Teva Announces Strong Growth in Second Quarter Revenues mainly
driven by Generics Products in All Regions and AUSTEDO®; Raises
2024 Financial Guidance
For an accessible version of this Press Release, please visit
www.tevapharm.com
- Q2 2024 revenues of $4.2 billion
reflecting an increase of 7% in U.S. dollars or 11% in local
currency terms compared to Q2 2023.
- Generics business grows across all
regions – increased in local currency terms by 16% in the U.S., 8%
in Europe and 22% in International Markets, compared to Q2
2023.
- AUSTEDO – continued growth, U.S.
revenue of $407 million in Q2 2024, an increase of 32% compared to
Q2 2023; raising 2024 revenue outlook to ~$1.6 billion.
- AJOVY® – global revenues
of $115 million in Q2 2024, an increase of 12% in local currency
terms compared to Q2 2023.
- Announced acceleration of
development timeline for duvakitug (Anti-TL1A) – top-line results
now expected in Q4 2024, with full data expected next year.
- Announced positive Phase 3 efficacy
results for olanzapine LAI (TEV' 749); so far completed ~95% of
target injections with no PDSS observed.
- SIMLANDI®
(adalimumab-ryvk) injection launched in May 2024 as an
interchangeable biosimilar to Humira®.
- SELARSDI™ (ustekinumab-aekn)
injection for subcutaneous use, preparing for February 2025 launch
as a biosimilar to Stelara®.
Q2 2024
Highlights:
- Revenues of $4.2 billion
- GAAP loss per share of $0.75
- Non-GAAP diluted EPS of $0.61
- Cash flow generated from operating
activities of $103 million
- Free cash flow of $324 million
- Building on Teva's strong
performance in the first half of2024 and expected developments in
the second half of the year, Teva's full year 2024 business outlook
is raised to:
- Revenues of $16.0 - $16.4
billion
- AUSTEDO revenues of ~$1.6
billion
- Adjusted EBITDA of $4.6 - $5.0
billion
- Non-GAAP diluted EPS of $2.30 -
$2.50
TEL AVIV, Israel, July 31, 2024 (GLOBE NEWSWIRE) -- Teva
Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today reported
results for the quarter ended June 30, 2024.
Mr. Richard Francis,
Teva's President and CEO, said, "In the second quarter of
2024, we are encouraged by the positive momentum across each of the
four pillars of our Pivot to Growth strategy. Teva's global
revenues of $4.2 billion increased by 7% in U.S. dollars, or 11% in
local currency terms compared to the second quarter of 2023,
delivering strong growth driven mainly by our generics and
innovative business, with AUSTEDO growing 32% in the U.S. compared
to Q2 2023."
Mr. Francis continued, "We are also showing significant progress
in on our late-stage innovative pipeline, underscored by the
acceleration of the development timeline of duvakitug (Anti-TL1A),
with top-line results now expected in the fourth quarter of 2024,
and full data expected next year.
"With these robust results, we are raising 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.
Second Quarter 2024 Consolidated
Results(1)
Revenues in the second quarter of 2024 were
$4,164 million, an increase of 7% in U.S. dollars or 11% in local
currency terms compared to the second quarter of 2023. This
increase was mainly due to higher revenues from generic products in
all our segments, and from AUSTEDO in our United States and
International Markets segments.
Exchange rate movements during the second
quarter of 2024, including hedging effects, negatively impacted
overall revenues by $122 million compared to the second quarter of
2023. Exchange rate movements during the second quarter of 2024,
including hedging effects, negatively impacted our operating income
and non-GAAP operating income each by $56 million compared to the
second quarter of 2023.
Gross profit in the second quarter of 2024 was
$2,024 million, an increase of 13% compared to $1,796 million in
the second quarter of 2023. Gross profit margin
was 48.6% in the second quarter of 2024, compared to 46.3% in the
second quarter of 2023. Non-GAAP gross profit was
$2,205 million in the second quarter of 2024, an increase of 9%
compared to $2,023 million in the second quarter of 2023.
Non-GAAP gross profit margin was
52.9% in the second quarter of 2024, compared to 52.2% in the
second 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, primarily driven by growth in AUSTEDO revenues.
Research and Development (R&D)
expenses, net in the second quarter of 2024 were
$269 million, an increase of 12% compared to $240 million in the
second quarter of 2023 as we continue to execute on our Pivot to
Growth Strategy. Our higher R&D expenses, net in the second
quarter of 2024, compared to the second quarter of 2023, were
mainly due to an increase related to our late-stage innovative
pipeline in immunology, as well as related to immuno-oncology and
neuroscience projects.
Selling and Marketing (S&M)
expenses in the second quarter of 2024 were $656
million, an increase of 9% compared to the second quarter of 2023.
This increase was mainly due to promotional activities in our
innovative products.
General and Administrative (G&A) expenses
in the second quarter of 2024 were $283 million, a decrease of 8%
compared to the second quarter of 2023, mainly due to lower
litigation costs in the second quarter of 2024.
Other income in the second quarter of 2024 was
$2 million, compared to $33 million in the second quarter of 2023.
Other income in the second quarter of 2023 included a capital gain
from the sale of assets related to our International Markets
segment.
Operating loss in the second
quarter of 2024 was $5 million, compared to an operating loss of
$654 million in the second quarter of 2023. Operating loss as a
percentage of revenues was 0.1% in the second quarter of 2024,
compared to 16.9% of revenues in the second quarter of 2023. The
higher operating loss in the second quarter of 2023 was mainly due
to higher legal settlements and loss contingencies as well as
higher goodwill impairment charges. Non-GAAP operating
income in the second quarter of 2024 was $1,056 million
representing a non-GAAP operating margin of 25.3% compared to
non-GAAP operating income of $1,011 million representing a non-GAAP
operating margin of 26.1% in the second quarter of 2023. The
decrease in non-GAAP operating margin in the second quarter of 2024
was mainly due to higher operational expenses as a percentage of
revenues, partially offset by higher gross profit margin.
Financial expenses, net in the second quarter
of 2024 were $241 million, mainly comprised of net-interest
expenses of $233 million. In the second quarter of 2023, financial
expenses, net were $268 million, mainly comprised of net-interest
expenses of $240 million.
In the second quarter of 2024, we recognized a tax
expense of $630 million, on a pre-tax loss of $246
million. Our tax rate for the second quarter of 2024 was mainly
affected by a settlement agreement with the Israeli Tax Authorities
(“ITA”) and impairments. The settlement agreement with the ITA
resulted in an increase of $506 million in Teva's total income
taxes in the second quarter of 2024, as certain elements had been
recognized in previous periods. For additional information on the
settlement agreement, see our Current Report on Form 8-K filed with
the SEC on June 25, 2024. In the second quarter of 2023, we
recognized a tax benefit of $16 million, on a pre-tax loss of $923
million. Our tax rate for the second quarter of 2023 was mainly
affected by impairments, legal settlements, amortization, and
interest expense disallowances. Non-GAAP
tax rate in the second quarter of 2024 was 15.4%,
compared to 15.2% in the second quarter of 2023. Our non-GAAP tax
rate in the second quarter of 2024 was mainly affected by 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
second quarter of 2023 was mainly affected by the generation of
profits in various jurisdictions with different tax rates, interest
expense disallowances, tax benefits in Israel and other countries,
as well as infrequent or non-recurring items.
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 intellectual property related integration plans in
2024 compared to 2023.
