Teva Pharmaceutical Industries Limited (TEVA) 27 Jul 222022 Q2 Earnings call transcript

Welcome to the Teva's Second Quarter Financial Results Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Ran Meir, Senior Vice President, Head of Investor Relations. ahead. go Please

this Head Thank our hope Sandra. Eli our for us copy joining release, a well Sven on Thank presented of copy have by the on you, had on We the of A yesterday. you was review release Kare can North Kalif, I an and tevapharm.com. today. as which as you, of Schultz, issued everyone, press be opportunity press call being at Teva's am CEO; our Commercial. call Dethlefs, CFO; slides found Teva's this website America joined today to

have busy We agenda. a quite today

We will Eli’s we updated the that XX well Kare second update opioid end update will the the litigation XXXX. presentation Kare discussion start strategy minutes. financial front. and Please for of financial as quarter long-term This business the review on of and of a followed run an from results and from approximately call the will call as new progress Kare’s will on call the achieved targets. be outlook with And with today's part today's our by note

please statements Slide X. disclaimer our we number see on Before begin forward-looking

please. measures these call over and our to Kare. Additional our information will if release the turn factors. would I now under is statements available And earnings non-GAAP risk SEC regarding our financial XX-Q on XX-K and and Forms, with you that, Kare,

It's a Welcome to everybody. the you, Thank litigation. you Ran. pleasure update on opioid

tribes plaintiff representing subdivisions financial opioids group agreement a principle seen terms you settlement. and with our an the and the in working lawyers the both states, for have of in States reached nationwide release, reached we the the As and

already $X.XX years. We billion settled over the XX will be cases. includes This paying

over last We'll but spread half As of seeing paying during for million Tribes, settled number be also years. year. the XX $XXX we've the states you've been

help also state used As we basis to is be these been product overdosing option donation. go XX you've be a generic actual the version of donating by product of survive. Narcan, state which will of to for there on for doing years have so instead in committed states people cash we've be seen to settlements the far, a We'll value a could over case in products and donate that the

we course, donation opioid accept that the way in epidemic. combat hopeful Of are many the will help and that

which We and remaining majority additionally, and course of upon is a Teva, XXXX, adopted reflect exception revised on agreement of is subdivisions, is all number the nationwide like details ongoing of we engaged certain The litigation; in it nationwide in with among is also to our Native-American states you to York in to provision finalized, big which us. opioids Allergan with its relief a obligations, the final respect And would nationwide and vast settlement in states, the in be scheduled resolve of of upon the the reaching are by York United opioids of will and us contingent be then plaintiffs, the a New nationwide reaching settled. currently are opioid-related trials There States negotiations. predicated forth other and contingent a agreement subdivisions Once the the phase in be the an trial against have settlement. that group working no possible will New in agreements to State, the documentation need sufficient documentation final settlement. agreement agreement. the the by have claims litigation the principle the subdivisions, tribes will indemnification with and from us any need also Allergan agreement Agreement participation upon set

the with will the be the subdivisions, coming that actual nationwide for and for tribes process expect agreement follow. settlement nationwide to in sign-on documentation settlement We weeks, finalized states, the

came let turn $X.XX the loss now the Next slide. Revenues in per non-GAAP financial in EPS highlights. $X.XX $X.X quarter and $XXX the GAAP billion, to and diluted year flow billion, second at at was and free adjusted was in million. diluted $X.X cash me the at Please EBITDA came came

reduce debt We debt continue to our now been to the $XX and reduced has billion.

XX%. We've outlook dollar the last the as due year foreign revised as against the Our mainly revenue continued XXXX been significantly much seen during has to appreciate exchange XX%, Euro headwinds.

and guidance unchanged. flow EPS remains free operating Our cash for income, EBITDA,

revenue as XX%. both North to the comment a was On contribution generic the version strong in biosimilar and but quarter Rituxan, generics strong and that Austedo we will coming of have of the sales I is out good version where saw had which EpiPen Ajovy that we as the America actually biosimilar generics a business side, strong well OTC the Revlimid, up the also uptake point of like on currency our we we of with but would share. In market a continued high in slides, Europe, local saw rituximab, volume still and also very from

– have of a lifted. COVID-XX volumes been seeing we're the seeing are normalization we following So restrictions that

a product the in launch We the biosimilar biosimilar UK, had to also Lucentis.

Next slide please.

do increase. report do you're as course, in at in Ukraine of well North we decline, ongoing we realized And in see as means QX In line U.S. is in you that currencies on influence we basically see decline comparing look revenues basically see dollar a then which in that local terms here, means the in be the we If expectations. see when to to that our Europe overall the to XXXX, there, revenue need in then revenues flat. stable markets. be a in international international negative development ongoing reported the would conflict revenue it aware with small been has markets, the in we international local a currencies, had there you this currency the that currency, America, revenue markets due but not but rather And a

see to TRx We the nicely. continues slide, a very Next in growth in continuous AUSTEDO and patient numbers. the please. grow

revenue revenue are our we happy where year the full downs for side, about to some had, second outlook quarterly the reconfirm always we but ups billion. And we've sell the in can On quarter. expect we the we have $X and as

very also please. Next is slide, fine. doing AJOVY

strongly here You are the of and of have how U.S. now aim a of grow a continues the can continuing this of in share very market AJOVY Europe an XX to the in market efficacy the to also see we Europe, sales position optimistic how are compared we good that to safety is launch above a and from competition. European now about coming we the as and also scripts product. can two now have very, growth see in are you markets late key market grow. third in three. We number the share future and We of number And the believe

with The evolve positively along optimize operational optimize continues margin operation. slide, to Next to manufacturing, please. commercial our our plans

