Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q2 2023 Earnings Presentation
54 slides from Teva Pharmaceutical Industries's earnings presentation, Aug 2, 2023
Slide 1: Second Quarter 2023 Results
Teva Pharmaceutical Industries Ltd. Second Quarter 2023 Results August 2, 2023
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This presentation contains forward-looking statements w ithin the meaning of the Private Securities Litigation Reform Act of 1995, w hich are based on management’s current beliefs and expectations and are subject to substantial risks and uncertain
Slide 3: Richard Francis, President and CEO
Richard Francis President and Chief Executive Officer |3|
Slide 4: Q2 2023 Solid Performance
Q2 2023 Revenues Adjusted EBITDA Solid performance $3.9 billion $1.1 billion Revenues up 4% vs. Q2’22* Non-GAAP gross margin 52.2% Non-GAAP EPS Free Cash Flow “Pivot to Growth” strategy $0.56 $632 million gaining momentum Full Year 2023 Outlook Full year 2023 revenues outlook increased to $15.0-$15.
Slide 5: Q2 2023 Solid Performance Driven by our Growth Engines
Q2 2023 Solid Performance Driven by our Growth Engines % In local currency, compared to Q2 2022 Europe Generics +51% +2% Revenues of $3.9b +4% International North Markets America Generics +16% +13% Europe +32% |5|
Slide 6: AUSTEDO on-track to Reach $1.2B Target for 2023
AUSTEDO on-track to Reach $1.2B Target for 2023 Continued growth of AUSTEDO prescriptions AUSTEDO quarterly TRx 70,000 U.S. Revenues 61,932 $308 million 60,000 50,000 40,000 Revenues Growth +51% 30,000 20,000 TRx Growth 10,000 +28% 0 Source: IQVIA US NPA Audit |6| Revenue and TRx data is compared to
Slide 7: AUSTEDO – Reaffirming Goal to Achieve $2.5B by 2027
AUSTEDO – Reaffirming Goal to Achieve $2.5B by 2027 Largely under-treated and under-diagnosed TD market Commercial excellence including Number of U.S. tardive dyskinesia patients in thousands (2022) increased field force resources Enhanced patient support to improve TD Prevalence conversion & adhere
Slide 8: AJOVY – Global Growth
AJOVY – Global Growth Quarterly Global Net Sales $104m Q2’23 $88m UP Q2’22 17% • On track to reach 2023 revenues guidance of $400 million, with $104 million net global sales in Q2’23 • Strong competitive positioning in North America (25% market share) and in Europe (30% market share) • Continued gro
Slide 9: UZEDY (risperidone) Launched in May 2023
UZEDY™ (risperidone) Launched in May 2023 UZEDY provides differentiated profile for schizophrenia patients • Strong early UZEDY volume demand; positive HCP feedback on first patient experiences confirming product profile benefits • UZEDY is capturing >40% of all NBRx in risperidone LAI market • Sign
Slide 10: Patients and HCPs Report Satisfaction
Patients and HCPs Report Satisfaction 9 out of 10 patients report overall satisfaction 9 out of 10 HCPs report overall satisfaction *Rated ≥5 on a 7-point Likert scale. | 10 | Source: Data on file, Teva Neuroscience, Inc; Robinson DG, et al. Presented at: Psych Congress 2021; October 29-November 1,
Slide 11: Generics: Continued Growth in Europe and International Markets
