Skip to main content

Teva Reports Second Quarter 2022 Financial Results

Teva has reached agreement in principle on the primary financial terms of a nationwide opioids settlement and has revised its provision to reflect its terms

Key financial highlights and outlook

  • Revenues of $3.8 billion
  • GAAP diluted loss per share of $0.21
  • Non-GAAP diluted EPS of $0.68
  • Cash flow generated from operating activities of $123 million
  • Free cash flow of $301 million
  • 2022 revenues outlook revised mainly due to continued foreign exchange headwinds; COPAXONE® outlook revised lower mainly to reflect increased competition and foreign exchange fluctuations; non-GAAP tax rate outlook revised mainly due to a portion of the realization of losses related to an investment in one of our U.S. subsidiaries; operating income, EBITDA, EPS and free cash flow reaffirmed:
    • Revenues of $15.0 - $15.6 billion vs. previous range of $15.4 - $16.0 billion
    • COPAXONE revenues of approximately $700 million vs. previous outlook of approximately $750 million
    • Adjusted EBITDA of $4.7 - $5.0 billion
    • Non-GAAP diluted EPS of $2.40 - $2.60
    • Free cash flow of $1.9 - $2.2 billion
    • Non-GAAP tax rate of 13% - 14% vs. previous outlook of approximately 18% - 19%

 

Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today reported results for the quarter ended June 30, 2022.

Mr. Kåre Schultz, Teva's President and CEO: "In the second quarter Teva has delivered a solid performance, despite global macroeconomic headwinds. Our generic and OTC business benefitted from the gradual easing of COVID-19 restrictions in Europe and successful generic launches in the U.S. We also executed well on our key specialty brands, AUSTEDO® and AJOVY®, growing our overall market share. As fluctuations of foreign exchange rates persist, we have lowered our 2022 revenue outlook, while reaffirming our earnings and cash flow guidance.

We are also pleased to have reached a nationwide agreement in principle, pending participation by states and subdivisions, to resolve the majority of our costly legacy opioids litigation, and importantly, make critical medicines available to those most impacted by the U.S. opioid epidemic."

Mr. Schultz added: "We are excited to share Teva's updated long-term strategic and financial objectives through 2027 on our quarterly earnings call tomorrow. With our strong foundation of generic and OTC business, our focused specialty pipeline and our significant biosimilar pipeline, we are strategically positioned to seize market opportunities and create long term growth."

Update on Agreement in Principle on the Primary Financial Terms of a Nationwide Opioids Settlement

  • Teva has reached an agreement in principle with the working group of States’ Attorneys General, counsel for Native American Tribes, and plaintiffs’ lawyers representing the States and subdivisions, on the primary financial terms of a nationwide opioids settlement.
  • Teva will pay up to $4.25 billion (including the already settled cases) plus approximately $100 million for the Tribes, spread over 13 years. 
  • The figure above includes the supply of up to $1.2 billion (wholesale acquisition cost (“WAC”)) of its generic version of the life-saving medication, Narcan® (naloxone hydrochloride nasal spray)—which can reverse an overdose from opioids—over 10 years, or cash at 20% of WAC ($240 million) in lieu of product. The agreement provides the option for a significant supply of Narcan® to provide access across the nation to help combat the opioid epidemic.
  • Teva has revised its provision to reflect this agreement in principle on a nationwide settlement. 
  • The agreement is contingent upon final documentation among the working group and Teva, and reaching the thresholds for participation that will be set forth in the final agreement.
  • The agreement is also contingent upon Teva reaching an agreement with Allergan with respect to any indemnification obligations, and Allergan reaching a nationwide opioids settlement.
  • Once the documentation is finalized, the nationwide agreement will need to be adopted by a sufficient number of plaintiffs, which would then resolve the vast majority of opioid-related claims and litigation by states, subdivisions, and Native-American tribes in the United States.
  • There are no remaining trials currently scheduled against Teva in 2022, with the possible exception of the relief phase of the trial in the New York opioids litigation; additionally, Teva, New York State, and its subdivisions are engaged in ongoing settlement negotiations.
  • The Company expects that it will have the documentation for the nationwide settlement agreement finalized within the coming weeks, with the nationwide settlement sign-on process for states, subdivisions, and tribes to follow.
  • While the agreement will include no admission of wrongdoing, it remains in our best interest to put these cases behind us and continue to focus on the patients we serve every day.

Second Quarter 2022 Consolidated Results

Revenues in the second quarter of 2022 were $3,786 million, a decrease of 3% compared to the second quarter of 2021. In local currency terms revenues increased by 1%, mainly due to higher revenues from generic products in our Europe and North America segments, partially offset by lower revenues from COPAXONE and BENDEKA®/TREANDA® in our North America segment.

Exchange rate movements during the second quarter of 2022, net of hedging effects, negatively impacted our revenues by $162 million compared to the second quarter of 2021. Exchange rate movements during the second quarter of 2022, net of hedging effects, negatively impacted our GAAP and non-GAAP operating income by $6 million and $11 million, respectively, compared to the second quarter of 2021.

GAAP gross profit was $1,794 million in the second quarter of 2022, a decrease of 4% compared to the second quarter of 2021. GAAP gross profit margin was 47.4% in the second quarter of 2022, compared to 47.9% in the second quarter of 2021. This decrease was mainly driven by lower revenues from COPAXONE and a change in the mix of products in our North America segment, partially offset by a favorable mix of products in our Europe segment. Non-GAAP gross profit was $2,059 million in the second quarter of 2022, a decrease of 1% compared to the second quarter of 2021. Non-GAAP gross profit margin was 54.4% in the second quarter of 2022, compared to 53.3% in the second quarter of 2021. The increase was mainly due to a favorable mix of products in our Europe segment and the positive impact of hedging activities, partially offset by lower revenues from COPAXONE and a change in the mix of products in our North America segment.

GAAP Research and Development (R&D) expenses in the second quarter of 2022 were $228 million, a decrease of 8% compared to the second quarter of 2021. Non-GAAP R&D expenses were $222 million, or 5.9% of quarterly revenues, in the second quarter of 2022, compared to $243 million, or 6.2%, in the second quarter of 2021. Our lower R&D expenses in the second quarter of 2022, compared to the second quarter of 2021, were mainly due to a decrease in neuroscience (in the pain and migraine and headache therapeutic areas) and immunology (in the respiratory therapeutic area) as well as various generics projects, partially offset by higher R&D expenses related to our biosimilar products pipeline.

GAAP Selling and Marketing (S&M) expenses in the second quarter of 2022 were $594 million, a decrease of 3% compared to the second quarter of 2021. Non-GAAP S&M expenses were $563 million, or 14.9% of quarterly revenues, in the second quarter of 2022, compared to $582 million, or 14.9%, in the second quarter of 2021.

GAAP General and Administrative (G&A) expenses in the second quarter of 2022 were $313 million, an increase of 29% compared to the second quarter of 2021. The increase in G&A expenses in the second quarter of 2022 was related to proceeds received from Teva’s insurance carriers pursuant to a settlement reached on a derivative proceeding related to the acquisition of Actavis Generics in the second quarter of 2021, as well as higher litigation fees in the second quarter of 2022. Non-GAAP G&A expenses were $258 million, or 6.8% of quarterly revenues, in the second quarter of 2022, compared to $231 million, or 5.9%, in the second quarter of 2021.