Net loss attributable to Teva and loss
per share in the second quarter of 2024 were $846 million
and $0.75, respectively, compared to net loss attributable to Teva
and loss per share of $872 million and $0.78, respectively, in the
second quarter of 2023. The lower net loss in the second quarter of
2024 was mainly due to lower operating loss, partially offset by
higher income taxes, as discussed above. Non-GAAP net
income attributable to Teva and non-GAAP
diluted earnings per share in the second
quarter of 2024 were $697 million and $0.61, respectively, compared
to $629 million and $0.56, respectively, in the second quarter of
2023.
Adjusted EBITDA was $1,168 million in the
second quarter of 2024, an increase of 4%, compared to $1,125
million in the second quarter of 2023.
As of June 30, 2024 and 2023, the fully diluted share
count for purposes of calculating our market
capitalization was approximately 1,167 million shares and
1,157 million shares, respectively.
Non-GAAP information: net non-GAAP adjustments
in the second quarter of 2024 were $1,542 million. Non-GAAP net
income attributable to Teva and non-GAAP diluted EPS for the second
quarter of 2024 were adjusted to exclude the following items:
- Amortization of purchased intangible assets of $146 million, of
which $135 million is included in cost of sales and the remaining
$11 million in S&M expenses;
- Impairment of long-lived assets of $130 million;
- Goodwill impairment charge of $400 million related to the Teva
API reporting unit;
- Legal settlements and loss contingencies of $83 million;
- Contingent consideration expenses of $192 million, which
primarily consisted of $174 million related to a change in the
estimated future royalty payments to Allergan in connection with
lenalidomide capsules (the generic version of
Revlimid®);
- Equity compensation expenses of $32 million;
- Restructuring expenses of $18million;
- Financial expenses of $12 million;
- Other non-GAAP items of $59 million;
- Items attributable to non-controlling interests of$33 million;
and
- Corresponding tax effects and unusual tax items of $503
million, of which $495 million is related to the settlement
agreement with the ITA discussed above.
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 generated from operating activities
during the second quarter of 2024 was $103 million, compared to
$324 million of cash flow generated from operating activities in
the second quarter of 2023. The lower cash flow generated from
operating activities in the second quarter of 2024 resulted mainly
from changes in working capital items, including a negative impact
from accounts receivables, net of SR&A, driven mainly from
higher sales during the second quarter of 2024 with extended
payment terms into the third quarter, and from accounts payables,
as well as higher tax payments.
During the second quarter of 2024, we generated free
cash flow of $324 million, which we define as comprising
$103 million in cash flow generated from operating activities, $317
million in beneficial interest collected in exchange for
securitized accounts receivables (under our EU securitization
program) and $1 million in divestitures of businesses and other
assets, partially offset by $97 million in cash used for capital
investment. During the second quarter of 2023, we generated free
cash flow of $632 million, which we define as comprising $324
million in cash flow generated from operating activities, $371
million in beneficial interest collected in exchange for
securitized accounts receivables (under our EU securitization
program) and $56 million in proceeds from divestitures of
businesses and other assets, partially offset by $119 million in
cash used for capital investment. The decrease in free cash flow in
the second quarter of 2024, resulted mainly from lower cash flow
generated from operating activities, as well as lower proceeds from
divestitures of businesses and other assets.
As of June 30, 2024, our debt was $18,640
million, compared to $19,833 million as of December 31, 2023. This
decrease was mainly due to repayment of $956 million of 6% senior
notes at maturity and a positive impact of $247 million from
exchange rate fluctuations. The portion of total debt classified as
short-term as of June 30, 2024 was 11% compared to 8% as of
December 31, 2023. Our average debt maturity was approximately 5.8
years as of June 30, 2024, compared to 6.0 years as of December 31,
2023.
_________
(1) The data presented in this press release with
respect to comparative periods include revised figures. 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 June 30, 2024.
Segment Results for the Second
Quarter of 2024
United States Segment
As part of the previously announced 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. 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 June 30, 2024
and 2023:
| |
Three months ended June 30, |
| |
2024 |
|
2023 |
| |
(U.S. $ in millions / % of Segment Revenues) |
|
Revenues |
$ |
2,110 |
100% |
$ |
1,892 |
100% |
| Gross profit |
|
1,167 |
55.3% |
|
1,017 |
53.8% |
| R&D expenses |
|
170 |
8.1% |
|
156 |
8.2% |
| S&M expenses |
|
270 |
12.8% |
|
250 |
13.2% |
| G&A expenses |
|
100 |
4.7% |
|
101 |
5.3% |
| Other income |
|
(1) |
§ |
|
(1) |
§ |
| Segment profit* |
$ |
629 |
29.8% |
$ |
511 |
27.0% |
| |
|
|
|
|
|
|
* Segment profit
does not include amortization and certain other items.
§ Represents an amount less than 0.5%.
|
| |
Revenues from our United States segment in the
second quarter of 2024 were $2,110 million, an increase of $218
million, or 12%, compared to the second quarter of 2023. This
increase was mainly due to higher revenues from generic products,
AUSTEDO and COPAXONE®, partially offset by lower
revenues from certain innovative products, primarily
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
June 30, 2024 and 2023:
| |
|
|
|
|
| |
|
Three months ended
June 30, |
|
Percentage Change |
| |
|
2024 |
|
2023 |
|
2024-2023 |
| |
|
(U.S. $ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
| Generic products |
|
$ |
1,023 |
|
$ |
884 |
|
16% |
| AJOVY |
|
|
42 |
|
|
52 |
|
(20%) |
| AUSTEDO |
|
|
407 |
|
|
308 |
|
32% |
| BENDEKA and TREANDA |
|
|
41 |
|
|
67 |
|
(39%) |
| COPAXONE |
|
|
81 |
|
|
56 |
|
44% |
| Anda |
|
|
373 |
|
|
392 |
|
(5%) |
| Other |
|
|
144 |
|
|
131 |
|
9% |
| Total |
|
$ |
2,110 |
|
$ |
1,892 |
|
12% |
| |
|
|
|
|
|
|
|
|
Generic products revenues in our United States
segment (including biosimilars) in the second quarter of 2024 were
$1,023 million, an increase of 16% compared to the second quarter
of 2023, the majority of which was driven by higher revenues from
lenalidomide capsules (the generic version of
Revlimid®), and the remaining primarily by the launch of
liraglutide injection 1.8mg (an authorized generic of
Victoza®), partially offset by increased competition to
other generic products.
Among the most significant generic products we sold in the
United States in the second quarter of 2024 were lenalidomide
capsules (the generic version of Revlimid®), epinephrine
injectable solution (the generic version of EpiPen® and
EpiPen Jr®), liraglutide injection (an authorized
generic of Victoza®), and Truxima® (the
biosimilar to Rituxan®). In the second quarter of 2024,
our total prescriptions were approximately 303 million (based on
trailing twelve months), representing 7.9% of total U.S. generic
prescriptions, compared to approximately 319 million (based on
trailing twelve months), representing 8.4% of total U.S. generic
prescriptions in the second 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 17, 2024, Alvotech and Teva
amended their collaboration agreement to enable the purchase by
Quallent of a private label adalimumab-ryvk injection from Alvotech
for the U.S. market, with Alvotech sharing profits with Teva on the
private label sales. On May 20, 2024, Alvotech and Teva announced
that SIMLANDI is available in the United States.
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 six years and older.
On June 24, 2024, Teva announced the launch of
liraglutide injection 1.8mg (an authorized generic of
Victoza®) in
the United States. Liraglutide injection is indicated to improve
glycemic control in adults and pediatric patients aged 10 years and
older with type 2 diabetes mellitus and reduce the risk of
cardiovascular events in adults with type 2 diabetes mellitus and
established cardiovascular disease.
AJOVY revenues in our United States segment in
the second quarter of 2024 were $42 million, a decrease of 20%
compared to $52 million in the second quarter of 2023, mainly due
to an increase in sales allowance due to a non-recurring item,
partially offset by higher demand. In the second quarter of 2024,
AJOVY’s exit market share in the United States in terms of total
number of prescriptions was 28.6% compared to 25.1% in the second
quarter of 2023.
