Teva Pharmaceutical Industries Limited

Welcome to the Teva Pharmaceuticals Industries Limited Q4 2025 earnings conference call. My name is Alex. I'll be coordinating today's call. If you'd like to ask a question at the end of the presentation, you may press star followed by one on your telephone keypad. I'm going to hand it over to Chris Stevo, SVP, Investor Relations. Please go ahead.

Thank you, Alex. Good morning and good afternoon, everyone. Thank you for joining us on our fourth quarter call. Before I turn it over to our CEO, Richard Francis, I just want to remind everyone that we will be making forward-looking statements on this call. Any statements we make are only as of today, and we undertake no obligation to update those statements subsequently. And if you have any questions about our forward-looking statements, feel free to see the appropriate sections in our SEC forms 10-K and 10-Q. With that, Richard Francis.

Thank you, Chris. Good morning, good afternoon, everybody. Great to have you on the call. Also on the call with me today will be Dr. Eric Hughes, head of R&D and chief medical officer, who will be walking you through some exciting developments in our pipeline. And then Eli Khalif, my CFO, who will go through the Q4 and the full year results. So starting with, as I always do, the pivot to growth strategy and the progress we've made over the last three years. As you know, the foundation is the four pillars, Delivering our growth engines, I think you'll see in the results that we continue to have great momentum around our innovative portfolio of Stedo, Yosedi, and Ejovi. That's some great progress on our innovation, so step-up innovation. You'll see that we filed Olanzapine last year and completed the recruitment of the diary study for dual action rescue inhaler and started our phase three, so if you do pick it up in UC and CD. On that sustained generics powerhouse, good progress. Our aim was to get this business back to stability, and we have done that. And now we see some exciting growth emerging from our biosimilar portfolio, and I'll talk a bit about that. And then focus the business. This is all about making sure we allocate capital to the correct areas to give the best return. And we'll walk you through a bit of the progress we've had on our transformation program, which the aim is to have 700 million net savings by 2027. We made excellent progress in 25, and we're on track to hit the two-thirds by at the end of this year, 2026. So now moving on to the actual results. So please read these results. Now just to orientate you on this slide, the numbers on the left include the Sanofi milestones and the numbers on the right do not. So starting with the revenues. So 5% increase in revenues at 17.3 billion. EBITDA grew 12% up to 5.3 billion. EPS grew 19% to $2.93. and free cash flow was up 16% at 2.4 billion. And our net debt to EBITDA is now at 2.5 times, which is, as you know, our goal for 2027 is to two times. So we're well on our way to do that. Now, a slide that I've shown over the last 12 quarters, actually, to show that our return to growth, which was our strategy part of the pivot to growth strategy when we launched it in 2023. And as you see, we've consecutively done this and we did that in Q4 where the growth was up 11%. Now that did include the milestone from Sanofi. If you take that away, we were slightly down at 1%. But let's look at it over a three year period. So over a three year period, these impressive results, once again, reminding you that we had multiple years of sales decline. And so in 2023, We actually grew the business 4% in 2024, 11%, and then last year, 2%. So we're well on track for our CAGR of mid-single digit, as you can see from the slide there. Now, let's get into a bit of detail as to what's driving these good results. So on the next slide, you'll see the innovative performance is one of the key areas of growth for us. And the study you said, Ina Jovi, hit $3.1 billion for the year. This is up about 35%, so excellent results there. And I'm really pleased to tell you that in Q4, we surpassed $1 billion for our innovative portfolio that you see on the screen here. But in a bit more detail, Estero grew at 34% at $2.26 billion. Yosedi was up 63% at $191 million, and Adjovi continues to perform as up 30% at $673 million. Our generics business was flat, worth noting this excludes Japan from these numbers. Now, I've talked a lot about moving from a pure play generics company to a biopharma company. I think these results show we clearly have done that. And now it's a question of just how much we can keep driving this innovative portfolio and the pipeline that comes through. Now, moving on to a bit more detail, I wanted to talk to you a bit about Estetto. So Estero had a really strong quarter in quarter four. As you can see, $725 million up 40% for the quarter. And for the full year, $2.2 billion