Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q2 2024 Earnings Presentation
57 slides from Teva Pharmaceutical Industries's earnings presentation, Jul 31, 2024
Slide 1: Second Quarter 2024 Results
Teva Pharmaceutical Industries Ltd. Second Quarter 2024 Results July 31, 2024
Slide 2: Forward-looking statements
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our futu
Slide 3: President and Chief Executive Officer
President and Chief Executive Officer
Slide 4: Q2 2024 Wins
Deliver on Step up Sustain generics Focus our growth engines innovation powerhouse business • AUSTEDO® U.S. revenues up • Olanzapine LAI ~95% of • Generics growth across all • Teva api is back to growth, up Q1 2024 Wins 32% target injections completed geographies 5% in Q2’24 with no PDSS observed •
Slide 5: Quarterly Revenue Growth vs. previous year
Quarterly Revenue Growth vs. previous year +11% +5% +14% Q2 2024 +7% +4% +4% Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Growth in local currency terms 5| Q4 2023 includes the impact from an upfront payment received in connection with the collaboration on duvakitug
Slide 6: Raising Our 2024 Financial Outlook Including Revenues, EBITDA and EPS
Q2 2024 Revenues Adjusted EBITDA 11% 4% Non-GAAP EPS Net Debt / EBITDA 9% Raising Our 2024 Financial Outlook Including Revenues, EBITDA and EPS 6| Growth vs. Q2 2023, revenues in local currency
Slide 7: Global generics revenues $4.2b
Global generics +32% +14% Revenues $4.2b +11% Teva api +12% +5% % growth In local currency, AUSTEDO U.S. revenues, all compared to Q2 2023 7| Teva api revenues increase reflecting a reallocation of an immaterial business within our other activities, in line with our intention to divest our API busin
Slide 8: Raising 2024 AUSTEDO revenues outlook to ~$1.6B
Raising 2024 revenues outlook from ~$1.5B to ~$1.6B Continued growth of AUSTEDO prescriptions AUSTEDO quarterly TRx U.S. Revenues 90,000 80,000 $407M 70,000 60,000 50,000 U.S. Revenues Growth 40,000 +32% 30,000 20,000 10,000 0 TRx Growth +30% Revenue and TRx data is compared to Q2 2023 9 Data repres
Slide 9: AUSTEDO XR once-daily dosing options
AUSTEDO XR offers the most once-daily dosing options of any VMAT2 inhibitor, including an updated titration kit Response delivered as early as 2 weeks with results through 3 years in the longest TD clinical trial to date* 9| * Open-label extension, non-blinded; Source on file
Slide 10: AJOVY: reaffirming 2024 revenues outlook of ~$500 million
Reaffirming 2024 revenues outlook of ~$500 million Quarterly Global Net Sales • Global revenue of $115 million $115m +12% Q2’24 • Strong competitive positioning and market $104m Q2’23 share: 18 19 17 22 • U.S.: 28% 14 • Europe: 31% 41 45 • U.S.: #1 preventive anti-CGRP in new 39 51 prescriptions amo
Slide 11: UZEDY: reaffirming 2024 revenues outlook of ~$80M
Reaffirming 2024 revenues outlook of ~$80M UZEDY Prescription Growth • Solid demand and TRx growth, driven UZEDY TRx MOT (months of therapy) by strong product profile • Continuous market share gain in the 5,000 4,500 Risperidone LAI market, targeting the 4,000 broader LAI market for Schizophrenia 3,
Slide 12: Biosimilars: payer coverage and upcoming launches
Q2 2024 Upcoming 2026 and beyond ✓ Growing U.S. payer coverage Expected launch February 2025 ✓ Wholesalers are stocking ✓ Private label with Quallant expanding access to more patients Expected approval late 2025 In collaboration with Alvotech for the U.S. market 12 | Trademarks mentioned are the pro
