Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q3 2024 Earnings Presentation
56 slides from Teva Pharmaceutical Industries's earnings presentation, Nov 6, 2024
Slide 1: Third Quarter 2024 Results
Teva Pharmaceutical Industries Ltd. Third Quarter 2024 Results November 6, 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: Q3 2024 Wins
Deliver on Step up Sustain generics Focus our growth engines innovation powerhouse business • AUSTEDO® U.S. revenues • Olanzapine LAI completed • Continued generics growth • Credit rating upgrades by Q1 2024 Wins increased by 28% vs. Q3’23 >100% of targeted injections across all geographies Fitch; o
Slide 5: Quarterly Revenue Growth vs. Previous Year
Quarterly Revenue Growth vs. Previous Year +15% +11% +5% +14% Q3 2024 +7% +4% +4% Q2 2024 Q1 2024 Q4 2023 Q2 2023 Q3 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, Adjusted EBITDA and EPS
Q3 2024 Revenues 15% Adjusted EBITDA 17% Non-GAAP EPS 16% Free Cash Flow Net Debt / EBITDA Raising Our 2024 Financial Outlook Including Revenues, Adjusted EBITDA and EPS Growth vs. Q3 2023, revenues growth in local 6| currency terms
Slide 7: Global generics revenues $4.3B
+28% Global generics +17% Revenues +21% $4.3b +15% Teva api $75M +4% YTD % growth In local currency, AUSTEDO U.S. revenues, all compared to Q3 2023 7| Teva api revenues increase reflects a reallocation of an immaterial business within our other activities, in line with our intention to divest our AP
Slide 8: AUSTEDO: Reaffirming 2024 revenues outlook of ~$1.6B
Reaffirming 2024 revenues outlook of ~$1.6B Continued growth of AUSTEDO prescriptions AUSTEDO quarterly TRx U.S. Revenues 100,000 90,000 $435M 80,000 70,000 60,000 U.S. Revenues Growth 50,000 40,000 +28% 30,000 20,000 10,000 TRx Growth 0 +36% Revenue and TRx data is compared to Q3 2023 8| Data repre
Slide 9: AJOVY: Reaffirming 2024 revenues outlook of ~$500 million
Reaffirming 2024 revenues outlook of ~$500 million Quarterly Global Net Sales $137m Global revenues of $137 million in Q3'24 +21% $114m Strong competitive positioning among anti-CGRP 24 18 19 17 22 • U.S.: 29% market share, #1 in new prescriptions in top headache centers 56 combined1 41 45 51 52 • E
Slide 10: UZEDY: Raising 2024 revenues outlook to ~$100M
Raising 2024 revenues outlook from ~$80M to ~$100M UZEDY Prescription Growth UZEDY TRx MOT (months of therapy) 8,000 7,000 U.S. revenues Q3’24 6,000 $35M 5,000 4,000 U.S. revenues YTD 2024 3,000 2,000 $75M 1,000 0 May-23 Jun-23 Jul-23 Aug-23 Sep-23 Oct-23 Nov-23 Dec-23 Jan-24 Feb-24 Mar-24 Apr-24 Ma
Slide 11: Innovative pipeline progress and next milestones
Asset Indication Progress Next milestones Olanzapine LAI Achieved Phase III targeted Long term study Schizophrenia H1 2025 TEV-’749 injections without PDSS full safety presentation Duvakitug Ulcerative Colitis & Preparing for Phase II readout Phase II top line results Q4 2024 TEV-’574 Crohn’s Diseas
Slide 12: Prolia biosimilar TVB-009P
Prolia® (denosumab) is indicated to treat certain conditions that lead to high risk for fracture, including osteoporosis in postmenopausal women $3 billion Originator Value TVB-009P, Teva’s proposed biosimilar to Prolia®, met primary endpoints in Phase 3 clinical results in osteoporosis Anticipated
