Teva Pharmaceutical Industries Limited

Hello and welcome to the Teva Pharmaceutical Industries Limited Q2 2024 earnings call. My name is Alex, I'll be coordinating the call today. If you'd like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. And I'll hand it over to your host, Ran Mir, SVP, Head of Investor Relations. Please go ahead.

Thank you, Alex, and thank you everyone for joining us today. We hope you have had a chance to review our Q2 results press release. which was issued earlier this morning. Copy of the press release, along with the slides presented during this call, are available on our website at ir.tevafarm.com. Please review our forward-looking statements on slide number two. Additional information regarding these statements and the non-GAAP financial measures is available 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 second quarter business performance with recent events and 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 second quarter financial results and our updated financial outlook 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, and thank you for joining us on our Q2 2024 earnings call. So I'd like to start by talking to you about the pivot to growth strategy, and it's just over a year since we launched this pivot to growth strategy. And as you know, the foundation of it was four pillars, deliver on our growth engine, step up innovation, sustain generics powerhouse, and focus the business. and I'm pleased to say we've made great progress over the last year. To live on our growth engines, we have driven, we continue to drive Esteto and Yosedi and Ejovi from a revenue point of view, and I'm pleased to say that we've launched Simuladi up by a similar Humira. With regards to step-up innovation, Eric and his team have done a great job in bringing this pipeline through quickly. We're pleased to say that Olanzapine is now at 95% of target injections completed with no PDSS. And also there's some good news on TL1A with the acceleration of that and top line results expected in Q4 this year. We'll also, Eric, we'll also start to highlight a bit more about ICS-SABA and we're pleased to introduce a new member of our pipeline family, a treatment for MSA, where we'll go into in more detail later on. On the third pillar, sustained generics powerhouse, as you'll see, we've made, continue to make good progress here as well with good growth across all regions. And then finally, focusing our business and our capital allocation with regards to TAPI, we have the second quarter of revenue growth, and we're well on our way with the process of divestment there, which I'll go into in a bit more detail later on. So now, is the pivot to growth delivering on what we set out to do? And as you can see by this slide, I believe it is. We've had six quarters of continuous growth culminating in the quarter two that we're going to walk you through today. of a strong 11%. So clearly, this strategy is helping the company align and get focused and drive revenue growth. Now, to go into a bit more detail on these numbers, as you can see by this slide, revenue is up to 4.2 billion 11%, adjusted EBITDA up to 1.2 billion 4%, and our non-GAAP BPS up to $0.61, up 9%. Because of these strong results, I'm pleased to announce we're going to increase our guidance for the year and that will be across revenue EBITDA and EPS and Ellie will go into a bit more detail of the specifics of that but obviously we're very pleased to announce that today now going to a bit more detail as to what's driving that 11 what I'm pleased is that this has been driven across all of our businesses as you can see from this slide our innovative business continues to perform well and grow quickly But you'll also see that our generics business growing at 14%, and I'll walk you through how this is growing across all regions, is also a major contributor. And then finally, TAPI API growing at 5% means, once again, we've returned this business to growth, and this is our second quarter of growth, and this gives us a lot of confidence for the rest of the year. Now get into even more detail on some of these areas, starting with Stedo. really excellent performance by Esteto. So congratulations to the team behind this. Really proud of what you've done. $407 million revenue, 32% revenue growth, and TRX at a strong 30%. And because of this good, strong performance, we're raising guidance from $1.5 billion to $1.6 billion for the year. So very pleased about the progress we've made on Esteto. Now, Just to give you some updated news on Estero, we completed the family with regards to every dosage form having a once a day. And this is a nice sort of completion of the circle that allows the patients who are titrating to have an even more simplistic dosing regimen. So congratulations to the team for bringing that to the market. As we move on to Jovi, Jovi continues to grow strongly at 12%, driven primarily by European business and the international markets. But what I continue to be impressed with is the competitiveness of all of our regions. We're growing market share across all of our regions, US, Europe, and international markets. As I've highlighted before, this just shows the quality of the team we have at Teva when it comes to driving these innovative products in even very competitive markets. Now I'd like to move on to the newest member of our family, Busetti. And we're very pleased with