• Revenue: $4.2 billion, up 11% in local currency terms.

• Adjusted EBITDA: $1.2 billion, up 4%.

• Non-GAAP EPS: $0.61, up 9%.

• GAAP Operating Loss: $5 million, improved from a $654 million loss last year.

• GAAP Net Loss: $846 million, with a loss per share of $0.75.

• Non-GAAP Gross Profit Margin: 52.9%, up from 52.2% last year.

• Non-GAAP Operating Margin: 25.3%, down from 26.1% last year.

• Free Cash Flow: $324 million, down from $632 million last year.

• Net Debt: $16.4 billion.

• Net Debt to EBITDA: 3.3 times.

• AUSTEDO Revenue: $407 million, 32% growth.

• AJOVY Growth: 12%, driven by European and international markets.

• Generics Business Growth: 14% globally.

• TAPI API Growth: 5%.

• 2024 Revenue Guidance: Raised to $16 billion to $16.4 billion.

• 2024 Free Cash Flow Guidance: $1.7 billion to $2 billion.

• Warning! GuruFocus has detected 5 Warning Signs with TEVA.

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 (NYSE:TEVA) 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.