Teva Pharmaceutical Industries Limited (TEVA) 10 May 232023 Q1 Earnings call transcript

Hello, and welcome to the Q1 2023 Teva Pharmaceutical Industries Limited earnings conference call. My name is Alex. I'll be coordinating the call today. [Operator instructions].

I'll now hand over to your host, Ran Meir, SVP of Investor Relations. ahead. go Please

copy Thank presented hope Alex. our for us found of website morning. joining release, well our release, Thank a on this as have you, call, had We copy A this earlier you was slides review tevapharm.com. this an today. press which as being you, the issued everyone, of on opportunity at press be to can

forward-looking our No. on statement review Please X. Slide

available today's is our and XX-K will our forward. Francis, Teva's non-GAAP and business results of Additional our earning Teva's QX overview information regarding in and going measures release performance, these statements and financial XX-Q. call, CEO, on SEC events, Forms recent priorities XXXX an To provide begin Richard and

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

call officer. on Eric and Sven Joining that medical chief head the Teva's and the our during available will business; Hughes, today Richard America follow of Dr. question-and-answer presentation. the head They be are session will and North R&D Eli Dethlefs, of

call run Please Richard, today's over you Richard. with turn the will will that approximately call to And one if please? would, that, note I hour. now

also us and morning afternoon, you, And Ran. Thank good today. everyone. for Thank good you joining

at Now just impressions and of before results, take QX to I I'd you start months my thoughts the had getting I a I've time thought Teva. to the few give bit of last

the I underappreciated impressed have is around it's of opportunity short, and think by the our I've being many that and currently. the the of company, real in Now to while of we this maybe for because and talking company things seen many world discovered people,

sort I'd go focus me let like to of on areas here. into Now four

you we more of most company. in as that. And of truth, generics than are think know us a I Now

continued recently product, emerging growth business, be this is driven UZEDY, but about schizophrenia fuel long-acting We gonna of by and And our is already, AUSTEDO AJOVY, this have an revenue. our primarily to XX% going by forward. and innovative supported total

portfolio, is benefit I'll coming a of years. biosimilar We the which brand also talk opportunity about to a in patent later, few bit have next off which from $X value billion an

Second, our pipeline.

particularly know tell understood. we not known have and antibody I design profile some organization, you, some and fully expertise. comes R&D see think our through I assets. definitely in dug here. seen many we risk our can a our that it I And sort to we I as exciting of And But is pipeline, this formulation assets unique Now deeper, I've balanced capabilities have of when go as you'll on

global our discovered, Now the U.S. coming business. And is this to our I've core a This is strong more business. generics business, than core what

a generates fact, And emerging is which down to it outside debt. pay in of cash, In Europe, and this the business XX% that we're markets. obviously significant and business U.S., our is strong using currently

something we're then great moving people, which as here and real with Teva this probably and forward on gonna culture, people Now a move most. leverage group the can-do the new is Teva at of me strategy got is We've what inspired for on a great attitude, growth. our our we to

goods, forward. which have cost going challenges, these have and our Now short-term with headwinds but today, deal particularly said, we'll discuss to around some that some plans of we we

XXXX. that, of reaffirming our we because And are for guidance

strategy our to day, to York we're investor Teva. next to would just like our which the in at everybody introduce slide. growth on new invite we're gonna week, New gonna hold moving for next where Now I

previous and unlock the we how really been the outcome. Now described I'm along company, team changing foundations in this working for the create with going real slide, Teva challenge I've can, built value ourselves to will at others look with I strategy with to excited market, many forward. strong hard the Teva, here the about on some that management be of executive the at in and

forward, made follow a this capital some going have have allocation the clear We choices in where this. prioritization. And strategy, clip will company focused some we

next said, I Teva. chapter where we as to please week So join unveil new us a

Now moving on to QX performance.

revenues. Let's start with

were Our revenues QX earlier. generics, I up were innovative XXXX $X.X up In currency was up for billion, in up QX local in XX%; XX%. that business we're up X%, that international European currency, X%. and AJOVY, and local versus mentioned AUSTEDO driving markets X%. And

a think I the on performance for QX solid revenue. So

Now a regional perspective. taking a from it look at

X%, X% can you and growth, As all markets. North X%, local America; Europe; or currency for regions see, international in were up

the in million are negative $XXX Quarter our keep would we X and dollar, I mind strengthening revenues did that XXXX. impact versus of by Now U.S. a still affected have

to slide part talk Now as to that the moving about on innovative next portfolio about. I this of AUSTEDO talked

TRx, were its in up Revenues million, I versus $XXX was particularly last XX%. it pleased year. XX% was up

this Now particularly and untapped as I'm an very opportunity. about see excited because I AUSTEDO

from XXX,XXX and treated. suffering XXX,XXX condition, XXX,XXX this -- XX,XXX have people diagnosed, only only We roughly then and

So we have suffering grow this help and condition. from product patients to opportunity significant this

next has the XR. the once-a-day is AUSTEDO see been improved, This formulation. further this of this slide, the launch On you'll with patient offering,