the momentum that we have with UCEDD. What we're seeing is this really favorable product profile continues to attract new physicians and excite them. And as I've mentioned before, from a patient perspective, the subcutaneous needle is obviously something they welcome versus the IM. But also what we're noticing is the practical nature of the administration. The fact that this product doesn't have to be kept refrigerated. But most importantly, that this can be administered to a patient and they receive, get to therapeutic dose within eight to 24 hours. And physicians love that. And so this is what is allowing us to compete very effectively and to take market share in the risperidone long-acting market. So pleased with the progress we're making there and confident for the rest of the year. Now, excuse me, as I move on to my, the last part of the growth drive is deliver on our first pillar, I move on to the biosimilars. And as you know, we launched our similarity, our biosimilar Humira in Q2 of this year. And we're really pleased with the progress we've made. We've fully stocked the channel. We're getting good and growing coverage with our payers. And also we set up a private label with Qualent. So I think we're well set for this to generate some performance in Q3 and Q4 of this year. But building on this, we're also pleased that we got approval from the FDA for our biosimilar of Stelara. And this will be launched in February of 2025. But now we have approval. This gives us the opportunity to start to prepare for this launch in February 25. Now, it is worth pointing out on this slide also that excited we are about these two products. We do have another five in the pipeline that are coming in the near term. So as you can see that a biosimilar strategy is gaining momentum and it will contribute to the pivot to growth strategy and allow us to grow top. and bottom line. Now, moving on to the second pillar, step-up innovation. Eric's going to talk a lot about this later, so I'll try not to steal any of his thunder. What I will do is just highlight the significant progress that has been made. This is now becoming a deep pipeline that's exciting. We'll talk a bit about Lanzapine and obviously TL1A, but it's nice to start to see some data points in the future emerging on TL1A and TPD1IL2. We're also working hard to accelerate ICS-SABA. And as I said earlier, we're pleased that we're bringing a much needed medicine to the MSA community in a phase two study that's starting later this year. So very excited about the work Eric and his team have done. Now I'm going to go into a couple of these assets to sort of highlight why we're excited about them from a commercial point of view. So starting with are ICS-SABA. As you can see, this is a big market. There's 13 million people who suffer from asthma in the U.S., and the recommendations of the guidelines, the GINA guidelines, are that people should be on a combination therapy. So that's exciting, obviously, because ICS-SABA is a combination therapy. But what is interesting is we will be differentiated in the fact that we have a pediatric indication and a patient-friendly device. Now, just to sort of give you some grounding on the numbers here from a pediatric indication, asthma is the most common chronic disease when it comes to children in the United States. It also accounts for more hospitalizations than any other chronic illness in this patient population. So clearly, there's an opportunity for us to help these people, and that's what we're energized to do with ICS-SABA. Hence, we're trying to drive this to the market as quickly as possible. pipeline product that we're very excited about and there's a lot of discussion about is olanzapine. And the reason why we're excited about it is obviously the opportunity, there's a large market of 5 billion for long-acting antipsychotics. What's interesting is there is no long-acting olanzapine that's used in any quantity at all. And that's because they haven't had the right product profile. We believe in olanzapine, our long-acting olanzapine, we will have the product profile that has efficacy, safety, and tolerability all in one. It will also have similar attributes to Yasedi, which the ability to reach therapeutic doses quickly, so avoiding oral supplementation, so making it very user-friendly for the physician. And that's why we're seeing the excitement amongst the psychiatric community. So now moving on to our third pillar, which is creating a and sustainable generics powerhouse. So as you see here, 40% growth globally, but all regions contributing very strongly, particularly pleased to see the US at 16%. But as you can see, 8% and 22% for international markets, strong growth across all of our regions. Now moving on to TAPI, our final pillar of our strategy, which is focusing on capital. The aim was to get TAPI management team up and running and focused on driving this business. As I've said in the past, it's an $85 billion market. We have a great business with TAPI, and the question is keeping it focused, could we get it back to growth? We have done that for the second quarter. We're seeing continued strong traction across the CDMO community, and the divestment process is on track, and we're targeting completion by H1 in 2025. So that concludes my presentation for today. I'm going to hand over to Eric, who's going to walk you through that exciting pipeline that I spoke about.