- Revenues of $4.4 billion
- GAAP diluted EPS of $0.06
- Non-GAAP diluted EPS of $0.76
- Free cash flow of $551 million
- Full year 2020 business outlook reaffirmed:
- Net revenues of $16.6 - $17 billion
- EBITDA of $4.5 - $4.9 billion
- EPS of $2.30 - $2.55
- Free cash flow of $1.8 - $2.2 billion
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA, TASE: TEVA)
today reported results for the quarter ended March 31, 2020.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20200507005231/en/
Mr. Kåre Schultz, Teva's President and CEO, said, “2020 brought
an unprecedented global health crisis, affecting all nations and
industries, including the pharmaceutical industry, which plays many
roles in countering the epidemic. As our industry responds to the
challenge, we are reminded of the importance of reliable supplies
of high quality generic medicines to meet critical demand. Teva has
responded to this challenge by supporting efforts of governments
and health services to curb the impact of the virus. We have done
this while taking robust measures to safeguard the health and
well-being of our employees, who have diligently worked to ensure
that all our manufacturing and distribution facilities remain open
to allow the safe supply of medicines and APIs to our customers,
and to millions of patients around the world."
Mr. Schultz continued, "Our very strong results during the first
quarter of 2020 were impacted by greater demand in our major
markets for generic and OTC products and respiratory products.
Stronger revenues across these categories, along with growth in our
operating and net profit, contributed to strong free cash flow and
a further reduction in our net debt to $24.3 billion."
"Looking ahead, in light of the challenges and uncertainties
facing our industry and society at large, we will continue to take
measures to safeguard our dedicated employees, securing continued
operation of our supply chain and deliveries of our broad portfolio
to the 200 million patients we serve."
First Quarter 2020 Consolidated
Results
Revenues in the first quarter of 2020 were $4,357
million, an increase of 5% in both U.S. dollar and local currency
terms, compared to the first quarter of 2019. This increase was
mainly due to higher revenues from generics and OTC sales in
Europe, higher revenues from AUSTEDO® and Anda in North America and
higher revenues from our International Markets segment, partially
offset by lower revenues from generics in the U.S. and lower
revenues from QVAR® and BENDEKA®/TREANDA® in North America.
Exchange rate differences between the first quarter of
2020 and the first quarter of 2019, net of hedging, negatively
impacted our revenues by $3 million and positively impacted our
GAAP and non-GAAP operating income by $27 million and $25 million,
respectively.
GAAP gross profit was $2,063 million in the first quarter
of 2020, an increase of 11% compared to the first quarter of 2019.
GAAP gross profit margin was 47.3% in the first quarter of
2020, compared to 44.7% in the first quarter of 2019. Non-GAAP
gross profit was $2,312 million in the first quarter of
2020, an increase of 8% compared to the first quarter of 2019.
Non-GAAP gross profit margin was 53.1% in the first quarter
of 2020, compared to 51.8% in the first quarter of 2019. The
increase in gross profit as a percentage of revenues was mainly due
to higher profitability in each of our three segments, mainly due
to higher revenues from AUSTEDO, a favorable mix of generic
products in North America, a favorable mix of generic products in
Europe and International Markets and a positive impact from our
hedging activity, partially offset by higher revenues from Anda,
which has lower profitability.
GAAP Research and Development (R&D) expenses in the
first quarter of 2020 were $221 million, a decrease of 15% compared
to the first quarter of 2019. Non-GAAP R&D expenses were
$221 million, or 5.1% of quarterly revenues, in the first quarter
of 2020, compared to $255 million, or 6.1%, in the first quarter of
2019. The decrease in R&D expenses resulted primarily from the
life cycle and stage of various projects.
GAAP Selling and Marketing (S&M) expenses in the
first quarter of 2020 were $613 million, a decrease of 5% compared
to the first quarter of 2019. Non-GAAP S&M expenses were
$570 million, or 13.1% of quarterly revenues, in the first quarter
of 2020, compared to $602 million, or 14.5%, in the first quarter
of 2019. The decrease was mainly due to cost reductions and
efficiency measures, as well as lower marketing and travel costs
attributed to travel restrictions related to the COVID-19
pandemic.