I Now many for final patients on these piece multiple think the is AUSTEDO appreciate, obviously, of of because, as medications. the this puzzle are you

a some offering having those and strengthens the advantage once-a-day for think, product offering, caregivers. and patients offers thus, for really I And them

portfolio another to on moving AJOVY. part of now, our innovative pipeline So is or, say,

currently Now Europe, in in million. at North a AJOVY up in quarter, America, almost million Up international is XX% markets. $XX up XX% XX% and $XXX sitting reaching

not and bring to its category. is what what fact I've we So we've before that about the in this which to managed we're a all market the grown regions, AJOVY about. was product across reiterate, first I like pleased very I'll And mentioned

two. commercial number this, often we In in share fact, the position areas, and growing in many can what achieve muscle not, that we've market in But despite a and of capability were we our were we shown with many significant markets last.

going see AJOVY expansion market growth still I geographical share. forward expansion a to of with So and

field administration risperidone The within needle, be them. it, when were in with are back innovative with risperidone, board-approved available. important practitioners two this sales actually UZEDY, And the There's product on right XX I in ago, of about we new representatives, to about that them about of our was some but them six came a many would hours long-acting enthusiastic profile. subcu this to which we discussing is we're and asking AUSTEDO, about nurse rapid lower risperidone. to why was the weeks have psychiatrists speaking clinical U.S. our a they long-acting patient-friendly so and and family excited to volume. recently to small Now of this was absorption fact

these them this an for product All it patient made easy-to-use of population. in

in mind keep is opportunity Now comes when billion market a that the schizophrenia. to $X long-acting it

a we think revenue forward. so generate UZEDY And we real going opportunity with some profile, to have

pivoting to our business. Now back generics

both XX%, markets. As U.S., continued in And in I have mentioned we're strong core our outside business before, attributed growth over and to those XX% we seeing in currency in the a this local regions, is capabilities. of big international X% Europe,

a good pipeline. We can launch have portfolio. We regularly our products into

we We have have a and good supply a good infrastructure. commercial chain,

forward. leverage we can't reason see this going capability to no I why continue So

innovative you'll to pipeline move believe to highlight this notice assets we for the the our to and Now separated start really I've And of we that's pipeline. have pipeline, to the pipeline from it. some and on the biosimilar exciting call,

at people from franchise; more slides. here, describe long-acting, But couple of bit which Dr. talking to add detail SABA, far this in Phase more strategy call about in olanzapine, of our depth out long-acting will suffering another X; Hughes, for a more presenting obviously, head next which a just week it medication in few pipeline our schizophrenia, I'll in in Phase we'll a is ICS R&D, and I'll anti-TLXA Now forward asthma, where in to in patients, detail. our X. today, looking be our

franchise. to Now moving and pipeline our on biosimilar

is pipeline a you in I and good to succeed to portfolio good think a need I've what commercial a have said footprint. biosimilars good and the in to have past

have think those. both I we see can of you

address I a is where to think up we about is that. biosimilar which Stelara gonna question, are and come Now with today,

moments talk that. few to a take about could I maybe So

of So as Alvotech, to you certain partner in inspection the observations CRL FDA a based on their Iceland. in know, many issued our facility

responses communication FDA their expecting observations. is their from the Alvotech shortly, assessing Now for

from Alvotech the will we potential understanding biosimilar Now of timings Humira. launch receives the FDA, of of have a better a communication once

Now going back assets portfolio. from to those innovative our promising late-stage

on step Eric toes Investor some Day, give slight to programs. on just week launch for the it Hughes' a want maybe don't we at headline I strategy these of next brief, keep but when so Now the new I'll

So olanzapine. long-acting there's to UZEDY, a to because, therapy. excited market opportunity the We're obviously, you mentioned move a already I schizophrenia significant with to by this

company Now on with this MedinCell, technology UZEDY. we which olanzapine the product with our leverages is work deeper

of, because proven I'd UZEDY. to think recent been has this approval So the of like obviously,

and Now our our ICS This complex to clearly SABA. market. leverages expertise ability bring to moving products to on respiratory the

hot well-characterized for familiar will have now. I'm products a anti-TLXA, It a and and asthma of of you're could asset, around brings one well-used we two subset is target. it's see, billion. a to a because good after $XX And seems opportunity it because validated opportunity we it see topic be potentially which with Then to believe the which the billion, a competitor. that market, moving we of because indications, right number very only $X.X worth around on We significant lastly, sure as together all this go the

come to closing, those we is important give And on of a and to In you on which day. ours, made. want the progress profile, a commitment take to time more priority assets talk just to but ESG, I I to an we have the insight want we've to of bit investment about an believe best-in-class our

When these greenhouse by few just goal XX% So of have a to let pick gas to it comes initiatives, a reduce we now. XXXX. these to me

on see, As can that we're closing already. you

compliance employees of in met policies. focus XXX% Another of integrity, and all compliant and area on our our we has of been goal business have trained

