Teva Pharmaceutical Industries Limited (TEVA) 2 Aug 182018 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Teva Pharmaceutical second quarter 2018 financial results call. At this time, all participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. I must advise you the conference is being recorded today, Thursday, August 2, 2018. I would now like to turn the conference over to your first speaker today, Kevin Mannix, Senior Vice President, Head of Investor Relations. ahead. go Please

results well and to release Steve, Earlier everyone, Relations joining detailing can slides as call a for copy morning found A Thank Teva's thank on as second app. well on our our copy being as today our release of on press Investor presented discuss issued results. the of quarter us as quarter. this we you, www.tevapharm.com, Teva our the you, for be XXXX this the website financial at

believes Our that, Commercial. with today the provides and by non-GAAP Brendan evaluate discussion disclosed discuss information both measures And analysis additional to assumptions now O'Grady, North as supplementary events, company's business. Officer, in today includes Today, outlook around McClellan, quarter Kåre. non-GAAP the outlook. are call Also our Chief inclusion Executive to recent with some more of XXXX. certain to the Officer, Q&A over management for presentation. better financial is will call financial American please. measures to the of Head Financial detail remarks our investors review manage our and us on on in Kåre by non-GAAP GAAP the release our the annual measures and turn results results, updated joining in Kåre, defined performance, XXXX financial to GAAP open non-GAAP Chief measures the and Teva's facilitates Mike internally operations, the our of its will operations Schultz, company's of today's call and uses I'll second results SEC. evaluating in and measures available earnings Reconciliation and the financial Management trends. understand financial meaningful Further,

basically second is close at Kevin. revenues internal you, to billion, thanks which expectations. We due year, of non-cash share Actavis loss per on company. were in in on write-downs interest our significant a acquisition. acquisition Thank for our course, assets the some very In the $X.X a of Kevin. had from coming some specific to and everybody, out of these, also events. But your write-down did and quarter see That Welcome, the was accounts. the this goodwill you, Thank we Rimsa our GAAP from

the and very $X.X In program restructuring satisfied on of schedule. is a we $X.XX, we with saw terms Everybody come And also with at of that we and we non-GAAP that satisfied are well our job U.S., Overall, out very EPS, cash that. is are free doing too. with saw flow billion that. great

half are against had first So a can schedule XXXX billion compare of base the U.S. reduction since year you XXXX. over of first when we actually, that we we see half of of and $X start spend significant slightly the up ahead of

of down back later, band per are our by EPS by are in flow, Europe. to generic able a keep in around our and All now $X.XX program, come we very inform revenues billion really me just So were American I'm the from and now compared main out CONCERTA, cost strong, also parts more have portfolio stable of we you then our we from could are saw cash very you we all XXXX you and with to where declining Mike seeing a lower We're to quarter CONCERTA, we the of quite a competition last to restructuring really of non-GAAP see reasons do per a I'm generic our the say price specialty saw the the impact results of number generic that the marketplace, very are erosion, North we very year reducing products seeing we the in by COPAXONE, $X.XX we $X.XX in happy generic effect debt. were to major as about the how it the billion in the growth two tax quarter know, happy second our product to positive. bit And against band competitors expect $X range that linearly And a our $X.X sales. the were of about happy it. $X.X on get are share to, the you see to growth little erosion a And lot seeing solid U.S. all, growing on flea think launches, up patients I having Europe. share. we and regards in program. upgrade a and coming it In efforts a reduction in its and XXXX but to growth we not minor net free the I would performance second of And It's we U.S., organization U.S., maintained the based of to debt corporate explain but of and down. of upgrading very is the On and billion AUSTEDO, guidance we said our that. fueled both in a on now situation COPAXONE, U.S. price new the and the of pricing We're terms back that on reduction will I'll we to between nicely. on very side, different any little which has based in get both about see to get of a there's the $XX.X that also rapid also let also better in I billion. for very in volume, $X.XX share of strategy about in course, that's expectation quarter. it's specialty the And so stabilization progress a long-term dynamics carryover into to second had of but decrease and being

that second small the quarter. see are can still You first the here and in in We see quarter decline similar. second revenues the pretty a

you Mylan, know, XX% there's a You at as earlier small market seen XX% second America share small Glatopa, America. being the year. can was a the We've decline in space around and in get approved, slowly, see modest XX-milligram, a in also which stable seen outside volume for also of but point the to North with and North competitor we've XX-milligram We decline this did that share. Glatopa share for relatively increasing generic

effect their Cost] recently, on will, from the do have and a XX-milligram We a reduction as WAC price in and saw on that we generic course, COPAXONE, the volume, have significant for slide also an pricing. Mylan of the expect you effect, [Wholesale seen Acquisition marginal some effect

will $XXX inspection based On a And we was supplier, the we fremanezumab, approval, warning strong getting nice we as year the ready than launch hoping product that product. combination, in growth mid-September. In But see If Celltrion are And we this are inspection, be next on a so Huntington's, we and patients. and to product. patients this also million course, July, have I on We the to linear for We maintain API the as And will still have U.S. growth. very billion approval having combined COPAXONE to outlook and all the expecting the continue steady of it in we we been fremanezumab, competition thereafter. a immediately an that's be on outlook PAI growth There will drag still see Europe, had re-inspection U.S. PDUFA has set will Celltrion, yearly mid-September. in of see do are chorea on to that this will in around there to that on then, our U.S., for negative API both we and a we as will just a first of generic procedures different why all you told markets the AUSTEDO in over had. our that completed is disease, Huntington's The tardive still turnover all of you, as know, U.S. which AUSTEDO year, based letter downdrift So which XXXX, revenues growth a we our date in of reimbursement inspection will the more in this has basis for we switch the in dyskinesia the pressure more patient outside is the XXXX categories, know, be Europe. and in have we in continued very predict different downward and see continue, quarterly revenue marginal revenue launching we see $X selected half on on meaningful and and of markets, approval together and you there think a an a be year

to you would about like Now some in company. you on strategic just brief going be no with quarter comments this work forward, will news It's an our the how that give business we pursuing the I will we future. as idea one share to principles

