Teva Pharmaceutical Industries Limited (TEVA) 3 May 222022 Q1 Earnings call transcript

Good day, and thank you for standing by, and welcome to Teva's First Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being record it. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Ran Meir, Senior Vice President, Investor Relations. sir. ahead, go Please

this press Thank first for We quarter an our have Annette. this issued to as our website morning. our copy hope number slides Please a review us discuss had the statements well at copy on X. on earnings of A review presented to Teva's be on XXXX found opportunity as of which forward-looking Slide being this you, you, press was release call can joining earlier everyone, today you release Thank financial tevapharm.com. results.

non-GAAP Additional release measures quarter performance, information overview regarding Forms, begin these statements and our Teva's events in recent Kåre available and XX-K earnings an going our CEO, our call, the XX-Q. forward. provide To financial today's of on first SEC priorities and is and Schultz, will

by Our the XXXX outlook. CFO, reviewing including financial results follow Kalif, our will more detail, financial Eli up in

Eli of today's Kåre. that with call and the will Kåre run question-and-answer I on session Please Sven will today Commercial, is hour. one to approximately the available will the now that, be Kåre, that note America over Joining if will would, presentation. you please? North turn Teva's during call Head call follow the And Dethlefs, who

in present Thank we're a debt take $XX.X look now this to $X.XX. was Welcome, $X.X and progress at you. came and Free debt at you EPS diluted non-GAAP in per $XXX everyone. quarter happy our at billion. is fronts. I'm diluted net then that $X.X show billion, came in If share continued we in GAAP the at came our a flow of to and on revenues first to reduction loss solid at reduced happy our million, and $X.XX cash adjusted year, came billion financials, many with EBITDA continued the

will show has foreign the reaffirmed. being key you to we outlook exchange slightly later, downward been other revenue components, XXXX All headwinds. as are Our revised mainly due

growing the new market see very high. we at we prescriptions, And share growth key happy a nice the to COVID-XX Europe, U.S. recovering in OTC of business AUSTEDO a time, and markets our of in for in saw side, Europe our all-time AJOVY, to growth saw same development strong On were also continued a following growth a the other progress generics driver In also restrictions. we and the where were easing

strong which decline the American was are we markets. So, a sales of and did market and Revlimid, comeback Atripla year for key we saw last a the also had a continued that we new sales. well, in generic generics, and and very in of Truvada launch lack to happy North all compensating volumes that nice ProAir position very partly

we entry the Our biosimilar we there which biosimilar see very about now progressing date Humira, year. slide, excited pending We're XXXX have If July a is opioid approval. a settled you can next move of then to for course, have we litigation. the FDA next highlight of on nicely. pipeline And

means, and we Eli and March, also in have Kalif know, we And the settled have March. accrual in trials also our this then, Francisco, there's over both in will balance There San all right on Rhode that presiding in you As bench judge settled it, is a two have sheet changed Island West in on we Florida based are jury. one later. are there Virginia comment on ongoing no which one bit and a now, in trials,

Court, J&J also was where had the win. been victory, the has with which California, a there Oklahoma trial, to that there a positive. Orange was where We bench trials trial recently County, Supreme in and in clear also we also won experience Our a was bench appealed

a very with up. actually have development say, sales 'XX. euros. exchange said is first high One sales 'XX, had a can of are REVLIMID Europe. here sales in and you we and you settle and I next here, first and here you are dollar the difference that In euro compared so negative as we revenue sales the two, quarter. slide, really, the key have that in count we like comment AUSTEDO, to to in Europe is end a the significant of this the space quarter, on TRx the before, 'XX, basically all extent. quarter to in as before, in And states slide, stable mentioned a markets, we settlement can If of first end next U.S. underlying dollars, and nationwide this between that U.S., you the development. in meant currencies, that Truvada value we And developments see first the all-time rate reported can to We I are negotiations, And the down. an our but Atripla see the had in go we same generic If before in ongoing we positive had go the that international year. euro in I see, see quarter then could the the in not the first was that volumes we In of for of see quarter the the hopefully there dollar and worsened, between the that the sometime was can development. in increase we And you

for the two the spec at quarter very the other are we effects look first swing to due there main quarter. fact deductible demand week the traditionally take programs price in we and reset the And first donut-hole our patient the and less we fourth now therefore, that the increases then usual reasons the of fact had where is we is the in that see that the see of year. quarter in is buying you If one the One first there the low it. revenues, really always