GAAP General and Administrative (G&A) expenses in the
first quarter of 2020 were $304 million, an increase of 4% compared
to the first quarter of 2019. Non-GAAP G&A expenses were
$290 million, or 6.7% of quarterly revenues, in the first quarter
of 2020, compared to $280 million, or 6.8%, in the first quarter of
2019.
GAAP and non-GAAP other income in the first quarter of
2020 was $13 million, compared to $6 million in the first quarter
of 2019.
GAAP operating income in the first quarter of 2020 was
$191 million, compared to $134 million in the first quarter of
2019. Non-GAAP operating income in the first quarter of 2020
was $1,244 million, an increase of 22% compared to $1,019 million
in the first quarter of 2019. This increase was mainly due to
higher profit in our Europe, International Markets and North
America segments and the economic hedging activities mentioned
above as well as lower operating expenses, notably S&M
expenses, primarily related to the COVID-19 pandemic.
EBITDA (non-GAAP operating income, which excludes
amortization and certain other items, as well as depreciation
expenses) was $1,375 million in the first quarter of 2020, an
increase of 19% compared to $1,154 million in the first quarter of
2019.
GAAP financial expenses were $224 million in the first
quarter of 2020, compared to $218 million in the first quarter of
2019. Non-GAAP financial expenses were $213 million in the
first quarter of 2020, compared to $220 million in the first
quarter of 2019.
In the first quarter of 2020, we recognized a GAAP tax
benefit of $59 million, on pre-tax loss of $33 million. In the
first quarter of 2019, we recognized a tax expense of $9 million,
on pre-tax loss of $84 million. Our tax rate for the first quarter
of 2020 was mainly affected by impairments in jurisdictions in
which tax rates are higher than Teva's average tax rate. Non-GAAP
income taxes for the first quarter of 2020 were $175
million, or 17%, on pre-tax non-GAAP income of $1,030 million.
Non-GAAP income taxes in the first quarter of 2019 were $125
million, or 16%, on pre-tax non-GAAP income of $799 million. Our
non-GAAP tax rate for the first quarter of 2020 was mainly affected
by the mix of products sold and lower interest expense disallowance
compared to the first quarter of 2019.
We expect our annual non-GAAP tax rate for 2020 to be 17-18%,
unchanged from our outlook provided in February 2020.
GAAP net income attributable to ordinary shareholders and
GAAP diluted EPS were $69 million and $0.06, respectively,
in the first quarter of 2020, compared to GAAP net loss and GAAP
diluted loss per share of $105 million and $0.10 in the first
quarter of 2019. Non-GAAP net income attributable to
ordinary shareholders and non-GAAP diluted EPS in the first
quarter of 2020 were $835 million and $0.76, respectively, compared
to $654 million and $0.60 in the first quarter of 2019. The
increase in non-GAAP net income and EPS is mainly due to higher
profit in our Europe, International Markets and North America
segments and the economic hedging activities mentioned above as
well as lower operating expenses, notably S&M expenses,
primarily related to the COVID-19 pandemic, partially offset by
higher non-GAAP taxes compared to the first quarter of 2019.
The weighted average diluted shares outstanding used for
the fully diluted share calculation for the three months ended
March 31, 2020 and 2019 were 1,096 million and 1,090 million
shares, respectively. The weighted average outstanding
shares for the fully diluted EPS calculation on a non-GAAP
basis for the three months ended March 31, 2020 and 2019 were 1,096
million and 1,093 million shares, respectively.
As of March 31, 2020 and 2019, the fully diluted share count for
purposes of calculating our market capitalization was approximately
1,118 million and 1,107 million, respectively.