XX highlight billion from had, countries, XX billion can I to savings in we've the across Teva's $XX across we've medicines and contributed economic $XX GDP generic impact countries. Finally,

progress to our we've ESG think So good made with I regard commitments. very

over I'll that, with CFO, Eli. And hand to our

I'll afternoon were XXXX. morning QX everyone. dollar you, Richard, of financial our billion. starting XXXX and $X.X Thank performance. to compared of GAAP in with terms, first In with first were of good review the results and our quarter flat XX, my they XXXX to the begin quarter Slide Revenue good

by in our we increased the our on business. revenue products, to America, last Anda, AJOVY; QX as currency solid performance provide by innovative mainly performance you year. higher with X% mainly color XXXX terms, from well was some had revenue as North overall To X%. first certain by and growth revenue quarter local AUSTEDO; distribution region. compared driven This In growth

This our and TREANDA. offset generic BENDEKA was partially and business by revenues from lower

and timing America historical to business certain driven in The currency stable is increasing generic due generic to America in Our North of Europe customer North portfolio and bids. line business, by mainly of revenue in in environment XXXX, from terms, segment with generics by QX new decreased higher our pricing competition in parts overall launches. our mainly product including our local grew trends. X% strongly in Revenues

market due in increased our our segment generics coming costs by revenues higher as from international result revenue price due X% pressures. in largely terms, to currency increases, raising And to from inflationary mainly local a of business

improvement $X.XX loss We income of $X.XX million quarter our of $X we of XXXX operating QX first to net of per loss operating impact of per net XXXX, and ago. higher loss income, first GAAP in compared per quarter loss, $XXX same to that a net were legal of the loss share of This an settlement and a in compared Operating XXXX. $XXX million $XXX contingencies period in share in mainly the was million had of share the in the in the a year XXXX. loss and net GAAP loss million GAAP in first the quarter to to of compared XXXX, of first had due quarter a loss

was XXXX, $XX by a rate currencies currencies. Foreign result and U.S. million, other operate, main stronger the other the quarter against during of compared markets revenue XXXX. mainly and of $XXX related of the income first exchange first we dollar impact respectively, operating quarter hedge effects, our of including movements This in the euro to which of million GAAP negatively impacted and

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

XX. Slide to Turning

expenses total non-GAAP the in to $XXX notable first QX million, in of mainly A were provisions in adjustment in litigation of million compared estimated to can see non-GAAP billion the recorded XXXX. legal $X.XXX was $XXX XXXX the quarter connection certain U.S. with You adjustments cases related

update of majority settlement. the the with million. an nationwide purchased you to $XXX provide in million, Other and the notable sales is progress opioid intangible cost adjustments included also $XXX include assets amortization with assets totaling of impairments of which on long-lived of want I of litigation

out During the is I'm states. Based had phase ahead to XX previous decided next participation, also strong level state a high move which the quarter, XX very participation, well. of confirmed a of participation, going we with subdivision happy state we on to report the to

To have anticipate level XXXX. broad from participation half making have the participating the confirmed process, of the in to expect we forward of date, XX% subdivisions, those payment by the we first settlement the over with and the support states we and Overall, of subdivision firmly litigating seen from states. we in move second

terms a represented discussed currency of XX first of Now of to quarter for our totaled quarter first revenue, in moving Slide to X% XXXX. review $X.X I've performance. local compared non-GAAP and already which approximately the a growth billion our

Now like first this I quarter. the drill and move profit the our look down and down gross would P&L margin. to analyze let's at performance

XX.X% profit was in XXXX, and factors. two factors: to the driven Our QX by non-GAAP gross main line QX in compared The was macroeconomic portfolio profit gross mix margin in XX.X% non-GAAP our decrease XXXX.

we and Our first quarter mix with a expected. in unfavorable than came portfolio different

While AJOVY, legacy this from markets, our by key growth and business our diluted in being focus international AUSTEDO, contribution our is margin including solid Anda lower offset Europe our in we business generic continue of brands. area, growth and and

in mainly and As AJOVY. normalized we through by in growth more year, the quarter, balanced coming a mix shift a we AUSTEDO driven anticipate and the progress portfolio toward

was As our impact inventory faced impact that second already quarter. much on of year the sold we earnings factors, I of for call, inflationary and half and pressures our mentioned in held the macroeconomic the previous this XXXX, from in of last

resulted this sold of cost This year. of in in a QX goods higher

impacts majority our impacted also In addition, the gross from margin, and of which our impact some the unfavorable had international segment. activities, hedging with in European we market

of XXXX, including freight. the and on improvement expected of elements on certain in Going we energy forward cost inflationary pressures,

we In addition, our our COGS are taking we driven also in expected measures certain improvement a sequential in chain. by supply

