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- Generics business and AUSTEDO® growth lead Q1 2024
performance.
- Q1 2024 revenues of $3.8 billion reflect an increase of 5% in
local currency terms, compared to Q1 2023.
- Generics business growth across all regions – increased by 9%
in local currency terms globally, compared to Q1 2023.
- AUSTEDO – continued growth, up 67% (in the U.S.) from Q1 2023;
reaffirming 2024 revenue outlook of ~$1.5 billion.
- AJOVY® – revenues of $113 million in Q1 2024, up 18% from Q1
2023.
- Recent FDA approvals of SIMLANDI® and SELARSDI™, biosimilars to
Humira® and Stelara®, respectively.
- Announced positive Phase 3 efficacy results for olanzapine LAI
(TEV' 749); no incidence of post-injection delirium/sedation
syndrome (PDSS) observed to date.
Q1 2024 Highlights:
- Revenues of $3.8 billion
- GAAP loss per share of $0.12
- Non-GAAP diluted EPS of $0.48
- Cash flow used in operating activities of $124 million
- Free cash flow of $32 million
- Full year 2024 business outlook reaffirmed:
- Revenues of $15.7 - $16.3 billion
- Adjusted EBITDA of $4.5 - $5.0 billion
- Non-GAAP diluted EPS of $2.20 - $2.50
- Free cash flow of $1.7 - $2.0 billion
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today
reported results for the quarter ended March 31, 2024.
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Mr. Richard Francis, Teva's President and CEO, said, "In
2024 Teva is off to a good start, with global revenues of $3.8
billion showing growth of 5% in local currency terms compared to Q1
2023, fueled by robust growth in our generics business across all
regions, and continued growth of our innovative brands AUSTEDO and
AJOVY."
Mr. Francis continued, “As we mark the first anniversary of our
Pivot to Growth Strategy, I am proud of the significant strides we
have been making in realizing the goals and milestones we set out
to achieve on our journey to growth, including the progression of
our innovative pipeline and growth drivers, as well as the recent
FDA approvals of SIMLANDI and SELARSDI, the biosimilars to Humira®
and Stelara®, respectively, and the positive Phase 3 efficacy
results for olanzapine Once-Monthly LAI announced this morning. The
study met its primary endpoint, demonstrating a well-tolerated
effective long-acting treatment option for schizophrenia, with no
incidence of post-injection delirium/sedation syndrome (PDSS)
observed to date. As we continue to accelerate our growth progress,
we reaffirm our financial guidance for 2024."
Pivot to Growth Strategy
In May 2023, we introduced our “Pivot to Growth” strategy, which
is based on four key pillars: (i) delivering on our growth engines,
mainly AUSTEDO, AJOVY, UZEDY® and our late-stage pipeline of
biosimilars; (ii) stepping up innovation through delivering on our
late-stage innovative pipeline assets as well as building up our
early-stage pipeline organically and potentially through business
development activities; (iii) sustaining our generics medicines
powerhouse with a global commercial footprint, focused portfolio,
pipeline and manufacturing footprint; and (iv) focusing our
business by optimizing our portfolio and global manufacturing
footprint to enable strategic capital deployment to accelerate our
near and long-term growth engines and reorganizing certain of our
business units to a more optimal structure, while also reorganizing
key business units to enhance operational efficiency.
First Quarter 2024 Consolidated Results
The data presented in this press release with respect to
operating income (loss), income (loss) before income taxes, income
taxes (benefit), net income (loss) attributable to Teva and
earnings (loss) per share for prior period has been revised to
reflect a revision in relation to a contingent consideration and
related expenses. For additional information, see note 1b to our
consolidated financial statements included in our Annual Report on
Form 10-K for the year ended December 31, 2023 and note 1c to our
consolidated financial statements included in our Quarterly Report
on Form 10-Q for the period ended March 31, 2024.
Revenues in the first quarter of 2024 were $3,819
million, an increase of 4% in U.S. dollars or 5% in local currency
terms compared to the first quarter of 2023. This increase was
mainly due to higher revenues from generic products in all our
segments, from AUSTEDO, as well as from AJOVY in our Europe and
International Markets segments, partially offset by lower revenues
from COPAXONE®, and from Anda, our distribution business in the
U.S.
Exchange rate movements during the first quarter of 2024,
net of hedging effects, negatively impacted overall revenues by $39
million, compared to the first quarter of 2023. Exchange rate
movements during the first quarter of 2024, including hedging
effects, negatively impacted our operating income and non-GAAP
operating income each by $11 million compared to the first quarter
of 2023.
Gross profit in the first quarter of 2024 was $1,771
million, an increase of 12% compared to $1,582 million in the first
quarter of 2023. Gross profit margin was 46.4% in the first quarter
of 2024, compared to 43.2% in the first quarter of 2023.
Non-GAAP gross profit was $1,963 million in the first
quarter of 2024, an increase of 9% compared to $1,796 million in
the first quarter of 2023. Non-GAAP gross profit
margin was 51.4% in the first quarter of 2024, compared to
49.1% in the first quarter of 2023. The increase in both gross
profit margin and non-GAAP gross profit margin was mainly due to a
favorable mix of products as well as a decrease in our operational
costs.
Research and Development (R&D) expenses, net
in the first quarter of 2024 were $242 million, an increase of 4%
compared to $234 million in the first quarter of 2023, as we
continued to execute on our Pivot to Growth Strategy. Our higher
R&D expenses, net in the first quarter of 2024, compared to the
first quarter of 2023, were mainly due to an increase related to
our late-stage innovative pipeline in neuroscience (mainly
neuropsychiatry) and in immunology and immuno-oncology. Our R&D
expenses, net in the first quarter of 2024 were also impacted by
reimbursements from our strategic partnerships.
Selling and Marketing (S&M) expenses in the first
quarter of 2024 were $608 million, an increase of 11% compared to
the first quarter of 2023 to support our Pivot to Growth strategy,
mainly related to commercial activities for AUSTEDO and UZEDY in
the U.S.
General and Administrative (G&A) expenses in the
first quarter of 2024 were $278 million, a decrease of 6% compared
to the first quarter of 2023, mainly due to lower litigation fees
in the first quarter of 2024.
Operating loss in the first quarter of 2024 was $218
million, compared to an operating loss of $13 million in the first
quarter of 2023. Operating loss as a percentage of revenues was
5.7% in the first quarter of 2024, compared to an operating loss as
a percentage of revenues of 0.4% in the first quarter of 2023. The
higher operating loss in the first quarter of 2024 was mainly due
to higher other assets impairments, restructuring costs and other
items, as well as higher S&M expenses in the first quarter of
2024, partially offset by higher gross profit, lower legal
settlements and loss contingencies and lower intangible asset
impairments in the first quarter of 2024. Non-GAAP operating
income in the first quarter of 2024 was $892 million
representing a non-GAAP operating margin of 23.4% compared to
non-GAAP operating income of $785 million representing a non-GAAP
operating margin of 21.4% in the first quarter of 2023. The
increase in non-GAAP operating margin in the first quarter of 2024
was mainly impacted by an increase in non-GAAP gross profit margin,
partially offset by higher S&M expenses as a percentage of
revenues.