AUSTEDO revenues in our United States segment
in the second quarter of 2024 increased by 32%, to $407 million,
compared to $308 million in the second quarter of 2023, mainly due
to growth in volume, 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. In May 2024, the FDA approved
AUSTEDO XR as a one pill, once-daily treatment option in doses of
30, 36, 42, and 48 mg. In July 2024, the FDA approved the 18 mg
dosage for AUSTEDO XR making it a one pill, once-daily for all
available doses. AUSTEDO XR is a once-daily formulation indicated
in adults for tardive dyskinesia and chorea associated with
Huntington’s disease, which is 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. UZEDY faces competition from multiple
other products.
BENDEKA and TREANDA combined
revenues in our United States segment in the second quarter of 2024
were $41 million, a decrease of 39% compared to $67 million in the
second 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 second quarter of 2024 were $81 million, an increase of 44%
compared to $56 million in the second quarter of 2023, mainly due
to a decrease in sales allowance due to a non-recurring item.
Anda revenues from third-party products in our
United States segment in the second quarter of 2024 were $373
million, a decrease of 5% compared to $392 million in the second
quarter of 2023, mainly due to lower demand in the second quarter
of 2024. 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 second quarter of 2024 was $1,167 million, an
increase of 15%, compared to $1,017 million in the second quarter
of 2023.
Gross profit margin for our United States
segment in the second quarter of 2024 increased to 55.3%, compared
to 53.8% in the second quarter of 2023. This increase was mainly
due to a favorable mix of products primarily driven by higher
revenues from lenalidomide capsules (the generic version of
Revlimid®) and AUSTEDO.
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
second quarter of 2024 was $629 million, an increase of 23%
compared to $511 million in the second quarter of 2023. This
increase was mainly due to higher gross profit, partially offset by
higher operational 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 June 30, 2024 and
2023:
| |
Three months ended June 30, |
| |
2024 |
|
2023 |
| |
(U.S. $ in millions / % of Segment Revenues) |
|
Revenues |
$ |
1,213 |
100% |
$ |
1,163 |
100% |
| Gross profit |
|
677 |
55.8% |
|
640 |
55.0% |
| R&D expenses |
|
62 |
5.1% |
|
53 |
4.5% |
| S&M expenses |
|
209 |
17.2% |
|
194 |
16.7% |
| G&A expenses |
|
64 |
5.3% |
|
61 |
5.2% |
| Other income |
|
§ |
§ |
|
(1) |
§ |
| Segment profit* |
$ |
342 |
28.2% |
$ |
334 |
28.7% |
| ___________ |
|
|
|
|
|
|
* 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 second
quarter of 2024 were $1,213 million, an increase of 4%, or $50
million, compared to the second quarter of 2023. In local currency
terms, revenues increased by 5% compared to the second quarter of
2023, mainly due to higher revenues from generic products and
AJOVY.
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 June 30,
2024 and 2023:
| |
|
Three months ended
June 30, |
|
Percentage
Change |
| |
|
2024 |
|
2023 |
|
2024-2023 |
| |
|
(U.S. $ in millions) |
|
|
|
Generic products |
|
$ |
970 |
|
$ |
909 |
|
7% |
| AJOVY |
|
|
52 |
|
|
39 |
|
33% |
| COPAXONE |
|
|
53 |
|
|
60 |
|
(11%) |
| Respiratory products |
|
|
57 |
|
|
66 |
|
(14%) |
| Other |
|
|
81 |
|
|
89 |
|
(10%) |
| Total |
|
$ |
1,213 |
|
$ |
1,163 |
|
4% |
| |
|
|
|
|
|
|
|
|
Generic products revenues (including OTC and
biosimilar products) in our Europe segment in the second quarter of
2024, increased by 7% to $970 million, compared to the second
quarter of 2023. In local currency terms, revenues increased by 8%,
mainly due to price increases as a result of market conditions such
as inflationary pressures in certain markets, as well as higher
revenues from recently launched products.
AJOVY revenues in our Europe segment in the
second quarter of 2024 increased by 33% to $52 million, compared to
$39 million in the second quarter of 2023. In local currency terms
revenues increased by 34%, mainly due to growth in European
countries in which AJOVY had previously been launched.
COPAXONE revenues in our Europe segment in the
second quarter of 2024 were $53 million, a decrease of 11% compared
to the second quarter of 2023. In local currency terms, revenues
decreased by 9%, 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 second quarter of 2024 were $57 million, a decrease
of 14% compared to the second quarter of 2023. In local currency
terms, revenues decreased by 13% compared to the second quarter of
2023, mainly due to net price reductions and lower volumes.
Europe Gross Profit
Gross profit from our Europe segment in the
second quarter of 2024 was $677 million, an increase of 6% compared
to $640 million in the second quarter of 2023.
Gross profit margin for our Europe segment in
the second quarter of 2024 increased to 55.8%, compared to 55.0% in
the second quarter of 2023. This increase was mainly due to price
increases of generic products as a result of market conditions such
as inflationary pressures in certain markets.
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 second
quarter of 2024 was $342 million, an increase of 2%, compared to
$334 million in the second 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 the countries
included in our Europe segment. The International Markets segment
includes more than 35 countries, covering a substantial portion of
the global pharmaceutical industry.
As part of the previously announced 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 following table presents revenues, expenses and profit for
our International Markets segment for the three months ended June
30, 2024 and 2023:
| |
Three months ended June 30, |
| |
2024 |
|
2023 |
| |
(U.S. $ in millions / % of Segment Revenues) |
|
Revenues |
$ |
593 |
100% |
$ |
578 |
100% |
| Gross profit |
|
286 |
48.3% |
|
283 |
49.0% |
| R&D expenses |
|
30 |
5.1% |
|
23 |
4.0% |
| S&M expenses |
|
145 |
24.5% |
|
125 |
21.6% |
| G&A expenses |
|
38 |
6.4% |
|
34 |
5.9% |
| Other income |
|
§ |
§ |
|
(31) |
(5.4%) |
| Segment profit* |
$ |
73 |
12.3% |
$ |
132 |
22.8% |
| __________ |
|
|
|
|
|
|
* 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 second quarter of 2024 were $593 million, an increase of 3%
compared to the second quarter of 2023. In local currency terms,
revenues increased by 22% compared to the second 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 second quarter of 2024, revenues were negatively impacted
by exchange rate fluctuations of $114 million, including hedging
effects, compared to the second quarter of 2023. Revenues in the
second quarter of 2024 included $5 million from a negative hedging
impact, compared to a positive hedging impact of $5 million in the
second 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 June 30, 2024 and 2023:
| |
|
Three months ended
June 30, |
|
Percentage
Change |
| |
|
2024 |
|
2023 |
|
2024-2023 |
| |
|
(U.S. $ in millions) |
|
|
|
Generic products |
|
$ |
486 |
|
$ |
478 |
|
2% |
| AJOVY |
|
|
22 |
|
|
14 |
|
58% |
| COPAXONE |
|
|
14 |
|
|
17 |
|
(20%) |
| Other |
|
|
71 |
|
|
69 |
|
2% |
| Total |
|
$ |
593 |
|
$ |
578 |
|
3% |
| |
Generic products revenues (including OTC and
biosimilar products) in our International Markets segment were $486
million in the second quarter of 2024, an increase of 2% compared
to the second quarter of 2023. In local currency terms, revenues
increased by 22% compared to the second 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
in certain markets and higher volumes, partially offset by
regulatory price reductions and generic competition to off-patented
products in Japan.