Our QX the by was just in profit non-GAAP in I margin, margin other first as was lower quarter of This income XX.X% QX in mainly gross XXXX, as the versus the operating decrease XXXX. XXXX as higher driven XX.X% which mentioned, well XXXX, a to profit, $X.XX to segment. non-GAAP per We included ended international which I quarter mainly to $X.XX mainly our one-time share ago. due settlement the gross a the referred proceeds of in market earnings compared with lower in QX moment

look Now spend XX. base at let's take our a on Slide

quarterly mainly the million described related a other spend was in As earlier of international of Most increase this as I you our $XXX higher segment. to on well the cost market $XXX our goods can in base a higher settlement to increased million proceeds factors XXXX, income basis. or due sold of first the currency quarter see, which as by local includes

footprint And years have last to over see, can and XX down our sites manufacturing more with progress. transforming operating efficiency. have to and sites Our here, we been this around last the over global you XX the we consolidate next have we five from slide, years, plans shows continue how XX, manufacturing our gone sites, to five

four By the close additional divest already expect we XXXX, to in or plans XXXX. divest close end with beyond of sites to three additional or sites, place

of optimization our operations we and So ongoing this improving drive continue will as efficiencies margins. evolution for

XX. Turning to cash flow free on Slide

the million. flow cash in free XXXX Our was of first $XX quarter

payments Teva's the at in the timing annual flow first due start the paid quarter. year out tends of to free cash headwinds the to face unusual bonus of

also increase changes accounts XXXX lower in cash items, accounts we flow we in which an and profit SR&A, flow cash receivable, payable. increase of in by QX In offset partially XXXX our February. an free provided capital free by addition, including net impacted in working Today, are was for our guidance, reaffirming

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

three next working and we up pick continue to in flow capital expect as a free during cash see profitability we We our to as improvement. our the ramp-up drive quarters

XX. Turning to Slide

$XX.X net the billion of of end at XXXX debt QX XXXX. to Our end at compared billion $XX.X was the

Our to gross senior $XXX exchange XXXX. debt $XXX of at repaid offset rate notes decrease billion debt at was $XX.X was gross end partially million. to million maturity, the billion The due by in our compared $XX.X of fluctuation mainly

X.XX slightly for Our coming net debt to QX at EBITDA lower turns increased mainly due to XXXX, EBITDA.

Looking at to continue Slide XX. reduction our Debt be focus.

of reduce sheet, debt on you we times by EBITDA debt XXXX. see, progress our decline our years the six significant end level to continue to debt can of last as net long-term and the our As we net balance we target financial have this and expect progress further being work to of toward made two in

XX, Slide maturities. represents our which to Turning update upcoming

successfully 'XX quarter align through notes. $X.X done with our This 'XX, first year. debt to the we our debt this flow to near-term mainly maturities was our of cash XXXX, address guidance refinanced senior During of the for free sustainability-linked approximately billion maturities and and 'XX,

notes linked combine our the link Teva strategy. These financing and in previous bond now of continuing performance targets pharmaceutical second-largest funding establish SLB SLB corporate reaffirm our corporate sustainability If largest $X recent between is to the commitments issuer this attention industry. a to and direct are worldwide responsibility and with issuance billion, we the our our

the for in rate this provided interest we February. that in guidance annual already the result Given the for XXXX was environment, remainder in a year, which our will financial higher of expenses accounted

our Now on XXXX non-GAAP Slide let's attention to turn outlook XX. our

we of revenues be the February, both of provided margin. quarters. lowest when full-year to we our guided in four we and terms had in outlook, the As expected QX

billion $XX.X year to to our continue of we billion. XXXX, between $XX.X full expect For revenues be to

per cash flow as provided non-GAAP outlook income, reaffirming operating We in EBITDA, are share, our free February. earnings for and also XXXX

further in a quarter the a second in second margin the year. continue progress gradual We half pickup of in with to the expect

is second saw in company of year engaged the the and last in continue headwinds. impact of we fully macroeconomic the half Inflationary addressing impact that XXXX. Our navigating an ongoing in pressures have to

indicated, in goods As offset increase are we of certain our working cost measures collective the to sold. around

we inflationary gradual easing In our the energy mentioned with expect well including increase a in gross the coming mix, earlier, of and I cost freight. quarter 'XX, of of our portfolio as as as margin in pressures, improvement

the of improvements to my back it for addition, and ongoing efforts to that, drive this In hand results I Teva's expect for Richard we continue now operating review summary. expenses. quarter our to will With a of our in concludes XXXX, first

Thank you, Eli. Thanks a lot.

Today, the summary, for reaffirming in our are to the So non-GAAP we AUSTEDO, AJOVY guidance continue are good XXXX We year. growth. gonna believe drive

And international next to in With working growth focus that. we on in QX, the strategic the capital launch I markets management. more our of framework mentioned, of a launch and portfolio that's innovative once many And with week, and discipline believe I from continue of new daily, person. we upcoming strong cost and performance look Europe in priorities add few you gives as and to to forward introducing obviously, of opportunity our AUSTEDO as for gonna commercial AUSTEDO to

open with to questions. I'd you. like up that, Thank So to

[Operator Instructions].