you the swing can $X billion of the in high back We can monthly Europe the next on done for all maintaining also to I've is can TRx. And we markets, see an expect we and in and the it of high year the has of all-time AUSTEDO have in based the years key And for in and said here, all-time as all market sales. to up slide, If U.S. outlook see you the which we go share, that the we XX%. an U.S., including before of that are AJOVY. also prescriptions, to now see you still up are we there Europe, have that demand, course, volume

least the and aiming getting share to we expect the Europe market North there, that in both XX% numbers U.S. America the sales are also we to forward. a continue getting You close and and going Europe, really for is in see we are and now that on sales which So, can sales, being here at are slowly up

we very both So, profitability and see positive momentum Europe. in

we slide, the LAI. received that CRL If here then weeks to that have we some communicated you we ago go next risperidone news the a on

questions So, that we will answering be we got from the FDA.

have six efficacy. a of a six-month could some review We strong the this the still a belief to in up cause with that and and probably in concept months refiling delay then expect period. We

believe to XX approved, get likely months this up still So, we of product will on be but delay it. there to a

fact we illustrated the a biosimilar broad can on see slide, that next that's here you and is have thing very Another the portfolio.

good biosimilars year, XX settled the six product. we that's partners. from a concentration have next now, of launch know, now We July upcoming are seven in very and And entry that in-house launch. citrate the about Humira It's XXXX. high have course, you and development as We big the a have programs we date is version, very free And of interchangeable. excited this

that. very looking good to forward are on We we performance we ones seeing we are have think So the launched. still

like the So on doing that biosimilar. we still we of a Rituxan is marketplace And now in market. something in also launch exceedingly have year, X/X the Lucentis will TRUXIMA Europe of see this holding a well to

it's roughly all the we going biologic in XX% well going for both all, very in of longer aiming course, value biosimilar And off addressing on and So America North the are Europe. some term, of in in patent, side. products

look element of stop On at see XXXX, get we post operating restructuring, where another to like of just then, XX%. would to our could it you the back our cliff And patent flattening it's here the though going we're COPAXONE very XX%. target important can could And should in now you set is up basically, we're back not close. out, next slide, know, I say, course, margin that to you of of for graph which say, you be. the even see record, getting a like the as And

communicate targets will that's long-term improvement We another where which the targets, goes we the same those within year. slide an shown, new net we The coming will for our of and targets be key reduction. financial debt next will have the set

As to it know, ratio. a there, we same on debt. And you And have driving also net down. debt-to-EBITDA net keep for reduce goes we'll the target the

for setting target be new will We a that.

below We the we'll year. be and have EBITDA the end target financial a long-term new within for to a for target 'XX, three, coming debt of net setting also

very years, you time. this come number working targets. We're ambitious ESG upcoming hard are that can report, on also see And sure to a in compensation. week's setting progress been On linked next page, we about we've and executive performance making a will our some the our a commercial is we're for of which out making very little ESG for

you our on we're also happy linked we secured happy later Eli been sustainability that element. We although, very now also And a have are our sustainability. it's our our outside financing, Company. new and that to seen our debt performance, about tell say, RCF, is Kalif which you the also will has about could --

XXXX. performance since shown a no good thing. into that end I look we taking the we will then right go here many and Company, So ESG targets. is up course, five-year long-term slide, the improved to of come year that's also slide that, on with XXXX. you've forward the change also times. the here. If a coming period. is It's ratings, we targets of you financial I We've within course, sort financial that look follow And change we us these which, to the are next targets who of sign There's of see it new of next commercial those it meeting forward only a the at our doing to long-term little seen the our that

Eli I will to that, Kalif. hand with over So you

Revenues lower Thank a to segment. billion, America and decrease X% of in financial you, compared good were to generics in first quarter driven first of terms the with our $X.X XX, my COPAXONE, XXXX review the good from our afternoon the our ANDA Kåre, first GAAP quarter mainly performance. to by and results XXXX. begin I'll due X% starting quarter North This morning currency and products in by of Slide XXXX on in of everyone. and revenue decrease products partially mainly revenues of Europe offset local higher was generic segment, or

quarter. product first towards We have the end for generic the been of seeing Teva launches

from a is cases of loss, $XX decrease to connection of higher estimated XXXX, However, low of QX of provision first we share generic operating income $XXX expenses in number GAAP update per earnings XXXX. in by income net launches per period legal compared QX In an loss in affected year same quarter to million mainly XXXX. to settlement $XXX North operating loss A compared of the $X.XX million in driven compared net were in settlement GAAP QX recorded loss XXXX. of recorded ago. the GAAP in to the related by per with a loss our still revenues $XXX in the opioid America net $X.XX XXXX. and the million share million of in loss operating remaining products of share of GAAP the a

