Teva Pharmaceutical Industries Limited

Hello and welcome to the Q2 2023 Teva Pharmaceutical Industries Limited Earnings Conference call. My name is Alex and I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, you can press star followed by one on your telephone keypad. If you'd like to remove your question, you may press star followed by two. I'll now hand it over to your host, Ran Mir, Head of Investor Relations. Please go ahead.

Thank you, Alex. Thank you, everyone, for joining us today. We hope you have had an opportunity to review our press release, which was issued earlier this morning. A copy of this press release, as well as a copy of the slides being presented on this call, can be found on our website at serrafarm.com. Please review our forward-looking statements on slide number two. Additional information regarding these statements and our non-GAF financial measures is available on our Earnings Relief and in our SEC Forms 10-K and 10-Q. To begin today's call, Richard Francis, TABUS CEO, will provide an overview of TABUS Q2 2023 results and business performance, as well as recent trends and our priorities going forward. Then, Dr. Eric Hughes, our Head of R&D and Chief Medical Officer, will discuss progress on our innovative pipeline. Our CFO, Eric Khalif, will follow up by reviewing the financial results in more detail, including our 2023 financial outlook. Joining Richard, Eric, and Elio on the call today is Ran Niklas, Devils Head of North America Business, who will be available during the question and answer session that will follow the presentation. Please note that today's call will run approximately one hour. And with that, I will now turn the call over to Richard. Richard, if you would, please.