GAAP other income in the second quarter of 2022 was $34 million, compared to $43 million in the second quarter of 2021. Other income in the second quarter of 2022 was mainly related to a capital gain related to the sale of an R&D site. Other income in the second quarter of 2021 was mainly due to capital gains related to the sale of certain OTC assets. Non-GAAP other income in the second quarter of 2022 was $3 million, compared to $6 million in the second quarter of 2021.

GAAP operating loss in the second quarter of 2022 was $949 million, compared to an operating income of $582 million in the second quarter of 2021. GAAP operating loss in the second quarter of 2022 was mainly affected by goodwill impairment charges and legal settlements and loss contingencies. Non-GAAP operating income in the second quarter of 2022 was $1,019 million, a decrease of 1%, compared to $1,034 million in the second quarter of 2021. This decrease in non-GAAP operating income was mainly due to lower gross profit, as discussed above. Non-GAAP operating margin was 26.9% in the second quarter of 2022, compared to 26.4% in the second quarter of 2021. This increase was driven mainly by a lower spend base.

EBITDA (defined as operating income (loss), excluding amortization and depreciation expenses) was negative $590 million in the second quarter of 2022, compared to EBITDA of $887 million in the second quarter of 2021. Adjusted EBITDA (defined as non-GAAP operating income excluding depreciation expenses) was $1,134 million in the second quarter of 2022, a decrease of 2% compared to $1,162 million in the second quarter of 2021.

GAAP financial expenses, net were $211 million in the second quarter of 2022, compared to $274 million in the second quarter of 2021. Non-GAAP financial expenses, net were $188 million in the second quarter of 2022, compared to $240 million in the second quarter of 2021. Financial expenses in the second quarter of 2022 were mainly comprised of interest expenses of $225 million, partially offset by a positive exchange rate impact driven mainly from currencies which we were unable to hedge, such as the Russian ruble. Financial expenses in the second quarter of 2021 were mainly comprised of interest expenses of $240 million and loss on revaluations of marketable securities of $34 million.

In the second quarter of 2022, we recognized a GAAP tax benefit of $900 million, on pre-tax loss of $1,160 million. In the second quarter of 2021, we recognized a tax expense of $98 million, on pre-tax income of $308 million. Our tax rate for the second quarter of 2022 was mainly affected by the realization of losses related to an investment in one of our U.S. subsidiaries, as well as impairments, legal settlements, adjustments to valuation allowances on deferred tax assets and interest expense disallowances. Non-GAAP income taxes in the second quarter of 2022 were $64 million, or 8%, on pre-tax non-GAAP income of $831 million. Non-GAAP income taxes in the second quarter of 2021 were $133 million, or 17%, on pre-tax non-GAAP income of $794 million. Our non-GAAP tax rate in the second quarter of 2022 was mainly affected by a portion of the realization of losses related to an investment in one of our U.S. subsidiaries, as well as the mix of products we sold and interest expense disallowances.

We expect our annual non-GAAP tax rate for 2022 to be 13%-14%, lower than our non-GAAP tax rate for 2021, which was 16.4%, mainly due to the effect of a portion of the realization of losses related to an investment in one of our U.S. subsidiaries.

GAAP net loss attributable to Teva and GAAP diluted loss per share were $232 million and $0.21, respectively, in the second quarter of 2022, compared to net income of $207 million and diluted earnings per share of $0.19 in the second quarter of 2021. Net loss in the second quarter of 2022 was mainly affected by goodwill impairment charges and legal settlements and loss contingencies, partially offset by a tax benefit, as discussed above. Non-GAAP net income attributable to Teva and non-GAAP diluted earnings per share in the second quarter of 2022 were $754 million and $0.68, respectively, compared to $651 million and $0.59 in the second quarter of 2021.

The weighted average diluted shares outstanding used for the fully diluted share calculation for the three months ended June 30, 2022 and 2021 were 1,110 and 1,109 million shares, respectively. The weighted average diluted shares outstanding used for the fully diluted share calculation on a non-GAAP basis for the three months ended June 30, 2022 and 2021 was 1,114 million and 1,109 million shares, respectively.

As of June 30, 2022 and 2021, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,144 million and 1,129 million, respectively.

Non-GAAP information: Net non-GAAP adjustments in the second quarter of 2022 were $986 million. Non-GAAP net income and non-GAAP EPS for the second quarter of 2022 were adjusted to exclude the following items:

  • Legal settlements and loss contingencies of $729 million;
  • Goodwill impairment of $745 million;
  • Amortization of purchased intangible assets of $212 million;
  • Impairment of long-lived assets of $65 million;
  • Restructuring expenses of $35 million;
  • Contingent consideration expense of $61 million;
  • Equity compensation expenses of $39 million;
  • Finance expenses of $23 million;
  • Capital gain of $31 million;
  • Other items of $73 million; and
  • Income tax of $965 million, includes unusual tax items and corresponding tax effects of the foregoing items.

Teva believes that excluding such items facilitates investors’ understanding of its business.

Commencing the first quarter of 2022, we no longer exclude IPR&D acquired in development arrangements from our non-GAAP financial measures. No IPR&D acquired in development arrangements was recorded in our comparable non-GAAP financial measures for the second quarter of 2021. We are making this change to our presentation of non-GAAP financial measures to improve the comparability of our non-GAAP presentation to those of other companies in the pharmaceutical industry that are making a similar change to their presentations beginning in the first quarter of 2022.

For further information, see the tables below for a reconciliation of the U.S. GAAP results to the adjusted non-GAAP figures and the information under “Non-GAAP Financial Measures.” Investors should consider non-GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.

Cash flow generated from operating activities during the second quarter of 2022 was $123 million, compared to $218 million in the second quarter of 2021. This decrease was mainly due to payments related to legal settlements in the second quarter of 2022, partially offset by an increase in accounts payables.

Free cash flow (defined as cash flow generated from operating activities, cash used for capital investments, beneficial interest collected in exchange for securitized accounts receivables, proceeds from divestitures of businesses and other assets and cash used for acquisition of businesses, net of cash acquired) was $301 million in the second quarter of 2022, compared to $625 million in the second quarter of 2021. The decrease in the second quarter of 2022 resulted mainly from lower cash flow from operating activities as well as lower proceeds from sales of assets.

As of June 30, 2022, our debt was $22,082 million, compared to $23,043 million as of December 31, 2021. This decrease was mainly due to $680 million from exchange rate fluctuations and $296 million senior notes repaid at maturity. Our debt as of June 30, 2022 was effectively denominated in the following currencies: 63% in U.S. dollars, 34% in euros and 3% in Swiss francs. The portion of total debt classified as short-term as of June 30, 2022 was 8%, compared to 6% as of December 31, 2021. Our financial leverage was 69% as of June 30, 2022, compared to 67% as of December 31, 2021. Our average debt maturity was approximately 6.1 years as of June 30, 2022, compared to 6.4 years as of December 31, 2021.

In April 2022, we entered into an unsecured syndicated sustainability-linked revolving credit facility of $1.8 billion with a maturity date of April 2026, with two one-year extension options ("RCF"). The RCF is linked to two sustainability performance targets. The RCF margin may increase or decrease depending on the Company's sustainability performance.

Segment Results for the second Quarter of 2022

North America Segment

Our North America segment includes the United States and Canada.