Financial expenses, net in the first quarter of 2024 were
$250 million, mainly comprised of net-interest expenses of $233
million. In the first quarter of 2023, financial expenses, net were
$260 million, mainly comprised of net-interest expenses of $236
million.
In the first quarter of 2024, we recognized a tax benefit
of $52 million, on a pre-tax loss of $467 million. In the first
quarter of 2023, we recognized a tax benefit of $19 million, on a
pre-tax loss of $272 million. Our tax rate for the first quarter of
2024 was mainly affected by deferred tax benefits resulting from
Intellectual Property ("IP")- related integration plans. Such
integration plans have been adopted, among others, in an effort of
addressing the global adoption of the Organization for Economic
Co-operation and Development (OECD) Pillar Two minimum effective
corporate tax, commencing in 2024.
Tax rate in the first quarter of 2024 was 11.1%, compared
to 7.1% in the first quarter of 2023. Our tax rate for the first
quarter of 2024 was mainly affected by deferred tax benefits
resulting from intellectual property related integration plans.
Non-GAAP tax rate in the first quarter of 2024 was 15.0%,
compared to 15.5% in the first quarter of 2023. Our non-GAAP tax
rate in the first quarter of 2024 was mainly affected by deferred
tax benefits resulting from IP-related integration plans, the
generation of profits in various jurisdictions with different tax
rates, tax benefits in Israel and other countries, as well as
infrequent or non-recurring items. Our non-GAAP tax rate in the
first quarter of 2023 was mainly affected by the geographic mix of
earnings and interest expense disallowances.
We expect our annual non-GAAP tax rate for 2024 to be between
14%-17%, higher than our non-GAAP tax rate for 2023, which was 13%,
mainly due to a reduced net tax benefit related to deferred tax
resulting from IP-related integration plans in 2024 compared to
2023.
Net loss attributable to Teva and loss per share
in the first quarter of 2024 were $139 million and $0.12,
respectively, compared to net loss attributable to Teva and loss
per share of $220 million and $0.20, respectively, in the first
quarter of 2023. The lower net loss in the first quarter of 2024
was mainly due to higher net loss attributable to non-controlling
interests, higher gross profit and lower legal settlements and loss
contingencies, partially offset by higher other asset impairments,
restructuring and other items, as discussed above. Non-GAAP net
income attributable to Teva and non-GAAP diluted earnings
per share in the first quarter of 2024 were $548 million and
$0.48, respectively, compared to $457 million and $0.40,
respectively, in the first quarter of 2023.
Net loss attributable to non-controlling interests was
$280 million in the first quarter of 2024, compared to a net loss
attributable to non-controlling interests of $33 million in the
first quarter of 2023. The higher net loss in the first quarter of
2024 was mainly due to higher impairments of tangible assets
largely related to the classification of a business in our
International Markets segment as held for sale.
Adjusted EBITDA was $1,005 million in the first quarter
of 2024, an increase of 12% compared to $899 million in the first
quarter of 2023.
As of March 31, 2024 and 2023, the fully diluted share
count for purposes of calculating our market capitalization was
approximately 1,167 million and 1,158 million, respectively.
Non-GAAP information: net non-GAAP adjustments in the
first quarter of 2024 were $688 million. Non-GAAP net income
attributable to Teva and non-GAAP diluted EPS for the first quarter
of 2024 were adjusted to exclude the following items:
- Amortization of purchased intangible assets of $152 million, of
which $138 million is included in cost of sales and the remaining
$14 million in S&M expenses;
- Impairment of long-lived assets of $679 million primarily,
which primarily consisted of $577 million related to the
classification of a business in our International Markets segment
as held for sale;
- Legal settlements and loss contingencies of $106 million, which
primarily consisted of $64 million attributable to an update to the
estimated settlement provision for the Company’s opioid litigation
(mainly the effect of the passage of time on the net present value
of the discounted payments);
- Contingent consideration expenses of $79 million primarily
consisted of $64 million related to a change in the estimated
future royalty payments to Allergan in connection with lenalidomide
(generic equivalent of Revlimid®);
- Equity compensation expenses of $28 million;
- Restructuring expenses of $13 million;
- Accelerated depreciation of $7 million;
- Financial expenses of $12 million;
- Costs related to regulatory actions taken in facilities of $3
million;
- Other non-GAAP items of $44 million;
- Items attributable to non-controlling interests of $284
million; and
- Corresponding tax effects and unusual tax items of $150
million.
We believe that excluding such items facilitates investors’
understanding of our business including underlying performance
trends, thereby improving the comparability of our business
performance results between reporting periods.
For a reconciliation of the U.S. GAAP results to the adjusted
non-GAAP figures and for additional information, see the tables
below and the information included under “Non-GAAP Financial
Measures.” Investors should consider non-GAAP financial measures in
addition to, and not as replacement for, or superior to, measures
of financial performance prepared in accordance with GAAP.
Cash flow used in operating activities during the first
quarter of 2024 was $124 million, compared to $145 million of cash
flow used in operating activities in the first quarter of 2023. The
lower cash flow used in operating activities in the first quarter
of 2024 resulted mainly from higher profit in our Europe segment,
partially offset by changes in certain working capital items,
including a negative impact from accounts payables.
During the first quarter of 2024, we generated free cash
flow of $32 million, which we define as comprising $124 million
in cash flow used in operating activities, $295 million in
beneficial interest collected in exchange for securitized accounts
receivables (under our EU securitization program), partially offset
by $124 million in cash used for capital investment and $15 million
in cash used for acquisition of businesses, net of cash acquired.
During the first quarter of 2023, we generated free cash flow of
$41 million, which we define as comprising $145 million in cash
flow used in operating activities, $323 million in beneficial
interest collected in exchange for securitized accounts receivables
(under our EU securitization program) and $2 million in proceeds
from divestitures of businesses and other assets, partially offset
by $139 million in cash used for capital investment.
As of March 31, 2024, our debt was $19,643 million,
compared to $19,833 million as of December 31, 2023. This decrease
was mainly due to $193 million of exchange rate fluctuations. The
portion of total debt classified as short-term as of March 31, 2024
was 16% compared to 8% as of December 31, 2023. Our average debt
maturity was approximately 5.7 years as of March 31, 2024, compared
to 6.0 years as of December 31, 2023.
On May 3, 2024, the terms of our revolving credit facility
("RCF") were amended to update the Company’s maximum
permitted leverage ratio under the RCF for certain periods. Under
the terms of the RCF, as amended, the Company’s leverage ratio
shall not exceed (i) 4.00x in 2024, 2025 and in the first quarter
of 2026, (ii) 3.75x in the second, third and fourth quarters of
2026, and (iii) 3.50x in the first quarter of 2027 and onwards. The
RCF permits the Company to increase the maximum leverage ratio if
it consummates or commences certain material transactions.
