Teva Reports First Quarter 2024 Financial Results and Reaffirms 2024 Financial Outlook
Teva reported Q1 2024 revenues of $3.8 billion, a 5% increase from Q1 2023, with growth in generics business and AUSTEDO. AJOVY revenues were up 18%. Positive Phase 3 results for olanzapine LAI (TEV' 749). Financial outlook reaffirmed for 2024. Gross profit increased by 12%. Non-GAAP diluted EPS was $0.48. Cash flow used in operating activities was $124 million. Debt decreased to $19,643 million. US segment revenues increased by 3%, led by AUSTEDO and generic products. Europe segment revenues grew by 7%, driven by generic products and AJOVY.
Q1 2024 revenues increased by 5% to $3.8 billion, driven by growth in generics business and AUSTEDO.
AJOVY revenues rose by 18% in Q1 2024, reflecting continued growth in innovative brands.
Positive Phase 3 results for olanzapine LAI (TEV' 749) support effective treatment options for schizophrenia.
Financial outlook for 2024 reaffirmed with revenues projected at $15.7-$16.3 billion.
Gross profit increased by 12% to $1,771 million in Q1 2024.
Non-GAAP diluted EPS reached $0.48 in Q1 2024, indicating strong financial performance.
Debt decreased to $19,643 million as of March 31, 2024, showing improved financial health.
Operating loss in Q1 2024 was $218 million, compared to $13 million in Q1 2023, mainly due to higher expenses.
Net loss attributable to Teva in Q1 2024 was $139 million, indicating a decline compared to Q1 2023.
Cash flow used in operating activities was $124 million in Q1 2024, impacting liquidity.
US segment saw a 58% decrease in COPAXONE revenues in Q1 2024, affected by generic competition.
Europe segment experienced a 26% decline in BENDEKA and TREANDA revenues in Q1 2024.
Legal settlements and loss contingencies amounted to $106 million in Q1 2024, impacting the financials.
Insights
Upon examining Teva's Q1 2024 financial performance, there's a notable 5% revenue growth in local currency terms when compared to Q1 2023, indicating a sustained upward trajectory for the company. Key drivers include the 9% increase in the generic business and a surge in AUSTEDO sales by 67% in the U.S. These figures suggest Teva is leveraging its diversification in generics and specialty drugs effectively.
However, the GAAP loss per share of $0.12 signals challenges, likely attributable to impairments and restructuring costs. It's essential for investors to consider the impact of operational reinvestment and the costs of strategic shifts on short-term profitability. The reaffirmed full-year guidance suggests management confidence, but investors should be wary of external factors such as market volatility and competition, especially with an operating loss increase.
Free cash flow generation stands at $32 million despite operating activities consuming $124 million, a situation that may raise concerns about sustainability. The balance sheet's debt reduction, along with a manageable leverage ratio adjustment, provides some debt servicing comfort.
The positive Phase 3 results for olanzapine LAI (TEV' 749) without PDSS occurrences can be a pivotal moment in Teva’s innovative pipeline, potentially emerging as a strong contender in the neuropsychiatry space. This aligns well with the 'Pivot to Growth' strategy focusing on late-stage assets. If the treatment gains market approval, it could substantially enhance Teva’s portfolio.
The approvals of SIMLANDI and SELARSDI, biosimilars to Humira® and Stelara®, respectively, represent a strategic enhancement to Teva's biologics segment. These products could serve as key growth drivers, given the global shift towards cost-effective biosimilar treatments. However, the success hinges on market penetration rates and competitive pricing strategies.
Teva’s growth in the generics segment underpins a vital industry trend: the increased demand for affordable healthcare solutions. The 9% increase reflects not only a resilient generics strategy but also the potential for further expansion as cost pressures loom over the healthcare industry. Moreover, the 67% uptick in AUSTEDO sales showcases Teva's ability to foster the growth of its specialty portfolio.
An interesting aspect to monitor is the performance of the newly approved biosimilars, which are entering a highly competitive market that includes entrenched players. Their trajectory will be indicative of Teva's capacity to secure market share in a contested space and could become a key barometer for future revenue forecasts.
For an accessible version of this Press Release, please visit www.tevapharm.com
- Generics business and AUSTEDO® growth lead Q1 2024 performance.