You a see in here the first we and margin that always of margin is the margin have reason we margin half strong year. that half year above year year a the first terms uptake And fourth the the long-term why are financial is first last XX% on quarter difference had full And that half hit margin. year of between that revenue an the of means half way for the compared to see and as it year that our to expect full we practical target lot reasons. first for for we XXXX to operating still a means the

on We'll stop I Next of here. our development. the please. what alluded to course slide, continues I'll debt, won't will later billion, debt as to $XX We target we down earlier, and drive be decline. continue The to debt now commenting long-term down be for to

our We are very committed to patients.

our how around to we under medicine, oncology can health, doing also and on And people as meet with our of that's targets help website Africa, for over to clients. the numbers Kalif, vulnerable have Europe. then you're privileged comment we there's in a see hand this, this information know, could if but support who around these world mental because examples interested treatment our on you every bonds, part serve will day, here with we bonds, all in our some are we serve I'll ESG where million what Eli the access America groups As people. these With we've also you for do North quarter. all patients and set with on where for reporting, we to world lot targets more both you And the XXX can things around to we see both the try for the second programs sustainability-linked the

XXXX This our the driven $X.XX to to opioid discuss XXXX. were The to together to I partially million good of restrictions In decline of GAAP in compared to in quarter just the XXXX. XXXX, America. significant COVID-XX the estimated legal XXXX Thank update North in currency GAAP pandemic, $XXX revenue was from cases my X% OTC mainly in product income in billion the the America XXXX increase I $XXX saw increase launches. settlement recorded X% a second Slide compared compared QX and the was representing related revenue demand connection North remaining $X.XX operating version of by net from ago. XX, Europe, the second in expenses of by of as of a generic in North mainly settlement earnings next resulting and by by for generic of provision the in local per GAAP to increased Kare, to million in slide. terms, which performance. of year-over-year QX starting the QX results on financial loss In revenues. and Revenues year we're period with a to afternoon morning of compared goodwill will quarter loss mentioned. with to share of compared quarter the QX begin of revenue will you, It same $XXX impairment $XXX related from also was review generics everyone. decrease of recorded in second $X.X the good was America, per GAAP products of BENDEKA/TREANDA of million mainly offset the Kare income a in generic driven higher revenues mainly and COPAXONE operating higher with to and from We the million Europe XXXX, and net higher share removal related generic an due lower from higher products revenue The revenue charges,

of the impacted movements revenue impact non-U.S. dollar in compared second quarter by respectively, income of exchange quarter result currency. of our negatively the of quarter Foreign Euro. dollar, a to revenue second $X million and million XX% effects, versus XXXX. operating approximately rate $XXX GAAP sales stronger XXXX, second during of net U.S. XXXX, and was denominated the of This the In from of especially come hedging the

Slide net impairment was can of the to $XXX a the XXXX were QX quarter risk discounts million $XXX result The due goodwill XXXX. international second reporting you to Teva and a XX, and charge market increased see million adjustments Turning this of in that $XXX was majority in premium to ASPR that booked our units versus non-GAAP amount count million rates. of

$XXX adjustment our of an full for to is purchase Kare the accounting of we amortization mainly office all a to sold. non-GAAP update tax that discounted also billion in million the of U.S. get to goods office to updated estimated notable $XXX cost the overall and QX intangible reflect nationwide of settlement the terms majority portion million, cash a settlement provision. principles the adjustment losses of settlement to the outstanding finalized that flow which the included due the of include relevant in according Additional of mentioned, of Corresponding realization on investment In participation. subsidiaries. provision legal of elements related was $X.X includes effects an legal assumption includes totaling one the assets Non-GAAP XXXX,

I review our for Moving performance. revenue, already $X.X discussed XX to second quarter approximately non-GAAP have which Slide of totaled billion. our

P&L Now the look let's move down to on and margin.

segment favorable the by improved a revenue margin COPAXONE the gross lower a quarter-over-quarter America opted in was segment. non-GAAP of increase partially profit and in mix margin profit decline products our in XX.X% under compared Despite by hedging XXXX. gross activities, of in mainly non-GAAP positive to gross mix Europe QX the profit change X% of impact and our non-GAAP Our driven in to products from in North XX.X%

financial next was mainly XX.X% discuss lower in slide. driven was margin I QX taxes. in the income XXXX. XX.X% $X.XX non-GAAP quarter per compared operating XXXX due a This spend QX ended versus lower which earning and the increase by with base, will in to a non-GAAP expenses share $X.XX QX of mostly We XXXX, in to Our

Slide increased on of based declined $XX spend by million our to it FX. quarterly spend We look XX. by a see take let's Now net million, our base $XXX that although

XXXX, by base $XXX at million for first total $XXX million it of the half or of Looking our spend FX. net declined

ongoing global our our operating the to on ongoing transform We and expenses. continue of management with efforts operational network activities

the expect to our focus overall optimizing We to continue below goods reducing base well $XX remain and we our cost annual spend of efforts as billion sold. on

help in I efforts the macroeconomic of last ongoing margin XXXX the margin mentioned XX% of to to of eventually cost mitigate continue us inflation above including As goal global quarter, headwinds, a ultimate level the are these with in our expected to by stabilize lead end of XX% XXXX. operating partially labor and higher operating