Slide 13: Asset Progress and Next milestones
Asset Progress Next milestones Olanzapine LAI Recruited 9 months ahead Full Phase III safety Positive Phase III efficacy H2 2024 TEV-’749 complete Duvakitug Phase II expected to be completed Phase II top line results 3 months earlier Q4 2024 TEV-’574 (vs. interim analysis) Anti-IL15 Celiac PoC study
Slide 14: ICS/SABA (TEV-'248) expected to be a unique asset
11M of 13M Asthma patients in U.S. are treated on SABA ICS/SABA (TEV-’248) expected to be a unique asset 2023 Asthma Patient Population (U.S.)1 GINA guidelines recommend use of ICS/SABA in place of SABA SABA Treated Treated Expecting broad label including pediatric Patients: Expected Patients: ICS/S
Slide 15: Olanzapine LAI: LAI market > $5B
Schizophrenia market (U.S.+EU5) Olanzapine LAI Efficacy consistent with oral olanzapine and potential to be 1st LAI olanzapine Diagnosed with right safety profile: SteadyTeqTM technology expected to provide Prevalence: 4.9M predictable PK Treated Patients: 3.8M Oral Olanzapine is one of the most pre
Slide 16: Global Generics growth of 14%
Global Generics growth of 14% Q2-23 as reported +16% +8% +22% Q2-24 as reported Local currency impact 1,023 970 884 909 478 486 Q2-23 Q2-24 Q2-23 Q2-24 Q2-23 Q2-24 United States Europe International Markets 16 | $Commencing million, % growth In local currency, compared to Q2 2023 January 1, 2024, Ca
Slide 17: Teva api
+5% vs. Q2’23 Continued strong Divestment Continued revenue traction on process on track, growth1 CDMO business targeting completion by H1 2025 1. API sales to third parties in Q2 2024 reflecting an increase of 5% vs Q2 2023, following a reallocation of an immaterial business within our other activi
Slide 18: Executive Vice President, Global R&D & Chief Medical Officer
Executive Vice President, Global R&D & Chief Medical Officer
Slide 19: Duvakitug, Olanzapine LAI, ICS/SABA
'574 binds single TL1A subunit Duvakitug Olanzapine LAI ICS/SABA Recruitment of Phase II study Recruited Phase III study 9 months Phase III exacerbations study in accelerated ahead adults and pediatric progressing Final patient randomized July 5th Conference presentation of with readout expected in
Slide 20: AJOVY pediatric episodic migraine Phase 3 study
SPACE Phase 3 study: pediatric episodic migraine Pediatric1 Episodic Migraine Phase 3 Study Primary and key secondary end points for efficacy met4 with a significantly greater Placebo N=112 reduction in Monthly Migraine Days compared to placebo Screening 4 wks AJOVY2 N=123 <15 headache days Efficacy
Slide 21: Multiple System Atrophy
Recurrent falls Multiple System Atrophy Indwelling catheter Sexual dysfunction Frontal executive Fatal, neurodegenerative adult dysfunction Urinary dysfunction disease Unintelligible speech REM sleep behavior disorder Characterized by autonomic Gastrostomy failure, cerebellar ataxia and Orthostatic
Slide 22: Emrusolmin mechanism of action in MSA
• Multiple System Atrophy (MSA) is a devastating disease, for which emrusolmin has received orphan status • Promising mechanism of action to treat MSA: • orally administered small molecule which efficiently penetrates the brain and targets the pathology within cells (in contrast to antibodies) • inh
Slide 23: Anti-PD1-IL2 Attenukine preclinical data
