Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q4 2023 Earnings Presentation
56 slides from Teva Pharmaceutical Industries's earnings presentation, Jan 31, 2024
Slide 1: Fourth Quarter and Full Year 2023 Results
Teva Pharmaceutical Industries Ltd. Fourth Quarter and Full Year 2023 Results January 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: Deliver on growth engines, step up innovation, sustain generics, focus business
Deliver on Step up Sustain generics Focus our growth engines innovation powerhouse business • AUSTEDO® >$1.2 billion • Anti-TL1A exclusive • Generics back to revenue • Teva api U.S. revenue collaboration with Sanofi growth • Announcing intention to divest Teva api business • AJOVY® $435 million glob
Slide 5: FY 2023 Revenues, Adjusted EBITDA, EPS, Free Cash Flow
FY 2023 Revenues Adjusted EBITDA 7% 5% Non-GAAP EPS Free Cash Flow 2% 6% Net Debt / EBITDA 5 | Growth vs. 2022, revenues in local currency 2023 figures include the impact from an upfront payment received in connection with the collaboration on our anti-TL1A asset
Slide 6: Revenues by region, full year 2023
North America +28% generics -2% Revenues of Europe generics $15.85b +3% +7% International Markets generics +16% +16% 6 | % growth In local currency, compared to full year 2022 2023 figures include the impact from an upfront payment received in connection with the collaboration on our anti-TL1A asset
Slide 7: Continued growth of AUSTEDO prescriptions
Continued growth of AUSTEDO prescriptions AUSTEDO quarterly TRx U.S. Revenues 80,000 69,956 $1,225 M 70,000 60,000 50,000 U.S. Revenues Growth 40,000 +27% 30,000 20,000 10,000 TRx Growth 0 +28% 7 | Revenue and TRx data is compared to FY 2022 Data above represents AUSTEDO Family (AUSTEDO BID + AUSTED
Slide 8: AUSTEDO growth expected to continue in 2024
Strong growth expected to continue in 2024 with revenues of ~$1.5B TD market in the U.S. is largely under- diagnosed and under-treated Driving awareness and patient activation 785k Tardive Dyskinesia patients • Launch of fully integrated TV DTC campaign 120k Diagnosed patients 50k Treated patients •
Slide 9: Clear opportunity for UZEDY in the U.S.
Clear opportunity for UZEDY in the U.S. Plan for growth acceleration in 2024 2.4m Schizophrenia U.S. patients • Medicaid coverage approaching parity to category leader 2.3m Diagnosed patients • Significant progress with hospital access, key for new patients starts 1.6m Treated patients Treated with
Slide 10: AJOVY Global Growth
AJOVY Global Growth Annual Global Net Sales • Achieved revenue of $435 million in 2023, +16% exceeding revenue guidance $435m FY’23 • Strong competitive positioning in the U.S. with $377m 44 FY’22 26% market share and in Europe with 31% $313m 35 market share FY’21 160 • U.S.: #1 in new prescriptions
Slide 11: Biosimilars: proven capabilities, strong late-stage pipeline
Proven capabilities Strong late-stage pipeline 2022 U.S. Biosimilar Global commercial reach Reference originator Geographic development product brand net scope2 status revenue Generated global revenue >$1B through its biosimilar franchise since launch Filed1 ~$19B Moving Ahead Filed ~$6B 16 assets i
Slide 12: Step up innovation: late-stage assets