Turning to free XX. cash flow on Slide

the in second of cash million. XXXX quarter free Our was $XXX flow

the to flow cash of As in I year. face the have headwind mentioned free at Teva’s start past, the tends

cash in QX reaffirming a an the payable. which sales of related face of plan. in result cash our from decrease quarter ramp we as flow offset saw mainly to was our quarter by proceeds due to flow increase operational up guidance, XXXX, the provided payments relation XXXX which of flow from from Today, items lower initially operating cash In in in in mainly XXXX. as challenges timing activities partially free cash as decrease lower certain in our flow XXXX are working in annual settlements operating well to we production second resulted to from of capital assets, activities, free second related This accounts we February. addition, our we legal to in due a The of

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

of term XX% cash financial second end objective free our to as the we cash of by year half part working flow of the greater improvement. as capital expect on our free target. achieve of We remain continue pick to long flow track during to up We XXXX, or the conversion drive our

our of The the net decrease XXXX. fluctuation. XXXX Turning at compared to our was XX, debt rate to XXXX the billion $XX Slide in paid related as the maturities QX of QX billion well bond end exchange debt to $XX.X in at end gross

in X.XX times ratio QX Our decreased at net debt-to-EBITDA coming for XXXX.

Upcoming the reminder decline billion out as which main continues make include towards $X.X We expect CHF targets. reduction it equivalent be million debt to will focus tomorrow and further use which we XXXX $XXX primary million, of to continue to our to That of cash. progress XXXX be maturities our XXX repaid in maturity. of at

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

of to lowers million which million range to lowering an can of therefore strong exchange foreign current million. of competition $XXX expect you we midpoint availability of see adjust of As results. continue therapies had exchange unfavorable the to see, believe impact effects full new States our includes affecting chronic in expectation This of revenue range fluctuation what billion from our exchange we $XXX as generic have $XX to foreign it our we're that well guidance to communicated we rate, and sales $XX The we on increasing as prudent and guidance headwind range billion. $XX of year the full fluctuation. United still of by for our May new year continuing to alternative At the with in this due our to previous billion at range revenue by the range consistent time adjustment COPAXONE to billion global also $XX.X the to $XX.X

our of tax subsidiaries. of in us the in related XX% rate of U.S. previous our realization the losses to to guidance was XX%. XX% This of one revised the by range led XXXX non-GAAP tax affected to the rate from an to to quarter non-GAAP mainly Our update investment of XX% second range

long-term in half share key we and XXXX financials, concludes to update XXXX. quarter move cash Over the gradual are my provided to strategy target. to operating February, a I second other For back financial the review income, continue as pickup of discuss in Kare range per the our results second earnings EBITDA, And now the will XXXX flow you expect year. free several our and of for reaffirming This we to Kare. of

with form the along very happy It's how debt And years, continue to billion it the If behind announce to for financial to the business. share in principle, taking you've reduction debt we've then stabilize spend targets, gone those billion looking every everybody the a in now will start pleasure a point compare so we've you a to continue XX going actually plans our the in forward. basis. which look beginning to our created to order around unified be is able reductions seen size, The strategy so you, a XXXX, create it of way manufacturing between And of they XXXX billion generate coming the an of five putting kind it. continue of for the optimizing huge the over We've it a way I'm you together partly us. the Thank through today on from bond of by that organization long-term billion on to business. do XXXX, targets. office we of current we've by down as and the our of paid interest of to nearly presentations. we've in but more view, the the we really as optimize of is basically will we and update order last consistently new years, From In meantime, you beginning, One The we'll further means And sites. to sites. The that expect we one the R&D also holders at you beginning to a the can the organization generics, flow our $X below strong agreement synergies $XX complexity see then cash works around handle, number the also that from it sites were which different see a debt of is we and set XX, down OTC, set course, Eli. our cash today, this Also developed cash by footprint payments. paying here by focus very annual than if these course, had grew includes to been outlook for it four and reduction meaning we annual we've in been all $XX numbers the done base will to years. know, background And end consistently, $X in management consolidation. have and basically you is if the opioid to call of in we we same litigation that the and five-year business. by reduction if specialty, optimizing is between reducing and done concept It's we've year. in do the with XX and operational have having of at dramatic in But sites example you locations look the at number all the structure. board

the the generate leading and earnings we've and business every consolidation us a So, dramatic helping efficiencies in of more cash all to to had year. all, the

will we slide, foundation XXXX. next see that the the in how at compared you of to it look unchanged back business you is formulated our if Now,

day improving we company. the lives of of broad products. of why really million OTC, be all focus, generics our across to efforts Again, new, The range medicines, first mentioned lot different support and innovative the help you kind a here the with leader patients be broad And is say we countries very we products. geographical I range across Our it could it people. mission here, XXX key patients. in patient reason are to a be of be is And medicines. generic medicines, are it like all patients key help we with around of Roughly the of very of and biopharmaceuticals, every a global earlier,