OTC, manufacturing, we with regions, specialty, merged on. R&D, classical have one biosimilars, finance, so and have so generics, a biopharmaceuticals, We into where on, and organization sales global setup marketing,

more which and setup, our coming margins. can improvement make over on we years, believe basically classical working very we more a have efficient we So of the

element this. We back generics, our in that And to won't because be of steadily, We won't to to pursuing maintain And buying we all are our our we targets be of doing We injectables, products. flow won't relatively leadership we any describes a kind. delivery do reason be be complex financial want a first because be course, our spending long-term kinds file mechanisms. will to organic big We key course, also of be our course, want first some acquisitions but of in business. be here two reduction to this get simple we elements we cash Then that pipeline both The growth. will Phase that's, generics. generics, slowly debt. building We any and of buying want of the key companies. won't be be of we to constant I'll to want X is why And will launch. also on

In be want biologics. R&D biosimilars, terms on biopharmaceuticals, platform, whatever it. you we of will call focusing to

oncology, such targeted We therapeutic have to we mean the I so And we upscaling, platform, large-scale have doing have have scale, when and to is manufacturing, areas investments. where neurology, such finished that are and manufacturing medical say, knowhow it's such commercial as certain a like of And comes investments. then pursue we could innovative respiratory, by biologics as biosimilars. testing, stopping on. practical also pilot as will shared and products, What launch, it clinical you we not

large-scale we flow. do facility It's It's We're building doing our For place in to manufacturing. that cash instance, are nice already. in a taking biologics very included Germany.

all the done that have we U.S. that the pilot scale ensuring facilities. are We We've in

have research that around to facilities world targeted continue do the We research.

continue will we but things products, the So big billion. $X will will to we not in-license be do targeted in which scale

We We and reduction. management will but significantly all about are the increase for our how thing. products key won't products debt first portfolio just are I the active a say first make to selection go sure where are cash that the where improving that profitability. we launch preserve details are need flow can profitable, file, our and to business, to generics we is that into we

could be going everything. you size. valuing won't be profitability say So We we over will for

contribute going what can to We will for our profitability. be

space, And targeted medical profitability only margins effectively we launch course, The biosimilars pursuing keep and footprint, same that can in biosimilars you but in we biosimilars that into an restructuring have in also pricing the the presence I'm for. commercial will believe increase be be our and products that medical only OTC on goes setup, commercial ongoing dynamics of commercially, focused, integrated a also going our operationally, also and term. here and we manufacturing the term. presence margins longer link the if you're will our because you pursuing We really there our areas and sure whole profitability pricing. in higher for better Again, will of efforts both the will levels, longer focus TAPI

the course, assets, will success our areas such AJOVY, launch AUSTEDO, as we that. On in such on we capabilities we international out we'll when building side, the this. internal U.S., in ensure markets. capabilities the commercial And in different we the Europe, to own will on on current specialty rolled those core R&D be And our on will and will fremanezumab and get of so to commercial, on as our capabilities. medical, focusing Fremanezumab of keep geographies. commercial our side, be Also ensure worldwide, focus

within biologics range have We of and capabilities wide biopharmaceuticals. a

field, respiratory but way, our which net the long-term set could pipeline. in well-established about out out you we that this have to debt you to today, be us horizon set margin, forward early-stage we very an on exciting a, operating we franchise will do won't that the bring gives things We of projects, targets a how order say, and But a with looking new at have think to strong about in can some talking idea longer we a in lot profitable, and financial targets, disciplined three performance. earnings, We've income EBITDA. be have cash I

On margin, are we've That's pressure to XX%. pressure loss now, the have the for right remember, from you above now pricing seen we'll actually from the we we're generics. in operating under of income be going but where slightly downward COPAXONE,

we cash have earnings the year hope spend things cash year we ambition to we sure don't at down or it we XX% want below need we'll that because So pay leave Cash above see we into earnings, on three to we XX%. to cash the be results to and to and every that make the will makes cash debt. next and move the probably turn staying year, and margin then a upwards, five-year to current that this

And So We in X reduction result want aim all come to will net earnings And cash a below times. very targets. debt. our at this, realistic EBITDA we down course, are XX%. these of we to will above being think to debt in of

is to wanted restructuring share, do the start COPAXONE all to equity. We will just AUSTEDO The debt, and very we with. plans track, being flow, program out focusing nicely. is briefly. any on will The I I debt maintaining is on growing have This be sum very constantly. free up Revenue, raise is well paying schedule. cash reduced on volume down and not EPS

And just are We raised for AJOVY. fremanezumab, preparing we've guidance. for the

satisfied word I will hand performance in our I'm with But the some for the quarter. the So overall, over now second Mike, CFO. financial details, more to

Thank good we release you, updated Good provide numbers chance to some press had everyone. for issued and morning. time to this review some to afternoon, Kåre. of you more now our a the our outlook the morning, hope quarter I detail like with review XXXX. I'd take you've on