Non-GAAP information: Net non-GAAP adjustments in the
first quarter of 2020 were $766 million. Non-GAAP net income and
non-GAAP EPS for the first quarter of 2020 were adjusted to exclude
the following items:
- Impairment of long-lived assets of $724 million, mainly
comprised of $649 million in impairments of long-lived intangible
assets, which were mainly attributed to the results in AUSTEDO for
the treatment of Tourette syndrome, ongoing regulatory pricing
reductions and generic competition in Japan and updated marketing
assumptions regarding price and volumes of certain generic products
in the U.S.;
- Amortization of purchased intangible assets of $258 million, of
which $223 million is included in cost of sales and the remaining
$35 million in S&M expenses;
- Restructuring expenses of $39 million;
- Equity compensation expenses of $30 million;
- Other items of $37 million;
- Legal settlements and loss contingencies of $25 million due to
a settlement of an action brought against the sellers of Auden
McKenzie;
- Minority income of $63 million; and
- Income tax of $234 million.
Teva believes that excluding such items facilitates investors’
understanding of its business. 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
first quarter of 2020 was $305 million, compared to $112 million in
the first quarter of 2019. This increase was mainly due to higher
operating profit in each of our three segments, as well as lower
performance incentive payments to employees paid in the first
quarter of 2020 compared to the amounts paid in the first quarter
of 2019.
Free cash flow (cash flow generated from operating
activities, net of cash received for capital investments and
beneficial interest collected in exchange for securitized trade
receivables) was $551 million in the first quarter of 2020,
compared to $360 million in the first quarter of 2019. This
increase was mainly due to higher cash flow generated from
operating activities, including significant consumption of
inventories.
As of March 31, 2020, our debt was $26,103 million,
compared to $26,908 million as of December 31, 2019. The decrease
was mainly due to repayment at maturity of our $700 million 2.25%
senior note senior notes and exchange rate fluctuations. The
portion of total debt classified as short-term as of March 31, 2020
was 6%, compared to 9% as of December 31, 2019. Our average debt
maturity was approximately 6.6 years as of March 31, 2020, compared
to 6.4 years as of December 31, 2019.
Segment Results for the First Quarter
2020
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 March 31, 2020
and 2019:
Three months ended March
31,
2020
2019
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
2,082
100
%
$
2,047
100.0
%
Gross profit
1,062
51.0
%
1,039
50.8
%
R&D expenses
146
7.0
%
165
8.1
%
S&M expenses
251
12.1
%
268
13.1
%
G&A expenses
118
5.6
%
112
5.5
%
Other (income) expense
(2
)
§
(4
)
§
Segment profit*
$
550
26.4
%
$
498
24.3
%
* 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 first
quarter of 2020 were $2,082 million, an increase of $36 million, or
2%, compared to the first quarter of 2019, mainly due to an
increase in revenues of AUSTEDO and Anda as well as a milestone
payment related to our anti-CGRP intellectual property, partially
offset by lower revenues from QVAR, BENDEKA/TREANDA, COPAXONE and
generic products.
Revenues in the United States, our largest market, were
$1,940 million in the first quarter of 2020, an increase of $29
million, or 2%, compared to the first quarter of 2019.
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
March 31, 2020 and 2019:
Three months ended March
31,
Percentage Change
2020
2019
2019-2020
(U.S. $ in millions)
Generic products
$
952
$
966
(1%)
AJOVY
29
20
44%
AUSTEDO
122
74
64%
BENDEKA/TREANDA
105
122
(14%)
COPAXONE
198
208
(5%)
ProAir*
59
59
1%
QVAR
45
64
(29%)
Anda
426
379
13%
Other
146
155
(6%)
Total
$
2,082
$
2,047
2%
_________
*Does not include revenues from the ProAir
authorized generic, which are included under generic products.
Generic products revenues in our North America segment
(including biosimilars) in the first quarter of 2020 were $952
million a decrease of 1% compared to the first quarter of 2019.
This decrease was mainly due to price erosion in our product
portfolio and lower royalty income, offset by an increase in
revenues from launches of new products, including TRUXIMA and from
our ProAir® authorized generic due to higher demand related to the
COVID-19 pandemic.
In the first quarter of 2020, we led the U.S. generics market in
total prescriptions and new prescriptions, with approximately 389
million total prescriptions (based on trailing twelve months),
representing 10.4% of total U.S. generic prescriptions according to
IQVIA data.