Segment Results for the first Quarter of 2024
United States Segment
As part of a recent shift in executive management
responsibilities and in line with our Pivot to Growth strategy,
commencing January 1, 2024, Canada is reported as part of our
International Markets segment and the segment previously known as
our “North America” segment is now referred to as our “United
States” segment. Prior period amounts were recast to reflect this
change.
The following table presents revenues, expenses and profit for
our United States segment for the three months ended March 31, 2024
and 2023:
Three months ended March
31,
2024
2023
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
1,725
100%
$
1,677
100%
Gross profit
858
49.8%
789
47.0%
R&D expenses
154
8.9%
149
8.9%
S&M expenses
261
15.1%
207
12.4%
G&A expenses
93
5.4%
95
5.7%
Other income
1
§
§
§
Segment profit*
$
350
20.3%
$
338
20.2%
* Segment profit does not include
amortization and certain other items
§ Represents an amount less than $0.5
million or 0.5%, as applicable
Revenues from our United States segment in the first
quarter of 2024 were $1,725 million, an increase of $48 million, or
3%, compared to the first quarter of 2023. This increase was mainly
due to higher revenues from AUSTEDO, and higher revenues from
generic products, partially offset by lower revenues from certain
innovative products, primarily COPAXONE and BENDEKA® and TREANDA®,
as well as from Anda, our distribution business.
Revenues by Major Products and Activities
The following table presents revenues for our United States
segment by major products and activities for the three months ended
March 31, 2024 and 2023:
Three months ended
March 31,
Percentage
Change
2024
2023
2024-2023
Generic products
$
808
$
747
8%
AJOVY
45
46
(3%)
AUSTEDO
282
170
67%
BENDEKA and TREANDA
46
62
(26%)
COPAXONE
30
71
(58%)
Anda
381
424
(10%)
Other*
133
158
(16%)
Total
$
1,725
$
1,677
3%
* Other revenues in the first quarter of 2023 were higher
compared to the first quarter of 2024, mainly due to a reduction in
estimated liabilities in connection with ProAir® HFA during the
first quarter of 2023 following its discontinuation.
Generic products revenues in our United States segment
(including biosimilars) in the first quarter of 2024 were $808
million, an increase of 8% compared to the first quarter of 2023,
mainly due to revenues from lenalidomide capsules (the generic
version of Revlimid®), partially offset by increased competition to
other generic products.
In the first quarter of 2024, our total prescriptions were
approximately 314 million (based on trailing twelve months),
representing 8.2% of total U.S. generic prescriptions, compared to
approximately 312 million (based on trailing twelve months),
representing 8.3% of total U.S. generic prescriptions in the first
quarter of 2023, all according to IQVIA data.
On February 24, 2024, Alvotech and Teva announced that the FDA
approved SIMLANDI (adalimumab-ryvk) injection, as an
interchangeable biosimilar to Humira®, for the treatment of adult
rheumatoid arthritis, juvenile idiopathic arthritis, adult
psoriatic arthritis, adult ankylosing spondylitis, Crohn’s disease,
adult ulcerative colitis, adult plaque psoriasis, adult
hidradenitis suppurativa and adult uveitis.
On April 16, 2024, Alvotech and Teva announced that the FDA has
approved SELARSDI (ustekinumab-aekn) injection for
subcutaneous use, as a biosimilar to Stelara®, for the treatment of
moderate to severe plaque psoriasis and for active psoriatic
arthritis in adults and pediatric patients 6 years and older. In
June 2023, Alvotech and Teva reached a settlement and license
agreement with Johnson & Johnson, granting a licensed entry
date in the U.S. no later than February 21, 2025.
AJOVY revenues in our United States segment in the first
quarter of 2024 were $45 million, flat compared to the first
quarter of 2023. In the first quarter of 2024, AJOVY’s exit market
share in the United States in terms of total number of
prescriptions was 27.4% compared to 24.5% in the first quarter of
2023.
AUSTEDO revenues in our United States segment in the
first quarter of 2024 increased by 67%, to $282 million, compared
to $170 million in the first quarter of 2023, mainly due to growth
in volume including the launch of AUSTEDO XR in May 2023, as well
as expanded access for patients and increased investment to support
higher demand.
AUSTEDO XR (deutetrabenazine) extended-release tablets
was approved by the FDA on February 17, 2023, and became
commercially available in the U.S. in May 2023. AUSTEDO XR is a new
once-daily formulation indicated in adults for tardive dyskinesia
and chorea associated with Huntington’s disease, additional to the
currently marketed twice-daily AUSTEDO. AUSTEDO XR is protected by
ten Orange Book patents expiring between 2031 and 2041.
UZEDY (risperidone) extended-release injectable
suspension was approved by the FDA on April 28, 2023 for the
treatment of schizophrenia in adults, and was launched in the U.S.
in May 2023. UZEDY is a subcutaneous, long-acting formulation of
risperidone that controls the steady release of risperidone. UZEDY
is protected by nine Orange Book patents expiring between 2025 and
2033. We are moving forward with plans to launch UZEDY in other
countries around the world.
BENDEKA and TREANDA combined revenues in our
United States segment in the first quarter of 2024 decreased by 26%
to $46 million, compared to the first quarter of 2023, mainly due
to generic bendamustine products entry into the market. The orphan
drug exclusivity that had attached to bendamustine products expired
in December 2022.
COPAXONE revenues in our United States segment in the
first quarter of 2024 decreased by 58% to $30 million, compared to
the first quarter of 2023, mainly due to generic competition and a
decrease in glatiramer acetate market share due to availability of
alternative therapies. COPAXONE revenues in the first quarter of
2024 were also negatively impacted by an increase in sales
allowance due to a non-recurring item.
Anda revenues from third-party products in our United
States segment in the first quarter of 2024 decreased by 10% to
$381 million, compared to $424 million in the first quarter of
2023, mainly due to lower demand from seasonal and other market
conditions. Anda, our distribution business in the United States,
distributes generic and innovative medicines and OTC pharmaceutical
products from Teva and various third-party manufacturers to
independent retail pharmacies, pharmacy retail chains, hospitals
and physician offices in the United States. Anda is able to compete
in the distribution market by maintaining a broad portfolio of
products, competitive pricing and delivery throughout the United
States.
United States Gross Profit
Gross profit from our United States segment in the first
quarter of 2024 was $858 million, an increase of 9% compared to
$789 million in the first quarter of 2023.
Gross profit margin for our United States segment in the
first quarter of 2024 increased to 49.8%, compared to 47.0% in the
first quarter of 2023. This increase was mainly due to a favorable
mix of products primarily driven by an increase in revenues from
AUSTEDO and lenalidomide capsules (the generic version of
Revlimid®), as well as a decrease in our operational costs.
United States Profit
Profit from our United States segment consists of gross profit
less R&D expenses, S&M expenses, G&A expenses and any
other income related to this segment. Segment profit does not
include amortization and certain other items.