The following table presents revenues, expenses and profit for our North America segment for the three months ended June 30, 2022 and 2021:

 

 

 

 

 

 

 

 

Three months ended June 30,

 

2022

 

2021

 

(U.S. $ in millions / % of Segment Revenues)

Revenues

 

1,904

 

100%

 

1,943

 

100%

Gross profit

 

1,010

 

53.0%

 

1,040

 

53.5%

R&D expenses

 

147

 

7.7%

 

162

 

8.4%

S&M expenses

 

256

 

13.4%

 

255

 

13.1%

G&A expenses

 

127

 

6.7%

 

106

 

5.5%

Other income

 

(1

)

§

 

(5

)

§

Segment profit*

$

481

 

25.3%

$

521

 

26.8%

 

 

 

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

 

Revenues from our North America segment in the second quarter of 2022 were $1,904 million, a decrease of $39 million, or 2%, compared to the second quarter of 2021, mainly due to a decrease in revenues from COPAXONE and BENDEKA/TREANDA, partially offset by higher revenues from generic products.

Revenues in the United States, our largest market, were $1,773 million in the second quarter of 2022, a decrease of $46 million or 2% compared to the second quarter of 2021.

Revenues by Major Products and Activities

The following table presents revenues for our North America segment by major products and activities for the three months ended June 30, 2022 and 2021:

 

 

 

 

 

North America

 

Three months ended

June 30,

 

Percentage

Change

 

 

 

2022

 

2021

 

2022-2021

 

 

(U.S. $ in millions)

 

 

 

 

 

 

 

 

 

 

 

Generic products

 

 

1,026

 

 

951

 

8%

AJOVY

 

 

49

 

 

46

 

9%

AUSTEDO

 

 

204

 

 

174

 

17%

BENDEKA/TREANDA

 

 

83

 

 

106

 

(22%)

COPAXONE

 

 

94

 

 

152

 

(38%)

Anda

 

 

308

 

 

316

 

(2%)

Other

 

 

139

 

 

199

 

(30%)

Total

 

$

1,904

 

$

1,943

 

(2%)

 

 

 

 

 

 

 

 

 

Generic products revenues in our North America segment (including biosimilars) in the second quarter of 2022 were $1,026 million, an increase of 8% compared to the second quarter of 2021, mainly due to revenues from lenalidomide capsules (the generic version of Revlimid®), partially offset by increased competition and loss of revenues due to the closure of our Irvine, CA site.

In the second quarter of 2022, our total prescriptions were approximately 302 million (based on trailing twelve months), representing 8.2% of total U.S. generic prescriptions according to IQVIA data.

On March 7, 2022 we announced the launch of the first generic version of Revlimid® (lenalidomide capsules), in 5mg, 10mg, 15mg, and 25mg strengths, in the United States. These lenalidomide capsules are a prescription medicine used in adults for the treatment of (i) multiple myeloma in combination with the medicine dexamethasone, (ii) certain myelodysplastic syndromes, and (iii) mantle cell lymphoma following specific prior treatment.

AJOVY revenues in our North America segment in the second quarter of 2022 increased by 9% to $49 million, compared to the second quarter of 2021, mainly due to growth in volume.

AUSTEDO revenues in our North America segment in the second quarter of 2022 increased by 17%, to $204 million, compared to $174 million in the second quarter of 2021, mainly due to growth in volume.

BENDEKA and TREANDA combined revenues in our North America segment in the second quarter of 2022 decreased by 22% to $83 million, compared to the second quarter of 2021, mainly due to the availability of alternative therapies and continued competition from Belrapzo® (a ready-to-dilute bendamustine hydrochloride product from Eagle).

COPAXONE revenues in our North America segment in the second quarter of 2022 decreased by 38% to $94 million, compared to the second quarter of 2021, mainly due to generic competition in the United States and a decrease in glatiramer acetate market share due to availability of alternative therapies.

Anda revenues in our North America segment in the second quarter of 2022 decreased by 2% to $308 million, compared to $316 million in the second quarter of 2021, mainly due to lower market demand.

North America Gross Profit

Gross profit from our North America segment in the second quarter of 2022 was $1,010 million, a decrease of 3%, compared to $1,040 million in the second quarter of 2021.

Gross profit margin for our North America segment in the second quarter of 2022 decreased to 53.0%, compared to 53.5% in the second quarter of 2021. This decrease was mainly due to a change in mix of products.

North America Profit

Profit from our North America segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our North America segment in the second quarter of 2022 was $481 million, a decrease of 8% compared to $521 million in the second quarter of 2021, mainly due to lower revenues, as discussed above.

Europe Segment

Our Europe segment includes the European Union, the United Kingdom and certain other European countries.

The following table presents revenues, expenses and profit for our Europe segment for the three months ended June 30, 2022 and 2021:

 

Three months ended June 30,

 

2022

 

2021

 

(U.S. $ in millions / % of Segment Revenues)

Revenues

 

1,171

100%

 

1,184

100%

Gross profit

 

703

60.0%

 

661

55.8%

R&D expenses

 

56

4.7%

 

63

5.3%

S&M expenses

 

196

16.8%

 

209

17.7%

G&A expenses

 

63

5.4%

 

47

4.0%

Other income

 

(1)

§

 

§

§

Segment profit*

$

389

33.2%

$

343

28.9%

___________

 

 

 

 

 

 

* Segment profit does not include amortization and certain other item.

§ Represents an amount less than $0.5 million or 0.5%, as applicable.

Revenues from our Europe segment in the second quarter of 2022 were $1,171 million, a decrease of 1%, or $13 million, compared to the second quarter of 2021. In local currency terms, revenues increased by 8%. In the second quarter of 2021, our lower revenues were impacted by the implications of the COVID-19 pandemic. In the second quarter of 2022, our revenues were attributed to higher demand for generic and OTC products resulting mainly from the removal of restrictions related to doctor and hospital visits by patients that were previously implemented in response to the COVID-19 pandemic, together with higher revenues from generic product launches. In the second quarter of 2022, revenues were negatively impacted by exchange rate fluctuations of $106 million, net of hedging effects, compared to the second quarter of 2021. Revenues in the second quarter of 2022 included $31 million from a positive hedging impact, which is included in “Other” in the table below.

Revenues by Major Products and Activities

The following table presents revenues for our Europe segment by major products and activities for the three months ended June 30, 2022 and 2021:

 

 

Three months ended

June 30,

 

Percentage

Change

 

 

2022

 

2021

 

2022-2021

 

 

(U.S. $ in millions)

 

 

Generic products

 

 

873

 

 

878

 

(1%)

AJOVY

 

 

29

 

 

19

 

52%

COPAXONE

 

 

72

 

 

100

 

(28%)

Respiratory products

 

 

65

 

 

85

 

(23%)

Other

 

 

131

 

 

102

 

29%

Total

 

$

1,171

 

$

1,184

 

(1%)

 

 

 

 

 

 

 

 

 

Generic products revenues in our Europe segment in the second quarter of 2022, including OTC products, decreased by 1% to $873 million, compared to the second quarter of 2021. In local currency terms, revenues increased by 12%, mainly due to higher demand for generic and OTC products, resulting mainly from the removal of restrictions related to doctor and hospital visits by patients that were previously implemented in response to the COVID-19 pandemic, together with higher revenues from generic product launches.