Co-culture of human melanoma cell line and PBMCs • Encouraging activity of anti-PD1-IL-2 1.5 1.5 Vehicle Vehicle ATTENUKINETM in human ex vivo system Keytruda TEV-56278 (100 μg/mL) • Potential for additional combination Anti-PD1-IL2 Attenukine Pemb (100 μg/mL) Anti-PD1-IL2 Attenukine therapies with
Slide 24: Asset Progress and Next milestones
Asset Progress Next milestones Olanzapine LAI Recruited 9 months ahead Full Phase III safety Positive Phase III efficacy H2 2024 TEV-’749 complete Duvakitug Phase II expected to be completed Phase II top line results 3 months earlier Q4 2024 TEV-’574 (vs. interim analysis) Anti-IL15 Celiac PoC study
Slide 25: Executive Vice President, Chief Financial Officer
Executive Vice President, Chief Financial Officer 25 |
Slide 26: Q2 2024 GAAP and Non-GAAP results
$ millions, except EPS Q2 2024 Q2 2023 Q2 2024 Q2 2023 GAAP Non-GAAP Revenues 4,164 3,878 4,164 3,878 Operating income (loss) (5) (654) 1,056 1,011 Net income (loss) attributable to Teva (846) (872) 697 629 Earnings (loss) per share ($) (0.75) (0.78) 0.61 0.56 Number of shares (millions) 1,133 1,120
Slide 27: GAAP to Non-GAAP adjustments Q2 2024
$ millions Q2 2024 Comments Amortization 146 Impairment of intangible assets 61 Impairment of tangible assets 69 Mainly related to the classification of our business venture in Japan as held for sale Mainly related to estimated provisions recorded in connection with certain litigation Legal settleme
Slide 28: Q2 and H1 2024 financial summary
$ billions, except EPS Q2 2024 Q2 2023 Change H1 2024 H1 2023 Change Revenues 4.2 3.9 7% 8.0 7.5 6% 2.2 2.0 9% 4.2 3.8 9% Gross profit 52.9% 52.2% 0.8% 52.2% 50.7% 1.6% 1.1 1.0 4% 1.9 1.8 8% Operating income 25.3% 26.1% -0.7% 24.4% 23.8% 0.6% EBITDA 1.2 1.1 4% 2.2 2.0 7% Net income attributable to T
Slide 29: Non-GAAP Gross Profit, OPEX and Operating Income
27. Non-GAAP Gross Profit ($m) Non-GAAP OPEX ($m) Non-GAAP Operating Income ($m) 52.2% 8% 24. 26.8% 4% 50.7% 23.8% 4,168 2,220 3,819 2,023 1,948 1,796 2,205 2,023 1,149 1,963 1,071 1,056 1,796 1,011 1,012 1,011 892 785 Q1-23 Q2-23 Q1-24 Q2-24 H1-23 H1-24 Q1-23 Q2-23 Q1-24 Q2-24 H1-23 H1-24 Q1-23 Q2-
Slide 30: Free cash flow
$ millions 2,387 1,486 632 324 229 41 32 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 30 | Free cash flow includes cash flow from operating activities, beneficial interest collected in exchange for securitized accounts receivables, proceeds from divestitures of businesses and other assets, net of
Slide 31: Net Debt and EBITDA MAT leverage
$ billions 18.0 Net Debt 17.7 16.6 16.7 16.4 EBITDA MAT 4.8 4.9 5.0 4.4 4.4 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net Debt / EBITDA MAT 4.14 4.03 3.45 3.38 3.30 Leverage 73% 73% 71% 72% 73% 31 | Teva's Net Debt/EBITDA MAT covenant ratio limit is 4.00x for Q1-Q4 2024; MAT = Moving Annual Total 2023
Slide 32: Revised Financial Outlook
Revenues Tax Rate Revised 2024 AUSTEDO ($m) AJOVY ($m) ~1,600 ~500 Diluted EPS ($) Financial UZEDY ($m) ~80 COPAXONE ($m) ~450 1,150 million shares Outlook Operating Income Free Cash Flow Adjusted EBITDA CAPEX Finance Expenses Foreign Exchange Volatile swings in FX can negatively impact revenue and
Slide 33: Long-term financial targets
Revenue growth Operating income Net debt/ adjusted Cash-to- (CAGR) margin1, 2 EBITDA2 earnings2, 3, 4 Mid-single digit 30% 2.0x 80% 1. Operating income margin = Non-GAAP operating income divided by net revenues; excluding potential impact of business development deals depending on timing 2. All meas