U.S. of compared exchange the income movements the XXXX, $XX result GAAP quarter including the was hedging especially first and million, dollar, quarter impacted during rate by of This impact XXXX. first stronger Foreign to effects euro. the versus operating respectively, revenue of a $XXX negatively of and million

revenues As XX% come reminder, from denominated sales of dollar a our non-U.S. currency. approximately in

Turning to Slide XX.

of $XXX estimated of can quarter the non-GAAP net exclude the include net XXXX You mentioned adjustments legal XXXX. to adjustment versus due Non-GAAP per operating in billion quarter first in to intangible income, of opioid these totaling of of $X.XXX share million billion long-lived settlement see included update mainly cost million. non-GAAP and QX above. the earnings the assets impairment of in purchased $XXX income totaling first provision of were which million, goods is and settlement assets an Notable of the $XXX XXXX sold that for Amortization majority adjusted items. $X.XXX were

discussed of $X.X to I've XX quarter our for our already non-GAAP Moving a approximately first performance. revenues, Slide totaled billion. which review

P&L margin. profit in and total to improved profit, on in XX.X% increase let's quarter-over-quarter Now gross profit to compared of move The improve well non-GAAP our cost products a X% activities lower the driven segment look COPAXONE. our of goods market in the down QX was from the America margin Despite non-GAAP decline to in our margin by the gross continuous partially by gross non-GAAP offset revenues efforts product as in mix XX.X% to mainly as change mix network and sold, portfolio North generic our international segments unfavorable in our consolidation XXXX.

by lower gross earnings ended discuss mainly $X.XX XX.X% margin impacted operating and in million the $X.XX in XX.X% which operating slide. QX revenue due was by of will I in mentioned a driven to $XXX non-GAAP rate expenses, share next QX Our compared We This was exchange margin profit above, XXXX, the 'XX. to which with versus higher were non-GAAP fluctuation. mostly per lower from quarter increase negatively

to our such to Lower to management to transform the also global quarterly base, due that lower to related ongoing operational spend by mainly XX. in see to contributed sales partially of our due net or well declined $XXX of network. the goods efforts Slide of sold, a million, Turning the decrease ongoing our operating FX. decline Most spend of as million active $XXX cost We lower to expenses. base as was our expenses

the XXXX. billion labor to efforts above macroeconomic to global on help including expected spend margin the eventually goal stabilize margin ongoing our $XX overall we efforts base lead our partially by continue XX% higher operating our as of to cost are annual with optimizing of us We operating in remain below level headwinds, cost of XX% of to and focus sold. ultimate the mitigate reducing inflation expected and These and the of XXXX, end goods

flow Turning cash free to on XX. Slide

the quarter of at was payments to flow due of bonus first $XXX of to unusual Our cash quarter. free in first the free timing headwinds tends start Teva of XXXX the cash flow annual year face out the million.

production in February. flow Today, In addition, due faced to capital timing a our relation we related to as are our challenges XXXX our operational we we items certain to working of of which annual ramp-up result in cash guidance plan. reaffirming provided free

free cash be XXXX to range flow billion to is in the Our $X.X expected of $X.X billion.

we to We on XX% of expect quarters improvements. up flow the part pick free financial of conversion by objective to end the our long-term continue remain greater our during as of to free our three cash working We cash or as achieve targets. flow drive capital XXXX next track

XX. Turning to Slide

gross end rate was the at $XX.X debt in of $XX.X decrease QX was net The to billion XXXX to our at Our billion the end compared exchange net fluctuation. due XXXX. of mainly debt

in coming XXXX. ratio slightly to times debt EBITDA increased Our X.XX QX net of

make below main primary of expect continues towards target be is facility credit commitments as of you Debt our the sustainability-linked expected billion end year. an in funding targets corporate to which direct further use would our and cash to linked Upcoming and a Xx XXXX link into and and facility. our like we $X.X intention by we recently maturities to existing that liquidity our to performance our of strategy. to revolving our focus entered XXXX, we include generation. unsecured replacing billion, inform between establish reinforced reduction syndicated I decline responsibility continued flow sustainable $X.X continue by It being will progress of covered be be to it our However, cash. that

outlook So on to XXXX non-GAAP Slide financial now XX. for our turning

our million of experienced unfortunately affect At million many products States guidance are competition billion United therapies While headwinds foreign prudent lowering new we global a new to $XXX we billion. and lowers also the in have year expect pandemic, in to an guidance $XX.X strong of seeing foreign range from $XXX recovery countries some effect unfavorable range it global $XX.X the includes our our exchange are to of rates, Therefore, we year $XX due original expectation and current increase of billion to the revenue. our we exchange results. of by is range of foreign COPAXONE continued sales billion full to revenue adjustment we the adjust our by The range from availability $XX.X to have to for generic $XXX which for impact alternative of believe, million. midpoint as well time, to fluctuation. in at this full the as the effect exchange range for This on

financials, we February. range provided earnings per share are EBITDA, our in reaffirming flow, income, For cash operating and XXXX free the

a and our first the We the expected quarters and expect is gradual first following lowest be margins. will of the approximately half sales which of that to still quarter, XXXX of year our second XX% the be quarter expect pickup four in generated XX% approximately second in the the sales in for We half.