up 35%. And this was delivered with good underlying growth. As you can see, TRX is 10%. And there's a 19% rise in milligram volume. This has been driven by both new patients and better adherence. It's worth noting that Esteto XR now accounts for 60% of new patients. Now, very impressive results here. Now, we did have in Q4, these numbers did reflect some year-end inventory stocking and some favorable growth to net. And Ellie will talk a bit more detail about that. But if you actually take that out, then we still grew to 20% in Q4. So once again, the underlying growth of this product is very strong. And because of that, we're giving the guidance of 2.4 billion to 2.5 billion for 2025. I think it's worth noting that if we do hit the upper end of that, then that means we've hit the 2.5 billion a year ahead of schedule. But we'll talk in a bit more detail of the puts and takes to that range. Now, moving on to your study, you said you also had another strong quarter. 55 million, up 28%. And for the full year, up an impressive 63% to 191 million. TRX volume grew an impressive 123% year over year. And it's worth noting that more than 83% of the MBRX was generated by patients transitioning from oral therapies or treatment naive, which confirms that UCEDD is expanding the long-acting injectable market, not just taking share. Another impressive fact on your study is it's the fastest growing long-acting injectable in its category. And because of this momentum, our guidance reflects this. And as you see, we have a guidance of 250 to 218 million for 2026. Now moving on to adjovi. Adjovi had a strong quarter as well, up 43% year on year, 211 million. And for the full year, it's 673 million, up 30%. Once again, for a product that's fairly mature, really strong growth. AJP continues to be number one preventative anti-CGRP injectable in the top U.S. headache centers, and it leads in 30 markets across Europe and international. And this continued growth is driven by, I think, our commercial excellence, our ability to continue to take market share, to manage the pricing and the payer environment in the U.S., and to continue to expand in new geographies. And because of this strength, we're given a guidance of 750 to $790 million. Now moving on to the pipeline. So we talked about the products we have in the market and the excellent progress we made on those, but the pipeline is really exciting here. And I do want to mention this, even though I know Eric will talk a bit about it. The things that I always remind people about this slide is every product we're going to launch has a potential of over a billion. the size of the markets we're entering into are significant, and our entry points into these markets are in the short term. And if you look at the total, the total of the portfolio can be over 10 billion of peak sales. There's an addition to this slide that some of you may not have seen, which is we will be announcing two new indications for DuvaKey2 later this year. Once again, highlighting that is a pipeline in a product. Now moving on to our generics business. Our generics business, our aim was to get this back to stability, and we've done that. And the generics business was flat in 2025 versus 2024. Now, one of the things that I do always highlight is you need to look at the generics business over a multi-year period because of the fact that some years you have more launches than others. That's just part of the business. And as you see here, our two-year CAGR is 6%. But for 2025, the US grew at 2%, international markets 1%, and Europe declined 2%. Now, we continue to see good performance from our biosimilar business, and I think I'll move on to that now to talk you through that. And where we started with the biosimilars over the last three years, we've made tremendous progress. It's worth noting that we now have 10 assets in the market globally, and we're going to launch six additional between now and the end of 2027. Then we have another 10 assets that are going to start launching from 28 beyond. So some impressive numbers here. So the aim was to build a world-leading portfolio, and we've done that. In fact, I think we have the second largest portfolio of biosimilars now in the industry, and we've launched the most biosimilars since 2020. And because of this, we're well on track to grow our biosimilar business by 400 million by 2027. Now, to close out, As you've seen by some of the numbers we've talked about, we're well on track to hit our 2027 guidance. The CAGR, I talked about, we currently stand at 6%. The operating margin, we'll go into a bit more detail, but with the success of our innovative portfolio, we're very confident about 30%. Net debt, debit up two times, we're already at 2.5. And cash to earn is 80%. Ellie will walk you through a bit more detail on that. But with that, I'll hand you over to Eric to talk about our exciting pipelines.