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Teva Pharmaceutical Industries Ltd.
Quarterly Report • Oct 27, 2021
7082_rns_2021-10-27_560aa93e-ae09-478e-bbb9-99facc8bef54.pdf
Quarterly Report
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 30, 2021
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.)
Israel 001-16174 Not Applicable
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 | TEVA | New York Stock Exchange |
| Ordinary Share |
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. ☐
ITEM 2.02 Results of Operations and Financial Condition
On October 27, 2021, Teva Pharmaceutical Industries Ltd. issued a press release announcing its financial results for the period ended September 30, 2021. 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.
ITEM 9.01 Financial Statements and Exhibits
(d) Exhibits
| Exhibit | ||
|---|---|---|
| No. | Description of Document | |
| 99.1 | Teva Reports Third Quarter 2021 Financial Results |
SIGNATURES
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.
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
Date: October 27, 2021 By: /s/ Eli Kalif
Name: Eli Kalif Title: Executive Vice President, Chief Financial Officer
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| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
Third Quarter 2021 Consolidated Results
Revenues in the third quarter of 2021 were \$3,887 million, a decrease of 2%, or 3% in local currency terms, compared to the third quarter of 2020. This decrease was mainly due to lower revenues in our North America segment, mainly due to COPAXONE® and generic products, partially offset by higher revenues from generic and OTC products in our Europe seqment, AJOVY® and AUSTEDO®. Revenues continued to be affected by the ongoinq impact of the COVID-19 pandemic on markets and on customer stocking and purchasing patterns.
Exchange rate movements during the third quarter of 2021, including hedging effects, positively impacted our revenues by \$42 million and our GAAP operating income by \$22 million and \$23 million, respectively.
GAAP gross profit was \$1,794 million in the third quarter of 2021, a decrease of 3% compared to the third quarter of 2020. GAAP gross profit margin was 46.2% in the third quarter of 2021, compared to 46.6% in the third quarter of 2020. The decrease in gross profit margin was mainly driven by a change in the mix of products sold, resulting from lower sales of specialty products that have higher profitability, mainly COPAXONE and lower profitability from Anda, partially offset by improved profitability from generic products, mainly in our North America segment. Non-GAAP gross profit was \$2,083 million in the third quarter of 2021, flat compared to the third quarter of 2020. Non-GAAP gross profit margin was 53.6% in the third quarter of 2021, compared to 52.4% in the third quarter of 2020.
GAAP Research and Development (R&D) expenses in the third quarter of 2021 were \$222 million, a decrease of 14% compared to the third quarter of 2020. Non-GAAP R&D expenses were \$217 million, or 5.6% of quarterly revenues, in the third quarter of 2021, compared to \$233 million, or 5.8%, in the third quarter of 2020. In the third quarter of 2021, our R&D expenses related primarily to specialty product candidates in the respiratory, pain, migraine and headache therapeutic areas, with additional activities in selected other areas and qeneric products including biosimilars. Our lower R&D expenses in the third quarter of 2021, compared to the third quarter of 2020, were mainly due to a decrease in the pain and neuropsychiatry therapeutic areas as well as various generics projects.
GAAP Selling and Marketing (S&M) expenses in the third quarter of 2021 were \$597 million, a decrease of 1% compared to the third quarter of 2020. Non-GAAP S&M expenses were \$567 million, or 14.6% of quarterly revenues, in the third quarter of 2021, compared to \$566 million, or 14.2%, in the third quarter of 2020.
GAAP General and Administrative (G&A) expenses in the third quarter of 2021 were \$291 million, an increase of 4% compared to the third quarter of 2020. Non-GAAP G&A expenses were \$275 million, or 7.1% of quarterly revenues, in the third quarter of 2021, compared to \$269 million, or 6.8%, in the third quarter of 2020.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
GAAP operating income in the third quarter of 2021 was \$623 million, compared to a loss of \$4,342 million in the third quarter of 2020. The operating loss in the third quarter of 2020 was mainly due to a goodwill impairment charge and higher intanqible asset impairment charges. Non-GAAP operating income in the third quarter of 2021 was \$1,042 million, an increase of 2%, compared to \$1,025 million in the third quarter of 2020. Non-GAAP operating margin was 26.8% in the third quarter of 2021, compared to 25.8% in the third quarter of 2020. The increase was mainly due to higher profit in our Europe and International Markets segments, partially offset by lower profit in our North America segment.
EBITDA (defined as operating income, excluding amortization and depreciation expenses) was \$954 million in the third quarter of 2021, compared to negative EBITDA of \$3,961 million in the third quarter of 2020. Adjusted EBITDA (defined as non-GAAP operating income excluding depreciation expenses) was \$1,170 million in the third quarter of 2021, an increase of 1% compared to \$1,153 million in the third quarter of 2020.
GAAP financial expenses were \$241 million in the third quarter of 2021, compared to \$117 million in the third quarter of 2020. Non-GAAP financial expenses were \$235 million in the third quarter of 2021, compared to \$241 million in the third quarter of 2020. Financial expenses in the third quarter of 2021, were mainly comprised of interest expenses of \$232 million. Financial expenses in the third quarter of 2020 were mainly comprised of interest expenses of \$241 million, partially offset by qains on revaluations of marketable securities of \$124 million.
In the third quarter of 2021, we recognized a GAAP tax expense of \$76 million, on pre-tax income of \$382 million. In the third quarter of 2020, we recognized a tax expense of \$16 million, on pre-tax loss of \$4,459 million. Our tax rate for the third quarter of 2021 was mainly affected by amortization and interest expense disallowance. Non-GAAP income taxes in the third quarter of 2021 were \$137 million, or 17%, on pre-tax non-GAAP income of \$807 million. Non-GAAP income taxes in the third quarter of 2020 were \$133 million, or 17%, on pre-tax non-GAAP income of \$784 million. Our non-GAAP tax rate in the third quarter of 2021 was mainly affected by the mix of products we sold and interest expense disallowance.
We expect our annual non-GAAP tax rate for 2021 to be 17%-18%, unchanged from our outlook provided in February 2021.
GAAP net income attributable to Teva and GAAP EPS were \$292 million and \$0.26, respectively, in the third quarter of 2021, compared to net loss of \$4,349 million and a loss per share of \$3.97 in the third quarter of 2020. The loss in the third quarter of 2020 was mainly due to a qoodwill impairment charge and intanqible asset impairment charges. Non-GAAP net income attributable to Teva and non-GAAP diluted EPS in the third quarter of 2021 were \$651 million and \$0.59, respectively, compared to \$637 million and \$0.58 in the third quarter of 2020.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
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| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
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\$506 million in the third quarter of 2020. The increase in the third quarter of 2021 resulted mainly from higher cash flow from operating activities.