discussed results. open continued for now XXXX. of questions? fluctuations the exchange and expect please the This my concludes on you the answers. call Operator, Teva we call still As impact would open earlier, foreign for of quarter questions review results We'll for our first of also

first [Operator question line the comes the Instructions] Barclays. And of from Prasad Balaji from

Barclays. from Balaji is This

time, Firstly, see the Kåre, out call time you specific opioid a stating for you help by settlement to that on around the more global this time couldn't first line settlement, notice year. a expect of I to that seem the end

the settlements state play progress this give you're around at extent dynamics will the what on concentration to disclosable? towards is that this on the color And the or go with as your of relevance without give incremental So interchangeability can that you impact the some biosimilar, you seeing the share Humira, could least expect high you role secondly, thoughts on that And date? interchangeability? and you

was on sound question you, where just the small Thank Balaji. opioid dropped your there didn't I -- thing out.

So, I specific more color some you which it, got you that hear. I asked about, was but some element it wanted on there couldn't

Yes.

been more seem specific the first for the you to mentioning a have some end You by expect time line that of year. progress the stating time,

what asking was on could progress what further and provide I it? So, you color

very you much. Thank Okay.

question, the So on comment Humira the and first then in take those Sven I'll U.S. and can elements.

doing on some substance been elements are there settlements is, benefit opioids, we on abuse. in say, can from of a and combination state-by-state number all you see main it's common the you far basis which, One So can that elements. the have that see could a there you that people so settlements, can product suffering a of two

have balance period over we you And of reason that about. to is to course, longer time paying our in of we talked there. the just we So, also debt why longer sheet need due And over and see the of a pay products can are we time. period a

of people one if the of Narcan, to course, table the America, way the thing biggest in help generic out the do we we if be North it's are if is, for manufacturers the other also to bring used they due the spread biggest, we possible us overdose. to the payments. that So not to which fact value only it of can And can we and the generics in world, have is

getting ongoing nationwide a also and also with closer And happy believe there. that, those have course, conjunction we, very negotiations of settlements. settlement, about we're on in we're So we

you of optimistic time Sven, the see I we end more schedule hope will before slightly the I'm now, that's biosims nationwide will settlement question? and address on Humira So, year. the a this that why

Balaji. you, Thank Yes.

due have situation the concerning settlement of for on So to this biosimilars AbbVie the Alvotech we product. the a launch between clear Humira, and now

makes be is XXXX of is, every whole not product it will package our So second themselves, say a product I in but would wave the in in decisive it feature single attractive. with The our of features formulation. July we product itself course, that factor, the

of the in its to what course, analyze And that we product attractive very it's of and the free, offer market to year. of the And discussions well, is auto-injector. concentration the has we know it's also features. payers payer believe the attractive market that package high So provide next with and interchangeable, product that features citrate each we one it an is July aspect offering coming That total access. highly us is

course, a this features of the quite launch attractiveness you European is, have second of market product classical create the not and The we because it in once but one like the in to the will features product a in And the the more generic behave pull-through there, is U.S., product generic that know branded important. launch the has package launch. of market

next So, the with we year. we are biosimilar that quite will Humira happy launch Alvotech,

line Thank you. Please ask comes question Piper of question. from the next from And Amsellem the David your Sandler.

open. now Your line is

verticals? also and looking fair So, I brand to that you're additional get settlement M&A transaction thoughts to therapeutic thoughts other are wherewithal to your and So, now assets extent context do the you business effectuated? then, is neuroscience-focused prioritizing which to get addition the can that regarding global this consequential you I And Kåre, of can your And talk of at to look or as there. wanted and that, you for going you're to the about it from specifically, corollary assets. wanted financial M&A? a some both development being say How to to large contemplate, the of you, end, in

Thank you I'll two for those of answer both them. questions.