move our lives they have high won't next and a I that with generics If We strategic that and these here to in areas values, business to we specialty we but great next is we about have live employee new that penetration that specific which drive continue innovative look then really secures to that and generics, further focus launched. to are talk can see at the on with unchanged core in already in of to position we comment the slide, details, products products our be the and sort Slide continue the is the time. launched. then we of They're debate stay retention. leaders build products business way we course, compliance. very If of in an you secures developed have our to fundamental It model can fundamental secure model ethical in simple. the very, strong generics? always the biosimilar you And of and in uniquely are business what's Innovative all

successful. are generic expires patent and competition. get very Eventually you Some the

the off-patent would very products say a what is of XXXX products many year simple you going generic the you This in to XXXX. market off-patent. how is showing went value the overview So feeds

see here products mix more are going see it about XXX XX billion is times also and in roughly XXX are nearly XXXX. like go small the there's clearly and you've off-patent, and molecules, billion period XX five-year a that small marketplace this in XX XXXX biologics. billion in IQVIA a more the billion for which This small forecast gradual that And XXX can now therefore And off-patent. biologics. here. there's where many the many, me five gradual And and and talking say next the therapies biologics; we in molecules, to shift years you can shift you new is heard between illustrated innovative of is So very biologics, in molecules a

goes off-patent. of close getting are biologics the being what to XX% So

uncertain biologics, will do be gets actually five-year prediction value small projection products. revenues But it out, is my bigger and than the and you'll do is the XX/XX next more a close to molecules a different of you the years, be be you period. five this even will little for if it If how between further

message versions but for then off-patent, way at look of worldwide basis. market having business So is also launched, grow and this generic around the If biologics in here, another the being here being short is we in total of going prediction to going next be an sort plenty X% look at annual there's is the molecules, made having to the a This biosimilars to launch. just it's small Slide, huge generic it's it. and predicted you can see and on market off-patent

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need projects, off-patent cover many but many full of too means will world going off-patent. have of we everything. have a the that's a can't too and of XX% you to XX% covering than projects what's internally. cover guidance That we range want our really So to products, thousand technologies. more We going There be value

that is kind as patches, including very such means of doing And long-acting inhalers, the space them by early order that you market good footprint sterile for to and a of have that to continue can It you your to them injectables means footprint be first-to-file profitable the to need share integration, for doing goes in that a U.S. and good need your different position complex technology lot some you technologies off-patent. being the of things sure a Europe simple, that also make by the efficient injectables, scalability. whatever be it also product and platforms in so for whole you in to manufacturing products. are need that because launching fast all We optimize within get we generic world. pharmaceutical Some by R&D value of factories that global produce and

elements. we Now all have these

I'm are them, XXX% that continuing in generics leader We improve the and forward. world will to also confident we stay going

growing, and So revenues, And really the products you $X strong going by Truxima. continue already the something revenues around when all simple. America. share and strong in recently the thing And will to before, because see more more with than more including of billion now the And growth to this had it's be off-patent? more of world, we we new growing the of this and last and saw is of is, statement Why more course where saw accumulated and grow a case very strongly, XX% biosimilar North gain it over our biosimilars. big in biologics products. success and that it's over very how market we marketplace volume with Truxima is in that years it's Now more off-patent, are more go saw there's products course business as five

Now, typically of same but in is each different biopharmaceutical a space some you different could bit need products, strong in typically if the bigger. because projects course, Slide, in next or space portfolio the less the then technologically say little product biosimilar again order to are have to skills less you be because it's not need other we in to leader radically a there are it's the you move a in that way biosimilars,

biologics value you we want billion XX% are can basis. to The worldwide typically therefore $X have philosophy do products more on the today, you projects. but that So off-patent, cover And we a going sell with less billion, have products will billion, the $XX complex. and $XX $XX that projects billion, of somewhat same the

see a set you – of could different you So need technologies.

full all in-house. chain have technologies, value the those We

We expanding here, significantly are volume German our capacity. [indiscernible] in

be chain So we innovative biopharmaceuticals for huge say The patented, doing are actually this doing a of as of the a in are value The to and There is very, both very and leader the believe of very and future biosimilars. between in rest we will overlap same. we world. the become demand well in the positioned actual is Europe whole well and biosimilars, manufacturing [indiscernible] the new focused going forward. strong you U.S.

our Now look pipeline. at let's take a specialty

focused a have pipeline. specialty We

much We in AUSTEDO as the that the a an have details instance go immunology, strong projects in launch area other but projects about the MSA tradition little have neuroscience focus year within and and the where can know also us R&D area an focused ago years most. you with into for a have too here. many many, in for as you have we a that of years. and just for we won't R&D as see Day two we we where long, we you have Head in about areas disease, really AUSTEDO with teaser, new the today here will But members Movement take disorders well we Parkinson's plan have as more That's to I of where our where of is the marketplace. coming would projects tell will and management key

hurdles. the that as it kind in some very the very, projects the right we immunology neuroscience overcome very the spot. stimulating means the in regulate that's know, in some have that where also you of interesting you All that agents and safety you exciting of And oncology, down effect exciting. in tenure only projects So so works immune

that working doing We into and also the also Phase in going well together Takeda, very have category, that's with are in product license X. they

exciting we'll of things back during So detail a year. sometime the to in common more that get lot

the out it change relatively know, all to we targets, you gets make the it continue we I to for simple like if future getting are share how the next gets so confusing. the XXXX, the There stick you as close set to and targets Slide I've that and too to you are improve term a new good confusing. too analysts saying Now of your probably say I to it them will no with the are because targets year all And the see otherwise let's of big in And long-term move margin. long-term for because Teva. would also operating XXXX. end time, last to really these idea surprises. investors it's And we been longer

heading XX% We the XX%, down debt. are that's the year for to for past target next we heading continue take the now