AJOVY revenues in our International Markets
segment in the second quarter of 2024 were $22 million, compared to
$14 million in the second quarter of 2023. AJOVY was launched in
certain markets in our International Markets segment, including in
Canada, Japan, Australia, Israel, South Korea, Brazil and
others.
COPAXONE revenues in our International Markets
segment in the second quarter of 2024 were $14 million compared to
$17 million in the second 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 second quarter of 2024 was $286 million, an increase
of 1% compared to $283 million in the second quarter of 2023.
Gross profit margin for our International
Markets segment in the second quarter of 2024 decreased to 48.3%,
compared to 49.0% in the second quarter of 2023. This decrease was
mainly due to a negative hedging impact, regulatory price
reductions and generic competition to off-patented products in
Japan, as well as higher costs due to inflationary and other
macroeconomic pressures, partially offset by price increases
largely as a result of inflationary pressures in certain markets
and a favorable mix of products.
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 second
quarter of 2024 was $73 million, a decrease of 45%, compared to
$132 million in the second quarter of 2023. This decrease was
mainly due to lower other income as well as higher S&M expenses
in the second quarter of 2024.
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 second
quarter of 2024 were $249 million, an increase of 2% in U.S.
dollars and in local currency terms, compared to the second quarter
of 2023.
API sales to third parties in the second quarter of 2024 were
$151 million, reflecting an increase of 5% in both U.S. dollars and
local currency terms, compared to the second quarter of 2023,
following a reallocation of an immaterial business within our other
activities, in line with our intention to divest our API
business.
Outlook for 2024
Non-GAAP Results
|
$ billions, except EPS or as noted |
July 2024 Outlook |
January 2024 Outlook |
|
Revenues* |
$16.0 - $16.4 |
$15.7 - $16.3 |
| AUSTEDO
($m)* |
~1,600 |
~1,500 |
| AJOVY
($m)* |
~500 |
~500 |
| UZEDY
($m)* |
~80 |
~80 |
| COPAXONE
($m)* |
~450 |
~400 |
| Operating
Income |
4.1 -
4.5 |
4.0 -
4.5 |
| Adjusted
EBITDA |
4.6 -
5.0 |
4.5 -
5.0 |
| Finance
Expenses ($m) |
~1,000 |
~1,000 |
| Tax
Rate |
14% -
17% |
14% -
17% |
| Diluted EPS
($) |
2.30 -
2.50 |
2.20 -
2.50 |
| Free Cash
Flow** |
1.7 -
2.0 |
1.7 -
2.0 |
| CAPEX* |
~0.5 |
~0.5 |
| Foreign
Exchange |
Volatile swings in
FX can negatively impact revenue and income |
* Revenues and CAPEX presented on a GAAP basis.
** Free Cash Flow includes cash flow generated from operating
activities net of capital expenditures and deferred purchase price
cash component collected for securitized trade receivables
Conference Call
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA)
announced today that it will issue a press release on its second
quarter 2024 financial results on Wednesday, July 31, 2024, at 7:00
a.m. ET. Following the release, Teva will conduct a conference call
and live webcast on the same day, at 8:00 a.m. ET.
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 second quarter of 2024 and in our
Annual Report on Form 10-K for the year ended December 31, 2023,
including in the section captioned "Risk Factors.” 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 |
|
|
Six months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
Net revenues |
|
4,164 |
|
3,878 |
|
|
7,983 |
|
7,539 |
|
Cost of sales |
|
2,140 |
|
2,082 |
|
|
4,188 |
|
4,161 |
|
Gross profit |
|
2,024 |
|
1,796 |
|
|
3,795 |
|
3,378 |
|
Research and development expenses |
|
269 |
|
240 |
|
|
511 |
|
473 |
|
Selling and marketing expenses |
|
656 |
|
603 |
|
|
1,265 |
|
1,149 |
|
General and administrative expenses |
|
283 |
|
307 |
|
|
561 |
|
602 |
|
Intangible assets impairments |
|
61 |
|
63 |
|
|
141 |
|
241 |
|
Goodwill impairment |
|
400 |
|
700 |
|
|
400 |
|
700 |
|
Other asset impairments, restructuring and other items |
|
280 |
|
108 |
|
|
954 |
|
218 |
|
Legal settlements and loss contingencies |
|
83 |
|
462 |
|
|
188 |
|
695 |
|
Other income |
|
(2) |
|
(33) |
|
|
(1) |
|
(34) |
|
Operating income (loss) |
|
(5) |
|
(654) |
|
|
(223) |
|
(667) |
|
Financial expenses, net |
|
241 |
|
268 |
|
|
491 |
|
528 |
|
Income (loss) before income taxes |
|
(246) |
|
(923) |
|
|
(713) |
|
(1,195) |
|
Income taxes (benefit) |
|
630 |
|
(16) |
|
|
578 |
|
(35) |
|
Share in (profits) losses of associated companies, net |
|
(2) |
|
(1) |
|
|
2 |
|
(1) |
|
Net income (loss) |
|
(874) |
|
(906) |
|
|
(1,294) |
|
(1,159) |
|
Net income (loss) attributable to non-controlling interests |
|
(29) |
|
(35) |
|
|
(309) |
|
(68) |
|
Net income (loss) attributable to Teva |
|
(846) |
|
(872) |
|
|
(985) |
|
(1,091) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share attributable to Teva: |
Basic ($) |
(0.75) |
|
(0.78) |
|
|
(0.87) |
|
(0.98) |
|
|
Diluted ($) |
(0.75) |
|
(0.78) |
|
|
(0.87) |
|
(0.98) |
|
Weighted average number of shares (in millions): |
Basic |
1,133 |
|
1,120 |
|
|
1,128 |
|
1,118 |
|
|
Diluted |
1,133 |
|
1,120 |
|
|
1,128 |
|
1,118 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income attributable to Teva for diluted earnings per
share:* |
|
697 |
|
629 |
|
|
1,245 |
|
1,085 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP earnings per share attributable to Teva:* |
Diluted ($) |
0.61 |
|
0.56 |
|
|
1.09 |
|
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP average number of shares (in millions): |
Diluted |
1,151 |
|
1,129 |
|
|
1,146 |
|
1,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts may not add up due to rounding. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* See reconciliation attached. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED BALANCE SHEETS |
|
(U.S. dollars in millions, except for share data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2024 |
|
2023 |
|
ASSETS |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
2,258 |
|
$ |
3,226 |
|
Accounts receivables, net of allowance for credit losses of $95
million as of June 30, 2024 and as of December 31, 2023. |
|
|
3,766 |
|
|
3,408 |
|
Inventories |
|
|
3,927 |
|
|
4,021 |
|
Prepaid expenses |
|
|
1,096 |
|
|
1,255 |
|
Other current assets |
|
|
517 |
|
|
504 |
|
Assets held for sale |
|
|
69 |
|
|
70 |
|
Total current assets |
|
|
11,632 |
|
|
12,485 |
|
Deferred income taxes |
|
|
2,000 |
|
|
1,812 |
|
Other non-current assets |
|
|
434 |
|
|
470 |
|