Slide 34: Return to growth, sustain growth, accelerate growth
2028+ 2025-2027 2023-2024 Sustain growth • Innovative launches Accelerate growth (duvekitug, anti-PD1-IL2, anti-IL15) Return to growth • Innovative launches • Sustainable innovative pipeline • AUSTEDO and AJOVY continue to (olanzapine LAI, ICS/SABA) • Focused business development show strong growth
Slide 35: Q&A
Q. & A » \\ \
Slide 36: Innovative and Biosimilar Pipeline
Innovative and ilar ine Biosim Pipel 36 |
Slide 37: Innovative pipeline by development stage
Preclinical Phase 1 Phase 2 Phase 3 TEV-’279 TEV-’408 Duvakitug (TEV- Olanzapine LAI Neuroscience Immunology ’574) 2 (TEV-’749) Ulcerative Colitis & Schizophrenia TEV-’288 TEV-’192 Crohn’s Disease Neuroscience Immunology & ICS/SABA3 Neuroscience (TEV-’248) TEV-’278 Emrusolmin Asthma TEV-’2871 Oncolo
Slide 38: Biosimilar pipeline by development stage
Commercial Preclinical Phase 3 Approved Biosimilar Products Biosimilar to TEV-’285 Prolia® 3 1 TEV-’191 (denosumab) TEV-’261 Biosimilar to 3 Xgeva ® TEV-’289 (denosumab) TEV-’284 / TEV-’2941 Biosimilar to TEV-’2921 Xolair® 4 (omalizumab) TEV-’2951 Biosimilar to 1 TEV-’2961 Eylea® (aflibercept)1 TEV-
Slide 39: Additional financial information
Additional Cc 2 ~ ia®) = O (waa = 39 |
Slide 40: H1 2024 GAAP and Non-GAAP results
$ millions, except EPS H1 2024 H1 2023 H1 2024 H1 2023 GAAP Non-GAAP Revenues 7,983 7,539 7,983 7,539 Operating income (loss) (223) (667) 1,948 1,796 Net income (loss) attributable to Teva (985) (1,091) 1,245 1,085 Earnings (loss) per share ($)* (0.87) (0.98) 1.09 0.96 Number of shares (millions) 1,
Slide 41: Q2 2024 GAAP income statement
$ millions, except EPS Q2-24 Q2 2024 Margins Q2-23 Q2 2023 Margins Change Revenues 4,164 3,878 7% COGS 2,140 51.4% 2,082 53.7% 3% 2,024 1,796 Gross profit 48.6% 46.3% 13% R&D 269 6.5% 240 6.2% 12% S&M 656 15.8% 603 15.6% 9% G&A 283 6.8% 307 7.9% (8%) Legal settlements and loss contingencies 83 2.0%
Slide 42: H1 2024 GAAP income statement
H1 2024 H1 2023 $ millions, except EPS H1 2024 H1 2023 Change Margins Margins Revenues 7,983 7,539 6% COGS 4,188 52.5% 4,161 55.2% 1% 3,795 3,378 Gross profit 47.5% 44.8% 12% R&D 511 6.4% 473 6.3% 8% S&M 1,265 15.8% 1,149 15.2% 10% G&A 561 7.0% 602 8.0% (7%) Legal settlements and loss 188 2.4% 695 9
Slide 43: FX effect on revenues and operating income
$ millions Q2 2024 Q2 2023 Diff FX Effect Diff net FX Revenues 4,164 3,878 287 (122) 408 Operating income (loss) GAAP (5) )654( (649) (56) 705 Operating income Non-GAAP 1,056 1,011 45 (56) 101 The data presented with respect to operating income (loss), income taxes (benefit), income (loss) before in
Slide 44: Net revenues and non-GAAP margins by quarter
4,457 $ millions 4,164 3,884 3,878 3,850 3,786 3,819 3,661 3,595 58.2% 54.4% 53.0% 54.2% 52.2% 53.5% 52.9% 49.1% 51.4% 34.7% 26.9% 27.2% 29.1% 26.5% 26.1% 23.4% 25.3% 21.4% Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Net Revenues Non-GAAP Gross Profit Margin Non-GAAP Oper
Slide 45: Revenues by segment and product
$ millions Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 U.S. Segment 1,892 1,896 2,266 1,725 2,110 Generic products 884 839 667 808 1,023 AJOVY® 52 56 57 45 42 AUSTEDO® 308 339 408 282 407 BENDEKA®/TREANDA® 67 56 52 46 41 COPAXONE® 56 98 72 30 81 Anda 392 367 394 381 373 Other* 131 142 616 133 144 Europe Segment 1