XX, we revenues. below the of will we a focusing also it that course basically will This we of So strong ensure flow geographic and revenue mean now mid-single-digits. of the end do some X growing going cash and that small we earnings on otherwise both any And of revenues compounded cash we rate or means do debt focused less we products, at this of ensure in we'll are And we'll will of we have margin, course And need in better that we that annual might acquisition very expansion this on that period growth so growth. this. do hit hold-on of can't flow, some the are portfolio. our strong

which the the Thanks we in, It's flow a it and work market. come. continue for the means shareholder predictable will growth focus margin leverage which drive both business to and you the doing miracle. a our thereby The in just continue what and believe So and listening we we'll to our our earnings reason is and sustainable in with to not business, I it about Q&A. very and very our return generic move the strong up. with and on last generation can pipeline think cash in we increase we reducing have growth all slide, We'll why foundation, to biosimilar on specialty thereby It's strong on and pipeline, sum revenue years now my how showed to a AUSTEDO on well value. combined AJOVY, we are up just in based growth solid

[Operator you. go ahead. comes you. Thank question line Thank Instructions] of And first the Balaji Please Barclays. Prasad from the from

line Your is open.

on place. morning and question. Good Kare, getting firstly, in everyone for the thanks the taking settlement Hi. congratulations

doesn't, about is there to. it there Allergan guiding So the the I'm settlement limit settlement also just time curious – and a term to speak happen? that Allergan current And be could are that settlement caveat is growth on the you And to the is chance specifically mode? with steps there when know you're longer rendered a next the what if could timelines by and – focusing needs for could the

centered in been billion almost now a a have of flattish $X think We size. to condition around growth Teva's as generics

longer can to look we Teva as equal it growth this you. the of to out growth X% fair Is deliver So longer that Thank growth? generics to term, plus. than assume greater or generics term market

Thanks for those questions. two

settlement. start the opioid me by Let

participation finalized all included it it. the if look to the the do to as and wording. distributors, And get in actually the agreement way then all an terms on at So principle how that has an to will up money the and how coming expectation you And and agreement and subdivisions gets you ask the this then is will be can means start, plaintiffs' passed, and they evaluation, subdivision, start it that after done subdivision we information next then implementation actual and similarly, – have meaningful. say very then did I to you where would would clock year. it an have what the months We we distributors. and you given have we that a to state, by the have in. the with given this states that lawyers expect once some have that get agree And sign those big states know that have the product then into that of in and and way so that will then do you is course both typically way mechanics agreement. weeks, the implementing. for our from the is then people state it you been the opt actual the And on. by for to sign for enter because all it, be And and And states definitely saw in you agreement works months working, is start you works the three three the and they subdivisions enough the And sometime the and and they J&J you timing J&J

the will everybody involved. Allergan, far will best assumption of course of and think that an in terms In the by they also be here course, And most also that. for there taking the where of likely be part that's I agreement is

biosimilars the a of that that's, billion to In around of then rate but sort around billion, growth business. you're in terms of the right X entire rate, generics X.XX for course, U.S. absolutely is run not our

biosimilar and piece, piece have that the And and so the I we X% traditional will growing, biosimilar the generic also means And rest significantly. maybe say North and complex or be then TCE business do the you but also America piece of some generic see would think Europe have have specialty the generics, world. not be the will basically in but business generics. the in not We flat, you'll that X% growing growth on you will that a generics

growth so adding now biosimilars times off taking to only same this now million, close into for drivers went and And sold dramatically, first another see a AJOVY we've single time, say At AUSTEDO guidance speak. COPAXONE digit. dynamic. coming so X year in. many had time, had growth the if for would growth but the billion this discussed XXX of five We've had the not from we've are detractor that You'll that not it to the the rate, bigger to than just the for we from years look you drag we now, at the you and to

sales AJOVY reached now bigger level they're of where declining sales COPAXONE. combined and are of the as They've the twice actually AUSTEDO So big. than

will that say, next the AJOVY for symbol grow XX% the AUSTEDO per in in year or grow both delta of and could sense and have XX%, means then you portfolio to growing a specialty that continuing that of course by if contribute math, So now to many years.

looks very IP XXXXs. it's until the that AUSTEDO on the instance safe for like situation saw early You

is going a growth forward. AUSTEDO So path long for there

And that means Thanks questions. the combination single-digit growth. so whole can we we are for confident that that achieve

Thank you.

now of will the next Rich take Please line go Nathan comes We question next And the the question. from ahead. Sachs. from Goldman

open. Your line is

growth. follow long-term us just what targets, a wondering I if thanks, and similar digit And the could question, about single speaking underlying up slide. revenue Kare, to those, was put you blocks think morning. of sort were factor had revenue on you constant currency Great, I of term to, building last the good guidance that growth but help you main for wanted target as the mid on the

it specialty pipeline guess, areas ask follow we run the maybe the slide? how that your talk other you important if like on some targets of spending your on R&D So, new long-term as R&D rate as a focus the to going of the Could assumptions and any is up think I revenue the of you pipeline, looks on And had reaching achieving narrowed and I on forward the programs about you the maybe about reduce that focus percent for targets? Thank ongoing. just a you. and could

those questions. earnings to for you not first, debt between targets for three long-term fourth achieving the margin, then dynamics the the and targets, and let's targets target. we Thank are If take say cash linked different the the

fail any revenue on fail we reach four will we the growth course, growing answer will absolute all the do to means targets. But, even that like revenue three the fourth of three on to other the to targets, targets growth plan the simple in absolute we we if be three and achieve if pool So to the plan earnings because need of target, we'd is be achieve We don't but we but targets. profit growing order reach the will targets. they have the more just that first than not

not AJOVY, will there be growth we year. biosimilars, And half try are So next all to quite to growth be is coming name the just way. Risperidone which will first specialty, which still and from for of but from I launch targets There LAI, what expect also [ph] building UC simple illustrate that AUSTEDO committed contributing. we to brand blocks strongly will from achieving the are be which coming a in and four