GAAP So XXXX. a GAAP $X.XX our and net we turning share with of second of performance. start $XXX million a a to the loss loss slide XX, a GAAP of review during posted of per on We quarterly quarter basis

detail on lower we'll the are the by impairment in next million GAAP results the As driven quarter. slide, mainly charges of $XXX

assets. Turning manufacturing related goodwill, to fixed and to unit, assets product our impairment intangible impairment closure Actavis the were the due other in-process assets R&D impairment of non-GAAP to to adjustments, goodwill million, impairment assets and reporting acquisition, and of related $XXX and of long-lived totaling mainly the of Generics to Mexican largest the and some related rights comprised sites

prior expenses point pertaining quarters. charge out that consistent million, as addition of to In announced million an impairments, restructuring assets BENDEKA the in of finally, an granted were like to I'd program employees of also $XXX part with $XXX had is $XX totaling benefits our intangible million we which amortization to additional had mainly of related contingent we agreement. terminated And the December. consideration to recorded, to

to of $ increased in in XXXX. So on QX our which performance sales revenues to generics, decrease our decline of competition COPAXONE and at The a for North equal of continued related slide to America, the were XX% generic compared the mainly non-GAAP a sales billion, U.S. in with quarter CONCERTA. X.X pressure include roughly was looking version XX, reduction

price of Similarly, plan roughly base impact the our was decrease our and our had profit products gross information the to million and our in my some gross in the saw provide decline discontinued American decline ongoing partially revenues were of QX helped result on on million of our which in declines activities. following divestment Despite which also in income offset spend $XXX reduction restructuring mainly the by negative margin. savings effect profit presentation. from cost significant sales more profit, region, minor a I income. business the certain the will We of the loss operating a gross North in later approximately impacts, other in $XXX aforementioned driven

and came billion $XXX about EPS in of foreign a fluctuations, for our million in currency cash similar us for XXXX. giving of was of at XXXX, Free for half therefore generated by the $X.XX, XXXX. non-GAAP cash at $X.XX a paydown flow Our $XXX about $X.X total affected million total quarter, first was level QX to was negatively of debt the but

lower QX dollar in that and the this had of profit currencies foreign million weakening year, of still we line were a in we minor gave you do XXXX's see in half we in movements, line. second $XX headwind versus starting roughly can million and bit to the of had potentially second a year and of slight last QX is the on the some versus generated little a of to dividends a XXXX. as asset of of other dollar more strengthen, QX. currencies, we a revenue compare XXXX, acquisitions did little We cash paying currency You see the of the on $XX the increase versus us because half Briefly when be expect QX

the U.S. the North previously special as was to as generic positive reduction due a to at we mentioned. in COPAXONE I In competition generic XX% businesses looking of changes, terms the a XXXX, that XX, slide and in have to divestments negative better but and of revenue view an on items, quarterly impact biggest compared of America, to give segments mainly the decline the of the and well you overall QX decline other excluding

of flat payment generic from the the the orders NINLARO Health closure launch the markets, performance strong and of wholesale the In low that of this continuation new royalties QVAR business. due mainly revenues very uptake offset QX relatively in of our a AUSTEDO solid the activities, non-repeat to launches. of by and And for saw in divestments new net RediHaler mainly the In year, international distribution following the Europe, last the Women's of we to the were divestments is performance, quarter device. very Anda due had And timing other had of of a exchanges. XXXX. Hungary our the addition, we In was QX a in our and we currency

$XXX the consistent the first Turning to COPAXONE, quarter. quarterly revenues were was which million, with

As we go forward pressure to QX of to decline levels and the expected the additional the second that to Kåre sales we uptake expect second generic entrant half, earlier. pricing mentioned due compared to

decrease expect global non-GAAP slide XXXX. $X.X be income the On We $X.X of in in United of XX% operating year States. second to roughly was compared billion, XXXX of sales COPAXONE a for quarter second the billion the $X.X XX, full to billion, including the quarter

grew due the well business our as program. restructuring in European significantly Our increase as the from cost to savings revenues

benefited significantly $XXX first and our as we of G&A. was international achievements our reducing approximately totaled $XXX the and of And for million million billion the million R&D, spend base providing in in also by on impacted were some $XXX XXXX. North of On from the reductions first the in by marketing, America our base, in sales income mostly profit six half were line, in other the and decline a months in savings, in markets savings the flat. sales in quarter. million net $XXX are overall goods cost which The year-to-date Our $X.X partially mentioned XX, earlier, relatively restructuring slide the revenue offset cost

spend from million, also which reduction that foreign the some in businesses. most offset exchange we the base headwinds had divested We of $XXX experienced totaling

its plan, employees. In X,XXX the its addition, global has announcement of since count reduced Teva's restructuring head company approximately by

with versus to to end by track plan XXXX's $XX.X the billion the Kåre this free is Free flow XXXX quarter we're XXXX. $X feeling slightly regarding of to reduction first second in base. the XXXX for we're to which quarter cash flow due XXXX When good that we're the year-end of $XXX please $X.X quarter spend on the significant Furthermore, compared very As proceeds was our with said included adjustment figure minor target the one-time of in before, assets. than reduction net and reach million, cash quarter, base well of capital working of first Allergan sale billion. the full our comparing CapEx restructuring date, the as QX as Rimsa deliver billion lower execution confident of ability to recall the of the from and lower to in settlement some legal the

we second as of March was generation to Turning focus on quarter, approximately $X XX, This exchange as debt Teva's to foreign compared $XX.X billion billion. land driven net continue At fluctuations. slide debt. well by fell end XX, reducing Teva's favorable to the by at cash to

