Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Q3 2023 Earnings Presentation
53 slides from Teva Pharmaceutical Industries's earnings presentation, Nov 8, 2023
Slide 1: Q3 2023 Results
Teva Pharmaceutical Industries Ltd. Q3 2023 Results November 8, 2023
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: Business continuity in Israel
• The support and care for the wellbeing of our employees in Our Israel is our top priority Employees • The resilience and dedication of our employees has sustained our focus on delivering our medicines to the millions of patients around the world who count on us • Increased support of emergency sup
Slide 5: Q3 2023
Q3 2023 • Strong performance of AUSTEDO®, AJOVY® and generics across all regions Revenues Adjusted EBITDA • Gross profit continues to improve • Pivot to Growth strategy Non-GAAP EPS Free Cash Flow in action: TL1-A exclusive collaboration with Sanofi • Full year 2023 revenues outlook consecutive incr
Slide 6: Pivot to Growth strategy
Deliver on Step up Sustain generics Focus our growth engines innovation powerhouse business • AUSTEDO to reach $1.2 billion in • Anti-TL1A exclusive • Stability and sustainability in • Teva api - Executing on 2023; reaffirming goal to collaboration with Sanofi U.S. standalone plan; new CEO and achie
Slide 7: Anti-TL1A collaboration with Sanofi: expanding commercial potential
Expanding Broadening Scope Step up Commercial for Indication Innovation Potential Expansion Maximizing development and • Partnership with a global • Anchor asset in • Sanofi uniquely value of TEV-'574 leader in Inflammation inflammatory bowel positioned to maximize and Immunology disease (“IBD”) com
Slide 8: Generics revenues by region
North America Generics +15% +30% Revenues of $3.9b Europe Generics +2% +7% +22% International +17% Markets Generics 8 | % In local currency, compared to Q3 2022
Slide 9: AUSTEDO growth: $339 million
Continued growth of AUSTEDO prescriptions AUSTEDO quarterly TRx U.S. Revenues 70,000 66,371 $339 million 60,000 50,000 Revenues Growth 40,000 30,000 +30% 20,000 10,000 TRx Growth 0 +29% Revenue and TRx data is compared to Q3’22 9| Data above represents AUSTEDO Family (AUSTEDO BID + AUSTEDO XR) AUSTE
Slide 10: AUSTEDO growth in large untapped market
Commercial excellence including increased Largely under-treated and field force resources under-diagnosed TD market Number of U.S. tardive dyskinesia patients in thousands (2022) Enhanced patient support to improve fill rate and adherence TD Prevalence Streamlined titration regimen 785 and AUSTEDO X
Slide 11: AJOVY Global Growth
AJOVY Global Growth Quarterly Global Net Sales $114m • On track to reach 2023 revenues Q3’23 guidance of $400 million, $93m with $114 million net global Q3’22 sales in Q3’23 • Continued growth, up 22% vs. Q3’22 in local currency • Strong competitive positioning in the U.S. (25% market share) and in
Slide 12: UZEDY steady uptake since launch
UZEDY provides differentiated profile for schizophrenia patients, with steady uptake since launch • $4 billion U.S. market size for LAIs • Access continues to improve across all channels • UZEDY is capturing >55% of all NBRx in risperidone LAI market • Outstanding qualitative feedback from health ca
Slide 13: Generics revenues by segment
$ millions, % in local currency +15% +2% +17% growth growth growth Q3-22 as reported Q3-23 as reported Local currency impact 929 886 806 803 393 381 Q3-22 Q3-23 Q3-22 Q3-23 Q3-22 Q3-23 North America Europe International Markets 13 |
Slide 14: Late-stage pipeline potential market size