Our Jason, first go Please question for Gerberry line now today America. comes from open. of Bank is from Jason your ahead.

This for Jason. Hassan Aftab is

your XXXX. biosimilar antibody? head-to-head product guidance. question maybe if the XXXX Prometheus' some last revenue know what favorably to mentioned hedging to allow anti-TLXA And back second that the that risk-adjusted your think first the is anti-TLXA may elements compare maintain And was antibody, that we might quarter, you perspective, you the you saw a on we delayed. then or preclinical have you Pfizer's in guidance drives in confidence one other data the Humira, that the you So on do And this that from published

are? can you so share what elements those Thank you. And

anti-TLXA one Eric. first I'll the on hand to

give anti-TLXA we're excited So Eric, you about so on it? and can advice why

Yes. to highly excited and bring for new diseases, Sure. antibody We've very of inflammatory the targeted to differentiated Thank of anti-TLXA is that potency potential program. fast has is as you, people antibody believe exciting and us. as bring our about the the resources increased molecule. our from efforts our on to be We're suffering the TLXA very our this biologics built program strategy class in our best-in-class. possible. potential Richard. The This really we forward We a to and bowel the way

in interest the one. I understand have and program, this the We best we think

as we'll and Richard our more So week, strategy about alluded pipeline. this to new hear next our

So we'll more talk about that next week.

to the is of your guidance in on question it And you're we because the why that small Eric. is existed. second reason maintaining did we it's just risk-adjust was a relatively we're right, our biosimilar so much, very adjusted, I'd on What Humira, Thanks one knew uncertainty amount. forecast that say

have of launches UZEDY we is our pipeline. innovative and other our The growing

thing So right because we keeping clear guidance do. the of that, to feel that very is

answers that questions. your hopefully So

follow-up. Yes. targets And updates upcoming to at ask just see Should the long-term to a could for if expect XXXX I R&D we the any Day?

know, could investor you suppose make I answer cannot you one question I I that day. to the thing is there's come say So to

-- also We operating haven't we're and changed debt ratio we are the our net XXXX, guidance committing so for the XX% to growth.

you. Thank

next from ISI. Our of Umer question Raffat Evercore comes

ahead. now line go Please Your open. is

for Thanks have quick second on -- olanzapine type I my Zyprexa? on their not the guys. Phase you alignment exactly black your at level long-acting to a if got need Hi, the program. X program. show speak on could attempt of box what you of what to is spend risperidone it Could FDA on Lily And you question. prior in to Maybe secondly, on get that trial the taking then

about I from million shared program. on branded is, a few did know perspective barely commentary have I $XXX-ish you've sales the J&J but question a times, that

very risperidone of truly how that you a potential sort Thank like? molecule true So look do? could commercial the What's long-acting much. much follow-on to

you, Thank Thank those again. to questions, hand I'll first Umer. the for you Eric and one

our asking olanzapine really is so about with bringing in patients it. wheelhouse, The by to for prospect excited treatment excited program. of Umer, about We're program. another our very we're Yes. this Thank you, schizophrenia

subcutaneously. really caregivers available profile formulation, we that that advantage is favorable injectable hope and long-acting that olanzapine. characteristics And to given have given the olanzapine our provides upon injections ingenious technology compared safety formulation a It's a The for are for really to other we UZEDY. formulation both an of to the building patients. developed really It's

a referring I sedation delirium black you're intramuscular olanzapine. and warning the has box on think specifically that injection to of post-injection the

obviously, And of FDA. in program developed conjunction and we that injections total patients of be believe in the our effects. these the very we're study number good we've Now designed number that from profile we'll Phase we've way with a have the to confident safety X the feedback what avoid side to

going looking proud So the I'm study initiated. to we're is forward to well, and say very it's the results.

Thanks, Eric.

So of ask maybe question. I'll long-acting UZEDY. his come risperidone, I'll start it's head your by America, to North answering because, But team also in Sven, obviously, our launching

So I inroads the need, unmet laid with from product based medical the already we've product think can think think the the practitioners some the out. I then nurse we and we the and characteristics the because we of on in clinical got feedback we patient profile physicians favorable make have just

I'll give to opportunity So XX% between catch -- that think call grow bit market, to this a flavor the maybe of XX% an $X we add that. differently. between to opportunity to the but has see Sven to We more billion to

Umer, thank And the question. Richard. you, Thank Yes. for you,

patients The category about U.S. itself long-acting of growing X% them, X.X year. receive injectable So to per we the X% there at are treated million schizophrenia around about know, as is XX products. in

we not alone. do limited a a growing the UZEDY UZEDY compete franchise LAI being good see molecule means always actually with that we that We new into spectrum, to launch believe risperidone it's category. across which can to So the

Among patients is use the the believe product pharmacokinetic the actually needle, for it's hospital and main the profile makes about short in And LAIs. of has that aspects new the that convenience, many options, injection injection we subcutaneous. that several it volume. where get excited We're small key site attributes narrow the the initiated in setting, majority product. It of reason most with the the ideal patients'

loading levels treatment or can XX especially supplementation And reached hospitals. in quite is emergency oral important no category, which other have, drugs hours, compared dose. that in be we to And within for as a the therapeutic the here,

two can first you U.S. the after therapeutic right here discharge one sales for have months. So in that patient treatment levels or you at

And we as treatment. for LAI that can standard new to believe set competitive for compete have product And across a believe highly category. and here said, LAI in we the molecules reason, a all we we I

you Thank Umer. for question. you, Sven. Thank Thank you, the

Next question.