In due down and at the addition, balance was term. due the and that we continue paid down XXX in use bond we coming million a maturities current near cash have future franc cash Swiss paying the to to of flow plan July, end

on Our be to the directly net can up end the plan peak restructuring June been to nearly over debt. level following to Actavis-Allergan debt today's XXXX of compare $XX net we billion rapidly of if by of the from our focus free have cash of billion year. this to debt third our our as we $X of net quarter we start And reduce able year, our the $X billion. by the Since reduced use continues we acquisition, this reduce that to executing

mentioned year, as are the in full-year an increasing including to in $X.XX Kåre to EPS of our this increase $X.XX. a remarks, our we So, range time his second guidance for opening

mix. in reductions overall our plan, driven income business lower rate, tax our quarter the restructuring a other of guidance XXXX, and second from cost accelerated updated Our reflects higher by

of my U.S. timing about generic turn to our the as to of now I'd performance greatest we of that our over the operator year, to question-and-answer of the as to remarks, variable session the the impact we second the on well the call launches This call. believe think competition concludes like As half you. will and COPAXONE continue the start Thank the back single generic be in to

Thank much. very you

The first line from today from ahead. Abraham Citi. have question we go Liav Please comes of the

– that in in on the XX% you calculations. COPAXONE $XXX my half understanding Just for my your can U.S. the maybe a implying you talk second based versus can a action Based revised little possible? on XXXX, specific what about Thank half Maybe, you're so the in recent then second into net first expecting your and half, to half question if you. about the of second the bit assumptions expecting guidance, more exactly price COPAXONE. in half the the do first and million and Kåre, reduction for Mike going detail versus million Mylan's you're half, price pricing on first more $XXX half, and that's about volume your a is second versus impact on in talk on

here, is you overall bit an then And I and head This Schultz. is of who can little a you, it. give will have Liav. he further then U.S., answer. the Brendan on comment Kåre we Thank the of

to been fact is difficult So difficult in difficult lose to we generic first previous to in other precisely predict. days. have lot to changing reason predict, for curves, to it's predict. acknowledge I've the situations been in the have products that of dynamics in volume COPAXONE original also to companies that generics There's and marketplace, and with they out it's products, erosion been a of all, that how hard these predict

right XX% of consideration. been we've give we as do quarter you and guidance, we But in less, high to that's the very see, we the roughly that of And our into are level, course, XX% So take of have and slightly we volume. first seeing to we need maybe when on of probably year. this the the a holding can everything second volume think now

have of that don't and this expecting we're where could complicated that to game course, facts that a But there two terms to a And reduction lot lead some have volume. of of is negotiating, that's that you be different exactly. of out we also how going from then we generic will have competitors there. contracts play So the in the are us we fact price, some impact we the know

we course, know. can't Of

approach So we in that's prudent per always our earnings we very better, could But maybe, a it range you think is and that also very, with the uncertainty go guidance realistic. there's and comments. an because further we're why coming out have on taking share But have it go this, Brendan, could worse. a some

Thanks, Kåre.

if market So, to at drop price that the look impact the overreacted think I on Mylan. the the by think somewhat you has WAC market, I

they're changed the much. was that probably that selling I something gross-to-net, net think just price hasn't and that that completely all They've not that's the lowered unexpected.

that. and we when be If to with you originally it in be about thought towards come think we still trying product, stronger Momenta-Sandoz July, their build had they're would would April, then thought would it

when we in planned And as there said, had predicted more we event some for volume continued Kåre price. be price as both as well erosion would that happened, So competition. mild

year billion on is target the is $XXX the $X.X that. think million for I I the we're certainly the the second doable So and think year for half for of

you've quick year. but full Maybe a revenue kept increased flat, you've guidance for guidance just your the follow-up, COPAXONE your

are worse where you to So expectations things than be your expecting little a your QX at earnings?

So, we the – seeing up second having second half, raise come currency as things into little go a go that full the COPAXONE in the did quarter. we a we as the the We're actually has and some I'll first half. take bit revenue and see for couple do one. into we Liav, We're year, headwinds.

generics headwinds Europe the international So QVAR, of little dollar-based which sales non-dollar little is bit lower we regions, bit are in also than going to expected. originally like and we markets. decline see in a assets some for and seeing the We're the a a U.S.

bit line, we're So the revenue little a but to raised we've still more EPS overall, going the and profitability, in we why that's see relatively in coming have and flow. cash

Next question.

Thank question Please Fargo. ahead. from from much. of Wells the next Maris The David you go comes line today very

questions. Good morning, couple a

dynamic, pricing but that First, you're U.S. not yet. Kåre, you you're seeing it experiencing mentioned improved generic an

nuance? So explain us is Teva would And that the that of you suspect I representative can market. to

target? through then are from that that can just a your you. should return temporary? it is you you firm, at on And it? previous seeing provided second, So where differ something continue the that or today you you be invested you And the think the why ones targets used capital not long-term and how might year, explain Thank

thanks those questions, Sure, David. two for

quarter, a on the of requests the sales market with in to our there So on there's basis, into we're volume thousands we not on on insight said, dynamic are all competition identical pricing seen and you first improved being based believe in there's launched, you by an the don't product. day-to-day on CONCERTA seeing losing way on all CONCERTA. on second of There's kinds because thousands affected other generics it as very full course also I much have that discussions course, that competition is, we And is of has of said But been CONCERTA strong for we being pricing, the the products. market. and generic actual And U.S. the the that, customers therefore kinds we of works pickup beginning, by because volume. have the have and other this, and sales pricing That are with proposal that a the on of launches what generics. have precisely assessment on