As of September 30, 2021, our debt was \$23,746 million, compared to \$25,132 million as of June 30, 2021. This decrease was mainly due to repayment of our \$1,475 million 2.2% senior notes at maturity in July 2021 and exchange rate fluctuations, partially offset by \$300 million borrowed under our unsecured syndicated revolving credit facility ("RCF"). During the third quarter of 2021, we borrowed \$500 million under our RCF, of which \$200 million was repaid during the quarter and the remaining \$300 million was repaid subsequently. As of the date hereof, no amounts are outstanding under the RCF. Our debt as of September 30, 2021 was effectively denominated in the following currencies: 63% in U.S. dollars, 34% in euros and 3% in Swiss francs. The portion of total debt classified as short-term as of September 30, 2021 was 11%, compared to 14% as of June 30, 2021. Our financial leverage was 67% as of September 30, 2021, compared to 69% as of June 30, 2021. Our average debt maturity was approximately 5.4 years as of September 30, 2021, compared to 5.3 years as of June 30, 2021.
Segment Results for the Third Quarter of 2021
North America Segment
Our North America segment includes the United States and Canada.
The following table presents revenues, expenses and profit for our North America segment for the three months ended September 30, 2021 and 2020:
| Three months ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| (U.S. \$ in millions / % of Segment Revenues) | ||||||
| Revenues S | 1,875 | 100% | 2,017 | 100% | ||
| Gross profit | 967 | 51.6% | 1.056 | 52.4% | ||
| R&D expenses | 146 | 7.8% | 155 | 7.7% | ||
| S&M expenses | 250 | 13.3% | 250 | 12.4% | ||
| G&A expenses | 121 | 6.4% | 97 | 4.8% | ||
| Other income | (7) | S | (5) | ഗ് | ||
| Seqment profit* | 458 | 24.4% | ಲ | 560 | 27.7% |
* Segment profit does not include amortization and certain other items.
§ Represents an amount less than 0.5%.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
Revenues from our North America segment in the third quarter of 2021 were \$1,875 million, a decrease of \$142 million, or 7%, compared to the third quarter of 2020, mainly due to a decrease in revenues from COPAXONE and generic products. Our North America segment has experienced some reductions in volume due to less physician and hospital activity during the COVID-19 pandemic, but has also experienced increase in demand for certain products related to the treatment of COVID-19 and its symptoms. In addition, the ability to promote certain specialty products has been impacted by less physician visits by patients and less physician interactions by our sales personnel.
Revenues in the United States, our largest market, were \$1,754 million in the third quarter of 2021, a decrease of \$134 million, or 7%, compared to the third quarter of 2020.
Revenues by Major Products and Activities
The following table presents revenues for our North America segment by major products and activities for the three months ended September 30, 2021 and 2020:
| Three months ended September 30, |
Percentage Change |
||||
|---|---|---|---|---|---|
| 2021 | 2020 | 2020-2021 | |||
| (U.S. \$ in millions) | |||||
| Generic products | റ | 859 | ട് | 928 | (7%) |
| AJOVY | 46 | 35 | 31% | ||
| AUSTEDO | 201 | 168 | 19% | ||
| BENDEKA®/TREANDA® | ਰੇਤ | 105 | (9%) | ||
| COPAXONE | 133 | 236 | (44%) | ||
| ProAir®* | 31 | 50 | (37%) | ||
| Anda | 363 | 341 | 7% | ||
| Other | 146 | 155 | (5%) | ||
| Total | 1,875 | ഗ | 2.017 | (7%) |
* Does not include revenues from our ProAir authorized generic, which are included under generic products.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
temo
Generic products revenues in our North America segment (including biosimilars) in the third quarter of 2021 were \$859 million, a decrease of 7% compared to the third quarter of 2020, mainly due to increased competition and lower volumes.
In the third quarter of 2021, our total prescriptions were approximately 305 million (based on trailing twelve months), representing 8.2% of total U.S. generic prescriptions according to IQVIA data.
AJOVY revenues in our North America segment in the third quarter of 2021 increased by 31% to \$46 million, compared to the third quarter of 2020, mainly due to growth in volume.
AUSTEDO revenues in our North America segment in the third quarter of 2021 increased by 19%, to \$201 million, compared to \$168 million in the third quarter of 2020, mainly due to growth in volume.
BENDEKA and TREANDA combined revenues in our North America segment in the third quarter of 2021 decreased by 9% to \$95 million, compared to the third quarter of 2020, mainly due to the availability of alternative therapies and continued competition from Belrapzo® (a ready-to-dilute bendamustine hydrochloride product from Eagle).
COPAXONE revenues in our North America segment in the third quarter of 2021 decreased by 44% to \$133 million, compared to the third quarter of 2020, mainly due to generic competition in the United States.
ProAir (HFA and RespiClick) revenues in our North America segment in the third quarter of 2021 were \$31 million, a decrease of 37% compared to the third quarter of 2020, mainly due to generic competition. In January 2019, we launched our own ProAir authorized generic in the United States, following the launch of a generic version of Ventolin® HFA, another albuterol inhaler. Revenues from our ProAir authorized generic are included in "generic products" above. During the third quarter of 2021, the exit market share of our overall albuterol product, includinq our ProAir authorized generic was 38%, making it the second largest in the market, compared to 44% in the third quarter of 2020. Other generic versions of ProAir were launched in 2020.
Anda revenues in our North America seqment in the third quarter of 2021 increased by 7% to \$363 million, compared to \$341 million in the third quarter of 2020, mainly due to higher demand.
North America Gross Profit
Gross profit from our North America segment in the third quarter of 2021 was \$967 million, a decrease of 8%, compared to \$1,056 million in the third quarter of 2020. This decrease was mainly due to lower gross profit from COPAXONE.
Gross profit margin for our North America segment in the third quarter of 2021 decreased to 51.6%, compared to 52.4% in the third quarter of 2020. This decrease was mainly due to a change in the mix of products.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
North America Profit
Profit from our North America 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 North America seqment in the third quarter of 2021 was \$458 million, a decrease of 18% compared to \$560 million in the third quarter of 2020, mainly due to lower gross profit.
Europe Segment
Our Europe segment includes the European Union and certain other European countries.
The following table presents revenues, expenses and profit for our Europe segment for the three months ended September 30, 2021 and 2020:
| Three months ended September 30, | ||||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| (U.S. \$ in millions / % of Segment Revenues) | ||||||
| Revenues > | 1,220 | 100% | റ | 1.116 | 100% | |
| Gross profit | 714 | 58.6% | 637 | 57.1% | ||
| R&D expenses | 55 | 4.5% | 60 | 5.4% | ||
| S&M expenses | 204 | 16.7% | 200 | 17.9% | ||
| G&A expenses | 64 | 5.2% | ୧୧ | 5.9% | ||
| Other income | (2) | S | (1) | ക | ||
| Segment profit* > \$ | 394 | 32.3% | 312 | 28.0% |
* Segment profit does not include amortization and certain other items.