Slide 46: Non-GAAP net income, operating income and EPS
$ millions, EPS in $ 1,546 1,130 1,019 1,056 1,011 1,020 977 892 785 1,135 754 791 658 677 697 629 548 457 1.00 0.68 0.59 0.71 0.60 0.61 0.40 0.56 0.48 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Non-GAAP Net Income Non-GAAP Operating Income Non-GAAP EPS 46 | 2023 figures
Slide 47: Operating income bridge Q2
$ millions +$45m Nominal (+4%) +$101m In local Currencies (+10%) 8 (59) 118 (21) 1,011 1,056 Q2-23 US Europe International Other Activities Q2-24 Markets 47 |
Slide 48: Operating income bridge H1
$ millions +$152m Nominal (+8%) +$218m In local Currencies (+11%) (50) 86 (13) 130 1,948 1,796 H1-23 US Europe International Other Activities H1-24 Markets 48 |
Slide 49: Operating income by segment
1,546 $ millions 2 109 (0%) (7%) 461 (30%) 1,056 1,011 1,020 12 33 892 73 117 (1%) 132 (3%) 2 (7%) (11%) (13%) 117 (0%) 345 338 (13%) (33%) 334 (33%) (33%) 423 974 (47%) (63%) 571 626 511 (59%) (51%) (56%) 350 (39%) -5 (-1%) Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Revenues 3,878 3,850 4,457 3,819 4,164 US Eur
Slide 50: COGS and OPEX as share of revenues
+292 (+5%) In local currency +387 (+7%) $ millions +242 (+8%) In local currency +308 (+11%) 6,036 5,743 3,109 3,815 2,867 (63%) 1,959 3,720 (63%) (65%) 1,855 1,959 (65%) (63%) COGS OPEX 1,149 1,012 (37%) 2,023 (35%) 2,220 1,012 1,149 (37%) (37%) (35%) (35%) Q2-23 Q2-24 H1-23 H1-24 Revenues 3,878 4,1
Slide 51: Adjusted EBITDA
$ millions 1,660 1,125 1,134 1,168 1,005 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 51 | Please see our press release reporting our financial results this quarter for a reconciliation of Adjusted EBITDA to its nearest GAAP equivalent 2023 figures include the impact from an upfront payment received in c
Slide 52: Free cash flow bridge
$ millions (844) (72%) (120) (223) (248) (95) (369) (156) (239) 1,168 16 (18) (199) 1 (97) 317 (247) 324 103 Non-GAAP Interest Tax payments AR Inventory Legal AP & Other Securitization Operating Securitization Asset sales, Free cash flow EBITDA payments, net settlements cash flow reclass net; Capex
Slide 53: Balance sheet
$ billions June 30, 2024 March 31, 2024 Diff Cash and Cash Equivalents 2.3 3.0 (0.7) AR Trade 3.8 3.5 0.3 Pre-paid Expenses and Other Current Assets 1.7 1.9 (0.2) Inventory 3.9 3.9 (0.0) Fixed Assets 5.6 5.6 (0.0) Intangible Assets 4.9 5.1 (0.2) Goodwill 16.5 17.0 (0.5) Other Long-Term Assets 2.8 2.
Slide 54: Gross debt and net debt
$ billions 19.6 -1.0 -0.1 18.6 -2.3 16.4 Mar 31, 2024 Debt repay FX and Other Jun 30, 2024 Cash balance Jun 30, 2024 Gross Debt Gross Debt Net Debt 54 |
Slide 55: Net debt trend
$ billions $35.0 $34.0 $33.0 $31.0 $29.0 $27.0 $25.0 $23.0 $21.0 $19.0 $16.4 $17.0 $15.0 Q3'17Q4'17Q1'18Q2'18Q3'18Q4'18Q1'19Q2'19Q3'19Q4'19Q1'20Q2'20Q3'20Q4'20Q1'21Q2'21Q3'21Q4'21Q1'22Q2'22Q3'22Q4'22Q1'23Q2'23Q3'23Q4'23Q1'24Q2'24 55 |
Slide 56: Debt maturity profile by currency
3.4 CHF EUR 2.9 USD 2.5 2.1 2.0 1.8 1.6 1.0 0.8 0.7 - - 24 25 26 27 28 29 30 31 … 36 … 46 Gross Debt $18.6B Duration 5.8 Net Debt $16.4B WAC 4.5% 56 | * In April 2024, Teva repaid $956 million of its 6% senior notes at maturity
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Teva Pharmaceutical Industries — Q2 2024 Earnings Presentation on 6ix