Teva Pharmaceutical Industries Limited

Thank you, Alex, and thank you everyone for joining us today. We hope you have had a chance to review our Q1 results press release, along with the press release announcing positive Phase III results from our Lanzapine LAI trial, both issued earlier this morning. Copies of these press releases, along with the slides presented during this call, are available on our website at ir.feverfarm.com. Please review our forward-looking statements on slide number two. Additional information on this statement and our non-GAAP financial measures can be found on our earnings release and in our SEC forms 10-K and 10-Q. To begin today's call, Richard Francis, Teva's CEO, will provide an overview of Teva's first quarter results and business performance, recent events, and our focus and 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, Eli Khalif, will follow up by reviewing the first quarter financial results in more detail. 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 good morning, everybody. I'm glad you could join us this morning. Excited to talk to you about our Results for Q1 2024. Just to remind you, this is a year today almost since we launched the Pivot to Growth strategy, a strategy designed to get Teva back to growth. And I'm pleased to say that this is our fourth quarter in a row of continuous growth. So the strategy is clearly having some effect, and I'll go into a bit of detail as to why that is and what's driving it. But just to remind you a bit about the strategy, it's based on four pillars. step up innovation, deliver on our growth engine, step up innovation, create a sustainable generics powerhouse, and focus our business. I'll walk you through what we've achieved on each of these areas, but obviously we are starting to show that we can really commercialize innovative products. We are starting to show that we can take products through the clinic, and I think we'll talk a bit about olanzapine and the fact that we brought that to the clinic, through the clinic nine months ahead of schedule. And we're showing good growth in our generics business. And then I'll finalize with a talk about TAPI and how we've got that back to growth. But before I do that, I wanted to start with some exciting news on olanzapine, a long-acting treatment for schizophrenia, which is in the clinic. We had the data readout on the efficacy of this study, and it met its primary and secondary endpoints. on all dose groups versus placebo. So we're very excited about this. And all doses were generally well tolerated, safe, and there were no cases of PDSS. Obviously, the full submission of the safety database will be available in the second half of this year, but this is a really important milestone for ourselves as well as the patients who suffer from this terrible condition. Now, just to reiterate why we are excited about it, if I move on to the next slide, And just to sort of coordinate you, on the left-hand side of this slide, you'll see all the oral molecules that are used to treat schizophrenia. And as you can see, the largest of these is olanzapine, which treats moderate to severe. But also, you can see on the right-hand side of this slide, there is no effective long-acting treatment of olanzapine. So there's a significant unmet medical need. And that's why we're so excited about this product and bringing this to the patients who clearly will benefit from it. So more news on that from Eric later in the presentation. But now to dive into the results. So the results in cost of currency, we are up 5% in revenue, up 12% in adjusted EBITDA, 18% in non-GAAP EPS, and our net debt now stands at 3.38. So good start to the year. Because of that, we are reconfirming our 2024 financial outlook. So let's go into a bit more detail on all of these numbers. So when it comes to driving this revenue, what I'm pleased to say is the fact that we're hitting it in all our business sectors. So whether it's innovative medicines, whether it's generics or whether it's TAPI API, we're seeing good growth. And as you can see, it started with 67% growth. It's a really good start to the year, 18% on a Jovi, and our global generics business is growing at a really healthy 9%. and TAPI APIs back to growth at 2%. So let me go into a bit more detail on all of these. So starting with Estetto, Estetto continues to perform really well. 282 million for quarter one, up 67% versus quarter one 2023, and a good strong TRX growth of 28%. And because of this momentum, we are confirming our guidance of 1.5 billion for 2024. But this momentum gives me more confidence and more excitement around our long-term goal, which is to get to 2.5 billion of revenue by 2027. And I just wanted to use this slide to remind you, everybody, of the potential we have around this product, unfortunately, because so many patients are yet to get on treatment. And that is why we started our direct-to-consumer campaign at the start of this year, to make those people aware that there is an opportunity to help address this difficult condition, and they just need to seek help with their physician. So very encouraging start to the year with Stedo, and we look forward to that momentum continuing. Now