– So the in there's for driving in growth, in growth is not and the see Europe, do also Europe well as will doing very portfolio many be so years. of just in of specialty Europe continue you to U.S., AJOVY will but AJOVY products, is which continued

traditional in revenue stable generics growth position combined which be a altogether a number So that with means grown. the will drivers, of overall there's

is question R&D other about you're absolutely right. Your and

couple increase you where we that a value also closed high best and to We not area are say is high value scientific are we neuroscience historically, stopped the was have could and immunology. enough didn't of have projects. and also our the have projects. These the areas we right most have see give focusing – you'd expertise we patients quality we need very being we they Once to enough, projects because unmet where And have these that in then showed generics the therefore means have we We chance invest not percentage means in and if of needs, revenue will invest both not do being R&D, essential to it we the in we do specialty. medical growing of And high continue a we're successful. biosimilars you, all which either, R&D basically revenue. they plan succeed, to them which we basically that in and plan but they reduce

the questions. little bit but more, You nothing will see be Thanks we a spending that will for dramatic.

Thank you.

next And comes Evercore. We next will now question. Umer the the from take from Raffat ahead. question of Please go the line

is open. line Your

Thanks my Hi, question. for taking guys.

and of of so the value. sort adjusting on I'm of sort billion. this had $X.X the the $X.X cost payments time. of cumulative that of framework equivalent your $X.X implying quarter, you in $X over And settlement P&L, announced last billion is out which Separately, billion NPV $X.X is was – implying cash drug, was the to on we the about for know an look billion drug which billion charge So of of basis,

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want just square I and that. So clarify to

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and just I'll thing. accrual I'll to and get then the back give some we Sure have for an Allergan accrual details explanation the everything. The overall give can you of Eli includes the and overall then

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obligations, all picture is want some X.X give to of you maybe the very product Eli the of including net So good involved present a some, and color to here, else value everything it. being but

Yes.

including cannot some and So, years actually then this, we you our to we few that's some are the really around fees. call of and there Umer, is just each considering cost. the this not thing in line, which year. elements then one elements, amount the to that top as and one this we other we – elements other evenly comment cash there there Allergan that again comment a high on to And level, the then But understand announced, same is what related XX related the straight element X.X to X.X billion, XXX product on billion alternative is have element

their to amount the that actually commit some have we we seven need We own of front that already commit. six, the And settlement schedule kind years we assessment already at the have period. start loaded of that on that some prior have

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just… may I If

Yes.

what's is billion. amount if $X.X may just of element is the billion, $X.X If I clarify the cash P&L the The I announced may. is on NPV which

$X $X.X So other is elements, cash cash just of you that than the it's these amount on “that billion, does announced higher $X.X that some to billion based closer of actually billion mean mentioned”?

plus in billion, no then XX%, $X.X speed the the [indiscernible] which So theory potential to $X.X considering cash billion billion, $X.X right? product up it the additional and if insight, The to one cash to we in getting actually announced is $X.X element to billion. from up convert took element cash, actually product,

actually elements we trying Now paid. to assessment that in we NPV, than consider that, is from order because estimation not NPV already top the there cash of right. are straight getting you on And consider other and of because what get have line NPV and what what grow top straight the really we line And on the and risk it, call kind we we payments, you few different I'm tell right. actually that's it's upfront more is to the

try I to what frame. that's So

for you Thank that.

have Okay, comments any see thanks as we that, regard to for part of to we don't the Allergan, final them settlement. expect further with the to but question then

you. Thank

for questions. the Thanks

next line go now the comes your We'll the Please from question take America. next question. of ahead by. stand the of And line is open. Jason Please Gerberry Bank

morning. guys. Thanks taking questions. my Good Hey for

the finalized, XX% of it do sorted So, comprehensiveness the it like of my J&J second today, XXX had was sort out. of think, got the litigants we then I it as half agreed, in and question the with has announced deal when of were days deal, all later, think, XXXX, I to know allocations

via of already as states this deal. similar out about J&J and a trajectory think that the allocations we sort on most the should of subdivisions So sorted deal have and the like

color And Thanks. more any So Just many can states you I'd have how could happen curious almost can any shed light think group on this working on if then for you dynamic? this agreed sooner. that. give

think, is short I is, situation so Yes, the the answer very similar.

out. course details basically details. and haven't other percentages, and sure number if to out have been ton you know. details those agreed I'm worked all sense of a a all details on it on all been make So you states, And the the as worked all because agree of and have that stuff, subdivisions is There doesn't on