AJOVY revenues in our Europe segment in the second quarter of 2022 increased to $29 million, compared to $19 million in the second quarter of 2021, mainly due to growth in European countries in which AJOVY had previously been launched, as well as launches and reimbursements in additional European countries.

COPAXONE revenues in our Europe segment in the second quarter of 2022 decreased by 28% to $72 million, compared to the second quarter of 2021. In local currency terms, revenues decreased by 18%, mainly due to price reductions and a decline in volume resulting from competing glatiramer acetate products.

Respiratory products revenues in our Europe segment in the second quarter of 2022 decreased by 23% to $65 million compared to the second quarter of 2021. In local currency terms, revenues decreased by 14%, mainly due to net price reductions and lower volumes.

Europe Gross Profit

Gross profit from our Europe segment in the second quarter of 2022 was $703 million, an increase of 6% compared to $661 million in the second quarter of 2021.

Gross profit margin for our Europe segment in the second quarter of 2022 increased to 60.0%, compared to 55.8% in the second quarter of 2021. This increase was mainly due to higher revenues from the positive impact of hedging activities discussed above, as well as lower cost of goods sold, mainly due to a better mix of products and a decrease in write-offs.

Europe Profit

Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in the second quarter of 2022 was $389 million, an increase of 13%, compared to $343 million in the second quarter of 2021. This increase was mainly due to higher gross profit as discussed above.

International Markets Segment

Our International Markets segment includes all countries in which we operate other than those in our North America and Europe segments. The key markets in this segment are Japan, Russia and Israel.

In February 2022, Russia launched an invasion of Ukraine. As of the date of this press release, sustained conflict and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results. We have no manufacturing or R&D facilities in these markets. During the second quarter of 2022, the impact of this conflict on our International Markets segment results of operations and financial condition was immaterial.

The following table presents revenues, expenses and profit for our International Markets segment for the three months ended June 30, 2022 and 2021:

 

Three months ended June 30,

 

2022

 

2021

 

(U.S. $ in millions / % of Segment Revenues)

Revenues

 

454

100%

 

485

100%

Gross profit

 

242

53.3%

 

270

55.7%

R&D expenses

 

19

4.2%

 

18

3.6%

S&M expenses

 

99

21.7%

 

105

21.7%

G&A expenses

 

30

6.7%

 

25

5.1%

Other income

 

(1)

§

 

(1)

§

Segment profit*

$

95

20.9%

$

123

25.5%

__________

 

 

 

 

 

 

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

Revenues from our International Markets segment in the second quarter of 2022 were $454 million, a decrease of 6% compared to the second quarter of 2021. In local currency terms, revenues increased by 3% compared to the second quarter of 2021, mainly due to higher revenues in certain markets, partially offset by lower revenues in Japan due to regulatory price reductions and generic competition to off-patented products.

In the second quarter of 2022, revenues were negatively impacted by exchange rate fluctuations of $45 million, including hedging effects, compared to the second quarter of 2021. Revenues in the second quarter of 2022 included $17 million from a negative hedging impact, which is included in “Other” in the table below.

Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the three months ended June 30, 2022 and 2021:

 

 

 

 

 

 

 

 

Three months ended

June 30,

 

Percentage

Change

 

 

2022

 

2021

 

2022-2021

 

 

(U.S. $ in millions)

 

 

Generic products

 

 

394

 

 

407

 

(3%)

AJOVY

 

 

10

 

 

5

 

96%

COPAXONE

 

 

9

 

 

7

 

27%

Other

 

 

40

 

 

65

 

(39%)

Total

 

$

454

 

$

485

 

(6%)

Generic products revenues in our International Markets segment in the second quarter of 2022, which include OTC products, decreased by 3% in U.S. dollars. In local currency terms, revenues increased by 4% to $394 million, compared to the second quarter of 2021. This increase was mainly due to higher revenues in certain markets, partially offset by lower sales in Japan due to regulatory price reductions and generic competition to off-patented products in Japan.

AJOVY was launched in certain markets in our International Markets segment, including Japan in August 2021. We are moving forward with plans to launch AJOVY in other markets. AJOVY revenues in our International Markets segment in the second quarter of 2022 were $10 million, compared to $5 million in the second quarter of 2021.

COPAXONE revenues in our International Markets segment in the second quarter of 2022 were $9 million, compared to $7 million in the second quarter of 2021.

AUSTEDO was launched in early 2021 in China for the treatment of chorea associated with Huntington's disease and for the treatment of tardive dyskinesia, and was also launched in Israel during 2021. In October 2021, we received marketing approval for both indications in Brazil. We continue with additional submissions in various other markets.

International Markets Gross Profit

Gross profit from our International Markets segment in the second quarter of 2022 was $242 million, a decrease of 10% compared to $270 million in the second quarter of 2021.

Gross profit margin for our International Markets segment in the second quarter of 2022 decreased to 53.3%, compared to 55.7% in the second quarter of 2021. This decrease was mainly due to regulatory price reductions and generic competition to off-patented products in Japan, as well as a negative impact from hedging activity.

International Markets Profit

Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment. Segment profit does not include amortization and certain other items.

Profit from our International Markets segment in the second quarter of 2022 was $95 million, a decrease of 23%, compared to $123 million in the second quarter of 2021. This decrease was mainly due to lower gross profit discussed above.

Other Activities

We have other sources of revenues, primarily the sale of active pharmaceutical ingredients ("APIs") to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our North America, Europe or International Markets segments described above.

Our revenues from other activities in the second quarter of 2022 were $257 million, a decrease of 14% compared to the second quarter of 2021. In local currency terms, revenues decreased by 10%.

API sales to third parties in the second quarter of 2022 were $177 million, a decrease of 11% in both U.S. dollars and local currency terms, compared to the second quarter of 2021.

Outlook for 2022 Non-GAAP Results

$ billions, except EPS

July 2022 Outlook

May 2022 Outlook

2021 Actual

 

 

Revenues

15.0 – 15.6

 

15.4 - 16.0

 

15.9

 

 

COPAXONE ($m)

~700

 

~750

 

1,005

 

 

AUSTEDO ($m)

~1,000

 

~1,000

 

808

 

 

AJOVY ($m)

~400

 

~400

 

313

 

 

Operating Income

4.2-4.5

 

4.2-4.5

 

4.4

 

 

EBITDA

4.7-5.0

 

4.7-5.0

 

4.9

 

 

EPS ($)

2.40-2.60

 

2.40-2.60

 

2.58

 

 

Share Count

1,114 million shares

 

1,114 million shares

 

1,107 million shares

 

 

Free Cash Flow

1.9 - 2.2

 

1.9 - 2.2

 

2.2

 

 

CAPEX

0.5

 

0.6

 

0.6

 

 

Non-GAAP Tax Rate

13% - 14%

 

18% - 19%

 

16.4%

 

 

Conference Call

Teva will host a conference call and live webcast including a slide presentation on Wednesday, July 27, 2022, at 8:00 a.m. ET to discuss its second quarter 2022 results and overall business environment. A question & answer session will follow.

In order to participate, please register in advance here to obtain a local or toll-free phone number and your personal pin.

A live webcast of the call will be available on Teva’s website at: ir.tevapharm.com.

Following the conclusion of the call, a replay of the webcast will be available within 24 hours on Teva's website.