Property, plant and equipment, net |
|
|
5,573 |
|
|
5,750 |
|
Operating lease right-of-use assets, net |
|
|
358 |
|
|
397 |
|
Identifiable intangible assets, net |
|
|
4,853 |
|
|
5,387 |
|
Goodwill |
|
|
16,488 |
|
|
17,177 |
|
Total assets |
|
$ |
41,338 |
|
$ |
43,479 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Short-term debt |
|
$ |
2,094 |
|
$ |
1,672 |
|
Sales reserves and allowances |
|
|
3,700 |
|
|
3,535 |
|
Accounts payables |
|
|
2,366 |
|
|
2,602 |
|
Employee-related obligations |
|
|
492 |
|
|
611 |
|
Accrued expenses |
|
|
2,840 |
|
|
2,771 |
|
Other current liabilities |
|
|
1,191 |
|
|
1,044 |
|
Liabilities held for sale |
|
|
356 |
|
|
13 |
|
Total current liabilities |
|
|
13,037 |
|
|
12,247 |
|
|
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
|
|
Deferred income taxes |
|
|
553 |
|
|
606 |
|
Other taxes and long-term liabilities |
|
|
4,356 |
|
|
4,019 |
|
Senior notes and loans |
|
|
16,547 |
|
|
18,161 |
|
Operating lease liabilities |
|
|
281 |
|
|
320 |
|
Total long-term liabilities |
|
|
21,737 |
|
|
23,106 |
|
Equity: |
|
|
|
|
|
|
|
Teva shareholders’ equity: |
|
|
6,359 |
|
|
7,506 |
|
Non-controlling interests |
|
|
204 |
|
|
620 |
|
Total equity |
|
|
6,563 |
|
|
8,126 |
|
Total liabilities and equity |
|
$ |
41,338 |
|
$ |
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 |
|
|
Six months ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2024
|
2023 |
|
2024 |
2023 |
|
Operating activities: |
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
$ |
(874 |
) |
(906 |
) |
$ |
(1,294 |
) |
(1,159 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by
operations: |
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
259 |
|
300 |
|
|
531 |
|
604 |
|
|
Impairment of goodwill |
|
400 |
|
700 |
|
|
400 |
|
700 |
|
|
Impairment of long-lived assets and assets held for sale |
|
130 |
|
74 |
|
|
809 |
|
262 |
|
|
Net change in operating assets and liabilities |
|
(10 |
) |
212 |
|
|
(507 |
) |
(137 |
) |
|
Deferred income taxes – net and uncertain tax positions |
|
(424 |
) |
(44 |
) |
|
(613 |
) |
(150 |
) |
|
Stock-based compensation |
|
32 |
|
30 |
|
|
60 |
|
62 |
|
|
Other items * |
|
592 |
|
(12 |
) |
|
594 |
|
23 |
|
|
Net loss (gain) from investments and from sale of long lived
assets |
|
(1 |
) |
(30 |
) |
|
(1 |
) |
(26 |
) |
|
Net cash provided by (used in) operating
activities |
|
103 |
|
324 |
|
|
(21 |
) |
179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Beneficial interest collected in exchange for securitized trade
receivables |
|
317 |
|
371 |
|
|
612 |
|
694 |
|
|
Purchases of property, plant and equipment and intangible
assets |
|
(97 |
) |
(119 |
) |
|
(221 |
) |
(258 |
) |
|
Proceeds from sale of business and long lived assets |
|
1 |
|
56 |
|
|
1 |
|
58 |
|
|
Acquisition of businesses, net of cash acquired |
|
- |
|
- |
|
|
(15 |
) |
- |
|
|
Purchases of investments and other assets . |
|
(43 |
) |
(2 |
) |
|
(55 |
) |
(6 |
) |
|
Other investing activities |
|
- |
|
(4 |
) |
|
- |
|
(5 |
) |
|
Net cash provided by (used in) investing
activities |
|
178 |
|
302 |
|
|
322 |
|
483 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
(956 |
) |
- |
|
|
(956 |
) |
(3,152 |
) |
|
Proceeds from senior notes, net of issuance costs |
|
- |
|
- |
|
|
- |
|
2,451 |
|
|
Other financing activities |
|
(10 |
) |
(55 |
) |
|
(19 |
) |
(60 |
) |
|
Net cash provided by (used in) financing
activities |
|
(966 |
) |
(55 |
) |
|
(1,117 |
) |
(761 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Translation adjustment on cash and cash
equivalents |
|
(49 |
) |
(77 |
) |
|
(153 |
) |
(65 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change in cash, cash equivalents and restricted
cash |
|
(733 |
) |
494 |
|
|
(969 |
) |
(164 |
) |
|
Balance of cash, cash equivalents and restricted cash at
beginning of period |
|
2,991 |
|
2,176 |
|
|
3,227 |
|
2,834 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance of cash, cash equivalents and restricted cash at
end of period |
$ |
2,258 |
|
2,670 |
|
$ |
2,258 |
|
2,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
2,258 |
|
2,669 |
|
|
2,258 |
|
2,669 |
|
|
Restricted cash included in other current assets |
|
— |
|
1 |
|
|
— |
|
1 |
|
|
Total cash, cash equivalents and restricted cash shown in
the statement of cash flows |
|
2,258 |
|
2,670 |
|
|
2,258 |
|
2,670 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash financing and investing activities: |
|
|
|
|
|
|
|
|
|
|
|
Beneficial interest obtained in exchange for securitized accounts
receivables |
$ |
320 |
|
380 |
|
$ |
632 |
|
714 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
* Adjustment in the three months period ended June 30, 2024 mainly
relate to an agreement with the Israeli Tax Authorities. |
| |
|
|
|
|
|
|
|
|
|
|
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 |
|
|
Six months ended |
|
|
|
|
June 30, |
|
|
June 30, |
|
($ in millions) |
|
|
2024 |
2023 |
|
|
2024 |
2023 |
|
Gross profit |
|
$ |
2,024 |
1,796 |
|
$ |
3,795 |
3,378 |
|
Gross profit margin |
|
|
48.6% |
46.3% |
|
|
47.5% |
44.8% |
|
Increase (decrease) for excluded items: |
|
|
|
|
|
|
|
|
|
Amortization of purchased intangible assets |
|
136 |
145 |
|
|
273 |
290 |
|
|
Equity compensation |
|
7 |
5 |
|
|
13 |
10 |
|
|
Accelerated depreciation |
|
0 |
24 |
|
|
7 |
49 |
|
|
Other non-GAAP items (1) |
|
37 |
52 |
|
|
80 |
91 |
|
Non-GAAP gross profit |
$ |
2,205 |
2,023 |
|
$ |
4,168 |
3,819 |
|
Non-GAAP gross profit margin
(2) |
|
52.9% |
52.2% |
|
|
52.2% |
50.7% |
|
|
|
|
|
|
|
|
|
|
(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 |
|
|
Six months ended |
|
|
|
|
June 30, |
|
|
June 30, |
|
($ in millions) |
|
2024 |
2023 |
|
|
2024 |
2023 |
|
Operating income
(loss)(1) |
($) |
(5) |
(654) |
|
($) |
(223) |
(667) |
|
Operating margin |
|
(0.1%) |
(16.9%) |
|
|
(2.8%) |
(8.8%) |
|
Increase (decrease) for excluded items: |
|
|
|
|
|
|
|
|
|
Amortization of purchased intangible assets |
|
146 |
162 |
|
|
298 |
326 |
|
|
Legal settlements and loss contingencies(2) |
|
83 |
462 |
|
|
188 |
695 |
|
|
Goodwill impairment(3) |
|
400 |
700 |
|
|
400 |
700 |
|
|
Impairment of long-lived assets(4) |
|
130 |
74 |
|
|
809 |
262 |
|
|
Restructuring costs |
|
18 |
10 |
|
|
31 |
66 |
|
|
Equity compensation |
|
32 |
30 |
|
|
60 |
62 |
|
|
Contingent consideration(1)(5) |
|
192 |
78 |
|
|
271 |
113 |
|
|
Accelerated depreciation |
|
0 |
24 |
|
|
7 |
49 |
|
|
Other non-GAAP items(6) |
|
59 |
125 |
|
|
106 |
189 |
|
Non-GAAP operating income (loss) |
($) |
1,056 |
1,011 |
|
($) |
1,948 |
1,796 |
|
Non-GAAP operating