Profit from our United States segment in the first
quarter of 2024 was $350 million, an increase of 4% compared to
$338 million in the first quarter of 2023. This increase was mainly
due to higher gross profit, partially offset by higher S&M
expenses.
Europe Segment
Our Europe segment includes the European Union, the United
Kingdom and certain other European countries.
The following table presents revenues, expenses and profit for
our Europe segment for the three months ended March 31, 2024 and
2023:
Three months ended March
31,
2024
2023
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
1,272
100%
$
1,184
100%
Gross profit
738
58.0%
655
55.3%
R&D expenses
56
4.4%
53
4.5%
S&M expenses
194
15.2%
187
15.8%
G&A expenses
65
5.1%
70
5.9%
Other income
1
§
§
§
Segment profit*
$
423
33.2%
$
345
29.1%
___________
* Segment profit does not include
amortization and certain other items
§ Represents an amount less than $0.5
million or 0.5%, as applicable
Revenues from our Europe segment in the first quarter of
2024 were $1,272 million, an increase of 7%, or $88 million,
compared to the first quarter of 2023. In local currency terms,
revenues increased by 4% compared to the first quarter of 2023,
mainly due to higher revenues from generic products and AJOVY.
In the first quarter of 2024, revenues from our Europe segment
were positively impacted by exchange rate fluctuations of $43
million, including hedging effects, compared to the first quarter
of 2023. Revenues in the first quarter of 2024 included $8 million
from a positive hedging impact, which is included in “Other” in the
table below. Revenues in the first quarter of 2023 included $6
million from a negative hedging impact, which is included in
“Other” in the table below.
Revenues by Major Products and Activities
The following table presents revenues for our Europe segment by
major products and activities for the three months ended March 31,
2024 and 2023:
Three months ended
March 31,
Percentage
Change
2024
2023
2024-2023
(U.S. $ in millions)
Generic products
$
1,004
$
932
8%
AJOVY
51
36
42%
COPAXONE
57
59
(4%)
Respiratory products
66
68
(3%)
Other
94
89
6%
Total
$
1,272
$
1,184
7%
Generic products revenues (including OTC and biosimilar
products) in our Europe segment in the first quarter of 2024, were
$1,004 million, an increase of 8% compared to the first quarter of
2023. In local currency terms, revenues increased by 5%, mainly due
to higher volumes.
AJOVY revenues in our Europe segment in the first quarter
of 2024 increased by 42% to $51 million, compared to $36 million in
the first quarter of 2023. In local currency terms revenues
increased by 40%, mainly due to growth in European countries in
which AJOVY had previously been launched.
COPAXONE revenues in our Europe segment in the first
quarter of 2024 decreased by 4% to $57 million, compared to the
first quarter of 2023. In local currency terms, revenues decreased
by 5%, due to price reductions and a decline in volume resulting
from competing glatiramer acetate products and availability of
alternative therapies.
Respiratory products revenues in our Europe segment in
the first quarter of 2024 decreased by 3% to $66 million compared
to the first quarter of 2023. In local currency terms, revenues
decreased by 5% compared to the first quarter of 2023, mainly due
to net price reductions and lower volumes.
Europe Gross Profit
Gross profit from our Europe segment in the first quarter
of 2024 was $738 million, an increase of 13% compared to $655
million in the first quarter of 2023.
Gross profit margin for our Europe segment in the first
quarter of 2024 increased to 58.0%, compared to 55.3% in the first
quarter of 2023. This increase was mainly due to a favorable mix of
products as well as a decrease in our operational costs.
Europe Profit
Profit from our Europe segment consists of gross profit less
R&D expenses, S&M expenses, G&A expenses and any other
income related to this segment. Segment profit does not include
amortization and certain other items.
Profit from our Europe segment in the first quarter of
2024 was $423 million, an increase of 22%, compared to $345 million
in the first quarter of 2023. This increase was mainly due to
higher gross profit, as described above.
International Markets Segment
Our International Markets segment includes all countries in
which we operate other than the United States and countries
included in our Europe segment. As part of a recent shift in
executive management responsibilities, commencing January 1, 2024,
Canada is reported under our International Markets segment and is
no longer included as part of our United States segment. Prior
period amounts were recast to reflect this change.
The countries in our International Markets segment include
highly regulated, mainly generic markets, such as Canada and
Israel, branded generics-oriented markets, such as Russia and
certain Latin America markets and hybrid markets, such as
Japan.
The following table presents revenues, expenses and profit for
our International Markets segment for the three months ended March
31, 2024 and 2023:
Three months ended March
31,
2024
2023
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
597
100%
$
581
100%
Gross profit
297
49.7%
285
49.0%
R&D expenses
28
4.6%
27
4.7%
S&M expenses
118
19.8%
113
19.4%
G&A expenses
35
5.8%
38
6.6%
Other income
§
§
(1)
§
Segment profit*
$
117
19.6%
$
108
18.5%
__________
* Segment profit does not include
amortization and certain other items.
§ Represents an amount less than $0.5
million or 0.5%, as applicable.
Revenues from our International Markets segment in the
first quarter of 2024 were $597 million, an increase of 3% compared
to the first quarter of 2023. In local currency terms, revenues
increased by 17% compared to the first quarter of 2023, mainly due
to higher revenues from generic products in most markets, partially
offset by regulatory price reductions and generic competition to
off-patented products in Japan.
In the first quarter of 2024, revenues were negatively impacted
by exchange rate fluctuations of $82 million, net of hedging
effects, compared to the first quarter of 2023. Revenues in the
first quarter of 2024 included $4 million from a positive hedging
impact, compared to a minimal hedging impact in the first quarter
of 2023, which are included in “Other” in the table below.
Revenues by Major Products and Activities
The following table presents revenues for our International
Markets segment by major products and activities for the three
months ended March 31, 2024 and 2023:
Three months ended
March 31,
Percentage
Change
2024
2023
2024-2023
(U.S. $ in millions)
Generic products
$
477
$
477
§
AJOVY
17
13
26%
COPAXONE
12
17
(32%)
Other
91
74
24%
Total
$
597
$
581
3%
Generic products revenues (including OTC products) in our
International Markets segment were $477 million in the first
quarter of 2024, flat compared to the first quarter of 2023. In
local currency terms, revenues increased by 16% compared to the
first quarter of 2023, mainly due to higher revenues in most
markets, largely driven by price increases as a result of higher
costs due to inflationary pressure and higher volumes, partially
offset by regulatory price reductions and generic competition to
off-patented products in Japan.
AJOVY was launched in certain markets in our
International Markets segment, including in Canada, Japan,
Australia, Israel, South Korea, Brazil and others. We are moving
forward with plans to launch AJOVY in other markets. AJOVY revenues
in our International Markets segment in the first quarter of 2024
were $17 million, compared to $13 million in the first quarter of
2023.
COPAXONE revenues in our International Markets segment in
the first quarter of 2024 were $12 million compared to $17 million
in the first quarter of 2023.
AUSTEDO was launched in China and Israel in 2021 and in
Brazil in 2022, for the treatment of chorea associated with
Huntington’s disease and for the treatment of tardive dyskinesia.