Potential Market Size3 Progress in 2023 Funding agreement with Olanzapine LAI Potential to be first long-acting Royalty Pharma (TEV-‘749) olanzapine with a favorable $4B Phase III recruitment finalized; safety profile read-out now expected in H2 H2 2024 – Phase III results '24 (vs. H1 ‘25) ICS/SABA
Slide 13: Making our Generics Business a Sustainable Powerhouse
Making our Global commercial footprint with focused portfolio Generics • Concentrate on high value products and best-in-class service level • Exit lowest contribution products Business a Sustainable Focused pipeline Powerhouse • High-value segments, U.S. and Europe first-to-market, complex technolog
Slide 14: Complex generic products approved and planned launches
Planned complex generic launches in 10 New complex generic products approved in '22-’23 13 '24-'25, with a combined brand value of approximately $10 billion Select complex generics portfolio and pipeline products Respiratory Inhalers Long-Acting Injectables Peptides Ophthalmic Products Other technol
Slide 15: Teva announces intention to divest Teva api
Teva api | A competitive asset with strong potential A global leader in the large (~$85B) and growing (~6-7% p.a.) small Teva announces molecule APIs merchant market1 intention to divest Teva api Unmatched portfolio of differentiated APIs (~350 APIs) and in line with technologies serving 1,000+ cust
Slide 16: Deliver on growth engines, step up innovation: 2024 milestones
Deliver on Step up Sustain generics Focus our growth engines innovation powerhouse business • Innovative • Anti-TL1A interim • Generics new • Value Acceleration franchise >$2B, analysis (H2'24) product launches Program initiated; incl. $1.5B target • Olanzapine Ph III first impact for AUSTEDO result
Slide 17: Sustainability is a Key Business Priority
Sustainability is a Key Business Priority Healthy Future Our Purpose in Practice ne Healthy People Healthy Planet Healthy Business Improving the well-being Safeguarding Leading our business. of people and society our planet the right way Access to Medicines & Healthcare Climate Action & Resilience E
Slide 18: Executive Vice President, Global R&D & Chief Medical Officer
Executive Vice President, Global R&D & Chief Medical Officer
Slide 19: AJOVY real-world migraine free days in European studies
More migraine free days seen across two prospective European studies in real-world clinical practice Proportion of patients reaching ≥50% reduction in monthly Real-world clinical practice migraine days over 6 months vs baseline with AJOVY remains 100 consistent year over year 90 and numerically high
Slide 20: UZEDY long-term quality of life data
5 Level EuroQol 5-Demension VAS 4 LSM difference (95% CI) 0.40 (-2.05 to 2.85) Improved or stable long-term quality of life (QoL) with UZEDY up to 56 weeks 3 -2.16 of therapy. LSM change (SE) Better QoL 2 Patients remaining relapse free up to 56 weeks were 98% q1m. 1 1.36 0.95 0.95 Results are consi
Slide 21: AUSTEDO 4-week patient titration kit
The AUSTEDO 4-week patient titration kit Mean dosage increase through Week 12 enhances the initial phase of treatment to 48 individualize the dose according to each patient’s response and improve adherence Effective Mean dosage (mg) 36 32.5 32.8 Dosing Range 27.7 78% of patients with TD completed 24
Slide 22: Upcoming pipeline milestones