So, are timing be that's all of been terms the done. we that timing, And similar. again in estimating would

the then settlement all weeks, principle. you to in you understanding negotiations point that between as states of the the whole the we'll But of obscuring where the wording are parties So process subdivisions the that's subdivisions, is by estimating alluded you have states say majority and far and settlement. we nationwide people course, have, the within rightly a that opt and of coming that finalize in of and update, the and will the

So we what will similar high participation rate you with we see are optimistic saw a J&J. very to very probably that

the the we J&J And states hold and have actually some of out settled. distributors the that on free were already

quite As you relatively have the know, Rhode at outs. we Virginia, the opt so that we so settled will, Texas, end optimistic West few Florida, have we of we are see day, settled settled have we Island,

it. you. Got Thank

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you. Thank

will coming go it's ahead. of next Verma question. And the Ashwani line Please from We the from take UBS.

is open. line Your

my Hi, thanks taking for question.

the to participated understand the that for on XX So curious AGs, Jason's join of participate here there why are the the that remaining this negotiation just the first for or not first motivation side in hands so XX the day? the you coming so on level the question follow-up the gives what that's opioid to saw can they So confidence they in we like agreement. And second. negotiations weeks? the news media just And just in like AGs in-principle I'm that question. did actively in in

of Kare Teva? of remember this a that is and part be granted that the still that the contract anything embarking to you'd one closing you front. seen opioids chapter know next on assume wanted two-year in we expires current now haven't year can the prior window are last was I XXXX, the your on the just like at extension November, and on story, nearing but ask So phase time We the closing. expiration, presumably we that of to we the extension

that anything comment really on be can So helpful. you Thanks. there will

Thank you.

happened the compare the to quite the both group say subset with So, that you states. It's of negotiation with the, with distributors would participation, on a J&J. regards normal I again, children would what and to is

directly rate involved. have said will It's not states it that So states a happened no said there that very, indication up those. end in to they before, I with no and likely, There J&J hold-up that high distributors very saw, as being the like we end is would participation very some settled participating. as before, just up of with I already number the states and other indication of is that we

everybody So that be I that regard in. to we And contract I nearly are expires as join But will quite correct, actually say, XXXX. right as a thanks for situation, end it's settlement the the of today. now will With really any with don't future, have question. the you my this optimistic where to regards have of to that comments

Thank you. the on question. We'll now James. from Please ahead your take Wilbur the And next line question comes is the of line next Elliot Raymond open. go

Thanks. Good morning.

North here want drivers the a key Just shift couple gears revenue and focus business. to American on in of the

which we starting terms if general of terms just of latest an volume just then terms see pick getting approval out year. Thanks. the even such in to trends get North maybe But fairly competitor implying or want more you of erosion, price strong, also expansion into or market, in new follow-up, generics trends, may a North of specifically, as be on XX year behind in return seems the Curious this indications money that seems your outlook sales FDA. earlier complex an to flow to put First, over generics force. seeing starts been how any are to to for seeing relatively product your months, But get thinking incremental AUSTEDO second thinking are be patient you flow patient the approval of in expanding new overall read volume. what specifically of the up. trends, possibly XX be to patient a point either have on the good investment and activation a about approaching your American new focus DTC half still And on next difficult inflection American DTC of relatively investment wondering about AUSTEDO as generics, key terms we're

two I'll give about scripts the Thank for questions. then Sven you progress give with very it hand answers. to I'll brief a patient. over the on very and Yes. We're AUSTEDO detailed to those happy and answer

of a $X that generics combined we with the And in looks good. heading America here the America, billion. the North in performance second biosimilars So, quarter, happy about North also around in

more good. that details So looks But to for over Sven.

Yes. Thank you, Eli.

new year. are in the we also versus patients So for first the this strongly in developing same NRx grew the of period. And growth TRx of the AUSTEDO last half year had strong XX% XX%

in So goal we activation are for of of this key the definitely achieving and objectives our terms patient was that year. one

sales confident the for that also we second we that half set our For of ourselves year. that are reason, in target we achieved the

your the we already investments have area. half investments, we've in to activities. question believe of that on year. prescriber actually And and base, on effective. about seen patient We're activation that that to have significant the these titration was on now the increased and in we this focusing a fact expansion in our sales, first TV our salesforce potential investments also And of adherence As on goals the of patient which achieved downstream marketing we other we campaign did our speaks significantly activities, we terms the management,

on we expectation development. fully AUSTEDO the rates. of are On generics, the back So trending is erosion price on our top that towards level is generic historic

to does our we expect not stabilization of don't and not especially year. segment see stable for portfolio. erosion, we half incremental erosion, generics additional that an We mean just we price price the this in have It an expect the of acceleration have second base do for

have we and inhaler barrier for reason that and year – more are we have, products believe see this But are a we durable other rate development, that injectables. up see in rate to base than launch, new long-term our They we right, course, long-term other is the which of launches we overall generics higher of that we of shift expected our for think and the generics of generics, the you're biosimilar approvals. barriers that FDA to that, after happening currently of lined we EpiPen, stability next generic will because business. about high that And have are for for for with also significant business the sustainable patches here is of that product so the year. get the approvals what concerning seeing Humira future, I the these business. we now factor biosimilars So and two own our inflection for course, our we profile. approvals launched like complex some especially most generics is have point optimistic product outlook we XXXX And are pricing we're business more a the North elements American the gradual significant And

Thank you.