to interesting cash all, look debt capacity will have don't sheet, of at of on be it we any first or course, our do our but sheet. got So and to M&A, you've some balance balance nice really significant

major been we is, can on but the as with development So for terms take that's stage a have major will for What us to our is not an of that early interesting of opioid that happen own the we we or assets of that's M&A us without do see speak, transactions. do, years. We settlement. will not will to and that doing could transactions say, And simply any doing, you in going any doing balance in-licensing you course, have what together next which with through partner. several not all sheet continue really you we see

acquisitions, based You price could the for on, improves, on what But future, then you'll areas the no, could capital course, in that Then theoretical shareholders. want that's with in-licensing? have where if would do that, current we not our in But be [capital] ratios neuroscience coming focus you destroying we not Those is cash-based we share say see years. portfolio. early theoretical in a the areas Well, potentially, on and basically and immunology. say, of do in we our that this share to is stage knowledge, two most where are a M&A value have current opportunity. option, the the based the

We have we'll projects biopharmaceutical be the there exciting that on. those right clinic. now focusing And in be will XX very

early-stage of done those some areas. recent the also And been assets have with deals in we've

you So, we'll continue down that path. for Thank the questions.

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can hear you. We

were on first. on requiring in out that those And a of your we've states the a just the Great. basis. per more of to Are -- one states seeing quick compared from I follow-up. been have question the Lately, that agreements just state-by-state perspective? opted lot one the capita from agreements cash more these opioids

So that's no, the case. not

deals products a the cash that, beginning. slightly we've Texas of are saying that's in from we see but a it's Florida, say, could long what there, see been then, there, in the elements key payment and different, look all of course, in at, course, you are and period there, the we you we -- see If

what to basically has only big compared settlement we of nationwide paying basis. in states of what the you J&J, with we've much want big a only. cash some little then, it. course, four the cash We've And with philosophically hope very And the the settling, then the offered to the you and of three slightly that bit product now the and Back doing we're adjusted line more ago. is companies, capability If cash. right with other And where stabilized goes offered think we're we a hand-in-hand it about to changed of would than distributors fact have do at could individual now on sort that business. we nationwide now if we what this years they look

just follow-up is saw or on that consensus And numbers expecting a was that bit you the consensus Do and drivers rebase has than seems AJOVY accounted the aren't actually think to that AUSTEDO we the do in think It U.S. Got market U.S. reported. you a more need it. for? what being

don't I No, think so.

the I year think actually, the our on to consensus a full close consensus basis. numbers for U.S. pretty are numbers.

spec fourth hole. the It's year, outlook we but that also you, we are due are that billion. at I -- donut the always buying And if of as the So and our seeing had first quarter look you this AUSTEDO correct between reconfirming to quarters, quarter, and those. showed then we we're $X reconfirming this swing big

consensus consensus as I is to the close the way pretty -- the I've different that remember seen, So that's and marketplace. in it from

comes question the the Schott Chris line And JPMorgan. Please ask from from you. your question. of next Thank

now is line open. Your

really line guidance me. of more guess, as like pivot past kind more top the very think quarterly progression. Teva years, revenue kind get for two there know improvement. of we'll about give that second focus seems kind would XXXX, the going I be Just it business, for kind for of be longer of was you going targets, focused the next level, growth the post maybe a know about the to on I year, guess, story? high to margin later the set this later a stabilizing still color five on but of does of think term? or first how we're I'm you're this it is then And asking any but to to margin-centric year, on a And appreciated. I one preview bit me of details I

see. this and a more think that tied back-end or sure, which that commercial you're to guess, execution I risk we year, to bit to a you of more getting clearly is second regulatory the that of of of tied a kind XX-XX assets related typically approval. full is versus split for waiting on loaded am tied where approval for still to products have I about where the maybe just much is is how I much ramp ramp? FDA talking You're how get on guess, half a sense than I

for Yes. Chris. questions, those Thanks

some and one. So both them give additional a I'll to last it of then Sven can give shot at color the

about guidance be think explaining the will later it say. in terms think of sometime then more, So as communicating in should really same plus if year, you the we would about what I coming you long-term

will not the need get debt. on our and away fact generating cash we to we keep to that reducing keep need So, from on we

that's think is obvious the looking at to business. I who anybody pretty

the We also business sustainable. that is want secure to

So as revenues. we I growth to said But course, with want margin would continued give mode also a that, right for a into increasing to returning improvement. you're before, of target also we also the like business see

course, now. specifics. to you of think would expect should you it -- could the I I addition phrase same say, way then I, communicating the the be And more forward of I an look by So, with would

a On the revenue combination. side, it's

some quarter. we already were the saw say some knew full and between the there U.S. we elements for we fourth could year the the that factors communicated in when You swing first where

that. we communicated So,

of have happen, positive a that date a have ongoing -- progress effect, we then accumulated which we of course, could and we the knew say, as then, certain. of have, are, approval script launches And on some AJOVY you would we also effect an and have yet. progress also that of and number launches We of also see on Europe, you've have where nice well, so is doing U.S. the AUSTEDO. in And would very in don't the AUSTEDO, we course, actual very numbers seen

year So you most things of happen Sven, exciting maybe comment the the on the the will that some can in of U.S. rest in