& Represents an amount less than \$1 million or 0.5%, as applicable.
Revenues from our Europe segment in the third quarter of 2021 were \$1,220 million, an increase of 9% or \$104 million, compared to the third quarter of 2020. In local currency terms, revenues increased by 6%, mainly due to the impact the COVID-19 pandemic had on markets and on customer stocking and purchasing patterns.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
Revenues by Major Products and Activities
The following table presents revenues for our Europe segment by major products and activities for the three months ended September 30, 2021 and 2020:
| Three months ended September 30, |
Percentage Change |
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|---|---|---|---|---|---|
| 2021 2020 |
2020-2021 | ||||
| (U.S. \$ in millions) | |||||
| Generic products | 895 | ട | 824 | 9% | |
| AJOVY ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 23 | 8 | 180% | ||
| COPAXONE | ਰੇਤ | 101 | (6%) | ||
| Respiratory products | 85 | 77 | 10% | ||
| Other | 122 | 106 | 15% | ||
| Total | 1,220 | 1,116 | 9% |
Generic products revenues in our Europe seqment in the third quarter of 2021, including OTC products, increased by 9% to \$895 million, compared to the third quarter of 2020. In local currency terms, revenues increased by 7%, mainly due to the impact the COVID-19 pandemic had on markets and on customer stocking and purchasing patterns.
AJOVY revenues in our Europe seqment in the third quarter of 2021 increased to \$23 million, compared to \$8 million in the third quarter of 2020, mainly due to launches and reimbursements in additional European countries as well as growth in existing countries.
COPAXONE revenues in our Europe segment in the third quarter of 2021 decreased by 6% to \$95 million, compared to the third quarter of 2020. In local currency terms, revenues decreased by 7%, due to price reductions and a decline in volume resulting from competing glatiramer acetate products.
Respiratory products revenues in our Europe segment in the third quarter of 2021 increased by 10% to \$85 million compared to the third quarter of 2020. In local currency terms, revenues increased by 7%, mainly due to the impact the COVID-19 pandemic had on markets and on customer stocking and purchasing patterns.
Europe Gross Profit
Gross profit from our Europe segment in the third quarter of 2021 was \$714 million, an increase of 12% compared to \$637 million in the third quarter of 2020, mainly due to the impact the COVID-19 pandemic had on markets and on customer stocking and purchasing patterns.
Gross profit margin for our Europe segment in the third quarter of 2021 increased to 58.6%, compared to 57.1% in the third quarter of 2020.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
Europe Profit
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 third quarter of 2021 was \$394 million, an increase of 26%, compared to \$312 million in the third quarter of 2020. This increase was mainly due to higher revenues, as discussed above.
International Markets Segment
Our International Markets segment includes all countries in which we operate other than those in our North America and Europe segments. The key markets in this segment are Japan, Russia and Israel.
On February 1, 2021, we completed the sale of the majority of the qeneric and operational assets of our business venture in Japan.
The following table presents revenues, expenses and profit for our International Markets segment for the three months ended September 30, 2021 and 2020:
| Three months ended September 30 | |||||||
|---|---|---|---|---|---|---|---|
| 2021 | 2020 | ||||||
| (U.S. \$ in millions / % of Segment Revenues) | |||||||
| Revenues | 530 | 100% 5 | 529 | 100% | |||
| Gross profit | 296 | 55.9% | 275 | 52.0% | |||
| R&D expenses | 16 | 3.0% | 17 | 3.2% | |||
| S&M expenses | 102 | 19.2% | 101 | 19.1% | |||
| G&A expenses | 29 | 5.4% | 33 | 6.3% | |||
| Other income | (2) | റ്റ് | (1) | ഗ് | |||
| Segment profit* \$ | 152 | 28.8% | ട് | 125 | 23.6% |
* Segment profit does not include amortization and certain other items.
& Represents an amount less than 0.5%.
Revenues from our International Markets segment in the third quarter of 2021 were \$530 million, flat compared to the third quarter of 2020. In local currency terms, revenues increased by 1% compared to the third quarter of 2020, mainly due to higher revenues in most markets and a milestone payment of \$35 million from Otsuka related to the launch of AJOVY in Japan, partially offset by lower revenues in Japan resulting from the divestment mentioned above, as well as regulatory price reductions and generic competition to off-patented products. Revenues continued to be affected by the onqoinq impact of the COVID-19 pandemic on markets and on customer stocking and purchasing patterns.
| IR Contacts | Kevin C. Mannix | (215) 591-8912 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| PR Contacts | Kelley Dougherty | (973) 832-2810 |
| Yonatan Beker | (973) 917-0851 |
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Revenues by Major Products and Activities
The following table presents revenues for our International Markets segment by major products and activities for the three months ended September 30, 2021 and 2020:
| Three months ended September 30 |
Percentage Change |
|||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | 2020-2021 | ||||
| (U.S. \$ in millions) | ||||||
| Generic products | ഗ | 412 | ર | 429 | (4%) | |
| AJOVY | 39 | 16 | 145% | |||
| COPAXONE | 10 | 14 | (30%) | |||
| Other | રવ | 71 | (3%) | |||
| Total | 530 | 529 | ತಿ |
§ Represents an amount less than 0.5%.
Generic products revenues in our International Markets segment in the third quarter of 2021, which include OTC products, decreased by 4% in U.S. dollar or 3% in local currency terms, to \$412 million, compared to the third quarter of 2020. This decrease was mainly due to lower sales in Japan resulting from the divestment mentioned above, as well as regulatory price reductions and generic competition to off-patented products in Japan, partially offset by higher revenues in most other markets.
AJOVY was launched in certain markets in our International Markets seqment, including in Japan during the third quarter of 2021. We are moving forward with plans to launch AJOVY in other markets. AJOVY revenues in our International Markets segment in the third quarter of 2021 were \$39 million, compared to \$16 million in the third quarter of 2020. Revenues in the third quarter of 2021 included milestone payment of \$35 million received from Otsuka related to the launch of AJOVY in Japan. Revenues in the third quarter of 2020 included a milestone payment of \$15 million received from Otsuka.
COPAXONE revenues in our International Markets segment in the third quarter of 2021 were \$10 million, compared to \$14 million in the third quarter of 2020.