Slide 13: Biosimilar launches 2024-2026 and beyond
2024- 2025 2026 In line market and expected launches and beyond mAbxience collaboration: 2 oncology candidates Trademarks mentioned are the property of their respective owners 13 | Originator value is based on IQVIA U.S. net sales 2023 In line products, launched In collaboration with Alvotech for th
Slide 14: Global Generics growth of 17%
Global Generics growth of 17% +30% +8% +13% 1,094 973 839 886 470 477 Q3-23 Q3-24 Q3-23 Q3-24 Q3-23 Q3-24 United States Europe International Markets 14 | $Commencing million, % growth In local currency, compared to Q3 2023 January 1, 2024, Canada is reported under our International Markets segment a
Slide 15: Teva api and CDMO
+4% vs. Q3’23 Continued strong Divestment Continued revenue traction on process on track, growth CDMO business targeting completion by H1 2025 15 | API sales to third parties in Q3 2024 reflect a reallocation of an immaterial business within our other activities, in line with our intention to divest
Slide 16: Executive Vice President, Global R&D & Chief Medical Officer
Executive Vice President, Global R&D & Chief Medical Officer
Slide 17: Duvakitug Phase II study design
– Topline Analysis on Track for Q4 2024 Dose 1 Anti-TL1A Q2W – UC Primary Endpoint - Long Term Extension N=240 (120 each) Primary Endpoint N=40 each (UC/CD) Clinical remission per Randomization Loading Dose Modified Mayo Score UC & CD Dose 2 Anti-TL1A Q2W N=40 each (UC/CD) – CD Primary Endpoint - En
Slide 18: SOLARIS study design and results
SOLARIS study design randomization Screening and Period 1 Period 2 follow up 4-week Acute treatment phase Long-term safety phase Formulated to address PDSS risk (8 weeks) (up to 48 weeks) primary endpoint Controlled release properties without bursts in plasma concentrations Week 8 (Period 1) least s
Slide 19: Anti-IL15 early evidence of IL15 blockade
Early evidence of IL15 blockade Potential for differentiation Phase I in healthy volunteers1 • High affinity for IL15 Mean Free IL15 change from Baseline (%) 120 • Prolonged suppression of free IL15 60 • Potential for a low dosing frequency 0 • Well tolerated in FIH study • Proof of concept study in
Slide 20: Vitiligo overview
• Chronic disorder that causes patches of skin to lose pigment or color • Melanocytes are depleted from the skin and the area loses pigment • Hypothesis - Blockade of IL-15 signaling will reduce/deplete T cells and stop melanocytes attack • Psychological burden is high, with increased levels of depr
Slide 21: Emrusolmin TOPAS-MSA Phase 2 study
Emrusolmin is an oral compound designed to target alpha-synuclein aggregation, one of the core pathogenic mechanisms of MSA TOPAS-MSA: Ph 2 Study* Target enrollment 200 participants Treatment period Follow-up period (48 weeks) (4 weeks) Primary endpoint change from baseline to Week 48 in Screening E
Slide 22: Asset, indication and next milestones