AJOVY revenues in our North America segment in the first
quarter of 2020 were $29 million, an increase of $9 million, or 44%
compared to the first quarter of 2019, mainly due to growth in
volume in the first quarter of 2020. AJOVY was approved by the FDA
and launched in the United States in September 2018 for the
preventive treatment of migraine in adults. On January 27, 2020,
the FDA approved an auto-injector device for AJOVY in the U.S.,
which became commercially available in April 2020. In addition,
AJOVY was approved in Canada on April 14, 2020.
AUSTEDO revenues in our North America segment in the
first quarter of 2020 increased by 64% to $122 million, compared to
$74 million in the first quarter of 2019. This increase was mainly
due to growth in volume in the first quarter of 2020.
BENDEKA and TREANDA combined revenues in our North
America segment in the first quarter of 2020 decreased by 14% to
$105 million, compared to the first quarter of 2019, mainly due the
emergence of alternative novel therapies and continued competition
from Belrapzo® (a ready-to-dilute bendamustine hydrochloride
product from Eagle Pharmaceuticals, Inc.).
COPAXONE revenues in our North America segment in the
first quarter of 2020 decreased by 5% to $198 million, compared to
the first quarter of 2019, mainly due to generic competition in the
United States.
ProAir® revenues in our North America segment in the
first quarter of 2020 were $59 million, flat compared to the first
quarter of 2019. In January 2019, we launched our own ProAir
authorized generic in the United States following the launch of a
generic version of Ventolin® HFA, another albuterol inhaler.
Revenues from our ProAir HFA authorized generic are included in
“generic products” above. ProAir is the fourth-largest short-acting
beta-agonist in the market, with an exit market share of 15.5%
(37.5% including our ProAir HFA authorized generic, making our
overall albuterol product the largest in the market) in terms of
total number of prescriptions for albuterol inhalers during the
first quarter of 2020, compared to 27.6% in the first quarter of
2019.
QVAR revenues in our North America segment in the first
quarter of 2020 decreased by 29% to $45 million, compared to the
first quarter of 2019, mainly due to increased price competition
and lower volumes. QVAR maintained its second-place position in the
inhaled corticosteroids category in the United States, with an exit
market share of 20.8% in terms of total number of prescriptions
during the first quarter of 2020, compared to 21.7% in the first
quarter of 2019.
Anda revenues in our North America segment in the first
quarter of 2020 increased by 13% to $426 million, compared to $379
million in the first quarter of 2019, mainly due to higher volume
increases primarily related to the COVID-19 pandemic.
North America Gross Profit
Gross profit from our North America segment in the first quarter
of 2020 was $1,062 million, an increase of 2%, compared to $1,039
million in the first quarter of 2019. This increase was mainly due
to the change in mix of revenues, as discussed above.
Gross profit margin for our North America segment in the first
quarter of 2020 increased to 51.0%, compared to 50.8% in the first
quarter of 2019.
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 first quarter of
2020 was $550 million, an increase of 10%, compared to $498 million
in the first quarter of 2019. This increase was due to higher
revenues and lower expenses as discussed above.
Europe Segment
Our Europe segment includes the European Union and certain other
European countries.
The following table presents revenues, expenses and profit for
our Europe segment for the three months ended March 31, 2020 and
2019:
Three months ended March
31,
2020
2019
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
1,402
100
%
$
1,264
100
%
Gross profit
823
58.7
%
730
57.8
%
R&D expenses
55
3.9
%
66
5.2
%
S&M expenses
202
14.4
%
215
17.0
%
G&A expenses
66
4.7
%
48
3.8
%
Other (income) expense
(1
)
§
(1
)
§
Segment profit*
$
502
35.8
%
$
403
31.9
%
___________
* Segment profit does not include
amortization and certain other items. § Represents an amount less
than 0.5%.
Revenues from our Europe segment in the first quarter of 2020
were $1,402 million, an increase of 11% or $138 million, compared
to the first quarter of 2019. In local currency terms, revenues
increased by 13%, mainly due to higher demand for certain products
resulting from the impact of the COVID-19 pandemic on purchasing
patterns as well as continuing growth in generics and new generic
product launches, partially offset by price declines for oncology
products as a result of generic competition and a decline in
COPAXONE revenues due to competing glatiramer acetate products.