AUSTEDO was launched in China for the treatment of chorea associated with Huntington disease and for the treatment of tardive dyskinesia in early 2021. We continue with additional submissions in various other markets.
International Markets Gross Profit
Gross profit from our International Markets seqment in the third quarter of 2021 was \$296 million, an increase of 8% compared to \$275 million in the third quarter of 2020.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
temo
Gross profit marqin for our International Markets segment in the third quarter of 2021 increased to 55.9%, compared to 52.0% in the third quarter of 2020. This increase was mainly due to the divestment in Japan mentioned above, the Otsuka milestone payment for AJOVY and a chanqe in product portfolio mix, partially offset by regulatory price reductions and generic competition to off-patented products in Japan.
International Markets Profit
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 segment profit does not include amortization and certain other items.
Profit from our International Markets segment in the third quarter of 2021 was \$152 million, an increase of 22%, compared to \$125 million in the third quarter of 2020. This increase was mainly due to higher gross profit.
Other Activities
We have other sources of revenues, primarily the sale of active pharmaceutical ingredients ("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 North America, Europe or International Markets segments described above.
Our revenues from other activities in the third quarter of 2021 were \$262 million, a decrease of 17% compared to the third quarter of 2020 in both U.S dollar and local currency terms, mainly due to a decrease in volumes from API and Medis resulting from the COVID-19 pandemic, as well as lower revenues from contract manufacturing services.
API sales to third parties in the third quarter of 2021 were \$161 million, a decrease of 8% in both U.S. dollar and local currency terms, compared to the third quarter of 2020.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
Conference Call
Teva will host a conference call and live webcast including a slide presentation on Wednesday, October 27, 2021, at 8:00 a.m. ET to discuss its third quarter 2021 results and overall business environment. A question & answer session will follow.
In order to participate, please dial the following numbers:
| Passcode: | 6466787 |
|---|---|
| Israel: | 1 (809) 213-985 |
| International: | +44 (0) 2071 928338 |
| United States: | 1 (877) 870-9135 |
A live webcast of the call will be available on Teva's website at: ir.tevapharm.com.
Following the conclusion of the call, a replay of the webcast will be available within 24 hours on the Company's website or by calling the following numbers: United States 1-866-331-1332; International +44 (0) 3333 009785; passcode: 6466787.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) has been developing and producing medicines to improve people's lives for more than a century. We are a global leader in generic and specialty medicines with a portfolio consisting of over 3,500 products in nearly every therapeutic area. Around 200 million people around the world take a Teva medicine every day, and are served by one of the largest and most comply chains in the pharmaceutical industry. Alonq with our established presence in generics, we have significant innovative research and operations supporting our growinq portfolio of specialty and biopharmaceutical products. Learn more at http://www.tevapharm.com.
Some amounts in this press release may not add up due to rounding. All percentages have been calculated using unrounded amounts.
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
-
| IR Contacts | Kevin C. Mannix | (215) 591-8912 |
|---|---|---|
| Yael Ashman | +972 (3) 914 8262 | |
| PR Contacts | Kelley Dougherty | (973) 832-2810 |
| Yonatan Beker | (973) 917-0851 |
-
- ;
| IR Contacts | Kevin C. Mannix Yael Ashman |
(215) 591-8912 +972 (3) 914 8262 |
|---|---|---|
| PR Contacts | Kelley Dougherty Yonatan Beker |
(973) 832-2810 (973) 917-0851 |
Consolidated Statements of Income (U.S. dollars in millions, except share and per share data)
| Three months ended | Nine months ended | ||||
|---|---|---|---|---|---|
| September 30, | September 30, | ||||
| 2021 | 2020 | 2021 | 2020 | ||
| (Unaudited) | (Unaudited) | (Unaudited) (Unaudited) | |||
| Net revenues | 3,887 | 3,978 | 11,778 | 12,206 | |
| Cost of sales | 2,093 | 2,126 | 6,234 | 6,528 | |
| Gross profit | 1,794 | 1,852 | 5,544 | 5,678 | |
| Research and development expenses | 222 | 258 | 723 | 704 | |
| Selling and marketing expenses | 597 | 605 | 1,798 | 1,815 | |
| General and administrative expenses | 291 | 279 | 822 | 846 | |
| Intangible assets impairments | 21 | 509 | 295 | 1,278 | |
| Goodwill impairment | 4,628 | 4,628 | |||
| Other asset impairments, restructuring and other items | 62 | (98) | 227 | 404 | |
| Legal settlements and loss contingencies | 3 | 21 | 113 | 10 | |
| Other income | (25) | (8) | (73) | (30) | |
| Operating (loss) income | 623 | (4,342) | 1,638 | (3,978) | |
| Financial expenses, net | 241 | 117 | 805 | 565 | |
| Income (loss) before income taxes | 382 | (4,459) | 833 | (4,543) | |
| Income taxes (benefit) | 76 | 16 | 235 | (147) | |
| Share in (profits) losses of associated companies, net | 5 | (136) | (9) | (135) | |
| Net income (loss) | 302 | (4,340) | 608 | (4,261) | |
| Net income (loss) attributable to non-controlling interests | 11 | 10 | 32 | (121) | |
| Net income (loss) attributable to Teva | 292 | (4,349) | 576 | (4,140) |
| Earnings (loss) per share attributable to Teva: | Basic (\$) | 0.26 | (3.97) | 0.52 | (3.78) |
|---|---|---|---|---|---|
| Diluted (\$) | 0.26 | (3.97) | 0.52 | (3.78) | |
| Weighted average number of shares (in millions): | Basic | 1,103 | 1,096 | 1,102 | 1,095 |
| Diluted | 1,109 | 1,096 | 1,109 | 1,095 |
| Non-GAAP net income attributable to Teva:* | 651 | 637 | 2,001 | 2,077 | |
|---|---|---|---|---|---|
| Non-GAAP net income attributable to Teva for diluted earnings per share: | 651 | 637 | 2,001 | 2,077 | |
| Non-GAAP earnings per share attributable to Teva:* | Basic (\$) | 0.59 | 0.58 | 1.82 | 1.90 |
| Diluted (\$) | 0.59 | 0.58 | 1.81 | 1.89 | |
| Non-GAAP average number of shares (in millions): | Basic 1,103 1,096 1,102 |
1,095 | |||
| Diluted | 1,109 | 1,100 | 1,109 | 1,099 | |
* See reconciliation attached.