Yes. Thank you, Kåre.

that access steady we market development So expect improved for market based is AJOVY, and a share. improved on

a March, the see significant and January good TRXs. from development step-up in patient key campaign with We For AUSTEDO, script a we pretty had the within in our count. to quarter now activation

AUSTEDO of the a Atripla. In throughout its in quarter expect we step course, we guidance year Truvada to target. generics, in first significant So grow down had now towards this and

that had, last COVID XXXX. led loading to EpiPen for approval EpiPen because the spike We QX, year a a seen an as we've in reminder, vaccine effect in of also the

So U.S. just for But And we with for that repeat in ago. now course, in XXXX, not in that deflation, us March launched of be didn't a environment and the important year settlement would revenues the are which from the throughout will outlook, we generics, the XXXX. for independent BMS and of FORTEO, is we up to macro our continue have so four have the but is Revlimid FDA that hope build weeks most of other sales that still generics. the where then the we couple or in The for approval contributor significant with also have within us a expect we framework products one XXXX. to price

the and year end development a year. bottom the gradual line So, the we expect throughout is revenues buildup towards of the of that the

next comes the from And Elliot Please Raymond question. Wilbur the you. ask from line James. your of Thank question

now is open. line Your

operating about to the then line flow to a maintain expected combined impact range the not versus that had the may Or wanted numbers Kåre, the currency around ask to skewed more may still. on legal for specifically, potential adjusted one what be along the from this owing guidance? from the be just thinking Eli, to your these offsets question impact currency, profit that we a cash follow-up top about a combined be the a think some question and currently those thinking reduction should you bit free for of that Perhaps there still COPAXONE, which of prior bit and I is profit contribution more with little enabled assuming to insignificant lower to is And Trying then EBITDA quarter. they end settlement stand? lower provision the you, where of guidance, little towards lines

accrual to sheet legal based on of it's is where contingencies. loss just Just settlements get and what current for of over a sense want sense to billion get or now. a I'm $X assuming trying I'm the balance to some been settlements seen why significant to we've fairly settlements or seen potential entered year over be along really lines on which the seem litigation? have what into opioid related step-up so, accrual a to last the in that similar we've the recently,

Thanks, Elliot.

elements. talk will the currency So first Eli about

for Elliot, Thanks, question. the Yes.

year-over-year said long-term going that stick still gross our elements we those, with which OP, flow-through targets onwards to we And our the terms leading the to margin. as will of part in of on to means this be like XX% margin, financial So, I to to up the revenue. impacting points year OP, February to what would say, in top the 'XX according us of baseline is which tXX X.X% total well, basis

on also As operating countries less know, we're the expenses. getting are actually you those in kind of we that

us one. and not fixed our that we not kind portfolio, already of the of it all that manufacturing fact things. it's mainly we because But offsetting say, this from of reduction costs, ongoing and kind offset. now mainly to we activities, of on and our quarter-over-quarter with remove see a full would COGS help the certain footprint I So see benefit offset those

all on look QX, current to already for the should we the year. all, talked new that we same at you margin if in more land the So, less on XX.X% around guidance, XX.X% our midpoint or in

likely, of of the now And on an And assessment the legal versus quarter. the we've provision, what's US$X.X provision billion, litigation it's far, done Thank last the so most is based legal of the really the which outcome X.X what's is settlements of you, for increase opioid the a holistic our billion at result current effect on negotiations. Eli. the

in of cash so in a of course, there detailed that there's So you assessment over there's periods and products a there, various lot in And we see there's of various factors volumes, there should on. do. there's holistic

that's So we guess speak. our best really as

line And from the question. the Thank comes Bernstein. of next ask your question Please you. Ronny from Gal

Your line open. is now

I'll ask two.