In February 2024, we announced a strategic partnership for the
marketing and distribution of AUSTEDO in China. We continue with
additional submissions in various other markets.
International Markets Gross Profit
Gross profit from our International Markets segment in
the first quarter of 2024 was $297 million, an increase of 4%
compared to $285 million in the first quarter of 2023.
Gross profit margin for our International Markets segment
in the first quarter of 2024 increased to 49.7%, compared to 49.0%
in the first quarter of 2023. This increase was mainly due to price
increases largely as a result of inflationary pressures and a
favorable mix of products, partially offset by regulatory price
reductions and generic competition to off-patented products in
Japan, as well as higher costs due to inflationary and other
macroeconomic pressures.
International Markets Profit
Profit from our International Markets segment consists of gross
profit less R&D expenses, S&M expenses, G&A expenses
and any other income related to this segment. Segment profit does
not include amortization and certain other items.
Profit from our International Markets segment in the first
quarter of 2024 was $117 million, an increase of 8%, compared to
$108 million in the first quarter of 2023.
Other Activities
We have other sources of revenues, primarily the sale of APIs to
third parties, certain contract manufacturing services and an
out-licensing platform offering a portfolio of products to other
pharmaceutical companies through our affiliate Medis. Our other
activities are not included in our United States, Europe or
International Markets segments described above.
On January 31, 2024, we announced that we intend to divest our
API business (including its R&D, manufacturing and commercial
activities) through a sale, which divestment is expected to be
completed in the first half of 2025. The intention to divest is in
alignment with our Pivot to Growth strategy. However, there can be
no assurance regarding the ultimate timing or structure of a
potential divestiture or that a divestiture will be agreed or
completed at all.
Revenues from other activities in the first quarter of 2024 were
$225 million, an increase of 3% in U.S. dollars, or 2% in local
currency terms compared to the first quarter of 2023.
API sales to third parties in the first quarter of 2024
were $128 million, reflecting an increase of 2% in both U.S.
dollars and local currency terms, compared to the first quarter of
2023, following a reallocation of an immaterial business within our
other activities, in line with our intention to divest our API
business.
Conference Call
Teva will host a conference call and live webcast including a
slide presentation on May 8, 2024, at 8:00 a.m. ET to discuss its
first quarter 2024 results and overall business environment. A
question & answer session will follow.
In order to participate, please register in advance here to
obtain a local or toll-free phone number and your personal pin.
A live webcast of the call will be available on Teva’s website
at: https://ir.tevapharm.com/Events-and-Presentations
Following the conclusion of the call, a replay of the webcast
will be available within 24 hours on Teva's website.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) is a
global pharmaceutical leader with a category-defying portfolio,
harnessing our generics expertise and stepping up innovation to
continue the momentum behind the discovery, delivery, and expanded
development of modern medicine. For over 120 years, Teva's
commitment to bettering health has never wavered. Today, the
company’s global network of capabilities enables its ~37,000
employees across 58 markets to push the boundaries of scientific
innovation and deliver quality medicines to help improve health
outcomes of millions of patients every day. To learn more about how
Teva is all in for better health, visit www.tevapharm.com.
http://www.tevapharm.com.
Some amounts in this press release may not add up due to
rounding. All percentages have been calculated using unrounded
amounts.
Non-GAAP Financial Measures
This press release contains certain financial information that
differs from what is reported under accounting principles generally
accepted in the United States ("GAAP"). These non-GAAP financial
measures, including, but not limited to, non-GAAP operating income,
non-GAAP operating margin, non-GAAP gross profit, non-GAAP gross
profit margin, Adjusted EBITDA, free cash flow, non-GAAP tax rate,
non-GAAP net income (loss) attributable to Teva and non-GAAP
diluted EPS, are presented in order to facilitate investors'
understanding of our business. We utilize certain non-GAAP
financial measures to evaluate performance, in conjunction with
other performance metrics. The following are examples of how we
utilize the non-GAAP measures: our management and board of
directors use the non-GAAP measures to evaluate our operational
performance, to compare against work plans and budgets, and
ultimately to evaluate the performance of management; our annual
budgets are prepared on a non-GAAP basis; and senior management’s
annual compensation is derived, in part, using these non-GAAP
measures. See the attached tables for a reconciliation of the GAAP
results to the adjusted non-GAAP measures. Investors should
consider non-GAAP financial measures in addition to, and not as
replacements for, or superior to, measures of financial performance
prepared in accordance with GAAP. We are not providing forward
looking guidance for GAAP reported financial measures or a
quantitative reconciliation of forward-looking non-GAAP financial
measures to the most directly comparable GAAP measure because we
are unable to predict with reasonable certainty the ultimate
outcome of certain significant items including, but not limited to,
the amortization of purchased intangible assets, legal settlements
and loss contingencies, impairment of long-lived assets and
goodwill impairment, without unreasonable effort. These items are
uncertain, depend on various factors, and could be material to our
results computed in accordance with GAAP.
Cautionary Note Regarding Forward-Looking Statements
This press release 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 future
results, performance or achievements to differ significantly from
that expressed or implied by such forward-looking statements. You
can identify these forward-looking statements by the use of words
such as “should,” “expect,” “anticipate,” “estimate,” “target,”
“may,” “project,” “guidance,” “intend,” “plan,” “believe” and other
words and terms of similar meaning and expression in connection
with any discussion of future operating or financial performance.