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
| September 30, 2021 |
December 31, 2020 |
|
|---|---|---|
| ASSETS | (Unaudited) | (Audited) |
| Current assets: | ||
| Cash and cash equivalents | 2,045 | 2,177 |
| Accounts receivables, net of allowance for credit losses of \$119 | ||
| million and \$126 million as of September 30, 2021 and December | ||
| 31, 2020. | 4,046 | 4,581 |
| Inventories | 4,167 | 4,403 |
| Prepaid expenses | 1,066 | 945 |
| Other current assets | 805 | 710 |
| Assets held for sale | 25 | 189 |
| Total current assets | 12,154 | 13,005 |
| Deferred income taxes | 622 | 695 |
| Other non-current assets | 518 | 538 |
| Property, plant and equipment, net | 6,040 | 6,296 |
| Operating lease right-of-use assets | 507 | 559 |
| Identifiable intangible assets, net | 7,832 | 8,923 |
| Goodwill | 20,179 | 20,624 |
| Total assets | 47,851 | 50,640 |
| LIABILITIES & EQUITY | ||
| Current liabilities: | ||
| Short-term debt | 2,709 | 3,188 |
| Sales reserves and allowances | 4,241 | 4,824 |
| Accounts payables | 1,514 | 1,756 |
| Employee-related obligations | 555 | 685 |
| Accrued expenses | 2,035 | 1,780 |
| Other current liabilities | 770 | 933 |
| Total current liabilities | 11,825 | 13,164 |
| Long-term liabilities: | ||
| Deferred income taxes | 910 | 964 |
| Other taxes and long-term liabilities | 2,203 | 2,240 |
| Senior notes and loans | 21,037 | 22,731 |
| Operating lease liabilities | 425 | 479 |
| Total long-term liabilities | 24,575 | 26,414 |
| Equity: | ||
| Teva shareholders' equity | 10,467 | 10,026 |
| Non-controlling interests | 984 | 1,035 |
| Total equity | 11,451 | 11,061 |
| Total liabilities and equity | 47,851 | 50,640 |
TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in millions)
(Unaudited)
| Nine months ended | Three months ended | |||||
|---|---|---|---|---|---|---|
| September 30, | September 30, | |||||
| 2021 | 2020 | 2021 | 2020 | |||
| Operating activities: | ||||||
| Net income (loss) | \$ 608 |
\$ (4,261) | \$ 302 \$ |
(4,339) | ||
| Adjustments to reconcile net income (loss) to net cash provided by operations: | ||||||
| Depreciation and amortization | 1,010 | 1,162 | 329 | 381 | ||
| Impairment of long-lived assets and assets held for sale | 401 | 6,314 | 47 | 5,194 | ||
| Net change in operating assets and liabilities | (1,881) | (1,627) | (202) | (625) | ||
| Deferred income taxes – net and uncertain tax positions | 13 | (656) | 8 | (154) | ||
| Stock-based compensation | 86 | 91 | 26 | 29 | ||
| Net loss (gain) from investments and from sale of long lived assets | 109 | (232) | 16 | (256) | ||
| Research and development in process | - | 40 | - | 40 | ||
| Other items | (4) | 54 | 3 | 37 | ||
| Net cash provided by (used in) operating activities | 342 | 885 | 529 | 307 | ||
| Investing activities: | ||||||
| Beneficial interest collected in exchange for securitized accounts receivables | 1,278 | 1,102 | 397 | 333 | ||
| Purchases of property, plant and equipment | (409) | (402) | (146) | (143) | ||
| Proceeds from sale of business and long-lived assets | 269 | 54 | 15 | 9 | ||
| Proceeds from sale of investments | 172 | 12 | 19 | 3 | ||
| Other investing activities | (33) | (44) | 3 | (45) | ||
| Net cash provided by investing activities | 1,277 | 722 | 288 | 157 | ||
| Financing activities: | ||||||
| Repayment of senior notes and loans and other long-term liabilities | (1,475) | (1,871) | (1,475) | (1,171) | ||
| Proceeds from short term debt | 500 | 231 | 500 | 231 | ||
| Repayment of short term debt | (200) | (116) | (200) | (116) | ||
| Redemption of convertible senior notes | (491) | - | - | - | ||
| Other financing activities | (5) | (4) | (2) | (1) | ||
| Net cash used in financing activities | (1,671) | (1,760) | (1,177) | (1,057) | ||
| Translation adjustment on cash and cash equivalents Net change in cash and cash equivalents |
(80) (132) |
5 (148) |
(31) (391) |
18 (575) |
||
| Balance of cash and cash equivalents at beginning of period | 2,177 | 1,975 | 2,436 | 2,402 | ||
| Balance of cash and cash equivalents at end of period | \$ 2,045 |
1,827 | 2,045 \$ | 1,827 | ||
| Non-cash financing and investing activities: | ||||||
| Beneficial interest obtained in exchange for securitized accounts receivables | \$ 1,310 |
488 \$ 1,055 |
1,055 \$ 432 \$ |
327 |
| GAAP Excluded for non-GAAP measurement |
Non-GAAP | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Amortization of | Legal settlements and | Costs related to | |||||||||
| purchased intangible assets |
loss contingencies | Impairment of long lived assets |
Restructurin g costs |
regulatory actions taken in facilities |
Equity compensation | Contingent consideration |
Other non-GAAP items* | Other items | |||
| Net revenues | 3,887 | 3,887 | |||||||||
| Cost of sales | 2,093 | 175 | 5 | 5 | 104 | 1,804 | |||||
| Gross profit | 1,794 | 175 | 5 | 5 | 104 | 2,083 | |||||
| Gross profit margin | 46.2% | 53.6% | |||||||||
| R&D expenses | 222 | 4 | 217 | ||||||||
| S&M expenses | 597 | 24 | 7 | 567 | |||||||
| G&A expenses | 291 | 10 | 6 | 275 | |||||||
| Other income | (25) | (7) | (18) | ||||||||
| Legal settlements and loss contingencies | 3 | 3 | - | ||||||||
| Other assets impairments, restructuring and other items |
62 | 26 | 28 | 9 | (1) | - | |||||
| Intangible assets impairments | 21 | 21 | - | ||||||||
| Operating income (loss) | 623 | 199 | 3 | 47 | 28 | 5 | 26 | 9 | 103 | 1,042 | |
| Financial expenses, net | 241 | 6 | 235 | ||||||||
| Income (loss) before income taxes | 382 | 199 | 3 | 47 | 28 | 5 | 26 | 9 | 103 | 6 | 807 |
| Income taxes | 76 | (62) | 137 | ||||||||
| Share in (profits) losses of associated companies – net |
5 | 0 | 4 | ||||||||
| Net income (loss) | 302 | 199 | 3 | 47 | 28 | 5 | 26 | 9 | 103 | (56) | 665 |
| Net income (loss) attributable to non controlling interests |
11 | (4) | 14 | ||||||||
| Net income (loss) attributable to Teva | 292 | 199 | 3 | 47 | 28 | 5 | 26 | 9 | 103 | (60) | 651 |
| EPS - Basic | 0.26 | 0.33 | 0.59 | ||||||||
| EPS - Diluted | 0.26 | 0.32 | 0.59 |
Three Months Ended September 30, 2021
U.S. \$ and shares in millions (except per share amounts)
The non-GAAP diluted weighted average number of shares was 1,109 million for the three months ended September 30, 2021. Non-GAAP income taxes for the three months ended September 30, 2021 were 17% on pre-tax non-GAAP income.