-
Q1 2024 revenues of
$3.8 billion 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 theU.S. ) from Q1 2023; reaffirming 2024 revenue outlook of~ .$1.5 billion -
AJOVY® – revenues of
$113 million 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
-
Revenues of
Mr. Richard Francis, Teva's President and CEO, said, "In 2024 Teva is off to a good start, with global revenues of
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
Exchange rate movements during the first quarter of 2024, net of hedging effects, negatively impacted overall revenues by
Gross profit in the first quarter of 2024 was
Research and Development (R&D) expenses, net in the first quarter of 2024 were
Selling and Marketing (S&M) expenses in the first quarter of 2024 were
General and Administrative (G&A) expenses in the first quarter of 2024 were
Operating loss in the first quarter of 2024 was
Financial expenses, net in the first quarter of 2024 were
In the first quarter of 2024, we recognized a tax benefit of
Tax rate in the first quarter of 2024 was
We expect our annual non-GAAP tax rate for 2024 to be between
Net loss attributable to Teva and loss per share in the first quarter of 2024 were
Net loss attributable to non-controlling interests was
Adjusted EBITDA was
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
-
Amortization of purchased intangible assets of
$152 million $138 million $14 million -
Impairment of long-lived assets of
$679 million $577 million -
Legal settlements and loss contingencies of
$106 million $64 million -
Contingent consideration expenses of
$79 million $64 million -
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 -
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
Cash flow used in operating activities during the first quarter of 2024 was
During the first quarter of 2024, we generated free cash flow of
As of March 31, 2024, our debt was
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,
The following table presents revenues, expenses and profit for our
|
|
|
|
|
|
|
||||
|
Three months ended March 31, |
|||||||||
|
2024 |
|
|
2023 |
||||||
|
( |
|||||||||
Revenues |
$ |
1,725 |
|
|
|
$ |
1,677 |
|
|
|
Gross profit |
|
858 |
|
|
|
|
789 |
|
|
|
R&D expenses |
|
154 |
|
|
|
|
149 |
|
|
|
S&M expenses |
|
261 |
|
|
|
|
207 |
|
|
|
G&A expenses |
|
93 |
|
|
|
|
95 |
|
|
|
Other income |
|
1 |
|
§ |
|
|
§ |
|
§ |
|
Segment profit* |
$ |
350 |
|
|
|
$ |
338 |
|
|
|
|
|
|
|
|
|
|
||||
* Segment profit does not include amortization and certain other items |
||||||||||
§ Represents an amount less than |
||||||||||
Revenues from our
Revenues by Major Products and Activities
The following table presents revenues for our
|
|
|
|
|
||||
|
|
Three months ended
|
|
Percentage
|
||||
|
|
2024 |
|
2023 |
|
2024-2023 |
||
|
|
|
|
|
||||
Generic products |
|
$ |
808 |
|
$ |
747 |
|
|
AJOVY |
|
|
45 |
|
|
46 |
|
( |
AUSTEDO |
|
|
282 |
|
|
170 |
|
|
BENDEKA and TREANDA |
|
|
46 |
|
|
62 |
|
( |
COPAXONE |
|
|
30 |
|
|
71 |
|
( |
Anda |
|
|
381 |
|
|
424 |
|
( |
Other* |
|
|
133 |
|
|
158 |
|
( |
Total |
|
$ |
1,725 |
|
$ |
1,677 |
|
|
|
|
|
|
|
|
|
|
|
* 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
In the first quarter of 2024, our total prescriptions were approximately 314 million (based on trailing twelve months), representing
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
AJOVY revenues in our
AUSTEDO revenues in our
AUSTEDO XR (deutetrabenazine) extended-release tablets was approved by the FDA on February 17, 2023, and became commercially available in the
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
BENDEKA and TREANDA combined revenues in our