there's the last CRL probably Eli, data, opioid billion in. molecule XXXX of if going And want efficacy dollars, value is you Or contribution one is some this it undiscounted can my issues you're from contribution? for something dollar a to $X.X there you can And bit the long are discounting will preclinical gaps? where what call, talk for sneak question, Is little of a how I in the about it formulation, material it in essentially, is to in it settlement, is adalimumab just the assumption more of is mean XXXX, tell in lack what kind my see? it manufacturing? the here? about second but one the terms us with how this about provision like known first to about the known thrown take Risperidone, represents? Risperidone The much to pay, non-discounted the

future Thank in your you for career. those good three questions, and luck Ronny,

with, CRL, nothing the I tell do first can the all you one, the but tell has safety. could you and efficacy say, So details, to I it can't you

good data. We very, have very very efficacy data, safety good

expect with been confident very, And works around within and principle to could we are execution the months. six months. some clinical address But how details maximum correct we trials are review the communicate, six We whole details we very done there, you very the the and that say that FDA then, of can confident well. time and to back which it's do of some have

still at product on question? can Humira, we fact Then the Sven, the have will approved of trust that we high get the that end in day. you the handle So,

job. congratulations Yes. and Kåre, Thank your to you, Ronny new

So the between And was biosimilar of I the think XXXX? market contracting there it summer payers, in switchover they or the the many is AbbVie out on can about of adalimumab now to in the strategy given XXXX of offering. believe payers. depending material this on XXXX becomes if us question a biosimilar access happen are pushed is the available the options to XXXX that that how event or strategy dependent for

to have offering. But summer will course, to to factors in in market a XXXX with payers committed in and also to of a come couple broad believe the their we are up come So I of look strategy.

is or Of then, volume itself in of feature, contracted, I companies it course, prices. of volume, -- at us the a think because the market say market then you contracting that once I be in And all driven reliability coming of to it said, course, able cover event will four as market XXXX. we moment, whether XXX% a is product in to that be strategy a the XXXX And for material But moment of we the and AbbVie then to once experience the these market attractive one have sure the the have U.S. is in that in course, the pull-through And by, at of significant it supplies one right, overall. access will factors only the define can for was XXXX. and in create

Yes.

we sold date. happy, answer, Ronny, material it's that marketplace. for I say is thanks I Alvotech launching if it's already of of course, the Europe, are for the And product event So in aiming at would course, in in of being disappointed the be so are Sven. 'XX settlement not a And would we because, course, that

So say, could out. we high that, you that work have, will confidence

for something a you, the or Eli, Eli, last details. like more the comment we've years basically being But had to nearly payment. can XX technical of all inspiration on question just bit On them you've XX settlements done, as you seen, the

Yes.

years. layers detail certain between would an you detailed are years. average Ronny, this to didn't very, need for discounting, and understand players on years already first a we a can of of a of to all in of the the But part already and the cash company longer settle the kind and that I is settled but to it's because related we one that say, our We're settled because them rest understand the already things. most of there that So discounting of XX XX in using WACC, it's happening the what one that all, and we we part those

part also, pure need the to depends. of of well And the So, really their part as product. linear. the and we it fees It's not a element that embedded understand really of

XX but So discounted between of X.X%. the all, like -- in it's years to net all XX

question next comes BMO the you. Capital question. Gary Thank line And the Please your Markets. from Nachman from ask of

line Your is open. now

you go? lower Just efficiencies, greater will manufacturing in to few beyond you're from? about come more from? of products, thinking challenging bit a a AUSTEDO, the the into higher years? spend the be how how Could come It could certain Higher-margin point. mostly First, expanding operating just XX% the that Kåre, could get over will billion? when then And that? acceleration year you're seem in you get will full like it qualitatively, XXs confident think time, this much $X that How Where most of it margin potentially talk of where does with about areas? guidance at

the first and two for Thanks second one. will one Sven questions. answer I'll those take the

product from but So, it's product of basic and really come the margin say, could operating combination margin improvement improvement. portfolio gross improvement, a expansion you portfolio will primarily

improving So, by cost product it's families consolidation. the of also manufacturing

product So, shift, for that let's we're from we It's optimizing. say, within And that it's that footprint. more specialty. major expecting all a fact goes keep the not generics groups the to have, we the manufacturing can, on

another down XX are optimizing you -- our sites the product years around last sites down also know, we from keep couple XX manufacturing we'll And we As manufacturing in XX. last on of portfolios. process sites. optimizing four years, and to Right we'll now, of moved to moving on keep XX

same of gross majority the And from magnitude there the improvements, limited will could on, improvements structure because the come margin say, benefit and commercial see by be that's you lean we all will So relatively of cost in the don't all, improvements. now.

get to more the be. year to firm financial coming you experience we then you XXX of my see, do can some world-class target you XX situation what our much for And manufacturing, it's long-term that margin can will basis haven't on on points per annum. will then when the improvement in then your reached how operating like you speculate back If sort targets something the you with

confident you see the are Sven, details we billion can on why AUSTEDO developing sales the On $X how we give and we can some meet guidance. that maybe AUSTEDO,

Yes.

