Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Teva Pharmaceutical Industries Ltd (TEVA, Financial) reported a strong 11% revenue growth in Q2 2024, reaching $4.2 billion.
- The company increased its full-year guidance for revenue, EBITDA, and EPS due to strong performance.
- AUSTEDO showed impressive growth with a 32% increase in revenue, prompting an upward revision of its annual revenue guidance from $1.5 billion to $1.6 billion.
- Teva launched SIMLANDI, a biosimilar Humira, and received FDA approval for a biosimilar of Stelara, with a planned launch in February 2025.
- The innovative pipeline is progressing well, with significant advancements in Olanzapine LAI and TL1A, and a new Phase 2 study for MSA treatment starting later this year.
Negative Points
- Teva reported a GAAP net loss of $846 million in Q2 2024, slightly lower than the $872 million loss in the same quarter last year.
- The company's free cash flow decreased to $324 million in Q2 2024 from $632 million in Q2 2023, mainly due to changes in working capital items.
- Non-GAAP operating margin decreased to 25.3% from 26.1% in Q2 2023, due to higher sales, marketing, and R&D expenses.
- The TAPI business is undergoing a divestment process, with completion targeted by H1 2025, but no specific financial details or proceeds have been disclosed.
- There is uncertainty regarding the impact of the Inflation Reduction Act (IRA) on AUSTEDO's future revenue, particularly concerning potential price cuts in 2027.
Q & A Highlights
Q: Can you discuss the composition of the API business and its impact on divestment proceeds? Also, do you expect AUSTEDO to be on the CMS list for 2027?
A: The API business spans all technologies and platforms, making it versatile and well-positioned for growth. Regarding AUSTEDO, the Pivot to Growth strategy already accounts for potential IRA impacts, including CMS listing, in its $2.5 billion target for 2027.
Q: What is driving the growth in AUSTEDO, and how do you see SIMLANDI impacting the market?
A: AUSTEDO's growth is driven by a world-class team and strategic initiatives like DTC campaigns. For SIMLANDI, the channel is stocked, and payer coverage is increasing, setting the stage for market impact in Q3 and Q4.
Q: How do you plan to manage operating leverage with upcoming product launches and R&D investments?
A: We aim to leverage existing infrastructure, like the CNS-focused sales force, to minimize incremental costs. Additionally, we are enhancing manufacturing efficiency to improve gross margins, supporting our goal of achieving a 30% operating margin.
Q: How should investors view the contribution of generic Revlimid and its future impact?
A: While Revlimid contributes significantly, we are focusing on launching high-value complex generics and biosimilars to offset future competition. The accounting adjustments reflect forecasted royalties from legacy acquisitions.
Q: What are the dynamics of the biosimilar market in the US, and how is Teva positioned?
A: The US biosimilar market is becoming more receptive, with PBMs and payers recognizing their strategic value. Teva is well-positioned with a growing biosimilar portfolio and increasing market knowledge.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