Important factors that could cause or contribute to such
differences include risks relating to:
- our ability to successfully compete in the marketplace,
including: that we are substantially dependent on our generic
products; concentration of our customer base and commercial
alliances among our customers; delays in launches of new generic
products; our ability to develop and commercialize
biopharmaceutical products; competition for our innovative
medicines; our ability to achieve expected results from investments
in our product pipeline; our ability to develop and commercialize
additional pharmaceutical products; our ability to successfully
execute our Pivot to Growth strategy, including to expand our
innovative and biosimilar medicines pipeline and profitably
commercialize the innovative medicines and biosimilar portfolio,
whether organically or through business development, and to sustain
and focus our portfolio of generics medicines; and the
effectiveness of our patents and other measures to protect our
intellectual property rights, including any potential challenges to
our Orange Book patent listings in the U.S.;
- our substantial indebtedness, which may limit our ability to
incur additional indebtedness, engage in additional transactions or
make new investments, may result in a future downgrade of our
credit ratings; and our inability to raise debt or borrow funds in
amounts or on terms that are favorable to us;
- our business and operations in general, including: the impact
of global economic conditions and other macroeconomic developments
and the governmental and societal responses thereto; the widespread
outbreak of an illness or any other communicable disease, or any
other public health crisis; effectiveness of our optimization
efforts; our ability to attract, hire, integrate and retain highly
skilled personnel; interruptions in our supply chain or problems
with internal or third party manufacturing; disruptions of
information technology systems; breaches of our data security;
challenges associated with conducting business globally, including
political or economic instability, major hostilities or terrorism,
such as the ongoing conflict between Russia and Ukraine and the
state of war declared in Israel; costs and delays resulting from
the extensive pharmaceutical regulation to which we are subject;
our ability to successfully bid for suitable acquisition targets or
licensing opportunities, or to consummate and integrate
acquisitions; and our prospects and opportunities for growth if we
sell assets or business units and close or divest plants and
facilities, as well as our ability to successfully and
cost-effectively consummate such sales and divestitures, including
our planned divestiture of our API business;
- compliance, regulatory and litigation matters, including:
failure to comply with complex legal and regulatory environments;
the effects of governmental and civil proceedings and litigation
which we are, or in the future become, party to; the effects of
reforms in healthcare regulation and reductions in pharmaceutical
pricing, reimbursement and coverage; increased legal and regulatory
action in connection with public concern over the abuse of opioid
medications; our ability to timely make payments required under our
nationwide opioids settlement agreement and provide our generic
version of Narcan® (naloxone hydrochloride nasal spray) in the
amounts and at the times required under the terms of such
agreement; scrutiny from competition and pricing authorities around
the world, including our ability to comply with and operate under
our deferred prosecution agreement (DPA) with the U.S. Department
of Justice; potential liability for intellectual property right
infringement; product liability claims; failure to comply with
complex Medicare, Medicaid and other governmental programs
reporting and payment obligations; compliance with anti-corruption,
sanctions and trade control laws; environmental risks; and the
impact of sustainability issues;
- the impact of the state of war declared in Israel and the
military activity in the region, including the risk of disruptions
to our operations and facilities, such as our manufacturing and
R&D facilities, located in Israel, the impact of our employees
who are military reservists being called to active military duty,
and the impact of the war on the economic, social and political
stability of Israel;
- other financial and economic risks, including: our exposure to
currency fluctuations and restrictions as well as credit risks;
potential impairments of our long-lived assets; the impact of
geopolitical conflicts including the state of war declared in
Israel and the conflict between Russia and Ukraine; potential
significant increases in tax liabilities; the effect on our overall
effective tax rate of the termination or expiration of governmental
programs or tax benefits, or of a change in our business and our
ability to remediate an existing material weakness in our internal
control over financial reporting;
and other factors discussed in this press release, in our
Quarterly Report on Form 10-Q for the first quarter of 2024 and in
our Annual Report on Form 10-K for the year ended December 31,
2023, including in the sections captioned "Risk Factors” and
“Forward Looking Statements.” Forward-looking statements speak only
as of the date on which they are made, and we assume no obligation
to update or revise any forward-looking statements or other
information contained herein, whether as a result of new
information, future events or otherwise. You are cautioned not to
put undue reliance on these forward-looking statements.
Consolidated Statements of
Income (U.S. dollars in millions,
except share and per share data) (Unaudited)
Three months
ended March 31,
2024
2023
Net revenues
3,819
3,661
Cost of sales
2,048
2,079
Gross profit
1,771
1,582
Research and development expenses
242
234
Selling and marketing expenses
608
546
General and administrative expenses
278
296
Intangible assets impairments
80
178
Other asset impairments, restructuring and other items
673
110
Legal settlements and loss contingencies
106
233
Other income
1
(2)
Operating income (loss)
(218)
(13)
Financial expenses, net
250
260
Income (loss) before income taxes
(467)
(272)
Income taxes (benefit)
(52)
(19)
Share in (profits) losses of associated companies, net
4
(0)
Net income (loss)
(419)
(253)
Net income (loss) attributable to non-controlling interests
(280)
(33)
Net income (loss) attributable to Teva
(139)
(220)
Earnings (loss) per share attributable to
Teva: Basic ($)
(0.12)
(0.20)
Diluted ($)
(0.12)
(0.20)
Weighted average number of shares (in millions): Basic
1,123
1,115
Diluted
1,123
1,115
Non-GAAP net income attributable to Teva for diluted
earnings per share:*
(139)
(220)
Non-GAAP earnings per share attributable to Teva:* Diluted
($)
0.48
0.40
Non-GAAP average number of shares (in millions): Diluted
1,143
1,128
Amounts may not add up due to rounding.
* See reconciliation attached.
CONSOLIDATED BALANCE
SHEETS (U.S. dollars in millions, except for share data)
(Unaudited)
March 31,
December 31,
2024
2023
ASSETS Current assets: Cash and cash equivalents $
2,991
$
3,226
Accounts receivables, net of allowance for credit losses of $98
million and $95 million as of March 31, 2024 and December 31, 2023,
respectively
3,456
3,408
Inventories
3,949
4,021
Prepaid expenses
1,336
1,255
Other current assets
495
504
Assets held for sale
70
70
Total current assets
12,297
12,485
Deferred income taxes
1,960
1,812
Other non-current assets
470
470
Property, plant and equipment, net
5,618
5,750
Operating lease right-of-use assets, net
364
397
Identifiable intangible assets, net
5,056
5,387
Goodwill
17,007
17,177
Total assets $
42,773
$
43,479
LIABILITIES AND EQUITY Current liabilities:
Short-term debt $
3,060
$
1,672
Sales reserves and allowances
3,594
3,535
Accounts payables
2,439
2,602
Employee-related obligations
492
611
Accrued expenses
2,784
2,771
Other current liabilities
1,161
1,044
Liabilities held for sale
262
13
Total current liabilities
13,792
12,247
Long-term liabilities: Deferred income taxes
569
606
Other taxes and long-term liabilities
3,991
4,019
Senior notes and loans
16,584
18,161
Operating lease liabilities
294
320
Total long-term liabilities
21,438
23,106
Equity: Teva shareholders’ equity:
7,278
7,506
Non-controlling interests
265
620
Total equity
7,543
8,126
Total liabilities and equity $
42,773
$
43,479
Amounts may not add up due to rounding. TEVA
PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED STATEMENTS OF
CASH FLOWS (U.S. dollars in millions) (Unaudited)
Three months ended
March 31,
2024
2023
Operating activities: Net income (loss)
$
(419)
(253)
Adjustments to reconcile net income (loss) to net cash provided by
operations: Depreciation and amortization
272
304
Impairment of goodwill, long-lived assets and assets held for sale
679
189
Net change in operating assets and liabilities
(497)
(349)
Deferred income taxes – net and uncertain tax positions
(189)
(106)
Stock-based compensation
28
32
Other items
2
34
Net loss (gain) from investments and from sale of long lived assets
-
4
Net cash provided by (used in) operating activities
(124)
(145)
Investing activities:
Beneficial interest collected in exchange for securitized
trade receivables
295
323
Purchases of property, plant and equipment and intangible assets
(124)
(139)
Proceeds from sale of business and long lived assets
-
2
Acquisition of businesses, net of cash acquired
(15)
-
Purchases of investments and other assets .