XX% XXXX. Our a in versus that implies have guidance we of roundabout sales growth

quite by effect we of you last that $X sales in are quarters. quarters to roundabout reason, when plus donut I'm sales track QX the quarter-over-quarter billion the that these Also with Our and in went XX%. from up that XX% over eliminate and see hole the And over QX America. we to year, count two buying in the the two on sales of harmonize script spec confident also AUSTEDO for absolutely get North can

therapy. should tardive right maybe from of approved things two for scripts estimating dyskinesia. fact volume the of and for in course, products just AUSTEDO we less increased suffering AUSTEDO of known tardive in that, add only the driving population is we key XX% than one There that's And sort are or one And of are dyskinesia dyskinesia getting States. now, United are is of patients significantly population them. the the tardive

XXX,XXX unmet tardive huge suffering a from the among potential dyskinesia the there's So, in United States.

be unmet a need more which happy satisfy. huge will we there's of there, So medical than course, to,

of last question then And Jason from line of comes Gerberry the from Bank Please America. question. your ask

line is now open. Your

Gerberry. Patel This on for is Jason Bhavin

the by phasing looks It Is stocking sales quarter-to-quarter? so this of and patient or million market We're you could the finally, driven biosimilar I'm XXXX wondering the quarter. on first or a to in, speak Revlimid, to could I in why importance increasingly then hearing extent market last of generics of about on in my U.S. other needs are your like Could that insight $XXX the players position as about commitments to generic the is providing have you percent volatile some this. supply And Humira. assistance to provide could AUSTEDO million if So one to? could the quarter talk a last commit talk like $XXX versus impact? versus on number beyond? fit volume a And Teva then preferential just program supplier it strategy you question if patterns

you those for questions. three Thank

that And that, majority patterns just competing from have you And And you have the of look get beginning been important realistic the course, other Rituxan with recently that general, that to Sven, from supplies. I of market. then what situation. X/X some the right that can in the we we've firm targeting course, share. question been to competing deduct of volumes what's for. biosimilar can to if here. do on you have in for going volume competitive we you double-digit biosimilar have range some multiplayer when now, with to really will of day Truxima Sven that's we see we always of been answer. around the the at a we that that of would And biologics, sort what products a leave But you, or And and commitments questions have talk need. will I you have for think when I'd answers then, matter, about it's

Yes.

supply The regarding biosimilar. question supply commitment Humira chain first one was on the

will do how understanding market. the partner here ramped be our market. much be some up That manufacturing over U.S. the be already of Humira, in before Union, the there U.S. we time drug plan reliability and is gives in and that and launched confidence the volume is we us good that chain we set for how it and a There's, should course, a [Alvotech], is also about substance approved the supply this So the supply will Alvotech the come they how are about have European up. U.S. to This can volume manufacturing, partner product product. we also the commercial to here drug it is

market volume on access strategy. And that So, here as commitment do the we in can we and that U.S. well. have the in our then dependent for clarity contracting aspect is

quite confident would shape launch are we will this in but the we product product we year, be for that that something be balance launch. that So, for will next

talked about on the that volatility. before. So, other sales AUSTEDO was the question We

channel we had year. then on a We've seen QX say, reduction this you course, spec an have the last let's year. always the inventory, effect year, in in of every Of QX buying and this wholesaling

donut-hole year, is that Overall, as the track to actually growing this the AUSTEDO. In gradually, and on said February is and in comes January, plans. effect the addition, count in, I is of script there our before, according leads of to sales volatility very that

I we a reached for third have our think don't... So was sales there I are confident that question, we reason, that target. And but

volume Sven, and case. competitors, it, And 'XX, a I And other what that's know, Yes, have Revlemid will year be 'XX 'XX. limitation also a longer but a there can then settlement, was me in correct but you I also the kind there's in remember which, way volume-based if I'm there also where the wrong, this have we restriction. no volume from and some of

all-out say, could see in competition and see and volume some, 'XX probably 'XX, us in limitations we'll you for 'XX. we'll So,

correct. that's Yes,

for thank questions. So those you

Thank you. remarks. closing continue Please That does conclude session. question-and-answer with our your

a quarter. everyone, It see pleasure, you for in. you, Thank we'll listening and next was Bye-bye.

participating. call Thank you. conference today. Thank does That you for for our conclude

You may disconnect. now all