QX, the more had relatively do approvals of has affects also that pricing. in. really we That's QX and have effect that in launches And course. new fewer of to in had than more the coming we sales, So with nothing

very the pricing if fourth conclusion whether just reaction dynamics come firm of bad in will I improved a pricing the it's very, give or So and think and back. I third will to cannot on any continue going quarter don't the back. last this come you year dynamic it's whether to it

stable I think buyers call mature a of market would a we number more more we course. will of a and – now sensible and see a situation I three big with manufacturers, have where

think close now. have pretty actually generic the level pricing, I level is of we So new to a which European reached

my level in expensive than just jump good of have then said targets CEO if to here, only the when We job Whether as to can in you bringing to it's to them. a with elsewhere if But have U.S. your reach have, the this generate you the reasonably pay which you don't world previous is to ours, I indication XX%. debt big it and would achieve a use Teva, it discuss my you Lundbeck. cash. matters Then to in it's mixed And that a and can't portfolio of basically you before good case have that's scale. need. of in do think because target end you that expected that would to targets is or return also earnings was that's cash X-year and as X case a reaching So And in was because only And in at the there's generics policy you new investors, which discuss for be and we stabilization. even say on debt the debt, more question, shareholders, an it target you setting what the doesn't company to And can know, And to for we why a don't similarity us that shareholders your set whether do money use you course, cash/earnings if margin, I generate time we And of the a drug down targets, line cash you the much average. it I like have when target road. debt, with you I and change targets simply here we're you of these too have to much least better. pricing, a and that because really of say also you the not product is that are need the ratio, between your like financial debt. want that margin other I you the the the you pay can long-term can have, to so earnings so we have targets you cash then you

set we've targets. these three So

we for will set three them, future targets X Once reach X We new to these within next we will years. reach targets periods. the

Great, thank very you much.

the comes line from Goldman Thank you from question today ahead. of much. Rubin The very Please next go Jami Sachs.

to longer-term stay you billion billion, operating billion to $XX your what growth. year, $X.X for billion. sales $XX EBITDA is basically if billion $X.X at which guidance much Kåre, margins at you. implies this Thank to $X.X guided basically is not

returning had post growth business to Kåre and the You about the talked trough.

talk that. could I'm wondering you So about if

end you selling where about and going us had can this then much. Brendan, And of is there are but What in ANDA on next year? debt just is talked assumptions don't by net I level you bit back a you debt expecting? what You for of if for going year? know half your hasn't I the the Medis. paydown that your discussions. give year year, with lastly, of little we Thanks potentially the much, Secondly, what approvals. could, on? What think been do What's are very color FDA? expect on know

Jami. Okay. Thank you,

will in elegantly will the then will we with three and answer. I'll Mike the take squeeze first You comment questions, one debt, which take managed on then ANDA. one, the Brendan to

market. approval AJOVY. expect the the a get and the in that's very hope We The September, market need. year, guidance is You're valley, very, right I've probably we're is is $XX we of that for that's now as that promising. to billion, for and valley, migraine the for the much there's just run we But the around basically year next that's bottom think said talking enormous fantastic absolutely rate something because next and right year, before, that about. think And unmet next hopefully very

will XXXX. with and to we market good meaningful are to to expect be e-connected to Same for will next launch in sales the and expecting in respiratory So our sales. AJOVY, our year. a to bring XXXX grow of AUSTEDO, thing Same that respiratory start accumulate continue we for their thing

where on on with pressure based really down, launches, of COPAXONE continued situation with sales next portfolio restructuring generic But the not course, to of of hope we on hinging back year then expect good reduction growing seeing growth business. a tough But really by still coming of debt coming then we're growth real in And see a year see is is So business, based EBITDA. our a different optimization parts EBITDA. on good the of the the we margins, strong do to maintaining then XXXX.

We what. will reduce nominal debt matter the no

but linked start get long-term target. us not being growing So much hinging we able that, long-term line XXXX. once very again one the projection to top It's that's is of the on to to for earnings course, really

the and turn the on that question, So it was first to question. now I'll Mike over debt

reported this in the net billion we've quarter So $XX.X debt.

end exchange billion, $XX.X flow If remainder on cash free go, on $XX billion somewhere to you look you'd up, where currency between goes, the depending at depending the of rates. and

For we Medis, asset at couple in a a U.S. are it's a here Israel, in business little are divestments. looking small assets year, that still and next It's potential OTC the

to by we free XXXX. pay in all next all, be billion we're flow, the to get X again still $X go to then So that forward, targeting $X.X of cash as from down the with year. billion we hope and able to anywhere And end times at

after will how Kåre discussed. XXXX, revenue as Of on we course, the just depend growing do that in

we generating down all focusing eight of far. match to the think paid down quarters, very pay terms we're you I generate cash debt. successful down, forward, going so paying and we won't So third billion. to the in we've necessarily will $X the been be efforts want able cash question. part We We've last pace and our continue had of debt. but still that to of and down Brendan, pay continue In to

Jami. Hi, did. I

gates what's QX So fast the XX quarter. it's your launches in first came with And the had and then We one obviously in to question going then transpiring was one hard speculate around on so in far and FDA. approvals QX, with the is the and pretty ANDA FDA. QX. We in what out of

So some we to have year of between year. our XX the with of the we XX the the FDA through as launches end that of throughout -- expect the work remainder different still files we and now ANDA maybe

we So the into that we'll number start get tick see up half. second should as to

question, Can I ask Kåre? a I follow-up ask a follow-up question? Can

Yes, one. a quick

year, is do you about that next a billion $XX you trough that think talked The number? sales Okay.