Asset Indication / TA Progress Next milestones Olanzapine LAI Achieved Phase III targeted Long term study Schizophrenia H1 2025 TEV-’749 injections without PDSS full safety presentation Duvakitug Ulcerative Colitis & Preparing for Phase II readout Phase II top line results Q4 2024 TEV-’574 Crohn’s D
Slide 23: Executive Vice President, Chief Financial Officer
Executive Vice President, Chief Financial Officer 23 |
Slide 24: Q3 2024 GAAP and Non-GAAP results
$ millions, except EPS Q3 2024 Q3 2023 Q3 2024 Q3 2023 GAAP Non-GAAP Revenues 4,332 3,850 4,332 3,850 Operating income (loss) (51) 344 1,214 1,020 Net income (loss) attributable to Teva (437) 69 798 677 Earnings (loss) per share ($)* (0.39) 0.06 0.69 0.60 Number of shares (millions) 1,133 1,135 1,15
Slide 25: Q3 2024 GAAP to non-GAAP adjustments
$ millions Q3 2024 Comments Amortization 146 Impairment of intangible assets 29 Impairment of tangible assets (80) Mainly related to the classification of our business venture in Japan as held for sale Mainly related to a decision by the European Commission in its antitrust investigation into Legal
Slide 26: Q3 and Q3 YTD results summary
Q3 YTD $ billions, except EPS Q3 2024 Q3 2023 Change Q3 YTD 2024 Change 2023 Revenues 4.3 3.9 13% 12.3 11.4 8% 2.3 2.1 13% 6.5 5.9 10% Gross profit 53.7% 53.5% 0.2% 52.7% 51.6% 1.1% 1.2 1.0 19% 3.2 2.8 12% Operating income 28.0% 26.5% 1.5% 25.7% 24.7% 1.0% Adjusted EBITDA 1.3 1.1 17% 3.5 3.2 11% Net
Slide 27: Non-GAAP gross profit, OPEX, operating income and free cash flow
Non-GAAP Gross Profit ($m) Non-GAAP OPEX ($m) Non-GAAP Operating Income ($m) Free Cash Flow 52.7% 6,495 51.6% 27.1% 25.7% 5,878 3,333 26.9% 3,162 24.7% 3,063 2,816 62.5% 51.1% 1,278 902 Q3YTD 23 Q3YTD 24 Q3YTD 23 Q3YTD 24 Q3YTD 23 Q3YTD 24 Q3 YTD 23 Q3YTD 24 % represents chart metric as a % of reven
Slide 28: Net debt and leverage
$ billions Net Debt 17.7 16.6 16.7 16.4 15.7 4.8 4.9 5.0 5.2 EBITDA MAT 4.4 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net Debt / EBITDA MAT 4.03 3.45 3.38 3.30 3.04 Leverage 73% 71% 72% 74% 75% 28 | Teva's Net Debt/EBITDA MAT covenant ratio limit is 4.00x for Q1-Q4 2024; MAT = Moving Annual Total Q4 2
Slide 29: Credit rating upgrades
June 2024 September 2024 October 2024 Affirmed BB- rating Upgraded rating to BB, Affirmed Ba2 rating with positive outlook Upgraded outlook Upgraded outlook to positive to positive Gross Debt $19B Net Debt $15.7B Duration 5.5 WAC 4.5% 29 |
Slide 30: 2024 financial outlook
November 2024 July 2024 February 2024 Revenues $16.1-16.5B $16.0-16.4B $15.7-16.3B AUSTEDO ($m) ~1,600 ~1,600 ~1,500 AJOVY ($m) ~500 ~500 ~500 UZEDY ($m) ~100 ~80 ~80 COPAXONE ($m) ~500 ~450 ~400 Operating Income $4.2-4.5B $4.1-4.5B $4.0-4.5B Adjusted EBITDA $4.7-5.0B $4.6-5.0B $4.5-5.0B Finance Exp
Slide 31: 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 32: Return to growth, accelerate growth, sustain growth
2028+ 2025-2027 2023-2024 Sustain growth • Innovative launches Accelerate growth (duvakitug, anti-PD1-IL2, anti-IL15) Return to growth • Sustainable innovative pipeline • Innovative launches (olanzapine LAI, • AUSTEDO ‘24 revenues outlook of $1.6B ICS/SABA) • Focused business development • UZEDY gai