About Teva

Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) has been developing and producing medicines to improve people’s lives for more than a century. We are a global leader in generic and specialty medicines with a portfolio consisting of over 3,500 products in nearly every therapeutic area. Around 200 million people around the world take a Teva medicine every day, and are served by one of the largest and most complex supply chains in the pharmaceutical industry. Along with our established presence in generics, we have significant innovative research and operations supporting our growing portfolio of specialty and biopharmaceutical products. Learn more at http://www.tevapharm.com.

Some amounts in this press release may not add up due to rounding. All percentages have been calculated using unrounded amounts.

Non-GAAP Financial Measures

This press release contains certain financial information that differs from what is reported under accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures, including, but not limited to, non-GAAP EPS, non-GAAP operating income, non-GAAP gross profit, non-GAAP gross profit margin, EBITDA, Adjusted EBITDA, non-GAAP R&D expenses, non-GAAP S&M expenses, non-GAAP G&A expenses, non-GAAP other income, non-GAAP financial expenses, non-GAAP income taxes, non-GAAP income (loss) before income taxes, non-GAAP tax rate, non-GAAP net income (loss), non-GAAP net income (loss) attributable to Teva and non-GAAP diluted EPS are presented in order to facilitates investors' understanding of our business. We utilize certain non-GAAP financial measures to evaluate performance, in conjunction with other performance metrics. The following are examples of how we utilize the non-GAAP measures: our management and board of directors use the non-GAAP measures to evaluate our operational performance, to compare against work plans and budgets, and ultimately to evaluate the performance of management; our annual budgets are prepared on a non-GAAP basis; and senior management’s annual compensation is derived, in part, using these non-GAAP measures. See the attached tables for a reconciliation of the GAAP results to the adjusted non-GAAP figures. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP. We are not providing forward looking guidance for GAAP reported financial measures or a quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measure because we are unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. Important factors that could cause or contribute to such differences include risks relating to:

  • our ability to successfully compete in the marketplace, including: that we are substantially dependent on our generic products; consolidation of our customer base and commercial alliances among our customers; delays in launches of new generic products; the increase in the number of competitors targeting generic opportunities and seeking U.S. market exclusivity for generic versions of significant products; our ability to develop and commercialize biopharmaceutical products; competition for our specialty products, including AUSTEDO, AJOVY and COPAXONE; our ability to achieve expected results from investments in our product pipeline; our ability to develop and commercialize additional pharmaceutical products; and the effectiveness of our patents and other measures to protect our intellectual property rights;
  • our substantial indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, may result in a further downgrade of our credit ratings; and our inability to raise debt or borrow funds in amounts or on terms that are favorable to us;
  • our business and operations in general, including: uncertainty regarding the COVID-19 pandemic and the governmental and societal responses thereto; our ability to successfully execute and maintain the activities and efforts related to the measures we have taken or may take in response to the COVID-19 pandemic and associated costs therewith; effectiveness of our optimization efforts; our ability to attract, hire and retain highly skilled personnel; manufacturing or quality control problems; interruptions in our supply chain; disruptions of information technology systems; breaches of our data security; variations in intellectual property laws; challenges associated with conducting business globally, including political or economic instability, major hostilities or terrorism; costs and delays resulting from the extensive pharmaceutical regulation to which we are subject or delays in governmental processing time due to travel and work restrictions caused by the COVID-19 pandemic;
  • the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; significant sales to a limited number of customers; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; and our prospects and opportunities for growth if we sell assets;
  • compliance, regulatory and litigation matters, including: failure to comply with complex legal and regulatory environments; increased legal and regulatory action in connection with public concern over the abuse of opioid medications and our ability to reach a final resolution of the remaining opioid-related litigation; scrutiny from competition and pricing authorities around the world, including our ability to successfully defend against the U.S. Department of Justice criminal charges of Sherman Act violations; potential liability for patent infringement; product liability claims; failure to comply with complex Medicare and Medicaid reporting and payment obligations; compliance with anti-corruption sanctions and trade control laws; environmental risks; and the impact of ESG issues;
  • other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our intangible assets; potential significant increases in tax liabilities (including as a result of potential tax reform in the United States); and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business;



    and other factors discussed in this press release, in our Quarterly Report on Form 10-Q for the second quarter of 2022 and in our Annual Report on Form 10-K for the year ended December 31, 2021, including in the sections captioned "Risk Factors” and “Forward Looking Statements.” Forward-looking statements speak only as of the date on which they are made, and we assume no obligation to update or revise any forward-looking statements or other information contained herein, whether as a result of new information, future events or otherwise. You are cautioned not to put undue reliance on these forward-looking statements.
Consolidated Statements of Income
(U.S. dollars in millions, except share and per share data)
 
Three months ended Six months ended
June 30, June 30,

2022

2021

2022

2021

(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues

3,786

 

3,910

 

7,447

 

7,892

 

Cost of sales

1,992

 

2,037

 

3,913

 

4,141

 

Gross profit

1,794

 

1,873

 

3,534

 

3,750

 

Research and development expenses

228

 

248

 

453

 

501

 

Selling and marketing expenses

594

 

615

 

1,178

 

1,200

 

General and administrative expenses

313

 

242

 

609

 

532

 

Intangible assets impairments

51

 

195

 

199

 

274

 

Other asset impairments, restructuring and other items

118

 

28

 

246

 

165

 

Goodwill impairment

745

 

-

 

745

 

-

 

Legal settlements and loss contingencies

729

 

6

 

1,854

 

110

 

Other income

(34

)

(43

)

(87

)

(48

)

Operating income (loss)

(949

)

582

 

(1,662

)

1,015

 

Financial expenses, net

211

 

274

 

468

 

564

 

Income (loss) before income taxes

(1,160

)

308

 

(2,131

)

451

 

Income taxes (benefit)

(900

)

98

 

(899

)

159

 

Share in (profits) losses of associated companies, net

-

 

(11

)

(21

)

(14

)

Net income (loss)

(259

)

221

 

(1,211

)

306

 

Net income (loss) attributable to non-controlling interests

(27

)

14

 

(24

)

21

 

Net income (loss) attributable to Teva

(232

)

207

 

(1,187

)

284

 

 
 
 
Earnings (loss) per share attributable to Teva: Basic ($)

(0.21

)

0.19

 

(1.07

)

0.26

 

Diluted ($)

(0.21

)

0.19

 

(1.07

)

0.26

 

Weighted average number of shares (in millions): Basic

1,110

 

1,103

 

1,109

 

1,101

 

Diluted

1,110

 

1,109

 

1,109

 

1,108

 

 
 
Non-GAAP net income attributable to Teva:*

754

 

651

 

1,363

 

1,350

 

Non-GAAP net income attributable to Teva for diluted earnings per share:

754

 

651

 

1,363

 

1,350

 

 
Non-GAAP earnings per share attributable to Teva:* Basic ($)

0.68

 

0.59

 

1.23

 

1.23

 

Diluted ($)

0.68

 

0.59

 

1.22

 

1.22

 

 
Non-GAAP average number of shares (in millions): Basic

1,110

 

1,103

 

1,109

 

1,101

 

Diluted

1,114

 

1,109

 

1,116

 

1,108

 

 
 
 
* See reconciliation attached.
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
 
June 30, December 31,

2022

2021

ASSETS

(Unaudited)

(Audited)

Current assets:
Cash and cash equivalents

2,058

2,165

Accounts receivables, net of allowance for credit losses of $95 million and $90 million as of June 30, 2022 and December 31, 2021.