Thank you.

Our next Prasad question from Balaji Barclays. comes from

line go now open. is Your Please ahead.

A me. couple for

did with your of I Alvo's Humira. in discussions see assume want CRL the your posed XXXX biosimilar how is much setback the PBMs. on total is And not it What now? that understand you of to fair focus negotiations a the PBM Firstly, to of the is One. clarify market that for? provision are for you And about the legal are this further also on related maybe you settlements taking could if UZEDY discussions? litigations just these Two, you comment could the to? the that Thanks. What lastly, currently? you potential and

to you. you as So hand one know the PBM, that Sven, I'll

and downstream of discussions customers our because -- X. all end had changed had Humira for of situation customers this of intense June the July prepare with all PBMs, year. happening So at for customers, entry the the major course, market course, to and And we

all That So customers. of now, we received known and course, transparent to is, our the CRL.

to we that have forward has Alvotech the FDA of the BLA discussions the for of approvability of the with and take the concerning PBMs. will now it BLA, interchangeable wait also we outcome the we see And and biosimilar how then

Thanks, Eli? settlement, Sven. And legal the

Yeah. Balaji, the Thanks, for question.

on we're program the assistance -- on some So DOJ. mainly we patient with COPAXONE actually One, few on cases. on adjustments two the progressing had

working around settle And on it. actually to million. we're This and our trying are estimation currently, is what $XXX

HIV quarter, element to actually -- the we payment the the actually one And that's and of looking other at launch. elements mostly is And we're level. that this certain a with kind tiny related $XX million, about relating and actually this the element this reverse high the So we're participating and other this the of but Gilead. to a molecule, timing very rest now is is kind

understand then have, what Eli. solution it we profile. long-acting the profile a me allow the patient to Sven what a great this product and on a think our Based the we think clarify needs very very Thanks, I have And the based we It's we on to good $X patient-friendly on about physician comes and UZEDY, opportunity the said earlier, feedback, when billion is we of the said market. formulation.

We see out. how ourselves that We'll getting market. see XX% to between of and XX% the plays

say maybe one of schizophrenia a thing take a secondary Sven it is this market, and time. bit add comes will care. of when flavor would is of think bit the a to I can This it I

hospitals, those a get into on come alluded in available hospitals, is of make these for departments in. to and by and when there's get ready bit to as This time clinics Sven -- patients to outpatient into so it's get those to, sure to

there is place, sure once Sven. know we happens. a whether But to to want up add trajectory. bit the that, product of a this to don't So anything see you good that having in system setting make I that's

think, covered I you Richard, everything.

As you happen said, will next days. we in launch. It for are the prepared

We hospital dedicated team, for coverage. have the a also in field, but sales both

we is way. working also is clear. we We're in And clear through efficacy and itself communicate well-known, listing, getting believe, That's the compelling a of the all our the hospital can reimbursement I very well-established. And places. course, think in attributes then molecule product

for We've launch. extensive market this done to research prepare

have will So good I we believe a uptake.

in in see to are like well-prepared have indications, have I we But development, other you schizophrenia that a typically slower you in indications. these Although here. think

Thank you.

Ash next comes from of Verma Our UBS. question

ahead. Ash, is now your go open. line Please

here planning pursue already Amgen this self-administered important has as -- are one, Stelara, this think I interchangeability So to feature market? And biosimilar filed can to I interchangeability. on be in just have for an you

also site. on resolution still the Iceland understand, side And Stelara we I the And is that coming think on. going manufacturing from is

second, on the Stelara free here? outlook provided, gross XQ. you then my so for guidance that are first I So flow EBITDA one. here? of can be the the impacted and timeline And mean, get reform margin improvements you how level in launch this deterioration confident can cash That's typically, gradual,

you Thank reach you as guide on in to you some Can improvement year? free alone? cut need margin think the you progress flow you. cash do Or opex gross the