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 March 31,
2020 and 2019:
Three months ended March
31,
Percentage Change
2020
2019
2019-2020
(U.S. $ in millions)
Generic products
$
1,032
$
919
12%
COPAXONE
109
114
(4%)
Respiratory products
106
91
16%
AJOVY
4
-
NA
Other
151
140
7%
Total
$
1,402
$
1,264
11%
Generic products revenues in our Europe segment in the
first quarter of 2020, including OTC products, increased by 12% to
$1,032 million, compared to the first quarter of 2019. In local
currency terms, revenues increased by 16% compared to the first
quarter of 2019, mainly due to higher demand for certain products
resulting from the impact of the COVID-19 pandemic on purchasing
patterns as well as continuing growth in generics and new generic
product launches. We estimate that the impact of the COVID-19
pandemic on advanced purchasing patterns was approximately $100
million.
COPAXONE revenues in our Europe segment in the first
quarter of 2020 decreased by 4% to $109 million, compared to the
first quarter of 2019. In local currency terms, revenues decreased
by 1%, mainly due to price reductions and volume decline, resulting
from competing glatiramer acetate products, partially offset by
higher demand due to the impact of the COVID-19 pandemic on
purchasing patterns.
Respiratory products revenues in our Europe segment in
the first quarter of 2020 increased by 16% to $106 million,
compared to the first quarter of 2019. In local currency terms,
revenues increased by 20%, mainly due to higher demand attributed
to the impact of the COVID-19 pandemic.
AJOVY revenues in our Europe segment in the first quarter
of 2020 were $4 million. AJOVY was granted a Marketing
Authorization in the European Union by the European Medicines
Agency (“EMA”) in a centralized process in April 2019. We commenced
launching AJOVY in certain European markets in May 2019 and are
moving forward with plans to launch in other European countries. In
October 2019, we received approval from the EMA for AJOVY’s
auto-injector submission in the European Union and we commenced
launch in March 2020.
Europe Gross Profit
Gross profit from our Europe segment in the first quarter of
2020 was $823 million, an increase of 13% compared to $730 million
in the first quarter of 2019. This increase was mainly due to
higher revenues, as discussed above.
Gross profit margin for our Europe segment in the first quarter
of 2020 increased to 58.7%, compared to 57.8% in the first quarter
of 2019. The increase was mainly due to higher revenues from
generic products with higher profitability and lower inventory
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 first quarter of 2020 was
$502 million, an increase of 25%, compared to $403 million in the
first quarter of 2019. This increase was mainly due to higher
revenues and lower expenses as discussed above.
International Markets Segment
Our International Markets segment includes all countries other
than those in our North America and Europe segments. The key
markets in this segment are Japan, Russia and Israel.
The following table presents revenues, expenses and profit for
our International Markets segment for the three months ended March
31, 2020 and 2019:
Three months ended March
31,
2020
2019
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
565
100
%
$
521
100
%
Gross profit
305
54.0
%
269
51.7
%
R&D expenses
15
2.7
%
22
4.2
%
S&M expenses
106
18.8
%
115
22.0
%
G&A expenses
34
6.0
%
36
6.8
%
Other (income) expense
(6
)
(1.1
%)
-
§
Segment profit*
$
156
27.6
%
$
97
18.6
%
__________
* Segment profit does not include
amortization and certain other items. § Represents an amount less
than 0.5%.
**The data presented for prior periods
have been revised to reflect a revision in the presentation of net
revenues and cost of sales in the consolidated financial
statements. See note 1c to our consolidated financial statements
for additional information.
Revenues from our International Markets segment in the first
quarter of 2020 were $565 million, an increase of $44 million, or
8%, compared to the first quarter of 2019. In local currency terms,
revenues increased 5% compared to the first quarter of 2019, mainly
due to higher sales in Latin America, Asia-Pacific, Ukraine and
Russia, partially offset by lower sales in Japan. The revenues in
the first quarter of 2020 included $35 million from a positive
hedging impact, which are 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 March 31, 2020 and 2019:
Three months ended March
31,
Percentage Change
2020
2019
2019-2020
(U.S. $ in millions)
Generic products
$
449
$
441
2%
COPAXONE
12
13
(11%)
Other
104
67
57%
Total
$
565
$
521
8%
_________
*The data presented for prior periods have
been revised to reflect a revision in the presentation of net
revenues and cost of sales in the consolidated financial
statements. See note 1c to our consolidated financial statements
for additional information.