Anti-TL1A Phase II interim analysis H2 2024 TEV-’574 Olanzapine LAI Adult Phase III results H2 2024 TEV-’749 Anti-IL15 Phase I FIH SAD/MAD HV results H2 2024 TEV-’408 Celiac PoC study fully enrolled Anti-PD1-IL2 First patient enrolled in Phase I trial H1 2024 TEV-’278 ICS/SABA Phase III results H2 2
Slide 23: Executive Vice President, Chief Financial Officer
Executive Vice President, Chief Financial Officer
Slide 24: Q4 2023 GAAP and Non-GAAP results
$ millions, except EPS and share count Q4 2023 Q4 2022 Q4 2023 Q4 2022 GAAP Non-GAAP Revenues 4,457 3,884 4,457 3,884 Operating income (loss) 755 (940) 1,546 1,130 Net income (loss) attributable to Teva 461 (1,301) 1,135 791 Earnings (loss) per share ($) 0.41 (1.17) 1.00 0.71 Share count (millions)
Slide 25: Q4 2023 GAAP to Non-GAAP adjustments
$ millions Q4 2023 Comments Amortization 144 Impairment of long-lived assets 68 Mainly related to estimated provisions recorded in connection with certain Legal settlements 34 litigation cases in the U.S. Equity compensation plans 28 Restructuring 18 Accelerated depreciation 6 Contingent considerati
Slide 26: Q4 and FY 2023 financial summary
$ billions, except EPS Q4 2023 Q4 2022 Change FY 2023 FY 2022 Change Revenues 4.5 3.9 15% 15.8 14.9 6% 2.6 2.1 23% 8.5 8.1 5% Gross profit 58.2% 54.2% 4.0% 53.5% 54.0% -0.5% 1.5 1.1 37% 4.4 4.1 5% Operating income 34.7% 29.1% 5.6% 27.5% 27.7% -0.3% EBITDA 1.7 1.2 34% 4.8 4.6 5% Net income attributab
Slide 27: Free cash flow by quarter
$ millions 2,387 2,243 1,486 1,140 685 632 301 229 117 41 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Free cash flow includes cash flow from operating activities, beneficial interest collected in exchange for securitized accounts receivables, proceeds from 27 | divestitures of bu
Slide 28: Net debt and leverage
$ billions Net Debt 18.4 18.5 18.0 17.7 16.6 EBITDA MAT 4.6 4.4 4.4 4.4 4.8 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Net Debt / EBITDA MAT 4.00 4.25 4.14 4.03 3.45 Leverage 71% 71% 73% 73% 71% Teva's Net Debt/EBITDA MAT covenant ratio limits are 4.25x for Q1 2023 - Q3 2023 and 4.00x for Q4 2023; MAT
Slide 29: 2024 Non-GAAP Outlook
Revenues Tax Rate 2024 Non-GAAP AUSTEDO ($m) AJOVY ($m) ~1,500 ~500 Diluted EPS ($) Outlook UZEDY ($m) ~80 COPAXONE ($m) ~400 1,146 million shares Operating Income Free Cash Flow Adjusted EBITDA CAPEX Finance Expenses Foreign Exchange Volatile swings in FX can negatively impact revenue and income Fr
Slide 30: Long-term financial targets
Revenue growth Operating Net debt/ Cash-to- (CAGR) income margin1, 2 adjusted EBITDA2 earnings2, 3, 4 Mid-single 30% 2.0x 80% digit 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 31: Our Strategic Roadmap to Growth
31] Our Strategic Roadmap to Growth - Gaining Momentum Return to growth + AUSTEDO and AJOVY strong growth UZEDY launch Biosimilars launch + Resource reallocation towards innovative medicines Sustainable cash-generating from generics powerhouse 2025-2027 Accelerate growth Innovative launches (olanzap
Slide 32: Pipeline
32 |
Slide 33: Innovative and Biosimilar Pipeline
ive and ilar Innovat losSImM Pipeline B 33|
Slide 34: Teva innovative medicine pipeline