Thanks Thank you, question. Ash. for your

cash on the one, Sven, Eli, And give to to you'd think going the I Stelara the answer. free like on flow. if then

this for preparing course, of Stelara, launch. also On Yes. we are

Our around for the applications, on approval, process. of dependent Like biosimilar all of it site with review launch clearance course, patent be also but will FDA our the the of aspects inspection J&J. license is, part on

be still of into So are drug. interchangeability, of the that your for about approval drug. from will aspect this Alvotech Iceland we question looking inspected the Concerning

our see offering will at we with market of We when how with a But Stelara. Humira, now, have course, from to market competitive interchangeability. formation the also we believe will customers we come look

flow. cash the for Eli,

Hello, for It's question. Eli. Ash, thanks Yes. the

I two. will fair a it's So and it split question, to

for billion. what said I the First now the of really P&L. I guidance earlier look we that in see is year, to the in close $XX consensus And the all,

are in are are of well We we very in terms well-seated revenue. growing the our which means that we and innovative. in set there, And range,

departure the don't we'll U.S., But markets. of also And on margin range on well see see of free outside That's the European, more from cash cash growth we view to any as this our and in gross The now generics currently, pick flow. the gradually. help us international on on our up free flow. going year will terms

second last the certain in base. of element. is actually inventories it's The or enhancement and place on the year our have supplier capital mostly in working part so, a We about it and optimizations

there certain we capital also free to will of us cash a see flow. support benefit helping from working our and level So

that in So the the answer is are we guidance.

Thank you.

of ahead. open. now is from Nathan Goldman Rich go line comes Nathan, question Sachs. Please your next Our

And to seems there there, curious Thanks the much And Great. then visibility inflation-related? maybe level Maybe just following talk progresses? the the up how compared margin into the versus the on I'd can AUSTEDO how was of expectations quarter. pressure for questions. easing last one. gross confidence have just of of you Eli, year mix-related you in some kind of given lead for as terms to pressure, of your be be just that the time about inflationary

sales, I script to seasonality expected. know revenue some lower we than looked there's per but

with expectations? on can physicians drove So what the your positioning Thanks forward? the of full-year context you how that once-daily for in the you expand questions. think going dosing just And your improves do

Nathan. you, Thank

handing So to one Eli. first the

Yes.

So question. Nathan, thanks for the

a gross year-over-year, margin. So five-point you look is percentage-wise, decrease if this in

pressures, related element around inflationary back. of X.X first is to points, day The half this like

the inventory sold flavor cost. say, that elements XXXX the and energy And a this prepared half on we I and in of actually mentioned consumed with embedded And my the remarks, we as across quarter. second and that material this would is the well little received related, that inflationary and mostly And direct impact group went, that it as in across, pricing, other embedded I really, to and came costs related main freight. cost the and

energy freight see and rebounding. we Now,

on combinations rate, the we secure to and element. short to That's We consolidation we're shipments. terms very in see the of year. to that benefit how nice order in a successful on ocean more well versus of a this the optimize had the certain going well items us that We're last sea, for freight as as energy and and as see the benefit a year helped program managing hedging in long

around, is the is hedge element rest points, X coming from kind X.X I FX. other to the The is would really of and product between mix say, and

questions about we should So it, of elements other frame and -- ease on happened for industry QX. lot that forward rebound. that's of more and pressures, that starting in in in your labor, some think now. look A you as how about Getting difference. the shortages to inflationary terms And

how sourcing. we in it in the pricing. are it see We We see the --

this half the of So we get of rest will believe kind that throughout least effect at year. one the

accretive us mostly product portfolio, As more on will well, give mix going rebound forward. innovative look if one you the and our expected in our and this revenue margin

And our -- your Eli. what AUSTEDO with expectations, was then it's line questions, QX we AUSTEDO forecast. to had answer Thanks, in

metrics, of indicators, build and and the sort As a I'm if the inventory speculative QX, you that factor and happens. because largely sure between of aware, you're But Rx, leading look XX%; of QX the up TRx fundamentals, at XX%. buying swing there is

very as weakness we a once said day. was do, there's one, we excited AUSTEDO And about once a if day my think about in with opening now remarks, any any does its your one I had if question So Then it slight I and AUSTEDO and what potential. have that.

very I favorable strong physicians our a and is product think the product as profile. by accepted profile is

resource I to on once it. expectations AUSTEDO So now, the make that. and place allocated sure with strengthens reasons capital we is that we we We've day, allocated to the think match that -- have thing the other And can a happen. to

set the well of So I for year. think for the AUSTEDO we're rest

on of the launch building change high-margin coming, bit a growth gonna product and it's do there to the AJOVY, question I margins. And growth innovative the our AUSTEDO, business. combination that, that's of continued of of Eli mix answer see UZEDY into with the the

about the So question. Thank for strong you expectations your confident AUSTEDO. and

Thank you.

question Schott Chris, Please open. next from comes your Chris Our is ahead. of JPMorgan. now line go

questions for margin to the update. I'm get trying around two me. Just just gross my hands

we a for can little improvement you gradual bit a the in XQ. when of target gross maybe maybe of sounds the balance reasonable just of help what margin rest is us kind for of It's like some the dynamics of kind So year. year the what

a there. So is help something or don't than that? the second XX% we bigger one. just question bit And Or so right a the is XX% ballpark? bounce gonna it more little kind like surprises more is of back Just make picture

level Teva I you you're like depth kind number investment generics the know think next of talking business do week. of you and pipeline Teva between assets have a more making of pieces R&D? about seems pipeline capabilities gonna hybrid story, that overall the kind in How and is I brands. a of think underappreciated of be you're in the is one that highlighting of it

I'm And desire push allocating trying pipeline forward. and as but you're of I value When just not the R&D resources level a and low appropriately at end this that the Teva front. think it's balance the maximize of industry kind percent investment metric, on sales, much. the pipeline maybe Thanks so versus to to going about is kind a of of perfect of to

for Chris. Thanks question, the

start the you then. Eli, gross So margin on

for Chris, question. the Thanks, Yes.