is that picking from That's that what is is hitting I of I COPAXONE so call in that we not us that the based by the it, to chunk much tried AJOVY picking up, I AUSTEDO XXXX. momentum dynamics whatever XXXX. bottom of or are on trough, you And probably to want on valley, to sales it positive dropping the think then the then, then big anymore is because gone a expect and see up, explain,

thank you. Okay,

The question from ahead. JPMorgan. Please of much. next comes the very line go from you Thank today Schott Chris

the margin over guess for when think first much handle the sure very you how we thanks I'm you're a target, P&L cetera, business, can the when of budget, you around opportunity? or run et biosimilars but those the year, expense Great, just think XXXX, you questions. efficiencies the $X existing we $X with think there some margins much. on lot about further all, R&D the of longer-term of rate time increase does you on second how two question as plan, Kåre, I run on these One, some do branded have when about to the evolves R&D do projects? is about the decent the making of from some that I is a gross – time, question. billion get rate? so beyond So appreciate then reduction that start initiatives those within next we that billion think And margins, of very over to efforts about capture gross Thanks or manufacturing starting you spend XX%

interesting very those for Chris, you, thank questions. Okay,

that margin done, sales you the if compensating term reducing after in don't pressure XXXX, fact continued sales So could realize in yet AJOVY on that and the that first is think say there's margin XXXX the we of big and what then all, from overall to can have that. about we be meaningful of COPAXONE for we the and in fact coming see really longer

longer the course, is on a AJOVY better margin business. on in than term and gross on bulk there our of Of there's AUSTEDO

positive the that way. affect in will a term longer margin So

to manufacturing be long improve for doing move course, it you gain. there way the products costs, you sure efficient plants, management. And really or your of of then running But portfolio it will can so, margin. and margin, no two term continue you also places. comes gross long-term from optimization, our plants shut from right make When improve down It in needed. of your the you things, terms consolidate, you gross In the that comes from debts, possibilities gradually are the comes to you longer

go the geographically and you way, portfolio manage and by your you If of it's then of because the generics good, into pricing both course, environment gross manufacturing generic the of but it's as calculation. the that products improve also the your you cost, very of margin be those not your convinced $X a and worldwide, gradual, pricing splash on improving the interactive skills able the we're goes biggest pricing in that that our in optimize portfolio It's we, more a the to right supplier average products also, pricing this of will markets, manage of in each key out I'm But billion costs like it's continuously on the that dynamics both side manufacturing now. big ambition side. after cutting area, be not getting forward, to more on the margin, will, our as to and seeing XXXX we continue the but big also therefore, ones as but gross efficient of improvements you're it course, see now. as

doing to now also offset compensate COPAXONE. the margins revenue of right in magnitude will is But to on have billion. gross cutting remember, of we're $X out loss of improved order to We're continue improve, for $X billion XXXX. You of what the continue we will to basically after and to this getting work really we loss

the run you the billion enough support is $X one on to Chris, more biosimilars. rate if had

Yes.

is. answered that explicitly. have it It should enough. Yes, I is

much. very thanks Great,

very you of next go the line today much. from Thank comes question Bernstein. from Please ahead. The Gal Ronny

of this nice a first, Kåre, the questions, you. for achievements couple Good year, morning, Congratulations the everybody. on

some focus is in you're no taken on broadline You seems were of execute think the to to lot, narrow out is to the operating generics. and all you've commodity a of those stepping talking like from lines question about the of as Teva there trying room It biologics staying lines. to and all basically about novel OTC the is in, way better,

before? free do right this? access biologics, need you to when here. commercial Is order significant – first you order really are Is in never to take sneak before half You novel when think I'm going product of same the their before, just narrow entrant Should was to in don't it, And now lines guys year the all giving will if on temporary for of year question. as a behind to still Are market second going call or commitment own the and look your hard actually it essentially to of XXXX. to by third you share what the R in product capture this X.X done to haven't be to basic for payers XXXX- do United mentioned as the this fremanezumab know what to essentially the [Research] further a it medicine. payers? are we a be comes a ask to away just largely made competitive the think those fall the just I develop to in and have you to not And market you participation or a some you questions you better, in begin share in about thing? while. stay in States is Amgen do product so a I it's essentially giving for I'm And and fremanezumab, seeing more on second for going Brendan share going very when at going

You Is status facility. be that or there haven't a removed, OAI and why? of that is happen that to strong the mentioned will going assumption officially

Ronny? Which facility,

The that fremanezumab. facility Celltrion makes

will answer you comment the half-question fremanezumab very Thank the questions. for you Ronny, in I'll then Thank as on marketplace. much, and those very and much. Brendan well, your one first

optimize pay debt. to you the market you're lines the to need to are cash could correct say, profitability the per profitability. We all basically revenue generate combining, that the order So in we you down the

one make reducing off and business. going sell sure office any having So just optimizing going cost, we chunks sure scale flow. the the a to to of having force, sales well-structured benefits the the We're of it, integrate get generate cash back basically organization, revenues, we're we not making

to on which research company, it have, piece, gets I do was do we when excellent actually biologics. when also surprised actually Now, also the and we joined in have the I R&D discovery going