(12)
(4)
Other investing activities
-
(1)
Net cash provided by (used in) investing activities
144
181
Financing activities:
Purchase of shares from non-controlling interests
(64)
-
Dividends paid to non-controlling interests
(78)
-
Repayment of senior notes and loans and other long term liabilities
-
(3,152)
Proceeds from senior notes, net of issuance costs
-
2,451
Other financing activities
(9)
(5)
Net cash provided by (used in) financing activities
(151)
(706)
Translation adjustment on cash and
cash equivalents
(104)
12
Net change in cash, cash equivalents
and restricted cash
(236)
(658)
Balance of cash, cash equivalents and restricted cash at
beginning of period
3,227
2,834
Balance of cash, cash equivalents
and restricted cash at end of period $
2,991
2,176
Cash and
cash equivalents
2,991
2,143
Restricted cash included in other current assets
—
33
Total cash, cash equivalents and restricted cash shown in the
statement of cash flows
2,991
2,176
Non-cash financing and investing
activities: Beneficial interest obtained in
exchange for securitized accounts receivables $
312
334
Amounts may not add up due to rounding The accompanying
notes are an integral part of the financial statements.
Reconciliation of gross profit to Non-GAAP gross profit
(Unaudited)
Three months ended
March 31,
($ in millions)
2024
2023
Gross profit $
1,771
1,582
Gross profit margin
46.4%
43.2%
Increase (decrease) for excluded items: Amortization of
purchased intangible assets
137
145
Costs related to regulatory actions taken in facilities
3
1
Equity compensation
5
5
Accelerated depreciation
7
25
Other non-GAAP items (1)
41
38
Non-GAAP gross profit $
1,963
1,796
Non-GAAP gross profit margin (2)
51.4%
49.1%
(1) Other non-GAAP items include other
exceptional items that we believe are sufficiently large that their
exclusion is important to facilitate an understanding of trends in
our financial results, primarily related to the rationalization of
our plants, certain inventory write-offs and other unusual events.
(2) Non-GAAP gross profit margin is non-GAAP gross profit as a
percentage of revenue.
Reconciliation of operating income (loss)
to Non-GAAP operating income (loss) (Unaudited)
Three months ended
March 31,
($ in millions)
2024
2023
Operating income (loss)(1) ($)
(218)
(13)
Operating margin
(5.7%)
(0.4%)
Increase (decrease) for excluded items: Amortization of
purchased intangible assets
152
165
Legal settlements and loss contingencies(2)
106
233
Impairment of long-lived assets (3)
679
188
Restructuring costs
13
56
Costs related to regulatory actions taken in facilities
3
1
Equity compensation
28
32
Contingent consideration(1)(4)
79
35
Accelerated depreciation
7
25
Other non-GAAP items(5)
44
63
Non-GAAP operating income (loss) ($)
892
785
Non-GAAP operating margin(6) ($)
23.4%
21.4%
(1) The data presented for the prior period have been
revised to reflect a revision in the presentation of these items in
the consolidated financial statements. For additional information
see note 1b to our consolidated financial statements included in
our 2023 Annual Report on Form 10-K. (2) For the three
months ended March 31, 2024, adjustments for legal settlements and
loss contingencies primarily consisted of $64 million attributable
to an update to the estimated settlement provision for the
Company’s opioid litigation (mainly the effect of the passage of
time on the net present value of the discounted payments). For the
three months ended March 31, 2023, adjustments for legal
settlements and loss contingencies primarily consisted of $100
million related to an estimated provision recorded in connection
with the U.S. DOJ patient assistance program litigation, $50
million related to a provision for the reverse-payment antitrust
litigation over certain HIV medicines, as well as $36 million
attributable to an update to the estimated settlement provision
related to the remaining opioid cases (mainly the effect of the
passage of time on the net present value of the discounted
payments). (3) For the three months ended March 31, 2024,
adjustments for impairment of long-lived assets primarily consisted
of $577 million related to the classification of a business in
Teva’s International Markets segment as held for sale. For the
three months ended March 31, 2023, adjustments for impairment of
long-lived assets primarily consisted of $112 million mainly
related to regulatory pricing reductions in Japan. (4) For
the three months ended March 31, 2024, adjustments for contingent
consideration primarily consisted of $64 million related to a
change in the estimated future royalty payments to Allergan in
connection with lenalidomide (generic equivalent of Revlimid®).
(5) Other non-GAAP items include other exceptional items
that we believe are sufficiently large that their exclusion is
important to facilitate an understanding of trends in our financial
results, primarily related to the rationalization of our plants,
certain inventory write-offs, material litigation fees and other
unusual events. (6) Non-GAAP operating margin is Non-GAAP
operating income as a percentage of revenues.
Reconciliation of
net income (loss) attributable to Teva to Non-GAAP net
income (loss) attributable to Teva (Unaudited)
Three months ended
March 31,
($ in millions except per share amounts)
2024
2023
Net income (Loss) attributable to Teva(1) ($)
(139)
(220)
Increase (decrease) for excluded items: Amortization of
purchased intangible assets
152
165
Legal settlements and loss contingencies(2)
106
233
Impairment of long-lived assets(3)
679
188
Restructuring costs
13
56
Costs related to regulatory actions taken in facilities
3
1
Equity compensation
28
32
Contingent consideration(1)(4)
79
35
Accelerated depreciation
7
25
Financial expenses
12
23
Items attributable to non-controlling interests
(284)
(40)
Other non-GAAP items(5)
44
63
Corresponding tax effects and unusual tax items(6)
(150)
(104)
Non-GAAP net income attributable to Teva ($)
548
457
Non-GAAP tax rate(7)
15.0%
15.5%
GAAP diluted earnings (loss) per share attributable to Teva ($)
(0.12)
(0.20)
EPS difference(8)
0.60
0.60
Non-GAAP diluted EPS attributable to Teva(8) ($)
0.48
0.40
Non-GAAP average number of shares (in millions)(8)
1,143
1,128
(1)
The data presented for the prior period have been revised to
reflect a revision in the presentation of these items in the
consolidated financial statements. For additional information see
note 1c to our consolidated financial statements.
(2)
For the three months ended March 31, 2024, adjustments for legal
settlements and loss contingencies primarily consisted of $64
million attributable to an update to the estimated settlement
provision for the Company’s opioid litigation (mainly the effect of
the passage of time on the net present value of the discounted
payments). For the three months ended March 31, 2023, adjustments
for legal settlements and loss contingencies primarily consisted of
$100 million related to an estimated provision recorded in
connection with the U.S. DOJ patient assistance program litigation,
$50 million related to a provision for the reverse-payment
antitrust litigation over certain HIV medicines, as well as $36
million attributable to an update to the estimated settlement
provision related to the remaining opioid cases (mainly the effect
of the passage of time on the net present value of the discounted
payments).
(3)
For the three months ended March 31, 2024, adjustments for
impairment of long-lived assets primarily consisted of $577 million
related to the classification of a business in Teva’s International
Markets segment as held for sale. For the three months ended March
31, 2023, adjustments for impairment of long-lived assets primarily
consisted of $112 million mainly related to regulatory pricing
reductions in Japan.