4,471

4,529

Inventories

4,049

3,818

Prepaid expenses

1,052

1,075

Other current assets

518

965

Assets held for sale

16

19

Total current assets

12,164

12,573

Deferred income taxes

1,595

596

Other non-current assets

454

515

Property, plant and equipment, net

5,740

5,982

Operating lease right-of-use assets

441

495

Identifiable intangible assets, net

6,700

7,466

Goodwill

18,837

20,040

Total assets

45,932

47,666

 
LIABILITIES & EQUITY
Current liabilities:
Short-term debt

1,719

1,426

Sales reserves and allowances

3,880

4,241

Accounts payables

1,901

1,686

Employee-related obligations

467

563

Accrued expenses

2,112

2,208

Other current liabilities

916

903

Total current liabilities

10,996

11,027

 
 
Long-term liabilities:
Deferred income taxes

532

784

Other taxes and long-term liabilities

3,842

2,578

Senior notes and loans

20,363

21,617

Operating lease liabilities

371

416

Total long-term liabilities

25,107

25,395

Equity:
Teva shareholders’ equity

9,037

10,278

Non-controlling interests

791

966

Total equity

9,828

11,244

Total liabilities and equity

45,932

47,666

 
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in millions)
(Unaudited)
 
Six months ended Three months ended
June 30, June 30,

2022

2021

2022

2021

Operating activities:
Net income (loss) $

(1,211

)

$

306

 

$

(259

)

$

222

 

Adjustments to reconcile net income (loss) to net cash provided by operations:
Depreciation and amortization

681

 

681

 

358

 

305

 

Impairment of goodwill, long-lived assets and assets held for sale

975

 

354

 

810

 

226

 

Net change in operating assets and liabilities

913

 

(1,679

)

354

 

(603

)

Deferred income taxes – net and uncertain tax positions

(1,258

)

5

 

(1,083

)

16

 

Stock-based compensation

63

 

60

 

39

 

29

 

Other items

(77

)

(7

)

(107

)

4

 

Net loss (gain) from investments and from sale of long lived assets

(12

)

93

 

11

 

19

 

Net cash provided by (used in) operating activities

74

 

(187

)

123

 

218

 

 
 
Investing activities:
Beneficial interest collected in exchange for securitized accounts receivables

592

 

881

 

287

 

405

 

Proceeds from sale of business and long-lived assets

43

 

254

 

18

 

116

 

Acquisition of businesses, net of cash acquired

(7

)

-

 

-

 

-

 

Purchases of property, plant and equipment

(284

)

(263

)

(127

)

(113

)

Purchases of investments and other assets

(4

)

(36

)

-

 

(34

)

Proceeds from sale of investments

3

 

153

 

3

 

107

 

Other investing activities

(2

)

-

 

(2

)

-

 

Net cash provided by (used in) investing activities

341

 

989

 

179

 

481

 

 
Financing activities:
Repayment of senior notes and loans and other long-term liabilities

(296

)

-

 

(296

)

-

 

Redemption of convertible senior notes

-

 

(491

)

-

 

-

 

Other financing activities

(40

)

(3

)

(42

)

(1

)

Net cash provided by (used in) financing activities

(336

)

(494

)

(338

)

(1

)

Translation adjustment on cash and cash equivalents

(185

)

(49

)

(123

)

(5

)

Net change in cash, cash equivalents and restricted cash

(107

)

259

 

(159

)

693

 

Balance of cash, cash equivalents and restricted cash at beginning of period

2,198

 

2,177

 

2,250

 

1,743

 

Balance of cash, cash equivalents and restricted cash at end of period $

2,091

 

$

2,436

 

$

2,091

 

$

2,436

 

 
 
Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets:
Cash and cash equivalents

2,058

 

2,436

 

2,058

 

2,436

 

Restricted cash included in other current assets

33

 

-

 

33

 

-

 

Total cash, cash equivalents and restricted cash shown in the statements of cash flows

2,091

 

2,436

 

2,091

 

2,436

 

 
 
Non-cash financing and investing activities:
Beneficial interest obtained in exchange for securitized accounts receivables $

590

 

$

878

 

$

290

 

$

390

 

 

Three Months Ended June 30, 2022

U.S. $ and shares in millions (except per share amounts)
GAAP Excluded for non-GAAP measurement Non-GAAP
Amortization of purchased intangible assets Legal settlements and loss contingencies Goodwill impairment Impairment of long lived assets Restructuring costs Costs related to regulatory actions taken in facilities Equity compensation Contingent consideration Other non-GAAP items* Accelerated Depreciation Other items
Net revenues

3,786

 

3,786

 

Cost of sales

1,992

 

191

3

6

34

 

32

1,726

 

Gross profit

1,794

 

191

3

6

34

 

32

2,059

 

Gross profit margin

47.4

%

54.4

%

R&D expenses

228

 

5

222

 

S&M expenses

594

 

21

9

-

 

563

 

G&A expenses

313

 

18

37

 

258

 

Other (income) expense

(34

)

(31

)

(3

)

Legal settlements and loss contingencies

729

 

729

-

 

 
Other assets impairments, restructuring and other items

118

 

14

35

61

8

 

-

 

Intangible assets impairments

51

 

51

-

 

Goodwill Impairment

745

 

745

Operating income (loss)

(949

)

212

729

745

65

35

3

39

61

48

 

32

1,019

 

Financial expenses, net

211

 

23

 

188

 

Income (loss) before income taxes

(1,160

)

212

729

745

65

35

3

39

61

48

 

32

23

 

831

 

Income taxes

(900

)

**

(965

)

64

 

Net income (loss)

(259

)

212

729

745

65

35

3

39

61

48

 

32

(942

)

767

 

Net income (loss) attributable to non-controlling interests

(27

)

(39

)

13

 

Net income (loss) attributable to Teva

(232

)

212

729

745

65

35

3

39

61

48

 

32

(981

)

754

 

 
EPS - Basic

(0.21

)

0.89

 

0.68

 

EPS - Diluted

(0.21

)

0.89

 

0.68

 

 
The non-GAAP diluted weighted average number of shares was 1,114 million for the three months ended June 30, 2022.
Non-GAAP income taxes for the three months ended June 30, 2022 were 8% on pre-tax non-GAAP income.
* Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
** Includes a portion of the realization of losses related to an investment in one of our U.S. subsidiaries as well as corresponding tax effects on non-GAAP items.
Adjusted EBITDA reconciliation
Operating income (loss)

(949

)

Add:
Depreciation

147

 

Amortization

212

 

EBITDA

(590

)

Legal settlements and loss contingencies

729

 

Goodwill impairment

745

 

Impairment of long lived assets

65

 

Restructuring costs

35

 

Costs related to regulatory actions taken in facilities

3

 

Equity compensation

39

 

Contingent consideration

61

 

Other non-GAAP items

48

 

Adjusted EBITDA

1,134

 

 
Six Months Ended June 30, 2022
U.S. $ and shares in millions (except per share amounts)
GAAP Excluded for non-GAAP measurement Non-GAAP
Amortization of purchased intangible assets Legal settlements and loss contingencies Goodwill impairment Impairment of long-lived assets Restructuring costs Costs related to regulatory actions taken in facilities Equity compensation Contingent consideration Accelerated depreciation Other non-GAAP items* Other items
Net revenue

7,447

 

7,447

 