Preclinical Phase 1 Phase 2 Phase 3 TEV-’278 TEV-’408 Anti-TL1A Olanzapine LAI Oncology Gastrointestinal (TEV-’574)2 (TEV-’749) Ulcerative Colitis Schizophrenia TEV-’279 TEV-’192 Crohn’s Disease Neuroscience Neuroscience SABA/ICS TEV-’288 (TEV-’248) Neuroscience Emrusolmin Asthma (TEV-’286)1 Multipl
Slide 35: Teva biosimilar pipeline
Under Commercial Preclinical Phase 1 Phase 3 Regulatory Biosimilar Review Products1, 2 Biosimilar to Biosimilar to TEV-’285 Prolia® & Xgeva ® Humira® TEV-’191 (denosumab) (adalimumab) * TEV-’261 Biosimilar to Biosimilar to TEV-’289 Xolair® Stelara® TEV-’284 * (omalizumab) (ustekinumab) * Biosimilar
Slide 36: Additional Financial Information
Additional Cc O ‘yp a) ‘= _ O q = teva 36 |
Slide 37: FY 2023 GAAP and Non-GAAP results
$ millions, except EPS FY 2023 FY 2022 FY 2023 FY 2022 GAAP Non-GAAP Revenues 15,846 14,925 15,846 14,925 Operating income (loss) 433 (2,197) 4,361 4,139 Net income (loss) attributable to Teva (559) (2,446) 2,898 2,812 Earnings (loss) per share ($) (0.50) (2.20) 2.56 2.52 1,119 million shares 1,110
Slide 38: Q4 2023 GAAP income statement
$ millions, except EPS Q4-23 Q4 2023 Margins Q4-22 Q4 2022 Margins Change Revenues 4,457 3,884 15% COGS 2,041 45.8% 2,113 54.4% (3%) 2,416 1,770 36% Gross profit 54.2% 45.6% R&D 227 5.1% 210 5.4% 8% S&M 610 13.7% 549 14.1% 11% G&A 291 6.5% 289 7.4% 1% Legal settlements and loss contingencies 34 0.8%
Slide 39: FY 2023 GAAP income statement
$ millions, except EPS FY-23 FY 2023 Margins FY-22 FY 2022 Margins Change Revenues 15,846 14,925 6% COGS 8,200 51.8% 7,952 53.3% 3% 7,645 6,973 10% Gross profit 48.2% 46.7% R&D 953 6.0% 838 5.6% 14% S&M 2,336 14.7% 2,265 15.2% 3% G&A 1,162 7.3% 1,180 7.9% (2%) Legal settlements and loss contingencie
Slide 40: Q4 2023 FX effect
$ millions Q4 2023 Q4 2022 Diff FX Effect Diff net FX Revenues 4,457 3,884 573 17 556 Operating income (loss) GAAP 755 (940) 1,695 11 1,684 Operating income Non-GAAP 1,546 1,130 416 12 404 40 | The data presented with respect to operating income (loss), income taxes (benefit), income (loss) before i
Slide 41: Revenues and margins by quarter
$ millions 4,457 4,100 3,884 3,878 3,850 3,786 3,661 3,661 3,595 56.1% 58.2% 54.2% 54.4% 53.0% 54.2% 52.2% 53.5% 49.1% 34.7% 30.4% 27.7% 29.1% 26.9% 27.2% 26.1% 26.5% 21.4% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Net Revenues Non-GAAP Gross Profit Margin Non-GAAP Oper
Slide 42: Revenues by segment and product
$ millions Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 FY-22 FY-23 North America Segment 2,002 1,766 1,991 2,002 2,365 7,452 8,124 Generic products 818 824 969 929 754 3,549 3,475 AJOVY® 75 49 57 61 63 218 230 AUSTEDO® 344 170 308 339 408 963 1,225 BENDEKA®/TREANDA® 75 63 69 57 53 316 241 COPAXONE® 101 76 64 103
Slide 43: Non-GAAP net income, operating income and EPS
$ millions, EPS in $ 1,546 1,248 1,130 1,019 1,011 1,020 1,013 977 785 1,135 854 754 791 658 677 1.00 0.77 609 0.68 0.71 629 0.55 0.59 0.56 0.60 457 0.40 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Non-GAAP Net Income Non-GAAP Operating Income Non-GAAP EPS 43 | 2023 figur
Slide 44: Q4 non-GAAP operating income bridge
$ millions Nominal +$416m (37%) +$404m in local currencies (36%) 23 -35 95 333 1,546 1,130 Q4-22 North America Europe International Markets Other Activities Q4-23 44 | 2023 figures include the impact from an upfront payment received in connection with the collaboration on our anti-TL1A asset