Generics: Continued Growth in Europe and International Markets $ millions, % in local currency 909 873 394 394 Q2-22 Q2-23 Q2-22 Q2-23 Europe International Markets Q2-22 as reported Q2-23 as reported Local currency effect | 11 |
Slide 12: Moving Forward with Biosimilars Strategy
Expansion of Other Alvotech partnership partnerships & BD Moving Forward with Biosimilars • Four new biosimilar • Exploring business Strategy candidates development and partnerships to deliver on • Strengthened operations high-value opportunities in and quality management biosimilars | 12 |
Slide 13: Good progress on our late-stage pipeline
Good progress on our late-stage pipeline Potential Market Size Olanzapine LAI Potential to be first long-acting olanzapine $4bn ('749) with a favorable safety profile H1 2025 – Phase III results ICS/SABA De-risked1 ICS/SABA fixed-dose $2.5bn ('248) addressing market needs H2 2026 – Phase III results
Slide 14: Our Recent ESG Progress
Our Recent ESG Progress Target Updates Additional Highlights 7th 31 7 16.9M program launched in Chile cumulative regulatory states added to US doses of medicines donated as (of 8 - 2025 target) submissions* (43% of mental health program part of Access programs 2025 target) (10 total) (including ~400
Slide 15: Executing on all Pillars of Pivot to Growth Strategy
Executing on all Pillars of Pivot to Growth Strategy Deliver on Step up Sustain generics Focus our growth engines innovation powerhouse business • AUSTEDO to reach $1.2 • Accelerated • Focus on high-value • Teva API (TAPI) billion in 2023; development of generics R&D projects standalone unit Reaffir
Slide 16: Dr. Eric Hughes, MD, PhD
Dr. Eric Hughes, MD, PhD Executive Vice President, Global R&D & Chief Medical Officer | 16 |
Slide 17: AUSTEDO XR Adds Convenience to Long Term Efficacy & Safety
AUSTEDO XR Adds Convenience to Long Term Efficacy & Safety AUSTEDO provides long term efficacy (AIMS AUSTEDO XR formulation increases scores) with consistent safety in the real world attractiveness of AUSTEDO Positive patients' feedback on AUSTEDO XR • Reduces pill burden • Convenient once a day dos
Slide 18: Improvements in PANSS Scores and Reduction in Risk of Relapse
Improvements in PANSS Scores1 Significant Reduction in Risk of Relapse2 80% reduction in the risk of relapse with UZEDY PANSS scores change favoring UZEDY (-4.10) over Q1M compared vs. Placebo4 placebo (+1.11) at the end of treatment Number of patients with relapse – Exploratory study PANSS Total Sc
Slide 19: Select Assets within Our Promising Innovative Pipeline
Select Assets within Our Promising Innovative Pipeline Preclinical Phase I Phase II Phase III (select assets) Anti-IL15 (53408) Anti-TL1A (48574) LAI olanzapine (44749) Celiac Disease IBD (UC/CD) Schizophrenia Anti-PAR2 (56192) ICS/SABA (56248) Neuroscience Asthma Anle138b1 (56286) MSA Anti-PD1-IL2
Slide 20: Olanzapine LAI Trial Design to Address Significant Unmet Need
Olanzapine LAI Trial Design to Address Significant Unmet Need Limited Olanzapine LAI (‘749) Use Despite In-vitro evidence that TV44749 is not susceptible to Significant Oral Olanzapine Use PDSS Atypical Antipsychotics % of Schizophrenia Treatment Prescribed Release of olanzapine from Zyprexa Relprev