margin(3) |
($) |
25.3% |
26.1% |
|
($) |
24.4% |
23.8% |
|
|
|
|
|
|
|
|
|
|
|
(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) Adjustments for legal settlements and loss contingencies in the
second quarter of 2023 were mainly related to a provision of $200
million in connection with the U.S. DOJ criminal antitrust charges
on the marketing and pricing of certain Teva USA generic products
and an update to the estimated settlement provision of $170 million
related to some of the remaining opioid cases including an
agreement in principle on private hospital cases. Adjustments for
legal settlements and loss contingencies in the first six months of
2023 were mainly related to an update to the estimated settlement
provision of $206 million related to the remaining opioid cases,
the provision of $210 million relating to the U.S. DOJ criminal
antitrust charges on the marketing and pricing of certain Teva USA
generic products, an update to the estimated provision of $102
million related to the DOJ patient assistance program litigation,
and the provision of $100 million related to the settlement of the
reverse-payment antitrust litigation over certain HIV
medicines. |
|
(3) A goodwill impairment charge of $400 million related to our
Teva's API reporting unit was recognized in the three and six
months ended June 2024, compared to a goodwill impairment charge of
$700 million related to our International Markets reporting unit
recognized in the three and six months ended June 2023. |
|
(4) Adjustments for impairment of long-lived assets, for the six
months ended June 30, 2024, primarily consisted of $644 million
related to the classification of our business venture in Japan as
held for sale. |
|
(5) Adjustments for contingent consideration primarily related to a
change in the estimated future royalty payments to Allergan in
connection with lenalidomide capsules (the generic version of
Revlimid®), of $174 million and $238 million, respectively for the
three and six months ended June 30, 2024, and of $64 million and
$88 million, respectively for the three and six months ended June
30, 2023. |
|
(6) Other non-GAAP items include other exceptional items that we
believe are sufficiently large that their exclusion is important to
facilitate an understanding of trends in our financial results,
primarily related to the rationalization of our plants, certain
inventory write-offs, material litigation fees and other unusual
events. |
|
|
|
Reconciliation of net income (loss) attributable to
Teva |
|
to Non-GAAP net income (loss) attributable to
Teva |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
|
June 30, |
|
|
June 30, |
|
($ in millions except per share amounts) |
|
2024 |
2023 |
|
|
2024 |
2023 |
|
Net income (Loss) attributable to Teva(1) |
($) |
(846) |
(872) |
|
($) |
(985) |
(1,091) |
|
Increase (decrease) for excluded items: |
|
|
|
|
|
|
|
|
|
Amortization of purchased intangible assets |
|
146 |
162 |
|
|
298 |
326 |
|
|
Legal settlements and loss contingencies(2) |
|
83 |
462 |
|
|
188 |
695 |
|
|
Goodwill impairment(3) |
|
400 |
700 |
|
|
400 |
700 |
|
|
Impairment of long-lived assets(4) |
|
130 |
74 |
|
|
809 |
262 |
|
|
Restructuring costs |
|
18 |
10 |
|
|
31 |
66 |
|
|
Equity compensation |
|
32 |
30 |
|
|
60 |
62 |
|
|
Contingent consideration(1)(5) |
|
192 |
78 |
|
|
271 |
113 |
|
|
Accelerated depreciation |
|
- |
24 |
|
|
7 |
49 |
|
|
Financial expenses |
|
12 |
16 |
|
|
24 |
39 |
|
|
Items attributable to non-controlling interests(4) |
|
(33) |
(49) |
|
|
(317) |
(90) |
|
|
Other non-GAAP items(6) |
|
59 |
125 |
|
|
106 |
189 |
|
|
Corresponding tax effects and unusual tax items(7) |
|
503 |
(131) |
|
|
353 |
(235) |
|
Non-GAAP net income attributable to Teva |
($) |
697 |
629 |
|
($) |
1,245 |
1,085 |
|
Non-GAAP tax rate(8) |
|
15.4% |
15.2% |
|
|
15.2% |
15.3% |
|
GAAP diluted earnings (loss) per share attributable to Teva |
($) |
(0.75) |
(0.78) |
|
($) |
(0.87) |
(0.98) |
|
EPS difference(9) |
|
1.35 |
1.34 |
|
|
1.96 |
1.94 |
|
Non-GAAP diluted EPS attributable to Teva(9) |
($) |
0.61 |
0.56 |
|
($) |
1.09 |
0.96 |
|
Non-GAAP average number of shares (in millions)(9) |
|
1,151 |
1,129 |
|
|
1,146 |
1,127 |
| |
|
|
|
|
|
|
|
|
|
(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) |
Adjustments for legal settlements and loss contingencies in the
second quarter of 2023 were mainly related to a provision of $200
million in connection with the U.S. DOJ criminal antitrust charges
on the marketing and pricing of certain Teva USA generic products
and an update to the estimated settlement provision of $170 million
related to some of the remaining opioid cases including an
agreement in principle on private hospital cases. Adjustments for
legal settlements and loss contingencies in the first six months of
2023 were mainly related to an update to the estimated settlement
provision of $206 million related to the remaining opioid cases,
the provision of $210 million relating to the U.S. DOJ criminal
antitrust charges on the marketing and pricing of certain Teva USA
generic products, an update to the estimated provision of $102
million related to the DOJ patient assistance program litigation,
and the provision of $100 million related to the settlement of the
reverse-payment antitrust litigation over certain HIV
medicines. |
|
(3) |
A goodwill impairment charge of $400 million related to our Teva's
API reporting unit was recognized in the three and six months ended
June 30, 2024, compared to a goodwill impairment charge of $700
million related to our International Markets reporting unit
recognized in the three and six months ended June 2023. |
|
(4) |
Adjustments for impairment of long-lived assets and items
attributable to non-controlling interests for the six months ended
June 30, 2024, primarily consisted of $644 million and $317
million, respectively, related to the classification of our
business venture in Japan as held for sale. |
|
(5) |
Adjustments for contingent consideration primarily related to a
change in the estimated future royalty payments to Allergan in
connection with lenalidomide capsules (the generic version of
Revlimid®), of $174 million and $238 million, respectively for the
three and six months ended June 30, 2024, and of $64 million and
$88 million, respectively for the three and six months ended June
30, 2023. |
|
(6) |
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. |
|
(7) |
Adjustments for corresponding tax effects and unusual tax items for
the three months ended June 30,2024 mainly related to the