* 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, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Adjusted EBITDA reconciliation Operating income (loss) 623 Add: Depreciation 132 Amortization 199 EBITDA 954 Legal settlements and loss contingencies3 Impairment of long lived assets 47 Restructuring costs 28 Costs related to regulatory actions taken in facilities 5 Equity compensation 26 Contingent consideration 9 Other non-GAAP items (excluding accelerated depreciation of \$4 million)* 99
Adjusted EBITDA 1,170
| U.S. \$ and shares in millions (except per share amounts) | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| GAAP | Excluded for non-GAAP measurement | ||||||||||||
| Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Impairment of long-lived assets |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Other non GAAP items* Other items |
||||||
| Net revenue | 11,778 | 11,778 | |||||||||||
| Cost of sales | 6,234 | 538 | 17 | 17 | 195 | 5,467 | |||||||
| Gross profit | 5,544 | 538 | 17 | 17 | 195 | 6,311 | |||||||
| Gross profit margin | 47.1% | 53.6% | |||||||||||
| R&D expenses | 723 | 14 | 5 | 704 | |||||||||
| S&M expenses | 1,798 | 76 | 24 | - | 1,698 | ||||||||
| G&A expenses | 822 | 31 | 7 | 785 | |||||||||
| Other (income) expense | (73) | (44) | (29) | ||||||||||
| Legal settlements and loss contingencies | 113 | 113 | - | ||||||||||
| Other assets impairments, restructuring and other items |
227 | 106 | 96 | (7) 32 |
- | ||||||||
| Intangible assets impairment | 295 | 295 | - | ||||||||||
| Operating income (loss) | 1,638 | 613 | 113 | 401 | 96 17 |
86 | (7) 194 |
3,153 | |||||
| Financial expenses, net | 805 | 104 | 701 | ||||||||||
| Income (loss) before income taxes | 833 | 613 | 113 | 401 | 96 17 |
86 | (7) 194 |
104 | 2,452 | ||||
| Income taxes | 235 | (182) | 417 | ||||||||||
| Share in (profits) losses of associated companies – net |
(9) | (1) (8) |
|||||||||||
| Net income (loss) | 608 | 613 | 113 | 401 | 96 17 |
86 | (7) 194 |
(79) 2,042 |
|||||
| Net income (loss) attributable to non controlling interests |
32 | (10) 42 |
|||||||||||
| Net income (loss) attributable to Teva | |||||||||||||
| 576 | 613 | 113 | 401 | 96 17 |
86 | (7) 194 |
(90) 2,001 |
||||||
| EPS - Basic | 0.52 | 1.29 | 1.82 | ||||||||||
| EPS - Diluted | 0.52 | 1.29 | 1.81 |
The non-GAAP diluted weighted average number of shares was 1,109 million for the nine months ended September 30, 2021.
Non-GAAP income taxes for the nine months ended September 30, 2021 were 17% on pre-tax non-GAAP income.
* 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, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Nine Months Ended September 30, 2021
Adjusted EBITDA reconciliation
| Operating income (loss) | 1,638 |
|---|---|
| Add: | |
| Depreciation | 398 |
| Amortization | 613 |
| EBITDA | 2,650 |
| Legal settlements and loss contingencies | 113 |
| Impairment of long lived assets | 401 |
| Restructuring costs | 96 |
| Costs related to regulatory actions taken in facilities |
17 |
| Equity compensation | 86 |
| Contingent consideration | (7) |
| Other non-GAAP items (excluding accelerated depreciation of \$13 million)* |
181 |
| Adjusted EBITDA | 3,538 |
| Three Months Ended September 30, 2020 | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| U.S. \$ and shares in millions (except per share amounts) | |||||||||||||
| GAAP Excluded for non-GAAP measurement |
Non-GAAP | ||||||||||||
| Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Goodwill impairment |
Impairment of long lived assets |
Other R&D expenses |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Other non GAAP items* |
Other items | |||
| Net revenues | 3,978 | 3,978 | |||||||||||
| Cost of sales | 2,126 | 221 | 6 7 |
(2) | 1,894 | ||||||||
| Gross profit | 1,852 | 221 | 6 7 |
(2) | 2,084 | ||||||||
| Gross profit margin | 46.6% | 52.4% | |||||||||||
| R&D expenses | 258 | 21 | 5 | 233 | |||||||||
| S&M expenses | 605 | 31 | 8 | 566 | |||||||||
| G&A expenses | 279 | 10 | - | 269 | |||||||||
| Other income | (8) | (0) | (8) | ||||||||||
| Legal settlements and loss contingencies | 21 | 21 | - | ||||||||||
| Other assets impairments, restructuring and other items Intangible assets impairments Goodwill impairment |
(98) 509 4,628 |
4,628 | 56 509 |
9 | (179) | 15 | - - - |
||||||
| Operating income (loss) | (4,342) | (179) | |||||||||||
| Financial expenses, net | 117 | 251 | 21 | 4,628 | 565 | 21 | 9 | 6 30 |
14 | (124) | 1,025 241 |
||
| Income (loss) before income taxes Income taxes Share in profit (losses)of associated |
(4,459) 16 (136) |
251 | 21 | 4,628 | 565 | 21 | 9 | 6 30 |
(179) | 14 | (124) (117) (134) |
784 133 (1) |
|
| Net income (loss) | (4,340) | 251 | 21 | 4,628 | 565 | 21 | 9 | 6 30 |
(179) | 14 | (375) | 652 | |
| Net income (loss) attributable to non controlling interests |
10 | (6) | 15 | ||||||||||
| Net income (loss) attributable to Teva | (4,349) | 251 | 21 | 4,628 | 565 | 21 | 9 | 6 30 |
(179) | 14 | (381) | 637 | |
| EPS - Basic EPS - Diluted |
(3.97) (3.97) |
4.55 4.55 |
0.58 0.58 |
The non-GAAP diluted weighted average number of shares was 1,100 million for the three months ended September 30, 2020.
Non-GAAP income taxes for the three months ended September 30, 2020 were 17% on pre-tax non-GAAP income.