Slide 21: Anti-TL1A - Potential for Best-in-Class in IBD
Anti-TL1A - Potential for Best-in-Class in IBD Large underserved Expected anti-TL1A competitive profile patient population 1 Promising pre-clinical data Showcasing potential to be best-in-class >4M 1 diagnosed patients 2 Well characterized safety & ADA profile from outcomes of Asthma study 2.7M 1 tr
Slide 22: Anti-TL1A ('574) - Immunology
Anti-TL1A ('574) - Immunology High selectivity to DR3 and high potency confirmed in vitro '574 more selective than comparative reagent1,2 '574 more potent than comparative reagent1,6 TEV '574 DR3:DcR3 Anti-TL1A #11, 3 DR3:DcR3 TEV '574 vs. Anti-TL1A #21, 7 100 100 150 (TL1A-induced response) % compl
Slide 23: Progress on Track for Key Pipeline Assets
Progress on Track for Key Pipeline Assets Anti-PD1-IL2 First patient enrolled in Phase I trial H1 2024 TEV-56278 Anti-TL1A Phase II interim analysis H2 2024 TEV-48574 Anti-IL15 Phase I FIH SAD/MAD HV results H2 2024 TEV-53408 Olanzapine LAI Adult Phase III results H1 2025 TEV-44749 ICS/SABA Phase II
Slide 24: Eli Kalif, Chief Financial Officer
Eli Kalif Executive Vice President, Chief Financial Officer | 24 |
Slide 25: Q2 2023 Summary
Q2 2023 Summary $ millions, except EPS Q2 2023 Q2 2022 Q2 2023 Q2 2022 GAAP Non-GAAP Revenues 3,878 3,786 3,878 3,786 Operating income (loss) (646) (949) 1,011 1,019 Net income (loss) attributable to (863) (232) 629 754 Teva (0.77) (0.21) 0.56 0.68 1,120 million 1,110 million 1,129 million 1,114 mil
Slide 26: Non-GAAP Adjustments
Non-GAAP Adjustments $ millions Q2 2023 Comments Amortization 162 Impairment of long-lived assets 74 Goodwill impairment 700 Due to increased discount rate in our International Markets reporting unit Mainly related to estimated provisions recorded in connection with certain Legal settlements 462 lit
Slide 27: Q2 2023 Non-GAAP Summary
Q2 2023 Non-GAAP Summary $ billions, except EPS Q2 2023 Q2 2022 Change H1 2023 H1 2022 Change Revenues 3.9 3.8 2% 7.5 7.4 1% 2.0 2.1 -2% 3.8 4.0 -6% Gross profit 52.2% 54.4% -2.2% 50.7% 54.3% -3.7% 1.0 1.0 -1% 1.8 2.0 -12% Operating income 26.1% 26.9% -0.9% 23.8% 27.3% -3.5% EBITDA 1.1 1.1 -1% 2.0 2
Slide 28: Spend Base
Spend Base +329 (+6%) in local currency +439 (+8%) $ millions +100 (+4%) 5,743 in local currency +115 (+4%) 5,414 2,867 2,766 3,720 3,401 (65%) (63%) 1,726 1,855 (62%) (65%) COGS 1,040 2,013 2,023 1,012 OPEX (38%) (37%) (35%) (35%) Q2-22 Q2-23 H1-22 H1-23 Revenues 3,786 3,878 7,447 7,539 GP% 54.4% 5
Slide 29: Free Cash Flow by Quarters
Free Cash Flow by Quarters $ millions 1,140 795 716 685 625 632 301 117 59 41 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 | 29 | Free cash flow includes cash flow from operating activities, beneficial interest collected in exchange for securitized accounts receiva
Slide 30: Ongoing Debt Reduction
Ongoing Debt Reduction $ billions Net Debt 20.0 19.0 18.4 18.5 18.0 4.8 4.7 4.6 4.4 4.4 EBITDA MAT Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Net Debt / EBITDA MAT* 4.16 4.02 4.00 4.25 4.14 Leverage 69% 69% 71% 71% 73% | 30 | * Teva's Net Debt/EBITDA MAT covenant ratio limits are 4.25x for Q1 2023 - Q3
Slide 31: Debt Maturity Profile