Slide 45: FY non-GAAP operating income bridge
$ millions Nominal+$222m (5%) +$330m In local currencies (8%) -18 -15 -148 403 4,139 4,361 FY-22 North America Europe International Markets Other Activities FY-23 45 | 2023 figures include the impact from an upfront payment received in connection with the collaboration on our anti-TL1A asset
Slide 46: Non-GAAP operating income by segment
$ millions 1,546 2 116 (0%) (8%) 1,130 461 1,011 1,020 (30%) 37 (3%) 93 (8%) 33 111 124 (3%) (11%) 366 785 (12%) (32%) 338 114 (15%) 334 (33%) (33%) 345 966 (44%) (63%) 633 577 (56%) 520 332 (51%) (57%) (42%) -5 -6 (-1%) (0%) Q4-22 Q1-23 Q2-23 Q3-23 Q4-23 North America Europe International Markets O
Slide 47: COGS and OPEX breakdown
+698 (+6%) In local currency +762 (+9%) +157 (+6%) 10,786 11,484 In local currency +152 (+6%) 2,911 6,869 7,375 2,754 (64%) (64%) 1,865 $ millions 1,779 (64%) (65%) COGS 3,917 4,109 (36%) (36%) OPEX 975 1,046 (35%) (36%) Q4-22 Q4-23 FY-22 FY-23 Revenues 3,884 4,457 14,925 15,846 GP% 54.2% 58.2% 54.0
Slide 48: Adjusted EBITDA by quarter
$ millions 1,660 1,240 1,125 1,134 899 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Please see our press release reporting our financial results for the first second of 2023 for a reconciliation of Adjusted EBITDA to its nearest GAAP 48 | equivalent 2023 figures include the impact from an upfront payment
Slide 49: Q4 EBITDA to free cash flow bridge
$ millions (174) (10%) (257) (120) 150 (248) 237 (95) 107 (369) 421 1,660 1,486 1,185 Non-GAAP Interest Tax payments AR Inventory Legal AP & Other Securitization Operating Securitization Capex gross Free cash flow EBITDA payments, net settlements cash flow reclass 49 | Q4 securitization cash flow ne
Slide 50: FY EBITDA to free cash flow bridge
$ millions (2,431) (50%) (1,009) (298) (11) (147) (465) (64) 68 (526) 4,818 (1,454) 1,477 2,387 1,369 Non-GAAP Interest Tax payments AR Inventory Legal AP & Other Securitization Operating Securitization Asset sales, net; Free cash flow EBITDA payments, net settlements cash flow reclass Capex gross 5
Slide 51: Balance sheet
$ billions December 31, 2023 September 30, 2023 Diff Cash and Cash Equivalents 3.2 2.2 1.0 AR Trade 3.4 3.4 0.0 Pre-paid Expenses and Other Current Assets 1.8 1.7 0.1 Inventory 4.0 4.1 0.0 Fixed Assets 5.8 5.6 0.1 Intangible Assets 5.4 5.5 (0.1) Goodwill 17.2 16.9 0.3 Other Long Term Assets 2.7 2.6
Slide 52: Gross and net debt Q4 2023
$ billions 20.0 0.5 0.4 19.8 3.2 16.6 Sept 30, RCF FX & Other Dec 31, Cash balance Dec 31, 2023 Repayment 2023 2023 Gross Debt Gross Debt Net Debt 52 |
Slide 53: Gross and net debt FY 2023
$ billions 2.5 2.5 21.2 1.6 0.3 19.8 3.2 16.6 Dec 31, Debt issued Debt Debt repay. FX and Dec 31, Cash Dec 31, 2022 tendered Other 2023 balance 2023 Gross Debt Gross Debt Net Debt 53 |
Slide 54: Net debt trend
$ billions $35.0 $34.0 $33.0 $31.0 $29.0 $27.0 $25.0 $23.0 $21.0 $19.0 $16.6 $17.0 $15.0 54 |
Slide 55: Debt maturity profile and currency mix
3.4 CHF 3.0 EUR USD 2.5 2.1 2.0 1.8 1.6 1.7 1.1 0.8 - - 24 25 26 27 28 29 30 31 … 36 … 46 Gross Debt $20.7B Duration 6.2 Gross Debt $19.8B Net Debt $18.0B Duration WAC 4.5%5.97 Net Debt $16.6B WAC 4.6% 55 |
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