Potential Market Size3 Olanzapine LAI $4bn Potential to be first long-acting (TEV-‘749) olanzapine with a favorable safety profile H2 2024 – Phase III results (Accelerated from H1 2025) ICS/SABA $2.5bn De-risked1 ICS/SABA fixed-dose (TEV-‘248) addressing market needs H2 2026 – Phase III results Anti
Slide 15: ESG target updates
Target Updates Additional Highlights Access programs cumulative launched (of 8 - regulatory ACCESS TO MEDICINES 2025 target) submissions* (51% of 2025 target) Winner: Best Company for Sustainability Reporting Finalist: Best Company for Social Responsibility reduction in scope 1 and 2 greenhouse gas
Slide 16: Executive Vice President, Global R&D & Chief Medical Officer
Executive Vice President, Global R&D & Chief Medical Officer
Slide 17: AUSTEDO START study interim results
• The appropriate dose of AUSTEDO is determined individually for each patient based on efficacy and tolerability • Real-world interim results from the START study show that when initiating AUSTEDO using a 4-week titration kit*: Treatment patterns Effectiveness Reduction in mean AIMS 78% 97% total mo
Slide 18: AJOVY migraine and depression study
Migraine is associated with depression and is a predictor of chronic migraine increasing, headache-related disability and decrease quality of life1-4 Study enrolled people with migraine and major depressive disorder Primary Endpoint: Mean change from baseline in MMD Secondary Endpoint: Mean change f
Slide 19: UZEDY time to relapse
Disease duration Hazard ratio (95% CI) UZEDY q1m Less than 5 years UZEDY q2m UZEDY overall UZEDY shows longer time to relapse, UZEDY q1m 5 to <10 years regardless of duration of diagnosis UZEDY q2m UZEDY overall UZEDY q1m 10 to <20 years UZEDY q2m UZEDY overall ~80% of patients experience multiple r
Slide 20: Olanzapine LAI Phase 3 study design
Treatment period (Up to 56 weeks) Double-blind, Open-label safety period placebo-controlled period 8 weeks Up to 48 weeks TV-44749 high dose TV-44749 high dose q1m sc q1m sc TV-44749 medium dose TV-44749 medium dose Follow-up q1m sc q1m sc 4 weeks Screeninga R Up to 8 days 1:1:1:1 TV-44749 low dose
Slide 21: Anti-TL1A market and competitive profile
Large underserved market Expected anti-TL1A competitive profile Unmet patient population 1 Promising pre-clinical data Showcasing potential to be best-in-class >4M1 diagnosed patients 2 Well-characterized safety and ADA profile from outcomes of Asthma study 2.7M1 treated 3 Optimizing clinical develo
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 Anti-PD1-IL2 First patient enrolled in Phase I trial H1 2024 TEV-’278 ICS/SABA Phase III results H2 2026 TEV-’248 22 | SAD/MAD: Singl
Slide 23: Executive Vice President, Chief Financial Officer
Executive Vice President, Chief Financial Officer
Slide 24: Q3 2023 GAAP and Non-GAAP results
$ millions, except EPS Q3 2023 Q3 2022 Q3 2023 Q3 2022 GAAP Non-GAAP Revenues 3,850 3,595 3,850 3,595 Operating income 355 419 1,020 977 Net income attributable to Teva 80 56 677 658 Earnings per share ($)* 0.07 0.05 0.60 0.59 1,135 million 1,119 million 1,135 million 1,119 million shares shares sha
Slide 25: Non-GAAP adjustments Q3 2023
$ millions Q3 2023 Comments Amortization 145 Impairment of long-lived assets 48 Mainly related to estimated provisions recorded in connection with certain Legal settlements 314 litigation cases in the U.S. Equity compensation plans 31 Restructuring 27 Accelerated depreciation 25 Contingent considera
Slide 26: Q3 and YTD financial summary