Debt Maturity Profile 3.4 3.0 2.5 2.1 2.0 1.8 1.6 1.6 1.0* 1.0 0.8 23 24 25 26 27 28 29 30 31 … 36 … 46 USD EUR CHF Gross Debt $20.7B Duration 6.2 Net Debt $18.0B WAC 4.5% | 31 | •* In July 2023, Teva repaid $1 billion of its 2.8% senior notes at maturity
Slide 32: 2023 Non-GAAP Outlook
2023 Non-GAAP Outlook $ billions, except EPS or as noted August 2023 Outlook February 2023 Outlook 2022 Actual Revenues $15.0 – $15.4 $14.8 – $15.4 $14.9 COPAXONE ($m) ~500 ~500 691 AUSTEDO ($m) ~1,200 ~1,200 971 AJOVY ($m) ~400 ~400 377 Operating Income 4.0 – 4.4 4.0 – 4.4 4.1 Adjusted EBITDA 4.5 –
Slide 33: In Summary
Solid Q2 2023 performance Driven by our Growth Drivers AUSTEDO® XR – once-daily and commercial investment fueling expansion UZEDYTM – positive feedback on first patient experiences AJOVY® – continued growth momentum Stable generics business – continued growth in EU and International Markets Focus on
Slide 34: Q&A
Q&A | 34 |
Slide 35: Innovative and Biosimilar Pipeline
Innovative and Biosimilar Pipeline
Slide 36: Teva Innovative Medicine Pipeline
Teva Innovative Medicine Pipeline Under Regulatory Preclinical Phase 1 Phase 2 Phase 3 Pre-Submission Review TEV-56278 TEV-53408 Anti-TL1A Olanzapine LAI Digihaler® Digihaler® Oncology Gastrointestinal (TEV-48574) Schizophrenia (beclomethasone (budesonide and Ulcerative Colitis dipropionate HFA) for
Slide 37: Teva Biosimilar Franchise
Teva Biosimilar Franchise Under Regulatory Commercial Preclinical Phase 1 Phase 3 Under Regulatory Pre-Submission Preclinical Phase 3 Review Biosimilar Products1, 2 Review TEV-56285 Biosimilar to Prolia® Biosimilar to & Xgeva ® Humira® TEV-56191 (denosumab) (adalimumab) * TEV-56261 Biosimilar to Xol
Slide 38: Additional Information
Additional Information
Slide 39: H1 2023 Summary
H1 2023 Summary $ millions, except EPS H1 2023 H1 2022 H1 2023 H1 2022 GAAP Non-GAAP Revenues 7,539 7,447 7,539 7,447 Operating income (loss) (644) (1,662) 1,796 2,032 Net income (loss) attributable to (1,068) (1,187) 1,085 1,363 Teva (0.96) (1.07) 0.96 1.22 1,118 million 1,109 million 1,127 million
Slide 40: Quarterly GAAP Income Statement
Quarterly GAAP Income Statement Q2 2023 Q2 2022 $ millions, except EPS Q2 2023 Q2 2022 Change Margins Margins Revenues 3,878 3,786 2% COGS 2,082 53.7% 1,992 52.6% 5% 1,796 1,794 0% Gross profit 46.3% 47.4% R&D 240 6.2% 228 6.0% 5% S&M 603 15.6% 594 15.7% 2% G&A 307 7.9% 313 8.3% ( 2%) Legal settleme
Slide 41: H1 2023 GAAP Income Statement
H1 2023 GAAP Income Statement H1 2023 H1 2022 $ millions, except EPS H1 2023 H1 2022 Change Margins Margins Revenues 7,539 7,447 1% COGS 4,161 55.2% 3,913 52.5% 6% 3,378 3,534 ( 4%) Gross profit 44.8% 47.5% R&D 473 6.3% 453 6.1% 5% S&M 1,149 15.2% 1,178 15.8% ( 2%) G&A 602 8.0% 609 8.2% ( 1%) Legal
Slide 42: Q2 2023 Foreign Exchange Impact
Q2 2023 Foreign Exchange Impact $ millions Q2 2023 Q2 2022 Diff FX Effect Diff net FX Revenues 3,878 3,786 92 ( 51) 143 Operating income (loss) ( 646) ( 949) 303 ( 38) 341 GAAP Operating income 1,011 1,019 ( 8) ( 37) 29 Non-GAAP | 42 |
Slide 43: Net Revenue and Non-GAAP Profitability