settlement agreement with the ITA to settle certain litigation with
respect to taxes payable for the Company’s taxable years 2008
through 2020, in an amount of $495 million. |
|
(8) |
Non-GAAP tax rate is tax expenses (benefit) excluding the impact of
non-GAAP tax adjustments presented above as a percentage of income
(loss) before income taxes excluding the impact of non-GAAP
adjustments presented above. GAAP tax rate for the three and six
months ended June 30, 2024 was 256% and 81% respectively and for
the three and six months ended June 30, 2023 was 2% and 3%
respectively. |
|
(9) |
EPS difference and diluted non-GAAP EPS are calculated by dividing
our non-GAAP net income attributable to Teva by our non-GAAP
diluted weighted average number of shares. |
| |
|
|
|
|
|
|
|
|
Reconciliation of net income (loss) to adjusted
EBITDA
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
|
|
|
June 30, |
|
June 30, |
|
($ in millions) |
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
|
|
Net income
(loss)(1) |
$ |
(874 |
) |
(906 |
) |
$ |
(1,294 |
) |
(1,159 |
) |
|
Increase (decrease) for excluded items: |
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses |
|
241 |
|
268 |
|
|
491 |
|
528 |
|
|
|
Income taxes |
|
630 |
|
(16 |
) |
|
578 |
|
(35 |
) |
|
|
Share in profits (losses) of associated companies –net |
|
(2 |
) |
(1 |
) |
|
2 |
|
(1 |
) |
|
|
Depreciation |
|
113 |
|
138 |
|
|
233 |
|
278 |
|
|
|
Amortization |
|
146 |
|
162 |
|
|
298 |
|
326 |
|
|
EBITDA |
|
254 |
|
(355 |
) |
|
308 |
|
(63 |
) |
|
|
Legal settlements and loss contingencies(2) |
83 |
|
462 |
|
|
188 |
|
695 |
|
|
|
Goodwill impairment(3) |
|
400 |
|
700 |
|
|
400 |
|
700 |
|
|
|
Impairment of long lived assets(4) |
130 |
|
74 |
|
|
809 |
|
262 |
|
|
|
Restructuring costs |
|
18 |
|
10 |
|
|
31 |
|
66 |
|
|
|
Equity compensation |
|
32 |
|
30 |
|
|
60 |
|
62 |
|
|
|
Contingent consideration(5) |
|
192 |
|
78 |
|
|
271 |
|
113 |
|
|
|
Other non-GAAP items (6) |
|
59 |
|
125 |
|
|
106 |
|
189 |
|
|
Adjusted EBITDA |
$ |
1,168 |
|
1,125 |
|
$ |
2,173 |
|
2,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Adjustments for legal settlements and loss contingencies in the
second quarter of 2023 were mainly related to a provision of $200
million in connection with the U.S. DOJ criminal antitrust charges
on the marketing and pricing of certain Teva USA generic products
and an update to the estimated settlement provision of $170 million
related to some of the remaining opioid cases including an
agreement in principle on private hospital cases. Adjustments for
legal settlements and loss contingencies in the first six months of
2023 were mainly related to an update to the estimated settlement
provision of $206 million related to the remaining opioid cases,
the provision of $210 million relating to the U.S. DOJ criminal
antitrust charges on the marketing and pricing of certain Teva USA
generic products, an update to the estimated provision of $102
million related to the DOJ patient assistance program litigation,
and the provision of $100 million related to the settlement of the
reverse-payment antitrust litigation over certain HIV
medicines. |
|
|
(3) A goodwill impairment charge of $400 million related to our
Teva's API reporting unit was recognized in the three and six
months ended June 2024, compared to a goodwill impairment charge of
$700 million related to our International Markets reporting unit
recognized in the three and six months ended June 2023. |
|
|
(4) Adjustments for impairment of long-lived assets, for the six
months ended June 30, 2024, primarily consisted of $644 million
related to the classification of our business venture in Japan as
held for sale |
|
|
(5) Adjustments for contingent consideration primarily related to a
change in the estimated future royalty payments to Allergan in
connection with lenalidomide capsules (the generic version of
Revlimid®), of $174 million and $238 million, respectively for the
three and six months ended June 30, 2024, and of $64 million and
$88 million, respectively for the three and six months ended June
30, 2023. |
|
|
(6) 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 June 30, |
|
Three months ended June 30, |
|
Three months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(U.S. $ in millions) |
|
(U.S. $ in millions) |
|
(U.S. $ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
2,110 |
|
|
$ |
1,892 |
|
|
$ |
1,213 |
|
|
$ |
1,163 |
|
|
$ |
593 |
|
|
$ |
578 |
|
|
Gross profit |
|
1,167 |
|
|
|
1,017 |
|
|
|
677 |
|
|
|
640 |
|
|
|
286 |
|
|
|
283 |
|
|
R&D expenses |
|
170 |
|
|
|
156 |
|
|
|
62 |
|
|
|
53 |
|
|
|
30 |
|
|
|
23 |
|
|
S&M expenses |
|
270 |
|
|
|
250 |
|
|
|
209 |
|
|
|
194 |
|
|
|
145 |
|
|
|
125 |
|
|
G&A expenses |
|
100 |
|
|
|
101 |
|
|
|
64 |
|
|
|
61 |
|
|
|
38 |
|
|
|
34 |
|
|
Other income |
|
(1 |
) |
|
|
(1 |
) |
|
|
§ |
|
|
|
(1 |
) |
|
|
§ |
|
|
|
(31 |
) |
|
Segment profit |
$ |
629 |
|
|
$ |
511 |
|
|
$ |
342 |
|
|
$ |
334 |
|
|
$ |
73 |
|
|
$ |
132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
§ Represents an amount less than $0.5 million. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Information |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
Europe |
|
International Markets |
|
|
Six months ended June 30, |
|
Six months ended June 30, |
|
Six months ended June 30, |
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(U.S. $ in millions) |
|
(U.S. $ in millions) |
|
(U.S. $ in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
3,835 |
|
|
$ |
3,569 |
|
|
$ |
2,485 |
|
|
$ |
2,347 |
|
|
$ |
1,190 |
|
|
$ |
1,159 |
|
|
Gross profit |
|
2,025 |
|
|
|
1,806 |
|
|
|
1,415 |
|
|
|
1,294 |
|
|
|
583 |
|
|
|
568 |
|
|
R&D expenses |
|
324 |
|
|
|
305 |
|
|
|
118 |
|
|
|
106 |
|
|
|
58 |
|
|
|
51 |
|
|
S&M expenses |
|
530 |
|
|
|
457 |
|
|
|
403 |
|
|
|
381 |
|
|
|
263 |
|
|
|
238 |
|
|
G&A expenses |
|
193 |
|
|
|
196 |
|
|
|
130 |
|
|
|
130 |
|
|
|
73 |
|
|
|
72 |
|
|
Other income |
|
(1 |
) |
|
|
(1 |
) |
|
|
§ |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(33 |
) |
|
Segment profit |
$ |
979 |
|
|
$ |
850 |
|
|
$ |
764 |
|
|
$ |
679 |
|
|
$ |
190 |
|
|
$ |
240 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
§ Represents an amount less than $0.5 million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of our segment profit |
|
to consolidated income before income taxes |
|
Unaudited |
|
|
|
Three months ended |
|
|
|
June 30, |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(U.S.$ in millions) |
|
|
|
|
|
|
|
|
|
|
|
United States profit |
|
$ |
629 |
