% |
| June 30, | Percentage Change |
||||
|---|---|---|---|---|---|
| 2024 | 2023 | 2024-2023 | |||
| (U.S.\$ in millions) | |||||
| International Markets segment | |||||
| Generic products | \$ 963 |
\$ | 955 | 1% | |
| AJOVY | 39 | 27 | 42% | ||
| COPAXONE | 25 | 34 | (26%) | ||
| Other | 162 | 142 | 14% | ||
| Total | 1,190 | 1,159 | 3% |
(Unaudited)
| Three months ended June 30, | ||||
|---|---|---|---|---|
| 2024 | 2023 | |||
| (U.S. \$ in millions) | ||||
| Net cash provided by (used in) operating activities | 103 | 324 | ||
| Beneficial interest collected in exchange for securitized accounts receivables | 317 | 371 | ||
| Capital investment | (97) | (119) | ||
| Proceeds from divestitures of businesses and other assets | 1 | 56 | ||
| Free cash flow \$ | 324 | \$ | 632 |
(Unaudited)
| Six months ended June 30, | |||
|---|---|---|---|
| 2024 | 2023 | ||
| (U.S. \$ in millions) | |||
| Net cash provided by (used in) operating activities | (21) | 179 | |
| Beneficial interest collected in exchange for securitized trade receivables | 612 | 694 | |
| Capital investment | (221) | (258) | |
| Proceeds from divestitures of business and other assets | 1 | 58 | |
| Acquisition of subsidiary, net of cash acquired | (15) | - | |
| Free cash flow \$ | 356 | \$ 673 |
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