COPAXONE revenues in our
Anda revenues from third-party products in our
United States Gross Profit
Gross profit from our
Gross profit margin for our
United States Profit
Profit from our
Profit from our
Europe Segment
Our
The following table presents revenues, expenses and profit for our
|
Three months ended March 31, |
|||||||||
|
2024 |
|
2023 |
|||||||
|
( |
|||||||||
Revenues |
$ |
1,272 |
|
$ |
1,184 |
|
||||
Gross profit |
|
738 |
|
|
655 |
|
||||
R&D expenses |
|
56 |
|
|
53 |
|
||||
S&M expenses |
|
194 |
|
|
187 |
|
||||
G&A expenses |
|
65 |
|
|
70 |
|
||||
Other income |
|
1 |
§ |
|
§ |
§ |
||||
Segment profit* |
$ |
423 |
|
$ |
345 |
|
||||
___________ |
|
|
|
|
|
|
||||
* Segment profit does not include amortization and certain other items |
||||||||||
§ Represents an amount less than |
||||||||||
Revenues from our
In the first quarter of 2024, revenues from our
Revenues by Major Products and Activities
The following table presents revenues for our
|
|
Three months ended
|
|
Percentage
|
||||
|
|
2024 |
|
2023 |
|
2024-2023 |
||
|
|
( |
|
|
||||
Generic products |
|
$ |
1,004 |
|
$ |
932 |
|
|
AJOVY |
|
|
51 |
|
|
36 |
|
|
COPAXONE |
|
|
57 |
|
|
59 |
|
( |
Respiratory products |
|
|
66 |
|
|
68 |
|
( |
Other |
|
|
94 |
|
|
89 |
|
|
Total |
|
$ |
1,272 |
|
$ |
1,184 |
|
|
Generic products revenues (including OTC and biosimilar products) in our
AJOVY revenues in our
COPAXONE revenues in our
Respiratory products revenues in our
Europe Gross Profit
Gross profit from our
Gross profit margin for our
Europe Profit
Profit from our
Profit from our
International Markets Segment
Our International Markets segment includes all countries in which we operate other than
The countries in our International Markets segment include highly regulated, mainly generic markets, such as
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 |
||||||
|
( |
|||||||||
Revenues |
$ |
597 |
|
|
|
$ |
581 |
|
|
|
Gross profit |
|
297 |
|
|
|
|
285 |
|
|
|
R&D expenses |
|
28 |
|
|
|
|
27 |
|
|
|
S&M expenses |
|
118 |
|
|
|
|
113 |
|
|
|
G&A expenses |
|
35 |
|
|
|
|
38 |
|
|
|
Other income |
|
§ |
|
§ |
|
|
(1) |
|
§ |
|
Segment profit* |
$ |
117 |
|
|
|
$ |
108 |
|
|
|
__________ |
|
|
|
|
|
|
||||
* Segment profit does not include amortization and certain other items. |
||||||||||
§ Represents an amount less than |
||||||||||
Revenues from our International Markets segment in the first quarter of 2024 were
In the first quarter of 2024, revenues were negatively impacted by exchange rate fluctuations of
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
|
|
Percentage
|
||||
|
|
2024 |
|
2023 |
|
2024-2023 |
||
|
|
( |
|
|
||||
Generic products |
|
$ |
477 |
|
$ |
477 |
|
§ |
AJOVY |
|
|
17 |
|
|
13 |
|
|
COPAXONE |
|
|
12 |
|
|
17 |
|
( |
Other |
|
|
91 |
|
|
74 |
|
|
Total |
|
$ |
597 |
|
$ |
581 |
|
|
Generic products revenues (including OTC products) in our International Markets segment were
AJOVY was launched in certain markets in our International Markets segment, including in
COPAXONE revenues in our International Markets segment in the first quarter of 2024 were
AUSTEDO was launched in
International Markets Gross Profit
Gross profit from our International Markets segment in the first quarter of 2024 was
Gross profit margin for our International Markets segment in the first quarter of 2024 increased to
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
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
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
API sales to third parties in the first quarter of 2024 were
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.