East Australia, on in Coast, U.S. in We have activities the Coast, U.S. West Europe. the

pieces, pilot-scale – experts because many who or actually we the commercializing expanding when are everything have or actually steps. about. And done expanded places. last you respiratory, competitively the that disease talking we biologics in space capabilities, of different have steps, we know have do understanding, and not development in believe basically even of facilities, we a have in And early biologics need, commercializing And bits when do biologics about have talk XX all though XX we the the been steps in we that neurology, when fully also what do activities both talk have homegrown late our years. launched they're have we And all we oncology, a have we about and taken So biopharmaceutical, talk these through internal we products we for the in whether CNS, and and they're we terms in chance areas about are

nice what inspection, can base a then biosimilars, are thing. there, some the not say there think that has and a we What these we but we mid-September. that we and But guarantees an is what re-inspection we and And the good Brendan. nobody third the assets. really good course, hand the has tried we we but hoping on approval warning so satisfied give question promise to reasonably for our I which that and on was been can to place that Celltrion the that's think business ate we that based commercial expect of on remarks we opening second and of the that's behind I based for. we're reasonably fremanezumab, leaders or and then my that's FDA, anything, your still question we this letter So answer on will that combined to with leaders get and And your good biopharmaceuticals, commercialization to And Celltrion that inspection have we're in half medical not generate of PAI fremanezumab a it, utilize leads thinking any planning the in and we're have was based footholds player know on the in over are outcome. some into or And do also filing. really I'll taken

the you market migraine evolve, you launch product depends Ronny. look the so doing? as on you think frem on to and at when XXXX. Hi, I The is How how it going are question

now know very So because blocking those really right whether or will products you're of that payers don't Most second third the product. I matters it be to close. market are Amgen's

reimbursement they're So looking at it's to difficult get market to as this form.

well. the for as is Lilly the with I'm and conversations in already we're sure obviously So is payers Amgen XXXX. same,

a a when have they there. in a think runway we give competitive reflection in I put of long a very We're kind good about launch product, of largely formulary very that either starts. a that We that is work through they molecule. good launch we late don't issues. we've I would in period But be products where that for couple believe six-month six-month molecule. a I We think frem so got months their we've the think free January we'll late but program some know don't sampling think as I launched. confident that all the insurance we can coverage September, together. have it's quite the that would think the product of I think will away of we largely We then If package period So until September.

the So, this a good we're really forward launch, space looking be. looking to forward think to to and competing, is

Okay, thank you.

today from next Thank of question Bank. ahead. from line go comes you Gilbert Gregg very The Deutsche Please the much.

Thank you, for strategic ones you, two Kåre.

REMICADE distribution the portfolio look of players, players differentiated in trouble this all the terms generic strategy of for uptake for biosimilar industry OTC, and COPAXONE COPAXONE at talked API in even your generic at First, number generic the if mention, you you And biosimilar and limited generic and products an you your have the important not at I'm unique does rationale could the I not, of when those uptake limited system asset. you you And two, of though don't change that between think it your significant away? Thanks. you trying needs the you to you did as if these all. sell other hope but just you own launch? to Does to investments leverage-enhancing eventually the don't of to a generic yourselves if distribution, need see understand biosimilars why that generic the price slide, you rebates about in products and/or or differentiator make or are think, to telling and mean Do REMICADE in manufacturers? get for types importance not that go a it?

interesting very for Gregg, two you, Thank questions.

diabetes. of space, around question profitability could you what you biologics see very first the can and meaningful and say, experience generics compete is for the in biosimilar and well you branded actually this my out is can the is in, that something getting So biosimilars, really chance

and same. guess, not profitability just you – to to is price. the make space. But hormone compete but that specific know XXX(b), biosimilars, it's very straight order really aware it can be the compete, thing also so if it's there's I called, growth a you need good see of out You really of And out to they really on should you've want are I you in not in it, seen it's

in in new to so leaders, place, need trust commercial the the they setup you already opinion your have know product. You key

You know patients. the

and You patient have on. so programs support

switch just the like the just a patients. hope launch get and by So to to you going you launch can't That's having biosimilar generic not work. then pharmacists a share

sales support, because to to if Mylan need you force the your reasonable is should investments commercial do and just You means have successful, the back price down be to that that also you backbone. really of share kind price gain these that's not patient a volume what the you and doing But some protect probably to need want areas. get to in needed taking

do So to be we personally believe we're biosimilars will I'm we I with I launching going marketing that sales with together to how from how have it. really we this. and organization, to the it going Celltrion. are do that U.S. to prove And sure know the know in-licensed

the So that question. that was answer to

important they see us, to in a the distributor, are because I asset say biggest that I give are the secondary can would Anda distribution. Anda They it strategically few you On but maybe, as comments. also side, do Brendan, a

I us. business so Anda the differentiator for think Yes, is that a do

something optimize. asset has by and so spilled we the continue over pretty has very it's business. and keeps to that I was a QX. solid to strong to it QX, that we flu of that fueled that It's flows. to opportunistic ebbs season in quarters grow The is and maintain It a us But and business, think it want look a that think a I been forward strong. up continuing marketplace the strategic in first gives advantage, coming couple performance for to

Thanks.

very Raffat you line Please the question from Thank much. comes Umer next ahead. go today Evercore. The from of

so for thank have if I may. my much Hi, you I two, taking questions.

it inspections generics, your It's that? happen, secondly mentioned mentioned like XX% on that And excluding you QX satisfied dynamic with on outcome. the just understand within gross in CGRP, from wanted the XX% you dropped in also U.S. specifically the margin clearly generics, I in there. seems that? to First What's QX. just you're driving and to COPAXONE but what

from you FDA feedback question us on some you. more you feel give or my color Thank more got So you satisfied? the whether is can makes that any not

I'll then margin give you So and will thank the Umer. that. other you on the answer Mike question much, after first, gross the very take

margin in couple looking are relatively that factors a the there stable, in at you're was the press So gross America product. high-margin saw That's COPAXONE in release. you was a North but down. QVAR

change, did In see in of little we mix there. you're having margin that generics, a a the a lower little of so terms bit bit

some that some gross recalls having also little minor we bit of products did that on a affecting You're margin.

the probably run going an exceptionally you're we to more terms in forward-looking had to strong in of rate year. more normalized closer getting the in there rest and for So of a because we're a see of overall, that now that's to quarter QX back mix

you PDUFA terms we're in are not In dialogue dialogue that it's we of still on approaching PDUFA achieving the on inspection the date, any at any mid-September. I because in can't your date give the of FDA. normal extraordinary the optimistic We're and approval specifics with Celltrion, really it, the have you but

Thank you.