moving on to the second part of our innovative portfolio, which is Adobe. Once again, good continued growth of 18%. we're growing particularly strongly in europe and international markets but what pleases me about this product is we continue to show market share gains both in the us europe and in international markets showing the competitiveness of teva sales and marketing when we have a product like this so very pleased that and once again i'm reconfirming the guidance of half a billion for 2024. Now moving on to Yesedi, the newest member of our innovative family. So we launched this product last year, and the momentum continues to build. We continue to see good access when it comes to fee-for-service and Medicaid. We're working with Medicare. The hospitals continue to expand their coverage, and we're seeing good reordering from our hospitals. And this is driven by, once again, this very favorable product profile. We recently had the Association of Psychiatrists meeting in the US last week, I believe it was. And the feedback continues to be really strong, particularly about this ability to therapeutic doses within 24 hours without any oral supplements. So good momentum. And once again, I can confirm that the guidance of 80 million, we will be confident to achieving. Now moving on to a slide which gives me a lot of pleasure to talk about, which is our generics business. Just to sort of orientate you, remember 65% of our business is outside the US and we should continue to see continued good growth in Europe of 5% and international markets of 16%. But I am, I have to say, particularly pleased about the US and the growth of 8% there. This highlights, once again, the pivot to growth strategy and the focus we've placed on our generics business to make sure we can bring products to the market more regularly on time and we have a good supply chain that has good cost of goods. I think this is the start. We've got work to do, but this is very encouraging. I'm very pleased, and I want to congratulate the team on this. Now moving on to another part of our business which we're excited about, and that's our biosimilar business. We're excited to be in a position in quarter two to be launching our biosimilar Humira and Simuladi, and we're getting good interest from the payers, the PBMs, and the channel with regard to this. Also pleased with the fact that our biosimilar Stellara is also approved and will be launching that in February of 2025. But it is worth pointing out that we have a portfolio of biosimilars, and we'll be launching six by 2027. So this is really an opportunity to support the Pivot to Growth strategy from a biosimilars perspective. Now moving on to step-up innovation. I won't go into this in great detail because Eric will, but, and Alain's opinion I've already touched upon, but the one thing I would like to highlight on this slide is the capability build and the execution ability that we have at Teva. Alanzabine was recruited nine months ahead of schedule. TL1A is recruiting incredibly well in UC and CD. And we've got ICS Saburov to a good start, and that is now supported by the partnership we have with Launch Therapeutics and Abingworth. So we understand these assets are important to the patients who need them, and we're focusing on them, and we're showing that focus can deliver performance. But I want to take it a little minute now to talk to you a bit about our capabilities in CNS. Because obviously I do talk a lot about Esteto, Yosedi, and Adobe, and rightly so. And Alain Zabin will get a lot of attention today. But we are building out a very good pipeline when it comes to CNS. And we'll be giving you more and more information on this as we move forward. But once again, building a real foundation for Teva in CNS. Now moving on to our final pillar, which is focus the business around TAPI. Now, we obviously announced at the start of this year that we would be divesting TAPI, our API business. And I'm really pleased to see that the team, with this freedom to operate outside of Tether and in the global $85 billion API market, they've really started to deliver. I've got off to a good start with a 2% growth. I see this momentum growing and this performance increasing because of the interest we've got from CDMOs and the interest is based on the fact that we have a broad technology base and our credibility of quality and supply reliability is clearly something that they're interested in. So good news and more to come, I think, on SAPI throughout the year. To close on something that is important to us, which is about how we operate as a company and how we contribute to society, We launched our sustainability goals in 2023, and I just wanted to give you an update of how we progressed. So with regards to healthy people, we launched seven programs to increase access to medicine across the globe. Healthy planet, we have reduced our carbon emissions by 27% versus 2019. And when it comes to how we conduct ourselves in our business, being ethical and compliant, 100% of people have completed their training, and that was achieved in 2023. Now, with that, I'll conclude my section, and I'd like to hand over to Eric Hughes, head of R&D. Over to you, Eric.

