Teva- Pharmaceutical Industries Ltd. - ADR

Strong innovation-led growth; raised guidance - Q2 “innovative” portfolio grew +43% YoY with AUSTEDO +40%, UZEDY +43%, AJOVY +56%. - AUSTEDO: U.S. revenue $676m (+33% YoY); global +40%; TRx +14% and mg growth +21%. AUSTEDO XR = >60% of new patients (driving adherence/durability). - Company raised full-year guidance for AUSTEDO mid-point by ~$50m → $2.45–$2.6b (mid-point $2.5b, explicitly a 2027 target this year). - UZEDY: Q2 revenue $77m (+43% YoY); TRx +63%; commercial execution: UZEDY share vs risperidone LAI improved ~5% → ~10%, capturing ~80% of the risperidone LAI market. - AJOVY: Q2 revenue $244m (+56% YoY); U.S. revenue +83%; company raised AJOVY outlook mid-point by ~$90m → $850–$870m; sees >$1b peak sales (longer-term).

Pipeline momentum: multiple regulatory/catalyst milestones (opportunities) - Innovation pipeline includes olanzapine LAI FDA action expected Q4 2026 (EU already accepted); company expects meaningful LAI growth synergy with UZEDY and peak sales $1.5b–$2b (company’s stated range). - Ecopipane (Tourette syndrome): submitted June; Phase 2/3 showed clinically meaningful tick reduction and ~50% reduction in relapse, with durability (reported 66% remained on treatment in long-term follow-up). Target approval next year. - DARI (dual action rescue inhaler, asthma): fully enrolled ~2,700 patients; event-driven readout expected early 2027 (forecast for final event end of 2026). - Duviqito (IBD program with partner Sanofi): announced 2 new indications — hidradenitis superativa and fibrosing Crohn’s—adding additional submission opportunities over time (slide-level messaging emphasized up to 5 submissions over 5 years).

Financials: margins and cash flow improving, but headline P&L distorted by one-offs - Q2 revenues ~$4.1b (down -1% in USD / -3% local), largely due to lower generics contribution from generic REVLIMID; investors were reminded that underlying performance is better excluding this. - Non-GAAP gross margin +80 bps to 55.4% (innovation mix strength). - Non-GAAP operating margin reported ~9% but includes MLX-related impact: ~$726m expenses from the MLX Biosciences acquisition treated as an asset acquisition (one-time IP/R&D expense in Q2); without MLX, non-GAAP margin would have been ~26.6%. - Free cash flow (FCF) strong: $622m in Q2 (+31% YoY)—company attributes to disciplined capital allocation and transformation execution.