(4)
For the three months ended March 31, 2024, adjustments for
contingent consideration primarily consisted of $64 million related
to a change in the estimated future royalty payments to Allergan in
connection with lenalidomide (generic equivalent of Revlimid®).
(5)
Other non-GAAP items include other exceptional items that we
believe are sufficiently large that their exclusion is important to
facilitate an understanding of trends in our financial results,
primarily related to the rationalization of our plants, certain
inventory write-offs, material litigation fees and other unusual
events.
(6)
For the three months ended March 31, 2024 and March 31, 2023,
adjustments for corresponding tax effects and unusual tax items
exclusively consisted of the tax impact directly attributable to
the pre-tax items that are excluded from non-GAAP net income
included in the other adjustments to this table.
(7)
Non-GAAP tax rate is tax expenses (benefit) excluding the impact of
non-GAAP tax adjustments presented above as a percentage of income
(loss) before income taxes excluding the impact of non-GAAP
adjustments presented above. GAAP tax rate for the three months
ended March 31, 2024 and March 31, 2023 was 11.1% and 7.1%,
respectively.
(8)
EPS difference and diluted non-GAAP EPS are calculated by dividing
our non-GAAP net income attributable to Teva by our non-GAAP
diluted weighted average number of shares.
Reconciliation of net
income (loss) to adjusted EBITDA (Unaudited)
Three months ended
March 31,
($ in millions) $
2024
2023
Net income (loss)(1)
(419)
(253)
Increase (decrease) for excluded items: Financial expenses
250
260
Income taxes
(52)
(19)
Share in profits (losses) of associated companies –net
4
(0)
Depreciation
119
139
Amortization
152
165
EBITDA
54
291
Legal settlements and loss contingencies(2)
106
233
Impairment of long lived assets(3)
679
188
Restructuring costs
13
56
Costs related to regulatory actions taken in facilities(4)
3
1
Equity compensation
28
32
Contingent consideration
79
35
Other non-GAAP items (5)
44
62
Adjusted EBITDA $
1,005
899
(1) The data presented for the prior period have been
revised to reflect a revision in the presentation of these items in
the consolidated financial statements. For additional information
see note 1b to our consolidated financial statements included in
our 2023 Annual Report on Form 10-K. (2) For the three
months ended March 31, 2024, adjustments for legal settlements and
loss contingencies primarily consisted of $64 million attributable
to an update to the estimated settlement provision for the
Company’s opioid litigation (mainly the effect of the passage of
time on the net present value of the discounted payments). For the
three months ended March 31, 2023, adjustments for legal
settlements and loss contingencies primarily consisted of $100
million related to an estimated provision recorded in connection
with the U.S. DOJ patient assistance program litigation, $50
million related to a provision for the reverse-payment antitrust
litigation over certain HIV medicines, as well as $36 million
attributable to an update to the estimated settlement provision
related to the remaining opioid cases (mainly the effect of the
passage of time on the net present value of the discounted
payments). (3) For the three months ended March 31, 2024,
adjustments for impairment of long-lived assets primarily consisted
of $577 million related to the classification of a business in
Teva’s International Markets segment as held for sale. For the
three months ended March 31, 2023, adjustments for impairment of
long-lived assets primarily consisted of $112 million mainly
related to regulatory pricing reductions in Japan. (4) For
the three months ended March 31, 2024, adjustments for contingent
consideration primarily consisted of $64 million related to a
change in the estimated future royalty payments to Allergan in
connection with lenalidomide (generic equivalent of Revlimid®).
(5) Other non-GAAP items include other exceptional items
that we believe are sufficiently large that their exclusion is
important to facilitate an understanding of trends in our financial
results, primarily related to the rationalization of our plants,
certain inventory write-offs, material litigation fees and other
unusual events.
Segment Information (Unaudited)
United States
Europe
International Markets
Three months ended March
31,
Three months ended March
31,
Three months ended March
31,
2024
2023
2024
2023
2024
2023
(U.S. $ in millions) (U.S. $ in millions)
(U.S. $ in millions) Revenues $
1,725
$
1,677
$
1,272
$
1,184
$
597
$
581
Gross profit
858
789
738
655
297
285
R&D expenses
154
149
56
53
28
27
S&M expenses
261
207
194
187
118
113
G&A expenses
93
95
65
70
35
38
Other income
1
§
1
§ §
(1)
Segment profit $
350
$
338
$
423
$
345
$
117
$
108
§ Represents an amount less than $0.5 million.
Reconciliation of our segment profit to consolidated
income before income taxes (Unaudited)
Three months ended
March 31,
2024
2023
(U.S.$ in millions) United
States profit $
350
$
338
Europe profit
423
345
International Markets profit
117
108
Total reportable segment profit
890
791
Profit of other activities
2
(6)
892
785
Amounts not allocated to segments: Amortization
152
165
Other asset impairments, restructuring and other items*
673
110
Intangible asset impairments
80
178
Legal settlements and loss contingencies
106
233
Other unallocated amounts
99
112
Consolidated operating income (loss)
(218)
(13)
Financial expenses - net
250
260
Consolidated income (loss) before income taxes* $
(467)
$
(272)
*The data presented for the prior period have been
revised to reflect a revision in the presentation of these items in
the consolidated financial statements. For additional information
see note 1c to our consolidated financial statements.
Segment
revenues by major products and activities (Unaudited)
Three months ended
March 31,
Percentage Change
2024
2023
2023-2024
(U.S.$ in millions) United States segment Generic
products $
808
$
747
8%
AJOVY
45
46
(3%)
AUSTEDO
282
170
67%
BENDEKA/TREANDA
46
62
(26%)
COPAXONE
30
71
(58%)
Anda
381
424
(10%)
Other
133
158
(16%)
Total
1,725
1,677
3%
Three months ended
March 31,
Percentage Change
2024
2023
2023-2024
(U.S.$ in millions)
Europe segment
Generic products $
1,004
$
932
8%
AJOVY
51
36
42%
COPAXONE
57
59
(4%)
Respiratory products
66
68
(3%)
Other
94
89
6%
Total
1,272
1,184
7%
Three months ended
March 31,
Percentage Change
2024
2023
2023-2024
(U.S.$ in millions)
International Markets segment
Generic products $
477
$
477
§
AJOVY
17
13
26%
COPAXONE
12
17
(32%)
Other
91
74
24%
Total
597
581
3%
Free cash flow reconciliation (Unaudited)
Three months ended March
31,
2024
2023
(U.S. $ in millions) Net cash
used in operating activities
(124)
(145)
Beneficial interest collected in exchange for securitized accounts
receivables
295
323
Capital investment
(124)
(139)
Acquisition of businesses, net of cash acquired
(15)
-
Proceeds from divestitures of businesses and other assets
-
2
Free cash flow $
32
$
41
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240508490531/en/
IR Contacts Ran Meir (215) 591-8912 Yael Ashman +972
(3) 914 8262 Sanjeev Sharma (267) 658-2700 PR
Contacts Kelley Dougherty (973) 832-2810 Eden Klein
+972 (3) 906 2645
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