Thank you, Richard. As Richard mentioned, we're very excited that today we announced the positive primary endpoint readout of our olanzapine LEI program. It also met its secondary endpoints, key secondary endpoints. I thought I'd start off today by describing and reminding you of the study design and where we are in executing the study today. Remember, the study has an eight-week period. It's a randomized placebo-controlled study with three dose arms. And today, we are talking about the primary readout at the end of that eight weeks. The study also includes a 48-week follow-up for safety. that is now being executed with our full randomized patient size of about 675 subjects, so slightly over-enrolled. So, it's important to note that that second half of the study will be read out for the second half of this year. So, when it comes to the primary efficacy endpoints, we are very excited to see that we met clinical significance and statistical significance on our primary endpoint using the PAMS score. You can see that the score was between 9.7 and 11.3 points in change from the baseline score. That's the change from baseline to week eight. So, right where we expected the efficacy to be, and clearly efficacious on all three dose groups. Importantly, we are also up to about 80% of our total target injections at this point, and we've seen no PDSS. So the injections were well tolerated throughout the study. I should mention that the key secondary endpoints include the clinical global impressions for schizophrenia scale and the personal and social performance scale, which both for all doses achieved clinical significance. I would like to also say that this study illustrates our ability to execute and accelerate our programs in the innovative space. We brought this study out up by nine months, so a real good job by the clinical team. Moving on to Estetto. We continue to do great work informing our patients and our investigators about TB. We are running a study, a real-world observational study called Impact TB. And this is something that we're very proud of, where it's looking at both the patient voice and the caregiver perspective on what the impact Tardive Dyskinesia is. This study is the largest study for Tardive Dyskinesia ever, and it includes a wide range of ages, race and ethnicity, severities in their baseline movements, and their treatment experience. It's being run in 23 states in the United States. As I mentioned, we're developing a scale that really is measuring both what the patients tell us and what the caregivers see when it comes to Tardive Dyskinesia. Understanding sort of dyskinesia is our goal, and educating our patients and caregivers is our mission. The first set of data will be announced or presented at the PsychElevate meeting later this month. And moving on to asthma. Asthma is a significant patient population. It's a very important chronic illness in the U.S. and around the world, and the majority of these patients use rescue inhalers. There still is. over 10 million asthma exacerbations every year. And we've learned now that combination rescue inhalers are what's needed. And in fact, the guidelines by the GINA guidelines have changed to the point where that's the recommendation for asthma exacerbation. That's the combination of both a beta agonist and a steroid. And that's why we're excited about our program, TEV248. This is a combination rescue inhaler using albuterol and fluticasone, two well-known medications by our treating physicians. And the important thing is that this is a differentiated device. It's a dry powder inhaler, and that's important for when it comes to taking care of pediatric patients, and that's what we're targeting in this study. You know, we're excited that we started our phase three study at this point, and while it's going well, But it's great to have collaborated with Launch Therapeutics. We'll help to accelerate the program even further, and importantly, get those patients in the pediatric population going in the study. So very exciting to be delivering in the future a new treatment for asthmatic exacerbations in accordance with the GINA guidelines. Moving on to my last topic, the ANSI IL-15 program. This is a very important program because our first indication we'll be taking this compound into is celiac disease. Now, IL-15 is a key cytokine in the pathology of celiac disease. When these patients eat gluten, it causes an inflammatory reaction that releases IL-15 and activates inter-epithelial lymphocytes. It's a large patient burden in the U.S., about 2 million patients. Only about half of those patients are diagnosed But the important thing to remember that 50% of these patients still have symptoms even while taking a gluten-free diet. 20% of these patients never even respond to a gluten-free diet. And 50% of these patients still want treatment beyond a gluten-free diet. So that's why I'm excited about our anti-IL-15 program. I've shown you before that we have a very potent antibody that rapidly reduces free IL-15 levels. It keeps those levels suppressed out to almost 80 days. We're exploring the compound in celiac patients right now. We're enrolling a patient by the end of a study by the end of this year, looking at a celiac challenge study where we give a single dose of Tez-408 and then two weeks later start a gluten-free diet for 14 weeks. So we're very encouraged to see the results of this study hopefully soon. And the important part about the study is really focus on the symptoms of the patients. Really, are we impacting what they feel when they eat gluten-containing food? So we think we have a potentially differentiated product. It's a high-affinity anti-IL-15. It suppresses free IL-15 rapidly, and it's had low immunogenicity to date. So on my final slide, I just want to talk about, you know, Achieving our milestones and accelerating them where we can. We've shown that our analyzapine LAI today has achieved its primary endpoint. We'll be curious or hopeful to see the final set of the safety data on our injections the second half of this year. Our anti-TLNA program is right on target. The enrollment is going very well for both ulcerative colitis and Crohn's disease, and we'll be looking for that interim analysis in the second half of this year. I just mentioned our anti-IL-15 program enrolling our celiac patients this year in our proof of concept study. I'm very excited for the end of this month or next month where we see the first patient in our anti-PD1 IL-2 program in oncology. And finally, we're enrolling our phase three study now and working to accelerate our program for our dual action rescue inhaler for asthma. So a lot coming and we're looking forward to keeping you updated.