Q3 YTD Q3 YTD $ billions, except EPS Q3 2023 Q3 2022 Change Change 2023 2022 Revenues 3.9 3.6 7% 11.4 11.0 3% 2.1 1.9 8% 5.9 6.0 -1% Gross profit 53.5% 53.0% 0.5% 51.6% 53.9% -2.3% 1.0 1.0 4% 2.8 3.0 -6% Operating income 26.5% 27.2% -0.7% 24.7% 27.3% -2.6% EBITDA 1.1 1.1 4% 3.2 3.4 -6% Net income at
Slide 27: Revenues, COGS and OPEX
+541 (+7%) In local currency +610 (+8%) +213 (+8%) 8,573 In local currency +171 (+7%) 8,032 2,618 2,830 5,510 5,090 (64%) (63%) 1,791 $ millions 1,689 (63%) (65%) COGS 3,063 2,941 OPEX (36%) 928 1,040 (37%) (35%) (37%) Q3-22 Q3-23 YTD-22 YTD-23 Revenues 3,595 3,850 11,041 11,389 GP% 53.0% 53.5% 53.9
Slide 28: Free cash flow
$ millions 1,140 795 1,103 902 716 685 632 301 229 117 41 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Free cash flow includes cash flow from operating activities, beneficial interest collected in exchange for securitized accounts receivables, 28 | proceeds from divestitur
Slide 29: Net debt and leverage
$ billions 19.0 18.5 Net Debt 18.4 18.0 17.7 EBITDA MAT 4.7 4.6 4.4 4.4 4.4 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net Debt / EBITDA MAT* 4.02 4.00 4.25 4.14 4.03 Leverage 69% 71% 71% 73% 73% 29 | * Teva's Net Debt/EBITDA MAT covenant ratio limits are 4.25x for Q1 2023 - Q3 2023 and 4.00x for Q4 20
Slide 30: Debt maturities and composition
3.4 2.9 USD EUR CHF 2.4 2.0 2.0 1.8 1.6 1.6 1.0 0.8 24 25 26 27 28 29 30 31 … 36 … 46 Gross Debt $20.7B Duration 6.2 Gross Debt $18.0B Net Debt $20.0B* Duration WAC 4.5%6.3 Net Debt $17.7B WAC 4.6% 30 | * As of September 30, 2023, $0.5 billion is outstanding under the revolving credit facility
Slide 31: 2023 outlook
$ billions, November 2023 August 2023 February 2023 2022 Actual except EPS or as noted Outlook* Outlook Outlook Revenues 15.1 – 15.5 15.0 – 15.4 14.8 – 15.4 14.9 COPAXONE ($m) ~550 ~500 ~500 691 AUSTEDO ($m) ~1,200 ~1,200 ~1,200 971 AJOVY ($m) ~400 ~400 ~400 377 Operating Income 4.0 – 4.4 4.0 – 4.4
Slide 32: In Summary
In Summary Strong Q3 2023 performance driven by our growth drivers AUSTEDO – Strong performance and revenues growth momentum UZEDY – Outstanding feedback from health care providers and patients; confirming product profile benefits AJOVY – Continued growth momentum Generics – Strong performance acros
Slide 33: |
33 |
Slide 34: Innovative and Biosimilar Pipeline
ive and ilar Innovat losSImM Pipeline B 34 |
Slide 35: Innovative medicine pipeline
Under Preclinical Phase 1 Phase 2 Phase 3 Regulatory Review TEV-’278 TEV-’408 Anti-TL1A Olanzapine LAI Digihaler® Oncology Gastrointestinal (TEV-’574) (TEV-’749) (budesonide and Ulcerative Colitis Schizophrenia formoterol TEV-’279 TEV-’192 Crohn’s Disease Neuroscience Neuroscience SABA/ICS fumarate
Slide 36: 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 37: Additional Information
Additional Cc O ‘yp a) ‘= _ O q = teva 37|
Slide 38: Q3 YTD GAAP and Non-GAAP results
Q3 YTD Q3 YTD Q3 YTD Q3 YTD $ millions, except EPS 2023 2022 2023 2022 GAAP Non-GAAP Revenues 11,389 11,041 11,389 11,041 Operating income (loss) (289) (1,244) 2,816 3,010 Net income (loss) attributable to Teva (988) (1,132) 1,762 2,021 Earnings (loss) per share ($)* (0.88) (1.02) 1.56 1.81 1,119 mi
Slide 39: Q3 2023 GAAP income statement
Q3 2023 Q3 2022 $ millions, except EPS Q3 2023 Q3 2022 Change Margins Margins Revenues 3,850 3,595 7% COGS 1,999 51.9% 1,926 53.6% 4% 1,851 1,669 11% Gross profit 48.1% 46.4% R&D 253 6.6% 175 4.9% 44% S&M 576 15.0% 539 15.0% 7% G&A 268 7.0% 283 7.9% (5%) Legal settlements and loss contingencies 314
