Teva Pharmaceutical Industries Ltd. Q1 FY2026 earnings call

• Pivot to growth strategy launched 3 years ago with 4 pillars: deliver growth engines, step up innovations, sustain generics powerhouse, focus business. • Acquisition of Amilex Bioscience for Ecopipan, a first-in-class asset for Tourette syndrome. • Q1 results driven by innovative portfolio strength. • Pipeline has 7 milestone readouts this year, including dubiketric maintenance data, anti-IL-15 vitiligo data in Q2, and various data in H2. • Generics business performing as planned with biosimilar portfolio driving growth in US. • R&D highlights include EU submission for Olanzapine LAI, completion of enrollment in DARI phase three program, positive maintenance data for Duva-Ketog, and progress on anti-IL-15 and MROSOMIN programs.

Revenue was $4 billion, down 1% year-over-year. Adjusted EBITDA was $1.1 billion, up 2%. Non-GAAP EPS was $0.53%, up 2%. Free cash flow was $200 million, up 76%. Net debt to EBITDA was 2.42. Innovative portfolio grew 41%. Esteto grew 41% to $578 million. Yasedi grew 62% to $63 million. JV grew 35% to $196 million. Generics revenue was down 13% excluding Japan and generic Revlimid. Biosimilar portfolio is emerging with 11 products on market, 4 more to cover $16B originator sales by 2027, and 9 more to cover $58B by then.

• Reiterated 2027 financial targets: revenue mid-single digit, non-GAAP operating income 30%, net debt EBITDA less than 2, cash to earnings 80%. • MLX acquisition expected to be accretive to NAND gap EPS starting in 2028. • 2026 outlook: reaffirmed underlying financial metrics range, expected operating expenses towards higher end of 27-28% of revenue range, non-GAAP gross margin in 54.5%-55.5% range, free cash flow guidance range $2B-$2.4B remains unchanged. • Board instructed management to plan for share repurchase program subject to legal requirements.

• Forward-looking statements involve risks and uncertainties due to factors described in earnings press release, 10Q, and 10K. • Geopolitical situation in Middle East monitored, but operations remain uninterrupted with no material impact on 2026 guidance as of now.

Q: Louise Chen asked about Amilex acquisition synergies with CNS franchise and peak sales potential.

A: Ecopipan has significant unmet medical need in pediatric Tourette's. Synergies in patient services, managed markets, etc. Peak sales potential based on unmet need.

Q: Glenn Santangelo asked about reconciling innovative portfolio growth and 2027 low single-digit growth expectation.

A: Timing and impact of IRA on Esteto, need to see more quarters for other growth drivers.

Q: Matt Delatorre asked about capital allocation and branded pipeline.

A: Free cash flow strong, plan to allocate for BD, share repurchases, debt pay down. Duva-Keto has potential across indications.

Q: Dennis Ding asked about Amilex transaction adult population and pricing.

A: Ecopipan is pediatric treatment, pricing within orphan/rare range.

Q: Jason Gerbery asked about generics pipeline and IL-15 regulatory path.

A: Can't comment on generic pipeline. IL-15 accelerated path due to execution confidence.

Q: Uma Rafat asked about MLX patent and FDA feedback.

A: Ecobipam expected orphan drug exclusivity, FDA feedback positive on study data.

Q: David Amselem asked about MLX REMS and M&A strategy.

A: No REMS expected for MLX. M&A strategy: neuroscience inorganically, immunology organically.

Q: Chris Schott asked about MLX ramp and Esteto quarterly dynamics.

A: No peak sales guidance, Esteto destocking impact on Q2-Q3.

Q: Ash Verma asked about 700M BD payout and Middle East geopolitics.

A: No impact on investor-grade debt timeline. Middle East impact minimal.

Q: Les Salewski asked about IL-15 confidence and competition.

A: IL-15 program data competitive with systemic treatments.