Slide 33: Q&A
Q. & A » \\ \
Slide 34: Innovative and Biosimilar Pipeline
Innovative and ilar ine Biosim Pipel 34 |
Slide 35: Teva innovative medicine pipeline by development stage
Preclinical Phase 1 Phase 2 Phase 3 TEV-’279 Anti-IL-15 Duvakitug (TEV- Olanzapine LAI Neuroscience (TEV-’408) Celiac ’574) 2 (TEV-’749) & Vitiligo Ulcerative Colitis & TEV-’288 Schizophrenia Crohn’s Disease Neuroscience TEV-’192 ICS/SABA3 Immunology & (TEV-’248) Neuroscience Emrusolmin Asthma TEV-’
Slide 36: Teva biosimilar pipeline by development stage
Under Commercial Preclinical Phase 3 Approved Regulatory Review Biosimilar Products TEV-’285 Biosimilar to Xgeva® Biosimilar to Prolia® 3 (denosumab) (denosumab) TEV-’261 Biosimilar to Xolair® 3 TEV-’289 (omalizumab) TEV-’2941 Biosimilar to Eylea® Pipeline is current as of November 1, 2024 4 TEV-’29
Slide 37: Additional Financial Information
Additional Cc 2 ~ ia®) = O (waa = 37 |
Slide 38: Q3 YTD 2024 GAAP and Non-GAAP results
$ millions, except EPS Q3 YTD 2024 Q3 YTD 2023 Q3 YTD 2024 Q3 YTD 2023 GAAP Non-GAAP Revenues 12,315 11,389 12,315 11,389 Operating income (loss) (274) (323) 3,162 2,816 Net income (loss) attributable to Teva (1,422) (1,022) 2,043 1,762 Earnings (loss) per share ($)* (1.26) (0.91) 1.78 1.56 Number o
Slide 39: Q3 2024 income statement
$ millions, except EPS Q3-24 Q3 2024 Margins Q3-23 Q3 2023 Margins Change Revenues 4,332 3,850 13% COGS 2,183 50.4% 1,999 51.9% 9% 2,148 1,851 Gross profit 49.6% 48.1% R&D 240 5.5% 253 6.6% (5%) S&M 626 14.5% 576 15.0% 9% G&A 298 6.9% 268 7.0% 11% Legal settlements and loss contingencies 450 10.4% 3
Slide 40: Q3 YTD 2024 income statement
$ millions, except EPS YTD-24 YTD- 2024 Margins YTD-23 YTD 2023 Margins Change Revenues 12,315 11,389 8% COGS 6,372 51.7% 6,159 54.1% 3% 5,943 5,230 Gross profit 48.3% 45.9% R&D 751 6.1% 726 6.4% 3% S&M 1,891 15.4% 1,726 15.2% 10% G&A 859 7.0% 870 7.6% (1%) Legal settlements and loss contingencies 6
Slide 41: FX effect on results
$ millions Q3 2024 Q3 2023 Diff FX Effect Diff net FX YTD 2024 YTD 2023 Diff FX Effect Diff net FX Revenues 4,332 3,850 482 (88) 570 12,315 11,389 926 (249) 1,175 Gross Profit GAAP 2,148 1,851 297 (70) 367 5,943 5,230 714 (190) 904 Gross Profit Non-GAAP 2,327 2,060 268 (70) 338 6,495 5,878 616 (190)
Slide 42: Quarterly revenues and margins
4,457 $ millions 4,332 4,164 3,884 3,878 3,850 3,819 3,661 3,595 58.2% 53.0% 54.2% 52.2% 53.5% 52.9% 53.7% 49.1% 51.4% 34.7% 27.2% 29.1% 26.5% 28.0% 26.1% 23.4% 25.3% 21.4% Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Net Revenues Non-GAAP Gross Profit Margin Non-GAAP Oper
Slide 43: Revenues by segment and product
$ millions Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 U.S. Segment 1,896 2,266 1,725 2,110 2,225 Generic products 839 667 808 1,023 1,094 AJOVY® 56 57 45 42 58 AUSTEDO® 339 408 282 407 435 BENDEKA®/TREANDA® 56 52 46 41 40 COPAXONE® 98 72 30 81 69 Uzedy 2 9 15 24 35 Anda 367 394 381 373 380 Other* 139 607 118 119
Slide 44: Non-GAAP net income, operating income and EPS