Cost of sales

3,913

 

368

4

11

33

95

 

3,401

 

Gross profit

3,534

 

368

4

11

33

95

 

4,045

 

Gross profit margin

47.5

%

54.3

%

R&D expenses

453

 

10

443

 

S&M expenses

1,178

 

43

16

3

 

1,115

 

G&A expenses

609

 

26

73

 

510

 

Other (income) expense

(87

)

(31

)

(55

)

Legal settlements and loss contingencies

1,854

 

1,854

0

 

 
Other assets impairments, restructuring and other items

246

 

30

92

94

30

 

(0

)

Intangible assets impairment

199

 

199

(0

)

Goodwill impairment

745

 

745

Operating income (loss)

(1,662

)

412

1,854

745

230

92

4

63

94

33

170

 

2,033

 

Financial expenses, net

468

 

33

 

435

 

Income (loss) before income taxes

(2,131

)

412

1,854

745

230

92

4

63

94

33

170

 

33

 

1,597

 

Income taxes

(899

)

**

(1,105

)

206

 

Share in (profits) losses of associated companies – net

(21

)

(22

)

1

 

Net income (loss)

(1,211

)

412

1,854

745

230

92

4

63

94

33

170

 

(1,094

)

1,390

 

Net income (loss) attributable to non-controlling interests

(24

)

(50

)

26

 

Net income (loss) attributable to Teva

(1,187

)

412

1,854

745

230

92

4

63

94

33

170

 

(1,144

)

1,363

 

 
EPS - Basic

(1.07

)

2.30

 

1.23

 

EPS - Diluted

(1.07

)

2.29

 

1.22

 

 
The non-GAAP diluted weighted average number of shares was 1,116 million for the six months ended June 30, 2022.
Non-GAAP income taxes for the six months ended June 30, 2022 were 13% on pre-tax non-GAAP income.
* Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
** Includes a portion of the realization of losses related to an investment in one of our U.S. subsidiaries as well as corresponding tax effects on non-GAAP items
Adjusted EBITDA reconciliation
Operating income (loss)

(1,662

)

Add:
Depreciation

270

 

Amortization

412

 

EBITDA

(981

)

Legal settlements and loss contingencies

1,854

 

Goodwill impairment

745

 

Impairment of long lived assets

230

 

Restructuring costs

92

 

Costs related to regulatory actions taken in facilities

4

 

Equity compensation

63

 

Contingent consideration

94

 

Other non-GAAP items

170

 

 
Adjusted EBITDA

2,269

 

 
Three Months Ended June 30, 2021
U.S. $ and shares in millions (except per share amounts)
GAAP Excluded for non-GAAP measurement Non-GAAP
 
Amortization of purchased intangible assets Legal settlements and loss contingencies Impairment of long lived assets Restructuring costs Costs related to regulatory actions taken in facilities Equity compensation Contingent consideration Other non-GAAP items* Other items
Net revenues

3,910

 

3,910

 

Cost of sales

2,037

 

148

8

6

50

 

1,826

 

Gross profit

1,873

 

148

8

6

50

 

2,084

 

Gross profit margin

47.9

%

53.3

%

R&D expenses

248

 

5

243

 

S&M expenses

615

 

25

8

582

 

G&A expenses

242

 

11

231

 

Other (income) expense

(43

)

(37

)

(6

)

Legal settlements and loss contingencies

6

 

6

-

 

 
Other assets impairments, restructuring and other items

28

 

32

(13

)

(19

)

28

 

-

 

Intangible assets impairments

195

 

195

-

 

Operating income (loss)

582

 

173

6

226

(13

)

8

29

(19

)

42

 

1,034

 

Financial expenses, net

274

 

34

 

240

 

Income (loss) before income taxes

308

 

173

6

226

(13

)

8

29

(19

)

42

 

34

 

794

 

Income taxes

98

 

(36

)

133

 

Share in (profit) losses of associated companies – net

(11

)

(3

)

(8

)

Net income (loss)

221

 

173

6

226

(13

)

8

29

(19

)

42

 

(5

)

669

 

Net income (loss) attributable to non-controlling interests

14

 

(3

)

18

 

Net income (loss) attributable to Teva

207

 

173

6

226

(13

)

8

29

(19

)

42

 

(8

)

651

 

 
EPS - Basic

0.19

 

0.40

 

0.59

 

EPS - Diluted

0.19

 

0.40

 

0.59

 

 
The non-GAAP diluted weighted average number of shares was 1,109 million for the three months ended June 30, 2021.
Non-GAAP income taxes for the three months ended June 30, 2021 were 17% on pre-tax non-GAAP income.

*

Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Adjusted EBITDA reconciliation
Operating income (loss)

582

 

Add:
Depreciation

134

 

Amortization

173

 

EBITDA

887

 

Legal settlements and loss contingencies

6

 

Impairment of long lived assets

226

 

Restructuring costs

(13

)

Costs related to regulatory actions taken in facilities

8

 

Equity compensation

29

 

Contingent consideration

(19

)

Other non-GAAP items (excluding accelerated depreciation of $4 million)*

37

 

 
Adjusted EBITDA

1,162

 

 
Six months ended June 30, 2021
U.S. $ and shares in millions (except per share amounts)
GAAP Excluded for non-GAAP measurement Non-GAAP
 
Amortization of purchased intangible assets Legal settlements and loss contingencies Impairment of long-lived assets Restructuring costs Costs related to regulatory actions taken in facilities Equity compensation Contingent consideration Other non-GAAP items* Other items
Net revenue

7,892

 

7,892

 

Cost of sales

4,141

 

363

13

12

91

 

3,663

 

Gross profit

3,750

 

363

13

12

91

 

4,228

 

Gross profit margin

47.5

%

53.6

%

R&D expenses

501

 

10

5

 

487

 

S&M expenses

1,200

 

52

18

1,131

 

G&A expenses

532

 

21

-

 

510

 

Other (income) expense

(48

)

(37

)

(11

)

 
Legal settlements and loss contingencies

110

 

110

-

 

Other assets impairments, restructuring and other items

165

 

80

69

(16

)

33

 

-

 

Intangible assets impairment

274

 

274

-

 

Operating income (loss)

1,015

 

414

110

354

69

13

60

(16

)

92

 

-

 

2,111

 

Financial expenses, net

564

 

98

 

467

 

Income (loss) before income taxes

451

 

414

110

354

69

13

60

(16

)

92

 

98

 

1,644

 

Income taxes

159

 

(120

)

280

 

Share in losses of associated companies – net

(14

)

(1

)

(13

)

 
Net income (loss) attributable to Teva

306

 

414

110

354

69

13

60

(16

)

92

 

(24

)

1,377

 

Net income (loss) attributable to non-controlling interests

21

 

(6

)

28

 

 
Net income (loss)

284

 

414

110

354

69

13

60

(16

)

92

 

(30

)

1,350

 

EPS - Basic

0.26

 

0.97

 

1.23

 

EPS - Diluted

0.26

 

0.96

 

1.22

 

 
The non-GAAP diluted weighted average number of shares was 1,108 million for the six months ended June 30, 2021.
Non-GAAP income taxes for the six months ended June 30, 2021 were 17% on pre-tax non-GAAP income.
* Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events.
Adjusted EBITDA reconciliation
Operating income (loss)

1,015

 

Add:
Depreciation

266

 

Amortization

414

 