Thanks for the questions.

you. Thank

Please We comes of from will ahead. the And Gary line next Capital take Nachman the question. BMO Markets. go from question the next now

Your line open. is

morning. Good Thanks. Okay.

catalyst stage growth one doing start give need part of be as seven any I to revenue And want order that to have you'll much that'll if catalyst front you. soon at in payments Thank you back settlement over give the next answerings from know give years that? if long-term leverage highlighted And that of end how even Day you development out proposed specialty highlight. spread the want to us magnitude, then you don't of can you us specifics have that, And business over to do pipeline be Just could are mentioned just does the to Umer's what how be but years? So is on there? to objective, anytime on idea us a you an able you in the element, then the first can? model order give to loaded R&D revenue again, better the the that question? will just you six where key if much how us the some

Thank you very much.

actually then we some are year. that individual done Eli So was this already if was have paying we that take to first, with what the settlement where we current cash already alluding there are settlements states

quarter. already in first actually paid the have We second the and cash

next are from look per then you If going year marginal. variations actually year and forward the

and divide imagine factors and should dramatic. the total marginal. you It's and are you not down So it up swing then the by XX, amount take

per and all say different So $XXX for the net million $XXX it's year million elements. between cash somewhere in

a So extent, it's already that we it's this in already we loaded far. not so of couple have paid did settlements some that the hundred some frontend we where million just year, have fact money

we really that's settlement. small you development already individual business on the on, development products. of it we business side bolt-ons deals do So do the where Then say

development a UK, UK to year. deal a behind that's we planning did next are the also we – in the launched Humira Lucentis. that's just the launch biosimilar development launch the with biosimilar we it's that instance, Alvotech, business For In for business biosimilar The Humira we're the deal. planning of deal

development business deals so. continue and we two do we will So do to

is think about Because room, do If this more a something slightly the sheet be since the at in there more period. five-year will balance end below the bigger you for that when of debt-to-EBIDA room to than we're net significantly aiming debt. growing that therefore you Then over declining hit do around modernly that growing debt-to-EBITDA. of of will net net period, on course, the X EBITDA then and times a X, if net the EBIDA sort math be a constant you

lot of acting year it two one you And details extremely can setup, smaller say one now, clinical and view, companies of really can that course a you into a that the bolt-on revenues. you risperidone be targets room products when good these call hit and BG. where of With companies, and and that different to a exciting opportunities would of have just looks long months. you good get partnering things and do then of safety. that, the that continuing we do. of a from that won't need I end is don't will there's I and of And but improvement partner bit it that, to XXXX. the or But when do to size to it below think a point both you're efficacy be many who so, go you will or within You major so lot commercial little for psychotic and before the think lot still there's there acting of at of our so I long-end they we subcutaneous it's, the get a next then close continue course, more pipeline, a there, And with tradition have some things we can there, have of regard element means small a develop do works the a in they growth

finally going questions. to year. the that Thanks really and launched nice be to that's next approved get So for

you. Thank

question. the ahead. line take Please from now the by. next Please Sandler. will And We stand next the go Piper question of Amsellem David comes from

line Your open. is

Thanks.

questions. of couple So

a level about the business. at thinking just high one So

wanted U.S. is your able being be about brain of just divestitures, about a peers, and generate up thinking assets you're I on frequently. more quite your talked then major openly to as assets. pick the and divestitures aggressively topic of to to a brand particularly acquisition Viatris, One that how and towards a perhaps means Brand proceeds Kare pivot comes question

ramp the opioid about but you? adoption And the you general just gotten now you've particularly settlement your thinking how thoughts not that in are there? the just that, just to largely then also terms timeline about secondly, you. thoughts Thank here, latest of gears that you're and how thinking how biosimilar, about on you're switching thinking behind just So Humira

the then take and the the Thanks for one I'll first second questions. Sven one. continue can

in the off the last years effect. believe a gives So analyzed what divestments business, we the is value chain, and had we business. with have that regards synergistic those elements us the synergy no all kept we've rest thought strategic entire really the entire the that with And elements done we strong to we've sold of five we've

parts keep and business all plan So plans we have to together. of integrate because believe fits have the elected we the basically divesting our it have very of optimize we no business. well any We to

what the flexibility reduction more and margin we do the said, have to and say building So a in branded of you cash of will margin strong – like further and but margin strategy then we so organically will reduction will and it Humira more optimize, more the you explained foundation. as And increase the working And margin, operating debt of the or be generate then Sven? one in debt acquisitions and do free we more stronger a gross that improvement. products on to on could to I improvement area, either the earlier further the another and consequence with

you. Thank Yes.

about I of think expectation was uptake the the year. next question for Humira

of Amgen XXXX build and reminder, a uptake are think approach. that again. market comes a largely they be One with will they whole as I And biosimilar believe the happen the and XXXX, in when receive range PBMs phase biosimilar in be will AbbVie. be a that Just in believe then how summer companies book a opened other XXXX primarily will the of we and offer the the you the good will including in of two-step like contracting by in then their get whole customers; us would position. of contracting from second I in our to fined January July versus they XXXX. strategies a

you. market end are discussions access companies And about product at We in all all year. the that Thank with profile about already we next approach year this know been have think contracting our to in I we best customers the the of done. XXXX. for of when the the all Yes, and coming more has

in day. Bye-bye you nice very a questions your listening thank and for and for much all you So thank have

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

Speakers, please You may all disconnect. stand by.