* 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, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Adjusted EBITDA reconciliation
| Operating income (loss) | (4,342) | |
|---|---|---|
| Add: | ||
| Depreciation | 130 | |
| Amortization | 251 | |
| EBITDA | (3,961) | |
| Legal settlements and loss contingencies | 21 | |
| Goodwill impairment | 4,628 | |
| Impairment of long lived assets | 565 | |
| Other R&D expenses | 21 | |
| Restructuring costs | 9 | |
| Costs related to regulatory actions taken in facilities |
6 | |
| Equity compensation | 30 | |
| Contingent consideration | (179) | |
| Other non-GAAP items (excluding accelerated depreciation of \$2 million)* |
12 | |
| Adjusted EBITDA | 1,153 |
Nine months ended September 30, 2020
U.S. \$ and shares in millions (except per share amounts)
| GAAP Excluded for non-GAAP measurement |
Non-GAAP | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Goodwill impairment |
Impairment of long-lived assets |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Other non GAAP items* Other items |
|||||
| Net revenue | 12,206 | 12,206 | |||||||||||
| Cost of sales | 6,528 | 663 | 17 | 19 | 30 | 5,799 | |||||||
| Gross profit | 5,678 | 663 | 17 | 19 | 30 | 6,407 | |||||||
| Gross profit margin | 46.5% | 52.5% | |||||||||||
| R&D expenses | 704 | 14 | 3 | 687 | |||||||||
| S&M expenses | 1,815 | 95 | 25 | 1,695 | |||||||||
| G&A expenses | 846 | 31 | 12 | 803 | |||||||||
| Other (income) expense | (30) | (3) | (27) | ||||||||||
| Legal settlements and loss contingencies Other assets impairments, restructuring and |
10 | 10 | - | ||||||||||
| other items | 404 | 408 | 82 | (96) | 10 | - | |||||||
| Intangible assets impairment | 1,278 | 1,278 | - | ||||||||||
| Goodwill impairment | 4,628 | 4,628 | - | ||||||||||
| Operating income (loss) | (3,978) | 758 | 10 | 4,628 | 1,686 | 82 | 17 | 90 | (96) | 52 | - 3,248 |
||
| Financial expenses, net | 565 | (118) 683 |
|||||||||||
| Income (loss) before income taxes | (4,543) | 758 | 10 | 4,628 | 1,686 | 82 | 17 | 90 | (96) | 52 | (118) 2,565 |
||
| Income taxes | (147) | (583) 436 |
|||||||||||
| Share in losses of associated companies – net |
(135) | (134) | (1) | ||||||||||
| Net income (loss) attributtible to Teva Net income (loss) attributable to non |
(4,261) | 758 | 10 | 4,628 | 1,686 | 82 | 17 | 90 | (96) | 52 | (835) 2,130 |
||
| controlling interests | (121) | (174) 53 |
|||||||||||
| Net income (loss) | (4,140) | 758 | 10 | 4,628 | 1,686 | 82 | 17 | 90 | (96) | 52 | (1,009) 2,077 |
||
| EPS - Basic EPS - Diluted |
(3.78) (3.78) |
5.68 1.90 5.67 1.89 |
The non-GAAP diluted weighted average number of shares was 1,099 million for the nine months ended September 30, 2020.
Non-GAAP income taxes for the nine months ended September 30, 2021 were 17% on pre-tax non-GAAP income.
* 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, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Adjusted EBITDA reconciliation
| Operating income (loss) | (3,978) | |
|---|---|---|
| Add: | ||
| Depreciation | 404 | |
| Amortization | 758 | |
| EBITDA | (2,815) | |
| Legal settlements and loss contingencies | 10 | |
| Goodwill impairment | 4,628 | |
| Impairment of long lived assets | 1,686 | |
| Restructuring costs | 82 | |
| Costs related to regulatory actions taken in facilities |
17 | |
| Equity compensation | 90 | |
| Contingent consideration | (96) | |
| Other non-GAAP items (excluding accelerated depreciation of \$18 million)* |
34 | |
| Adjusted EBITDA | 3,635 |
Segment Information
| North America Three months ended September 30, |
Europe | International Markets | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Three months ended September 30, | Three months ended September 30, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||
| (U.S. \$ in millions) | (U.S. \$ in millions) | (U.S. \$ in millions) | |||||||||||
| Revenues \$ | 1,875 | \$ | 2,017 | \$ | 1,220 | \$ | 1,116 | \$ | 530 | \$ | 529 | ||
| Gross profit | 967 | 1,056 | 714 | 637 | 296 | 275 | |||||||
| R&D expenses | 146 | 155 | 55 | 60 | 16 | 17 | |||||||
| S&M expenses | 250 | 250 | 204 | 200 | 102 | 101 | |||||||
| G&A expenses | 121 | 97 | 64 | 66 | 29 | 33 | |||||||
| Other income | (7) | (5) | (2) | (1) | (2) | (1) | |||||||
| Segment profit \$ | 458 | \$ | 560 | \$ | 394 | \$ | 312 | \$ | 152 | \$ | 125 |
| North America Nine months ended September 30, |
Europe | International Markets | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Nine months ended September 30, |
Nine months ended | ||||||||||||
| September 30, | |||||||||||||
| 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | ||||||||
| (U.S. \$ in millions) | (U.S. \$ in millions) | (U.S. \$ in millions) | |||||||||||
| Revenues \$ | 5,807 | \$ | 6,146 | \$ | 3,618 | \$ | 3,520 | \$ | 1,505 | \$ | 1,582 | ||
| Gross profit | 3,081 | 3,208 | 2,063 | 2,009 | 826 | 828 | |||||||
| R&D expenses | 467 | 455 | 184 | 180 | 51 | 51 | |||||||
| S&M expenses | 734 | 755 | 628 | 590 | 303 | 312 | |||||||
| G&A expenses | 338 | 325 | 180 | 184 | 79 | 96 | |||||||
| Other income | (14) | (9) | (3) | (3) | (5) | (10) | |||||||
| Segment profit \$ | 1,556 | \$ | 1,682 | \$ | 1,074 | \$ | 1,058 | \$ | 398 | \$ | 378 |
Segment Information
Reconciliation of our segment profit to consolidated income before income taxes
| Three months ended | |||||
|---|---|---|---|---|---|
| September 30, | |||||
| 2021 | 2020 | ||||
| (U.S.\$ in millions) | |||||
| North America profit | \$ | 458 | \$ | 560 | |
| Europe profit | 394 | 312 | |||