Net Revenue and Non-GAAP Profitability $ millions 4,100 3,910 3,887 3,884 3,878 3,786 3,661 3,661 3,595 53.3% 53.6% 56.1% 54.2% 54.4% 53.0% 54.2% 49.1% 52.2% 26.8% 30.4% 27.7% 26.9% 27.2% 29.1% 26.4% 26.1% 21.4% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Net Revenues Non
Slide 44: Revenues by Activity and Geographical Area
Revenues by Activity and Geographical Area $ millions Q2-22 Q3-22 Q4-22 Q1-23 Q2-23 North America Segment 1,904 1,809 2,002 1,766 1,991 Generic products 1,026 806 818 824 969 AJOVY® 49 57 75 49 57 AUSTEDO® 204 260 344 170 308 BENDEKA®/TREANDA® 83 77 75 63 69 COPAXONE® 94 105 101 76 64 Anda 308 371 4
Slide 45: Non-GAAP Profits and EPS
Non-GAAP Profits and EPS $ millions, EPS in $ 1,248 1,130 1,019 1,034 1,042 1,013 977 1,011 785 854 754 791 651 651 609 658 629 0.77 0.68 0.71 457 0.59 0.59 0.55 0.59 0.56 0.40 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Non-GAAP Net Income Non-GAAP Operating Income Non-G
Slide 46: Q2 2023 Non-GAAP Operating Income
Q2 2023 Non-GAAP Operating Income $ millions Nominal -8 (-1% ) +29 in local currencies (+3% ) 39 (55) 29 (22) 1,019 1,011 Q2-22 North America Europe International Markets Other Activities Q2-23 | 46 |
Slide 47: H1 2023 Non-GAAP Operating Income
H1 2023 Non-GAAP Operating Income $ millions -$236m (-12% ) -$167m in local currencies (-8% ) (31) (90) (37) (79) 2,032 1,796 H1-22 North America Europe International Markets Other Activities H1-23 | 47 |
Slide 48: Quarterly Non-GAAP Operating Income
Quarterly Non-GAAP Operating Income $ millions 1,130 1,019 37 (3%) 1,011 977 93 (8%) 33 55 (5%) 29 (3%) (3%) 124 95 (9%) 112 (11%) (12%) 366 785 ( 32%) 389 114 (15%) 334 360 ( 38%) ( 33%) ( 37%) 345 ( 44%) 633 481 477 ( 56%) 520 ( 47%) ( 49%) ( 51%) 332 ( 42%) -6 (-1%) Q2-22 Q3-22 Q4-22 Q1-23 Q2-23
Slide 49: Quarterly Adjusted EBITDA
Quarterly Adjusted EBITDA $ millions 1,240 1,134 1,089 1,125 899 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 | 49 | 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 equivalent
Slide 50: Q2 2023 Adjusted EBITDA to Free Cash Flow
Q2 2023 Adjusted EBITDA to Free Cash Flow $ millions (493) (44%) (214) (34) 26 (23) (142) 56 (119) 1,125 (414) 371 632 324 Non-GAAP Interest Tax payments AR Inventory AP & Other Securitization Operating Securitization Asset sales, Free cash flow EBITDA payments, net cash flow reclass net; Capex gros
Slide 51: Consolidated Balance Sheet
Consolidated Balance Sheet $ billions June 30, 2023 Mar 31, 2023 Diff Cash and Cash Equivalents 2.7 2.1 0.5 AR Trade 3.5 3.4 0.1 Pre-paid Expenses and Other Current Assets 1.8 1.8 ( 0.0) Inventory 4.1 4.1 ( 0.0) Fixed Assets 5.7 5.8 ( 0.0) Intangible Assets 5.7 6.0 ( 0.2) Goodwill 17.1 17.8 ( 0.7) O
Slide 52: Q2 2023 Debt Movements
Q2 2023 Debt Movements $ billions 20.69 (0.01) 20.68 (2.67) 18.01 Mar 31, FX & Other June 30, Cash June 30, 2023 2023 2023 Gross Debt Gross Debt Net Debt | 52 |
Slide 53: Net Debt Development
Net Debt Development $ billions $35.0 $34.0 $33.0 $31.0 $29.0 $27.0 $25.0 $23.0 $21.0 $19.0 $18.0 $17.0 Q3'17 Q4'17 Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 | 53 |
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Teva Pharmaceutical Industries — Q2 2023 Earnings Presentation on 6ix