Generic products revenues in our International Markets
segment in the first quarter of 2020, which include OTC products,
increased by 2% to $449 million, compared to the first quarter of
2019. In local currency terms, revenues increased by 6%, mainly due
to higher sales in Latin America, Asia-Pacific, Ukraine and Russia,
partially offset by lower sales in Japan resulting from generic
competition to off-patented products.
COPAXONE revenues in our International Markets segment in
the first quarter of 2020 decreased by 11% to $12 million, compared
to $13 million in the first quarter of 2019. In local currency
terms, revenues decreased by 1%.
International Markets Gross Profit Gross profit from our
International Markets segment in the first quarter of 2020 was $305
million, an increase of 13% compared to $269 million in the first
quarter of 2019.
Gross profit margin for our International Markets segment in the
first quarter of 2020 increased to 54.0%, compared to 51.7% in the
first quarter of 2019. This increase was mainly due to higher sales
and the hedging activity discussed above.
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 first
quarter of 2020 was $156 million, an increase of 61%, compared to
$97 million in the first quarter of 2019. This increase was mainly
due to higher sales and the positive impact from the hedging
activity discussed above.
Other Activities
We have other sources of revenue, primarily the sale of 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 first quarter
of 2020 were $307 million, a decrease of 3% compared to the first
quarter of 2019. In local currency terms, revenues decreased by
2%.
API sales to third parties in the first quarter of 2020
were $177 million, a decrease of 5% in both U.S. dollar and local
currency terms, compared to the first quarter of 2019. This
decrease was mainly due to timing of certain orders and divestment
of certain activities.
Conference Call
Teva will host a conference call and live webcast along with a
slide presentation on May 7, 2020 at 8:00 a.m. ET to discuss its
first quarter 2020 results and overall business environment. A
question & answer session will follow.
United States: 1 (866) 966-1396
International: +44 (0) 2071 928000
Israel: 1 (809) 203-624
For a list of other international toll-free numbers, click
here.
Passcode: 9735219.
A live webcast of the call will also be available on Teva’s
website at: ir.tevapharm.com. Please log in at least 10 minutes
prior to the conference call in order to download the required
software.
Following the conclusion of the call, a replay of the webcast
will be available within 24 hours on the Company's website or by
calling United States 1-866-311-1332; International +44 (0) 3333
009785; passcode: 9735219.
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, non-GAAP financial
expenses, non-GAAP income taxes, non-GAAP net income 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; the increase in the number of
competitors targeting generic opportunities and seeking U.S. market
exclusivity for generic versions of significant products;
competition for our specialty products, especially COPAXONE®, our
leading medicine, which faces competition from existing and
potential additional generic versions, competing glatiramer acetate
products and orally-administered alternatives; the uncertainty of
commercial success of AJOVY® or AUSTEDO®; competition from
companies with greater resources and capabilities; delays in
launches of new products and our ability to achieve expected
results from investments in our product pipeline; ability to
develop and commercialize biopharmaceutical products; efforts of
pharmaceutical companies to limit the use of generics, including
through legislation and regulations 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 magnitude, duration, and geographic reach of the
COVID-19 pandemic and its impact on our business, financial
condition, operations, cash flows, and liquidity and on the economy
in general; manufacturing or quality control protocols;
interruptions in our supply chain, including due to potential
effects of the COVID-19 pandemic on our operations and business in
geographic locations impacted by the pandemic and on the business
operations of our customers and suppliers; 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; challenges
associated with conducting business globally, including adverse
effects of the COVID-19 pandemic; costs resulting from the
extensive governmental regulation to which we are subject or delays
in governmental processing time due to modified government