Thank you, Ran, and thank you, everybody, for joining our call. I'm very pleased to update you on our Q2 performance and the progress we are making on executing our Pivot to Growth strategy. It's been an exciting quarter with the launch of Astero XR, a once-a-day formulation, and the launch of Uceti, a long-acting treatment for schizophrenia. Now moving to slide four, let's start with our results. Revenue was up 4% in local currencies to $3.9 billion, and non-GAAP gross margin was at 52.2%, up 3.1% versus Q1. Adjusted EBITDA was at 1.1 billion. Based on this, we are increasing our revenues outlook for 2023 to 15 billion to 15.4 billion. I'm also pleased to highlight that we've got good momentum on our pivot to growth strategy with good execution across the four pillars driving this growth, and I'll give you an update on those in the presentation as well. Now digging down a bit into this performance and this 4% on the next slide. This was driven by our growth engines, and as you can see here, there's a 51% increase in revenue for Estedo, strong performance there. Punjabi continues to perform, and in North America grew 16%, and in Europe, 32%. We continue to see good growth in our international markets at 13% for our generics business, and Europe came in at plus 2%. Now maybe to dig a bit deeper on a steady performance on the next slide, I believe we're on track to hit the 1.2 billion target we set for 2023. As you can see, revenues for Q2 were $308 million, and that was a 51% increase, strong continued TRX growth. I'd like to point out we did launch our once-a-day formulation in this quarter in May, which we're very pleased to bring this to patients and physicians. But this obviously required us to put some stock in the channel. See, if allowed for this, the revenue growth was probably around about 35% to 40%, so still strong growth. and we can continue to believe in the potential of a stare down if you move to the next slide i talked about back in may at our strategy launch the 2.5 billion that we will achieve in 2027 and we're reaffirming this and and this is based on two particular points one is the unmet medical need that's out there the under-treated population as you can see on this slide on the right There are 785,000 patients suffering from tardive dyskinesia and only 120,000 are actually diagnosed and only a small amount of those are treated. So there's a significant unmet medical need. So obviously, we at Thaba here put a lot of focus around the stedo, both in resources and in managerial focus. And this is allowing us to increase our sales force, increase the support we're putting around patients. We've launched them once a day. We continue to raise awareness so we can get some of these patients who are not on treatment into the physician's office to get onto a stedo. We also are still confident that we will be able to take a stedo to the European market. So we reaffirm our belief that we can hit 2.5 billion by 2027. Moving on to the next slide, and another member of our innovative family is a Jovi. Now, Adobe continues to grow 17% versus Q2 2022. And I think this highlights the capability that we have here at Tether to launch products into competitive markets and so forth. We will hit our guidance of 400 million for 2023, and we continue to see that we either hold or grow market share across many of our markets. Now, moving on to slide nine, and the newest member of our innovative family, Uceti, with Spiridone, our long-acting treatment for schizophrenia. Now, to remind everybody, this is a $4 billion market, and we've only just launched Uceti, but we're very pleased with the feedback we're getting from healthcare professionals, and they're confirming that the product profile that we have with Uceti is unique and advantageous. Now we're seeing this in the fact that our NBRX is 40%, so already we're getting 40% of the risperidone long-acting market. We've also seen hospitals look to use our free samples and free trial requests, and we're having good discussions with our payers. So once again, I think excitement around your setting, early days, but initial feedback is very positive. And if I move on to slide 10, to give you probably a reason why we're getting this feedback, we already had reports that show the product profile that we put forward, the subcutaneous needle, the lack of... need for refrigeration, pre-built syringe, has allowed us to have a product that patients, 9 out of 10 patients, are very satisfied with. And obviously when it comes to position, we have the same, 9 out of 10. And what we have found already that's particularly advantageous is the fact that we don't need a loaded dose. And there are no oral supplements needed. One injection and the patient will get to the therapeutic dose within 24 hours. Now clearly that's advantageous when it comes to a patient having a relapse and needing to get that efficacy quickly. So good patient profile, good product profile, and physician's excitement for your study continues to grow. Now moving on to our generics business on slide 11. Good growth in international, up 13%. Continued growth in Europe, a bit softer than prior quarter and this is down to a couple of factors one is we did have a strong prior year and there is some seasonality in our business and that's impacted that said h1 will still show a seven percent growth versus h1 2022 and i remain confident in this business going forward based on our portfolio and its scale our pipeline and our commercial expertise Moving on to slide 12 on our biosimilar, I'd like to update you on the progress we're making on our Pivot to Growth strategy. Now, if you remember, the focus here was about having a broad biosimilar portfolio, and we've made some progress here. We have expanded our partnership with Alvitec. We have four new biosimilar candidates. We've also strengthened our operational relationship with Alpha Tech, helping them on manufacturing and quality, where they can really leverage the scale and expertise we have at Tevo. We'll continue to seek to expand our portfolio, and as we do this, engage in more relationships, we'll update you as and when they happen. Now moving on to slide 13. Eric will obviously go into some detail on our pipeline, which we're very excited about. We continue to make good progress. But I really wanted to highlight the fact that the three late-stage assets we have have favorable product profiles of the markets they're entering into. But also, these are significant markets. So with Alanzapine, I've already highlighted the fact that it's a $4 billion market. But if we do manage to bring this to the market with a favorable safety profile, I think we have a real opportunity to have a significant product on our hands here. ICS SAVA, it's a $2.5 billion market, and then obviously anti-TL1A has been well discussed, and this is a significant market which could help drive long-term growth for TAVA. Now moving on to the next slide on our ESG. We remain very committed to our ESG strategy, and we've made good progress across a number of goals. Just to highlight a few, I'm pleased that we've donated nearly up to 17 million doses of our medicines to improve access. We've also seen on our environmental goals a 24% reduction in our greenhouse gas emissions. And actually in quarter two, we recently signed an agreement with an energy supplier in Israel to make sure that 100% of our electricity is from renewable sources. And that includes all our manufacturing sites as well. Moving on to slide 15, our final slide before I hand over to Eric. This just highlights the progress we're making on our pivot to growth strategy, which we launched back in May. It's based on four pillars. On our first pillar to deliver on our growth engines, as I've highlighted, Estedo is performing well, and we're confident about hitting $2.5 billion. Eric will talk to you a bit about the progress we're making in the clinic on our late-stage assets, but he's put together a world-class leadership team to help make sure we can drive our complex generics business as well as our innovative pipelines. When it comes to creating a sustainable generics powerhouse, we're making good progress on focusing on our R&D portfolio and our portfolio in our manufacturing setup to make sure we can drive efficiencies there. And finally, TAPI, we've made the decision and the move to move that business to a standalone unit, and that is progressing very well. With that, I'm going to hand over to Eric to walk us through some of those assets I've touched upon. Over to you, Eric.