|
|
$ |
511 |
|
|
Europe profit |
|
|
342 |
|
|
|
334 |
|
|
International Markets profit |
|
|
73 |
|
|
|
132 |
|
|
Total reportable segment profit |
|
|
1,043 |
|
|
|
977 |
|
|
Profit of other activities |
|
|
12 |
|
|
|
33 |
|
|
|
|
|
1,056 |
|
|
|
1,011 |
|
|
Amounts not allocated to segments: |
|
|
|
|
|
|
|
|
|
Amortization |
|
|
146 |
|
|
|
162 |
|
|
Other asset impairments, restructuring and other items* |
|
|
280 |
|
|
|
108 |
|
|
Goodwill impairment |
|
|
400 |
|
|
|
700 |
|
|
Intangible asset impairments |
|
|
61 |
|
|
|
63 |
|
|
Legal settlements and loss contingencies |
|
|
83 |
|
|
|
462 |
|
|
Other unallocated amounts |
|
|
91 |
|
|
|
170 |
|
|
Consolidated operating income (loss) |
|
|
(5 |
) |
|
|
(654 |
) |
|
Financial expenses - net |
|
|
241 |
|
|
|
268 |
|
|
Consolidated income (loss) before income taxes* |
|
$ |
(246 |
) |
|
$ |
(923 |
) |
|
|
|
|
|
|
|
|
|
|
|
*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. |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of our segment profit |
|
to consolidated income before income taxes |
|
Unaudited |
|
|
|
Six months ended |
|
|
|
June 30, |
|
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(U.S.$ in millions) |
|
|
|
|
|
|
|
|
|
|
|
United States profit |
|
$ |
979 |
|
|
$ |
850 |
|
|
Europe profit |
|
|
764 |
|
|
|
679 |
|
|
International Markets profit |
|
|
190 |
|
|
|
240 |
|
|
Total reportable segment profit |
|
|
1,933 |
|
|
|
1,769 |
|
|
Profit of other activities |
|
|
15 |
|
|
|
27 |
|
|
Total segment profit |
|
|
1,948 |
|
|
|
1,796 |
|
|
Amounts not allocated to segments: |
|
|
|
|
|
|
|
|
|
Amortization |
|
|
298 |
|
|
|
326 |
|
|
Other asset impairments, restructuring and other items* |
|
|
954 |
|
|
|
218 |
|
|
Goodwill impairment |
|
|
400 |
|
|
|
700 |
|
|
Intangible asset impairments |
|
|
141 |
|
|
|
241 |
|
|
Legal settlements and loss contingencies |
|
|
188 |
|
|
|
695 |
|
|
Other unallocated amounts |
|
|
190 |
|
|
|
282 |
|
|
Consolidated operating income (loss) |
|
|
(223 |
) |
|
|
(667 |
) |
|
Financial expenses - net |
|
|
491 |
|
|
|
528 |
|
|
Consolidated income (loss) before income taxes* |
|
$ |
(713 |
) |
|
$ |
(1,195 |
) |
|
|
|
|
|
|
|
|
|
|
|
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. |
|
|
|
Segment revenues by major products and
activities |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
June 30, |
|
Percentage Change |
|
|
|
2024 |
|
2023 |
|
2023-2024 |
|
|
|
(U.S.$ in millions) |
|
|
|
United States segment |
|
|
|
|
|
|
|
|
|
Generic products |
|
$ |
1,023 |
|
$ |
884 |
|
16% |
|
AJOVY |
|
|
42 |
|
|
52 |
|
(20%) |
|
AUSTEDO |
|
|
407 |
|
|
308 |
|
32% |
|
BENDEKA/TREANDA |
|
|
41 |
|
|
67 |
|
(39%) |
|
COPAXONE |
|
|
81 |
|
|
56 |
|
44% |
|
Anda |
|
|
373 |
|
|
392 |
|
(5%) |
|
Other |
|
|
144 |
|
|
131 |
|
9% |
|
Total |
|
|
2,110 |
|
|
1,892 |
|
12% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
June 30, |
|
Percentage Change |
|
|
|
2024 |
|
2023 |
|
2023-2024 |
|
|
|
(U.S.$ in millions) |
|
|
|
Europe segment |
|
|
|
|
|
|
|
|
|
Generic products |
|
$ |
970 |
|
$ |
909 |
|
7% |
|
AJOVY |
|
|
52 |
|
|
39 |
|
33% |
|
COPAXONE |
|
|
53 |
|
|
60 |
|
(11%) |
|
Respiratory products |
|
|
57 |
|
|
66 |
|
(14%) |
|
Other |
|
|
81 |
|
|
89 |
|
(10%) |
|
Total |
|
|
1,213 |
|
|
1,163 |
|
4% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
|
June 30, |
|
Percentage Change |
|
|
|
2024 |
|
2023 |
|
2023-2024 |
|
|
|
(U.S.$ in millions) |
|
|
|
International Markets segment |
|
|
|
|
|
|
|
|
|
Generic products |
|
$ |
486 |
|
$ |
478 |
|
2% |
|
AJOVY |
|
|
22 |
|
|
14 |
|
58% |
|
COPAXONE |
|
|
14 |
|
|
17 |
|
(20%) |
|
Other |
|
|
71 |
|
|
69 |
|
2% |
|
Total |
|
|
593 |
|
|
578 |
|
3% |
|
|
|
|
|
|
|
|
|
|
|
Revenues by Activity and Geographical Area |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
|
|
June 30, |
|
Percentage Change |
|
|
|
2024 |
|
2023 |
|
2024-2023 |
|
|
|
(U.S.$ in millions) |
|
|
|
North America segment |
|
|
|
|
|
|
|
|
|
Generic products |
|
$ |
1,831 |
|
$ |
1,631 |
|
12% |
|
AJOVY |
|
|
87 |
|
|
98 |
|
(12%) |
|
AUSTEDO |
|
|
689 |
|
|
478 |
|
44% |
|
BENDEKA / TREANDA |
|
|
87 |
|
|
129 |
|
(33%) |
|
COPAXONE |
|
|
111 |
|
|
127 |
|
(13%) |
|
Anda |
|
|
754 |
|
|
816 |
|
(8%) |
|
Other |
|
|
276 |
|
|
289 |
|
(4%) |
|
Total |
|
|
3,835 |
|
|
3,569 |
|
7% |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
| |
|
June 30, |
|
Percentage Change |
|
|
|
2024 |
|
2023 |
|
2024-2023 |
|
|
|
(U.S.$ in millions) |
|
|
|
Europe segment |
|
|
|
|
|
|
|
|
|
Generic products |
|
$ |
1,974 |
|
$ |
1,841 |
|
7% |
|
AJOVY |
|
|
102 |
|
|
74 |
|
37% |
|
COPAXONE |
|
|
110 |
|
|
119 |
|
(7%) |
|
Respiratory products |
|
|
123 |
|
|
134 |
|
(8%) |
|
Other |
|
|
175 |
|
|
178 |
|
(2%) |
|
Total |
|
|
2,485 |
|
|
2,347 |
|
6% |
| |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
|
|
June 30, |
|
Percentage Change |
|
|
|
2024 |
|
2023 |
|
2024-2023 |
|
|
|
(U.S.$ in millions) |
|
|
|
International Markets segment |
|
|
|
|
|
|
|
|
|
Generic products |
|
$ |
963 |
|
$ |
955 |
|
1% |
|
AJOVY |
|
|
39 |
|
|
27 |
|
42% |
|
COPAXONE |
|
|
25 |
|
|
34 |
|
(26%) |
|
Other |
|
|
162 |
|
|
142 |
|
14% |
|
Total |
|
|
1,190 |
|
|
1,159 |
|
3% |
| |
|
|
|
|
|
|
|
|
|
Free cash flow reconciliation |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
(U.S. $ in millions) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
103 |
|
|
|
324 |
|
|
Beneficial interest collected in exchange for securitized accounts
receivables |
|
317 |
|
|
|
371 |
|
|
Capital investment |
|
(97 |
) |
|
|
(119 |
) |
|
Proceeds from divestitures of businesses and other assets |
|
1 |
|
|
|
56 |
|
|
Free cash flow |
$ |
324 |
|
|
$ |
632 |
|
| |
|
|
|
|
|
|
|
|
Free cash flow reconciliation |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
2024 |
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
(U.S. $ in millions) |
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating activities |
|
(21 |
) |
|
|
179 |
|
|
Beneficial interest collected in exchange for securitized trade
receivables |
|
612 |
|
|
|
694 |
|
|
Capital investment |
|
(221 |
) |
|
|
(258 |
) |
|
Proceeds from divestitures of business and other assets |
|
1 |
|
|
|
58 |
|
|
Acquisition of subsidiary, net of cash acquired |
|
(15 |
) |
|
|
- |
|
|
Free cash flow |
$ |
356 |
|
|
$ |
673 |
|
| |
|
|
|
|
|
|
|
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
A PDF accompanying this announcement is available
at: http://ml-eu.globenewswire.com/Resource/Download/3b1553b7-359d-4dae-86c1-9fe532ff3836
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