So the in that coming your the actually what now the from on mentioned, impact was yes, And I inventory. quarter, sustained really that's of for to second you we it cost mix most half on call consume coming related of 'XX, as pressures. the in element inflationary depends

actually the at inflationary pressures Considering least starting of from that inventories half different of impact What pricing to source, of from the stuff mid of the on low well we a the I reasons for we I XX will the say at that QX as start rest as increase. new year, the more the starting of now to actually the rebounding, embedded see are currently. to on say, that would are

So look I actually say XX. low would you should from

Thank you, Eli.

Now moving on assets. to pipeline

great bit to Chris, correctly, New give do we question more is question, your have resources allocated to enough good It's execute what we -- understand in York. a a and and that we flavor week we'll is on highlight a you I if pipeline. So capital next

some growth. short, opportunity sure we in But we capital yes, alluded validated. think, the to And we to, exciting prioritize or is and that as Eli to and are certain making we derisked allocate are. degree, drive We're where a assets have growth really profitable to

very to to to sensible that capital seems thing do. So allocate a

on comes across capital So how are thinking innovative And through. pipeline from an to our of better a types talked allocation go of idea sure making two well we're are we're managing that, it our there about those you different the give to then when pipeline how we assets you we'll and to business, generics capital funded markets probably day, that. about

week. into So detail next we'll go more

we So and you answer thank your I question, it. hope Chris, for

Thank you.

final of Our today line ahead. question David, open. now is for Sandler. Amsellem Piper Please your comes David from go

you mix that its gets just to on and differently, And the In then and you're how products, thinking the just entities looking innovation spectrum wanted the Or you XXX(b)(X) thinking far past, Huntington's? about extent it. about can maybe how along secondly, guess label versus upon AUSTEDO, about new between molecular chorea and it talk go? the the expansion the between Huntington's to you've of Maybe Ingrezza are tardive ask potential the XXX(b)(X) balance and about how about expanding to for asking impact last talked I products, question. you're opportunities, I brand

David. you, your question. Thank Thank you for

and then balance how already see correctly on capital. that do based where if and have I question resource forward, we and going XXX(b)(X)s., pure sort effort we to your the we that that balance opportunities is on apply I So resource that of we focus innovation understood think for we

so So that I difficult complex to generics, we in think falls our nicely. the wheelhouse see XXX(b)(X)s, as they're and make,

on point capability antibody innovative this our an and neuroscience we engineering we're immunology focus capability particular from view, have. with of in And leveraging

think So we sacrifice don't one we other. for have to the

we to it aspects, from Right innovative now, mention or I how to have. the doing XXX(b)X we're whether do down capital is opportunities reallocate that the we well. think what is can find comes other we

mix gonna how from strategy I so strategic have Huntington's Sven longer that's see dyskinesia, the and as that's an it a done term, to plan hand I'll week, approaching you'll we're that and expansion, with as to how label Ingrezza the potentially think tardive disease, in and then the operational with upcoming the regard the of back to we be next now. and And U.S. And clear over

Thank Yes. Richard. you,

So XX% of Huntington's about disease is our sales. around

tardive the XX% is dyskinesia. So

If look market, is which dyskinesia the you underpenetrated the size patient larger tardive still population, of and underserved. is, at course, of the significantly

focus. strategic our clearly that's So

first the We course, indication the here that are prescribers we highly that Huntington's scientific. well-established we of disease, Huntington's are For know disease launched. because treat that was that

data and with safety that provide, value titration also combined profile the value have. that dose long-term ability, we the they we options efficacy the They the

that we are For from this in the Neurocrine. expansion competitive category anticipated despite that label believe highly we reason,

as about the On the We exactly factors. convenience also, now the market these that with other with research was once-daily the Richard here missing. hand, did prescriber extensive segments have we XR, AUSTEDO value explained, formulation drug

going we Huntington's forward tardive will a have I disease. very And product dyskinesia in being in competitive think it now or

reason, are quite going growth year the XXXX our in that for categories So for both we optimistic forward. and

question. Thank again, you you, Sven. your for David, And thank

like questions week, just to I want listening starting New ones we asked York XX time doing May I in the and so for XX everybody p.m. remind questions you have investor in at on today, think in, of the the that next for I'd concludes so. day who all again dialing and the have to for all we thank

next now look look again you in can't Eastern forward in person. your if catching up today you forward time it Thank make for you look hearing time, attention and and of and forward person seeing some to week. to and seeing online you and to

for you joining Thank today's call.

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