Slide 40: Q3 YTD 2023 GAAP income statement
Q3 YTD 2023 Q3 YTD 2022 $ millions, except EPS Q3 YTD 2023 Q3 YTD 2022 Change Margins Margins Revenues 11,389 11,041 3% COGS 6,159 54.1% 5,839 52.9% 5% 5,230 5,203 1% Gross profit 45.9% 47.1% R&D 726 6.4% 628 5.7% 16% S&M 1,726 15.2% 1,716 15.5% 1% G&A 870 7.6% 892 8.1% (2%) Legal settlements and lo
Slide 41: FX effect on revenues and operating income
$ millions Q3 2023 Q3 2022 Diff FX Effect Diff net FX Revenues 3,850 3,595 255 (9) 264 Operating income GAAP 355 419 (63) (53) (11) Operating income Non-GAAP 1,020 977 43 (51) 93 41 |
Slide 42: Quarterly revenues and margins
$ millions 4,100 3,887 3,884 3,878 3,850 3,786 3,661 3,661 3,595 53.6% 56.1% 54.2% 54.4% 53.0% 54.2% 53.5% 49.1% 52.2% 26.8% 30.4% 27.7% 26.9% 27.2% 29.1% 26.1% 26.5% 21.4% Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Net Revenues Non-GAAP Gross Profit Margin Non-GAAP Oper
Slide 43: Revenues by segment and product
$ millions Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 North America Segment 1,809 2,002 1,766 1,991 2,002 Generic products 806 818 824 969 929 AJOVY® 57 75 49 57 61 AUSTEDO® 260 344 170 308 339 BENDEKA®/TREANDA® 77 75 63 69 57 COPAXONE® 105 101 76 64 103 Anda 371 450 424 392 367 Other 133 138 160 133 146 Europe
Slide 44: Non-GAAP net income, operating income and EPS
$ millions, EPS in $ 1,248 1,130 1,019 1,042 1,020 1,013 977 1,011 785 854 754 791 651 658 629 677 609 0.77 0.68 0.71 457 0.59 0.55 0.59 0.56 0.60 0.40 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 Non-GAAP Net Income Non-GAAP Operating Income Non-GAAP EPS 44 |
Slide 45: Non-GAAP operating income bridge Q3
$ millions Nominal +$43m (+4%) +$94m in local currencies (+10%) (23) (1) (34) 100 1,020 977 Q3-22 Act. North America Europe International Markets Other Activities Q3-23 Act. 45 |
Slide 46: Non-GAAP operating income bridge YTD
$ millions -$194m (-6%) -$73m In local currencies (-2%) 70 (113) (38) (113) 3,010 2,816 YTD-22 North America Europe International Markets Other Activities YTD-23 46 |
Slide 47: Non-GAAP operating income by segment
$ millions 1,130 37 (3%) 1,011 1,020 977 93 (8%) 33 111 29 (3%) 124 (3%) (11%) 112 (11%) (12%) 366 785 (32%) 338 114 (15%) 334 (33%) 360 (33%) (37%) 345 (44%) 633 577 477 (56%) 520 (51%) (57%) (49%) 332 (42%) -5 -6 (-1%) (0%) Q3-22 Q4-22 Q1-23 Q2-23 Q3-23 North America Europe International Markets O
Slide 48: Adjusted EBITDA
$ millions 1,240 1,089 1,125 1,134 899 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Q3 2023 48 | 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 49: Free cash flow bridge
$ millions (905) (80%) (258) (40) (85) 137 (87) (357) 1,134 10 (149) (438) 362 229 5 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 gross 49 | Q3 securitiza
Slide 50: Balance sheet
September 30, $ billions June 30, 2023 Diff 2023 Cash and Cash Equivalents 2.2 2.7 (0.5) AR Trade 3.4 3.5 (0.1) Pre-paid Expenses and Other Current Assets 1.7 1.8 (0.1) Inventory 4.1 4.1 0.0 Fixed Assets 5.6 5.7 (0.1) Intangible Assets 5.5 5.7 (0.2) Goodwill 16.9 17.1 (0.2) Other Long Term Assets 2.
Slide 51: Gross debt to net debt
$ billions 20.7 (1.0) 0.5 (0.2) 20.0 (2.2) 17.7 June 30, Debt RCF FX & Other Sept 30, Cash Sept 30, 2023 Repayment Withdrawal 2023 balance 2023 Gross Debt Gross Debt Net Debt 51 |
Slide 52: Net debt trend
$ billions $35.0 $34.0 $33.0 $31.0 $29.0 $27.0 $25.0 $23.0 $21.0 $19.0 $17.7 $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 Q3'23 52 |
Slide 53: Slide 53
Teva Pharmaceutical Industries — Q3 2023 Earnings Presentation on 6ix