Thank you line very Please from from next Elliot of Raymond much. question today Wilbur The the go James. ahead. comes

afternoon. good and morning good Thanks,

of or Should portfolio process similar if the just in. have first generic you two in Brendan, The us business? you we a play there's am where market question should in versus talked optimization reductions U.S. though share if pretty even bit are be to other roughly the how give we that gone for last significant companies have to held I holding basically Teva's think months. to X And more basis. a because frankly, Phase surprised profile guess are I XX% I Should in-licensing couple share you're assets dollar about current gist last be on I and do to market And names. of of understand quarters strategies The the is on earlier we post-XXXX? out, market biotech we company little be questioning through unit share environment, types unit Phase in specifically, the a not surprised I on those going think even started a companies, thinking about within dollars that about years or just taken assets, type I share But realistic the be processes, deals for is their been they've later-stage that guess, sense about company about of around growth question slip the ask in to falls I market. terms spending the U.S. given, could and couple And you've that's that public to terms the But in think building how in overvalued your And on XX% potential it. deals? the Phase looking process to or in or of just sums call, be do the see XX%, at BD you place? assets, Xb or for earlier specifically the overpriced think structures, the revenue-generating Thanks. question Kåre, Xa, large bio-bucks commentary follow-up do going

around first the and So, the market share portfolio Elliot, question the I here optimization will process. take

most So we before, call exercise the customers, but they'll of products about completed increases they I complete. the would of some rationalize we've largely will with inventories. we to had In on, said API, so got we XX% an suppliers. And had other that that that's as exercise. price of XX% we But we about immediate and had inventories, move cases, not the products

point, So bleed will couple to of two the quarters maybe out it and coming over first your a quarters. the

really probably visible launching also share until anyway. rationalize, we the market won't it new as products. had of that QX be very we do we're And But we that, or So QX. low many products

share. but based see, fluctuation going how mix There see one don't share think change playing that or big based don't a I so, really, point market our you're upon to and out. it's a think big market So may you'll in upon in the percentage be a I phase

there. be So that answer my would

give I'll a question. question, comment you BD very Elliott, a on good So, the

call do the basically So it will idea that but we to means which do is course would organically, to need I the develop portfolio, of we early. it in-licensing,

Phase basically, X So in-license will we not assets.

part acquire acquisitions that only That that accumulating will liabilities not X. maybe of are are in just assets we at will We we things companies on go as only pipeline. be the We'll Phase success Phase with that the be early the see X those financial pre-clinical, upfronts with X, to means will limited and about Phase into marketplace. that look

years also it takes, first pipeline course, than maybe from where the five, to see should longer It strategy marketplace longer-term start a the biologics is six to of come this you're new will the So as it now you buying a stuff late. strategy. assets. takes But if very with

debt. to to that's So five next course, something change not it will, the cash growth it's to two the years. for But going reduce of pattern our preserve

more take We'll question. one

today Koffler ahead. Thank much. go of Please comes Mizuho. you last The very Irina line the question from from

to of on had could was do company positive you. recent in my on you then And your taking retained I because to the I question earnings your wondering questions. convertible dividend? stock pay bondholders Do results you the XXXX. was other than expect of of for negative? Thank data the be for provide end thanks an rather your fremanezumab Hi, you expect And out if that Pfizer. update

two the for thank one, much Mike I those second one. Irina, will take questions. first will then and take very you

to to regards fremanezumab, don't with Pfizer/Lilly any So we comments results. have really the

There an unmet could need in sense real the a clear-cut enormous still many that group. You on that therapy drug. is pain Pfizer/Lilly fremanezumab situation efficacy the also no there's this And for for safety where and non-opioid years clarification. say a that has followed there's is for in patient unchanged been now, basically there's issue the on by

results, course, positive they're safety. it's to we, their terms with know. we longer-term really come but same conducting of But out are rather out positive hoping hoping we And early come say. will are or we're together also Regeneron, So for in too the ones both they that that Pfizer/Lilly of sure that trials, longer-term studies the I'm that don't conducting, the

never for great we Regeneron, with I And don't being it. of this. think now Phase have real on hope a positive we're They're that So results, that data, know doing of pursuing job have as safety partner, you until you the course, X our and results, we but

for earnings, the been updated EPS into shares the guidance. And, stock, convertible included Kåre. that count Irina, to preferred convert that's expect we mandatory the retained Thanks, do in on we've share and the used

for happen. that's view our that's most and So what's likely now, to

Thank you.

much call into very nice a day. this you listening and Thank for have

for does That much. very you Thank conference the today. conclude

reservation can for XX wishing by For accessed again, once facility to review XXXX. the those participating. conference, +XX this again, be is XX XX +XX number you replay Once Thank XX dialing of XXXXXXX, XX you XXXXXXX. XXXX. The XX

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