| International Markets profit | 152 | 125 | |||
| Total reportable segment profit | 1,004 | 997 | |||
| Profit of other activities | 38 | 28 | |||
| Total segment profit | 1,042 | 1,025 | |||
| Amounts not allocated to segments: | |||||
| Amortization | 199 | 251 | |||
| Other asset impairments, restructuring and other items | 62 | (98) | |||
| Intangible asset impairments | 21 | 509 | |||
| Goodwill impairment | - | 4,628 | |||
| Legal settlements and loss contingencies | 3 | 21 | |||
| Other unallocated amounts | 134 | 55 | |||
| Consolidated operating income (loss) | 623 | (4,342) | |||
| Financial expenses - net | 241 | 117 | |||
| Consolidated income (loss) before income taxes | \$ | 382 | \$ | (4,459) |
Reconciliation of our segment profit to consolidated income before income taxes
| Nine months ended | |||||
|---|---|---|---|---|---|
| September 30, | |||||
| 2021 | 2020 | ||||
| (U.S.\$ in millions) | |||||
| North America profit | \$ | 1,556 | \$ | 1,682 | |
| Europe profit | 1,074 | 1,058 | |||
| International Markets profit | 398 | 378 | |||
| Total reportable segment profit | 3,028 | 3,118 | |||
| Profit of other activities | 125 | 130 | |||
| Total segment profit | 3,153 | 3,248 | |||
| Amounts not allocated to segments: | |||||
| Amortization | 613 | 758 | |||
| Other asset impairments, restructuring and other items | 227 | 404 | |||
| Goodwill impairment | - | 4,628 | |||
| Intangible asset impairments | 295 | 1,278 | |||
| Legal settlements and loss contingencies | 113 | 10 | |||
| Other unallocated amounts | 266 | 148 | |||
| Consolidated operating income (loss) | 1,638 | (3,978) | |||
| Financial expenses - net | 805 | 565 | |||
| Consolidated income (loss) before income taxes | \$ | 833 | \$ | (4,543) |
Segment revenues by major products and activities (Unaudited)
| Three months ended | ||||
|---|---|---|---|---|
| September 30, | Percentage Change |
|||
| 2021 | 2020-2021 | |||
| (U.S.\$ in millions) | ||||
| North America segment | ||||
| Generic products | \$ 859 |
\$ 928 |
(7%) | |
| AJOVY | 46 | 35 | 31% | |
| AUSTEDO | 201 | 168 | 19% | |
| BENDEKA/TREANDA | 95 | 105 | (9%) | |
| COPAXONE | 133 | 236 | (44%) | |
| ProAir* | 31 | 50 | (37%) | |
| Anda | 363 | 341 | 7% | |
| Other | 146 | 155 | (5%) | |
| Total | 1,875 | 2,017 | (7%) |
* Does not include revenues from the ProAir authorized generic, which are included under generic products.
| Three months ended | ||||
|---|---|---|---|---|
| September 30, | Percentage Change 2020-2021 |
|||
| 2021 2020 |
||||
| (U.S.\$ in millions) | ||||
| Europe segment | ||||
| Generic products | \$ 895 |
\$ | 824 | 9% |
| AJOVY | 23 | 8 | 180% | |
| COPAXONE | 95 | 101 | (6%) | |
| Respiratory products | 85 | 77 | 10% | |
| Other | 122 | 106 | 15% | |
| Total | 1,220 | 1,116 | 9% |
| Three months ended | |||||
|---|---|---|---|---|---|
| September 30, | Percentage Change |
||||
| 2021 | 2020 | 2020-2021 | |||
| (U.S.\$ in millions) | |||||
| International Markets segment | |||||
| Generic products | \$ 412 |
\$ | 429 | (4%) | |
| AJOVY | 39 | 16 | 145% | ||
| COPAXONE | 10 | 14 | (30%) | ||
| Other | 69 | 71 | (3%) | ||
| Total | 530 | 529 | § |
Revenues by Activity and Geographical Area
(Unaudited)
| Nine months ended | |||
|---|---|---|---|
| September 30, | Percentage Change |
||
| 2021 | 2020 | 2020-2021 | |
| (U.S.\$ in millions) | |||
| North America segment | |||
| Generic products | \$ 2,864 |
\$ 2,804 |
2% |
| AJOVY | 123 | 98 | 25% |
| AUSTEDO | 520 | 451 | 15% |
| BENDEKA / TREANDA | 292 | 313 | (7%) |
| COPAXONE | 448 | 671 | (33%) |
| ProAir* | 140 | 175 | (20%) |
| Anda | 968 | 1,141 | (15%) |
| Other | 451 | 493 | (8%) |
| Total | 5,807 | 6,146 | (6%) |
* Does not include revenues from the ProAir authorized generic, which are included under generic products.
| Nine months ended | ||||||
|---|---|---|---|---|---|---|
| September 30, | Percentage Change |
|||||
| 2021 | 2020 | 2020-2021 | ||||
| (U.S.\$ in millions) | ||||||
| Europe segment | ||||||
| Generic products | \$ 2,637 |
\$ | 2,593 | 2% | ||
| AJOVY | 58 | 17 | 232% | |||
| COPAXONE | 296 | 294 | 1% | |||
| Respiratory products | 263 | 263 | 0% | |||
| Other | 364 | 352 | 3% | |||
| Total | 3,618 | 3,520 | 3% |
| Nine months ended | |||
|---|---|---|---|
| Percentage | |||
| September 30, | Change | ||
| 2021 | 2020 | 2020-2021 | |
| (U.S.\$ in millions) | |||
| International Markets segment | |||
| Generic products | \$ 1,211 |
\$ 1,304 |
(7%) |
| AJOVY | 46 | 17 | 170% |
| COPAXONE | 29 | 38 | (23%) |
| Other | 219 | 224 | (2%) |
| Total | 1,505 | 1,582 | (5%) |
Free cash flow reconciliation
(Unaudited)
| Three months ended September 30, | |||||
|---|---|---|---|---|---|
| 2021 | 2020 | ||||
| (U.S. \$ in millions) | |||||
| Net cash provided by operating activities | 529 | 307 | |||
| Beneficial interest collected in exchange for securitized accounts receivables | 397 | 333 | |||
| Purchases of property, plant and equipment | (146) | (143) | |||
| Proceeds from sale of business and long lived assets | 15 | 9 | |||
| Free cash flow \$ | 795 | \$ | 506 |
Free cash flow reconciliation
(Unaudited)
| Nine months ended September 30, |
|||
|---|---|---|---|
| 2021 | 2020 | ||
| (U.S. \$ in millions) | |||
| Net cash provided by (used in) operating activities | 342 | 885 | |
| Beneficial interest collected in exchange for securitized accounts receivables | 1,278 | 1,102 | |
| Purchases of property, plant and equipment | (409) | (402) | |
| Proceeds from sale of business and long lived assets | 269 | 54 | |
| Free cash flow \$ | 1,479 | \$ | 1,639 |