$ millions, EPS in $ 1,546 1,214 1,130 1,020 1,056 977 1,011 892 785 1,135 791 798 658 677 697 629 548 457 1.00 0.59 0.71 0.60 0.61 0.69 0.40 0.56 0.48 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Non-GAAP Net Income Non-GAAP Operating Income Non-GAAP EPS 44 | Q4 2023 incl
Slide 45: Q3 non-GAAP operating income bridge
$ millions +$194m Nominal (+19%) +$252m In local Currencies (+25%) -8 -11 35 177 1,214 1,020 Q3-23 US Europe IM Other Q3-24 Actual Actual 45 |
Slide 46: Q3 YTD non-GAAP operating income bridge
$ millions +$346m Nominal (+12%) +$470m In local Currencies (+17%) -58 120 -23 307 3,162 2,816 Q3-23 US Europe IM Other Q3-24 Actual Actual 46 |
Slide 47: Non-GAAP operating income by segment
1,546 $ millions 2 109 (0%) (7%) 1,214 461 109 (30%) 1,056 (9%) 1,020 73 12 117 892 (1%) 373 2 (7%) (11%) 117 (0%) 342 (31%) 338 (13%) (32%) (33%) 423 974 (47%) (63%) 748 571 629 (62%) (56%) 350 (60%) (39%) -5 -16 (-1%) (-1%) Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Revenues 3,850 4,457 3,819 4,164 4,332 US Eu
Slide 48: COGS and OPEX
+580 (+7%) In local currency +705 (+8%) $ millions +288 (+10%) In local currency +318 (+11%) 9,153 8,573 3,118 2,830 1,959 5,820 5,510 (63%) (64%) (64%) 2,005 1,791 (64%) COGS (63%) OPEX 1,149 1,012 (37%) 3,063 (35%) 3,333 1,040 1,113 (36%) (37%) (36%) (36%) Q3-23 Q3-24 Q3 YTD-23 Q3 YTD-24 Revenues
Slide 49: Adjusted EBITDA
$ millions 1,660 1,327 1,134 1,168 1,005 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 49 | Please see our press release reporting our financial results this quarter for a reconciliation of Adjusted EBITDA to its nearest GAAP equivalent Q4 2023 includes the impact from an upfront payment received in conne
Slide 50: Free cash flow
$ millions 2,387 1,278 1,486 922 632 324 229 41 32 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 Q3 2024 50 | Free cash flow includes cash flow from operating activities, beneficial interest collected in exchange for securitized accounts receivables, proceeds from divestitures of businesses and ot
Slide 51: Q3 free cash flow bridge
$ millions (405) (31%) (120) 72 (248) (95) (369) (238) (284) 367 (41) 38 (172) (148) (337) 339 1,327 922 693 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 52: Balance sheet
$ billions September 30, 2024 June 30, 2024 Diff Cash and Cash Equivalents 3.3 2.3 1.1 AR Trade 3.5 3.8 (0.3) Pre-paid Expenses and Other Current Assets 1.6 1.7 (0.1) Inventory 4.0 3.9 0.0 Fixed Assets 5.7 5.6 0.1 Intangible Assets 4.8 4.9 (0.1) Goodwill 16.1 16.5 (0.4) Other Long Term Assets 2.9 2.
Slide 53: Gross debt and net debt change
$ billions 0.3 19.0 -3.3 18.6 15.7 Jun 30, 2024 FX and Other Jun 30, Cash balance Sep 30, 2024 2024 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 $15.7 $17.0 $15.0 $13.0 $11.0 54 |
Slide 55: Debt maturity profile
3.4 CHF 3.0 EUR 2.5 USD 2.1 2.0 1.9 1.7 1.1 0.7 0.8 - - 24 25 26 27 28 29 30 31 … 36 … 46 Gross Debt $19B Net Debt $15.7B Duration 5.5 WAC 4.5% 55 | * In October 2024, Teva repaid €627 million of its 1.125% senior notes at maturity
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Teva Pharmaceutical Industries — Q3 2024 Earnings Presentation on 6ix