EBITDA

1,696

 

Legal settlements and loss contingencies

110

 

 
Impairment of long lived assets

354

 

Restructuring costs

69

 

Costs related to regulatory actions taken in facilities

13

 

Equity compensation

60

 

Contingent consideration

(16

)

Other non-GAAP items (excluding accelerated depreciation of $9 million)*

83

 

 
Adjusted EBITDA

2,368

 

 
 
Segment Information
 
North America Europe International Markets
Three months ended June 30, Three months ended June 30, Three months ended June 30,

2022

2021

2022

2021

2022

2021

 
(U.S. $ in millions) (U.S. $ in millions) (U.S. $ in millions)
 
Revenues $

1,904

 

$

1,943

 

$

1,171

 

$

1,184

$

454

 

$

485

 

Gross profit

1,010

 

1,040

 

703

 

661

242

 

270

 

R&D expenses

147

 

162

 

56

 

63

19

 

18

 

S&M expenses

256

 

255

 

196

 

209

99

 

105

 

G&A expenses

127

 

106

 

63

 

47

30

 

25

 

Other income

(1

)

(5

)

(1

)

§

(1

)

(1

)

Segment profit $

481

 

$

521

 

$

389

 

$

343

$

95

 

$

123

 

 
§ Represents an amount less than $1 million.
 
Segment Information
 
North America Europe International Markets
Six months ended June 30, Six months ended June 30, Six months ended June 30,

2022

2021

2022

2021

2022

2021

 
(U.S. $ in millions) (U.S. $ in millions) (U.S. $ in millions)
 
Revenues $

3,641

 

$

3,932

 

$

2,327

 

$

2,398

 

$

946

 

$

975

 

Gross profit

1,899

 

2,114

 

1,397

 

1,349

 

528

 

530

 

R&D expenses

289

 

322

 

114

 

129

 

39

 

35

 

S&M expenses

501

 

483

 

393

 

424

 

196

 

201

 

G&A expenses

239

 

218

 

122

 

117

 

60

 

51

 

Other income

(12

)

(7

)

(1

)

(1

)

(41

)

(3

)

Segment profit $

883

 

$

1,098

 

$

769

 

$

680

 

$

274

 

$

245

 

 
Reconciliation of our segment profit
to consolidated income before income taxes
Three months ended
June 30,

2022

2021

 
(U.S.$ in millions)
 
North America profit $

481

 

$

521

Europe profit

389

 

343

International Markets profit

95

 

123

Total reportable segment profit

964

 

987

Profit of other activities

55

 

47

1,019

 

1,034

Amounts not allocated to segments:
Amortization

212

 

173

Other asset impairments, restructuring and other items

118

 

28

Goodwill impairment

745

 

-

Intangible asset impairments

51

 

195

Legal settlements and loss contingencies

729

 

6

Other unallocated amounts

113

 

50

Consolidated operating income (loss)

(949

)

582

Financial expenses - net

211

 

274

Consolidated income (loss) before income taxes $

(1,160

)

$

308

 
Reconciliation of our segment profit
to consolidated income before income taxes
Six months ended
June 30,

2022

2021

 
(U.S.$ in millions)
 
North America profit $

883

 

$

1,098

Europe profit

769

 

680

International Markets profit

274

 

245

Total reportable segment profit

1,926

 

2,023

Profit of other activities

107

 

87

Total segment profit

2,032

 

2,111

Amounts not allocated to segments:
Amortization

412

 

414

Other asset impairments, restructuring and other items

246

 

165

Goodwill impairment

745

 

-

Intangible asset impairments

199

 

274

Legal settlements and loss contingencies

1,854

 

110

Other unallocated amounts

240

 

132

Consolidated operating income (loss)

(1,662

)

1,015

Financial expenses - net

468

 

564

Consolidated income (loss) before income taxes $

(2,131

)

$

451

 
Segment revenues by major products and activities
(Unaudited)
 
Three months ended
June 30, Percentage

Change

2022

2021

2021-2022
(U.S.$ in millions)
North America segment
Generic products $

1,026

$

951

8%

AJOVY

49

46

9%

AUSTEDO

204

174

17%

BENDEKA/TREANDA

83

106

(22%)

COPAXONE

94

152

(38%)

Anda

308

316

(2%)

Other

139

199

(30%)

Total

1,904

1,943

(2%)

 
 
Three months ended
June 30, Percentage

Change

2022

2021

2021-2022
(U.S.$ in millions)
Europe segment
Generic products $

873

$

878

(1%)

AJOVY

29

19

52%

COPAXONE

72

100

(28%)

Respiratory products

65

85

(23%)

Other

131

102

29%

Total

1,171

1,184

(1%)

 
 
Three months ended
June 30, Percentage

Change

2022

2021

2021-2022
(U.S.$ in millions)
International Markets segment
Generic products $

394

$

407

(3%)

AJOVY

10

5

96%

COPAXONE

9

7

27%

Other

40

65

(39%)

Total

454

485

(6%)

 
 
Revenues by Activity and Geographical Area
(Unaudited)
 
Six months ended
June 30, Percentage

Change

2022

2021

2021-2022
(U.S.$ in millions)
North America segment
Generic products $

1,925

$

2,004

(4%)

AJOVY

86

77

12%

AUSTEDO

358

320

12%

BENDEKA / TREANDA

165

197

(16%)

COPAXONE

180

315

(43%)

Anda

650

605

7%

Other

278

414

(33%)

Total

3,641

3,932

(7%)

 

 

 

 

Six months ended

 

June 30,

Percentage

Change

2022

2021

2021-2022

(U.S.$ in millions)

 

Europe segment

 

Generic products $

1,749

$

1,742

0%

AJOVY

60

35

71%

COPAXONE

144

201

(28%)

Respiratory products

137

179

(24%)

Other

238

242

(2%)

Total

2,327

2,398

(3%)

 

 

Six months ended

 

June 30,

Percentage

Change

2022

2021

2021-2022

(U.S.$ in millions)

 

International Markets segment

 

Generic products $

782

$

799

(2%)

AJOVY

16

7

143%

COPAXONE

20

19

4%

Other

128

150

(15%)

Total

946

975

(3%)

 
Free cash flow reconciliation
(Unaudited)
 
Three months ended June 30,

2022

2021

 
(U.S. $ in millions)
 
Net cash provided by (used in) operating activities

123

 

218

 

Beneficial interest collected in exchange for securitized accounts receivables

287

 

405

 

Purchases of property, plant and equipment

(127

)

(113

)

Proceeds from sale of business and long lived assets

18

 

116

 

Free cash flow $

301

 

$

625

 

 
Free cash flow reconciliation
(Unaudited)
 
Six months ended June 30,

2022

2021

 
(U.S. $ in millions)
 
Net cash provided by (used in) operating activities

74

 

(187

)

Beneficial interest collected in exchange for securitized accounts receivables

592

 

881

 

Purchases of property, plant and equipment

(284

)

(263

)

Proceeds from sale of business and long lived assets

43

 

254

 

Acquisition of businesses, net of cash acquired

(7

)

-

 

Free cash flow $

418

 

$

684

 

 

 

Contacts

IR Contacts

Ran Meir

(267) 468-4475

Yael Ashman

+972 (3) 914 8262

PR Contacts

Kelley Dougherty

(973) 832-2810

Eden Klein

+972 (3) 906 2645

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.