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
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 andUkraine and the state of war declared inIsrael ; 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 inIsrael , 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 ofIsrael ; -
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 betweenRussia andUkraine ; 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 | ||||
| ( |
||||
| (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 | ||||||
| ( |
||||||
| (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 |
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 | |||||
| ( |
|||||
| (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 |
|
|
||
| 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) |
|
|
||
| (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) | ($) | (218) |
(13) |
|
| Operating margin |
( |
( |
||
| Increase (decrease) for excluded items: | ||||
| Amortization of purchased intangible assets | 152 |
165 |
||
| Legal settlements and loss contingencies(2) | 106 |
233 |
||
| Impairment of long-lived assets (3) | 679 |
188 |
||
| Restructuring costs | 13 |
56 |
||
| Costs related to regulatory actions taken in facilities | 3 |
1 |
||
| Equity compensation | 28 |
32 |
||
| Contingent consideration(1)(4) | 79 |
35 |
||
| Accelerated depreciation | 7 |
25 |
||
| Other non-GAAP items(5) | 44 |
63 |
||
| Non-GAAP operating income (loss) | ($) | 892 |
785 |
|
| Non-GAAP operating margin(6) | ($) |
|
|
|
| (1) The data presented for the prior period have been revised to reflect a revision in the presentation of these items in the consolidated financial statements. For additional information see note 1b to our consolidated financial statements included in our 2023 Annual Report on Form 10-K. | ||||
| (2) For the three months ended March 31, 2024, adjustments for legal settlements and loss contingencies primarily consisted of |
||||
| (3) For the three months ended March 31, 2024, adjustments for impairment of long-lived assets primarily consisted of |
||||
| (4) For the three months ended March 31, 2024, adjustments for contingent consideration primarily consisted of |
||||
| (5) Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, certain inventory write-offs, material litigation fees and other unusual events. | ||||
| (6) Non-GAAP operating margin is Non-GAAP operating income as a percentage of revenues. | ||||
| Reconciliation of net income (loss) attributable to Teva | |||||
| to Non-GAAP net income (loss) attributable to Teva | |||||
| (Unaudited) | |||||
Three months ended |
|||||
March 31, |
|||||
| ($ 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) |
|
|
|||
| 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 |
||||
(3) |
For the three months ended March 31, 2024, adjustments for impairment of long-lived assets primarily consisted of |
||||
(4) |
For the three months ended March 31, 2024, adjustments for contingent consideration primarily consisted of |
||||
(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 |
||||
(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 |
||||
| (3) For the three months ended March 31, 2024, adjustments for impairment of long-lived assets primarily consisted of |
||||
| (4) For the three months ended March 31, 2024, adjustments for contingent consideration primarily consisted of |
||||
| (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) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Markets |
|||||||||||||
Three months ended March 31, |
|
Three months ended March 31, |
|
Three months ended March 31, |
|||||||||||||
2024 |
|
2023 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||
| ( |
( |
( |
|||||||||||||||
| 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 |
|||||||||||||||||
| Reconciliation of our segment profit | ||||||
| to consolidated income before income taxes | ||||||
| (Unaudited) | ||||||
Three months ended |
||||||
March 31, |
||||||
2024 |
|
2023 |
||||
| (U.S.$ in millions) | ||||||
| $ | 350 |
$ | 338 |
|||
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
|
||||||
2024 |
|
2023 |
|
2023-2024 |
||||
| (U.S.$ in millions) | ||||||||
| Generic products | $ | 808 |
$ | 747 |
|
|||
| AJOVY | 45 |
46 |
( |
|||||
| AUSTEDO | 282 |
170 |
|
|||||
| BENDEKA/TREANDA | 46 |
62 |
( |
|||||
| COPAXONE | 30 |
71 |
( |
|||||
| Anda | 381 |
424 |
( |
|||||
| Other | 133 |
158 |
( |
|||||
| Total | 1,725 |
1,677 |
|
|||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
Three months ended |
|
|
||||||
March 31, |
|
Percentage
|
||||||
2024 |
|
2023 |
|
2023-2024 |
||||
| (U.S.$ in millions) |
|
|||||||
|
||||||||
| Generic products | $ | 1,004 |
$ | 932 |
|
|||
| AJOVY | 51 |
36 |
|
|||||
| COPAXONE | 57 |
59 |
( |
|||||
| Respiratory products | 66 |
68 |
( |
|||||
| Other | 94 |
89 |
|
|||||
| Total | 1,272 |
1,184 |
|
|||||
|
||||||||
|
||||||||
Three months ended |
|
|
||||||
March 31, |
|
Percentage
|
||||||
2024 |
|
2023 |
|
2023-2024 |
||||
| (U.S.$ in millions) |
|
|||||||
| International Markets segment |
|
|||||||
| Generic products | $ | 477 |
$ | 477 |
§ |
|||
| AJOVY | 17 |
13 |
|
|||||
| COPAXONE | 12 |
17 |
( |
|||||
| Other | 91 |
74 |
|
|||||
| Total | 597 |
581 |
|
|||||
| Free cash flow reconciliation | |||||
| (Unaudited) | |||||
Three months ended
|
|||||
2024 |
|
2023 |
|||
| ( |
|||||
| 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
Source: Teva Pharmaceutical Industries Limited
FAQ
What were Teva's Q1 2024 revenues?
How much did AJOVY revenues increase in Q1 2024?
What positive results were announced for olanzapine LAI (TEV' 749) in Q1 2024?
What is Teva's financial outlook for 2024?
How did Teva's gross profit change in Q1 2024?
What was Teva's debt as of March 31, 2024?