operations due to the COVID-19 pandemic, including effects on
product and patent approvals due to the COVID-19 pandemic;
disruptions of information technology systems; and our ability to
successfully compete in the marketplace;
- our business and operations in general, including:
effectiveness of our restructuring plan announced in December 2017;
our ability to attract, hire and retain highly skilled personnel;
our ability to develop and commercialize additional pharmaceutical
products; compliance with anti-corruption sanctions and trade
control laws; 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 adverse effects of political or
economic instability, major hostilities or terrorism; 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; our prospects and
opportunities for growth if we sell assets and potential
difficulties related to the operation of our new global enterprise
resource planning (ERP) system;
- compliance, regulatory and litigation matters, including:
increased legal and regulatory action in connection with public
concern over the abuse of opioid medications in the U.S. and our
ability to reach a final resolution of the remaining opioid-related
litigation; costs and delays resulting from the extensive
governmental regulation to which we are subject; the effects of
reforms in healthcare regulation and reductions in pharmaceutical
pricing, reimbursement and coverage; governmental investigations
into S&M practices; potential liability for patent
infringement; product liability claims; increased government
scrutiny of our patent settlement agreements; failure to comply
with complex Medicare and Medicaid reporting and payment
obligations; and environmental risks;
- 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; 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 first quarter of 2020 and in
our Annual Report on Form 10-K for the year ended December 31,
2019, 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 March
31,
2020
2019
(Unaudited)
(Unaudited)
Net revenues
4,357
4,149
Cost of sales
2,294
2,293
Gross profit
2,063
1,856
Research and development expenses
221
261
Selling and marketing expenses
613
648
General and administrative expenses
304
292
Intangible assets impairment
649
469
Other asset impairments, restructuring and other items
121
1
Legal settlements and loss contingencies
(25)
57
Other income
(13)
(6)
Operating income (loss)
191
134
Financial expenses – net
224
218
Income (loss) before income taxes
(33)
(84)
Income taxes (benefit)
(59)
9
Share in losses of associated companies- net
1
4
Net income (loss)
25
(97)
Net income attributable to non-controlling interests
(44)
8
Net income (loss) attributable to Teva
69
(105)
Net income (loss) attributable to Teva's ordinary
shareholders
69
(105)
Earnings (loss) per share attributable to ordinary
shareholders: Basic ($)
0.06
(0.10)
Diluted ($)
0.06
(0.10)
Weighted average number of shares (in millions):
Basic
1,093
1,090
Diluted
1,096
1,090
Non-GAAP net income attributable to ordinary
shareholders:*
835
654
Non-GAAP net income attributable to ordinary shareholders for
diluted earnings per share:
835
654
Non-GAAP earnings per share attributable to ordinary
shareholders:* Basic ($)
0.76
0.60
Diluted ($)
0.76
0.60
Non-GAAP average number of shares (in millions):
Basic
1,093
1,090
Diluted
1,096
1,093
* See reconciliation attached.
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
March 31, 2020
December 31, 2019
ASSETS
(Unaudited)
(Audited)
Current assets: Cash and cash equivalents
1,804
1,975
Accounts receivables, net of allowance for credit losses of $127
million and $135 million as of March 31, 2020 and December 31, 2019
5,189
5,676
Inventories
4,290
4,422
Prepaid expenses
977
870
Other current assets
538
434
Assets held for sale
86
87
Total current assets
12,884
13,464
Deferred income taxes
440
386
Other non-current assets
550
591
Property, plant and equipment, net
6,221
6,436
Operating lease right-of-use assets
489
514
Identifiable intangible assets, net
10,256
11,232
Goodwill
24,490
24,846
Total assets
55,330
57,470
LIABILITIES & EQUITY Current liabilities:
Short-term debt
1,630
2,345
Sales reserves and allowances
5,662
6,159
Accounts payables
1,710
1,718
Employee-related obligations
540
693
Accrued expenses
1,718
1,869
Other current liabilities
1,061
889
Total current liabilities
12,322
13,674
Long-term liabilities: Deferred income taxes
912
1,096
Other taxes and long-term liabilities
2,624
2,640
Senior notes and loans
24,473
24,562
Operating Lease Liabilities
411
435
Total long-term liabilities
28,420
28,733
Equity: Teva shareholders’ equity
13,531
13,972
Non-controlling interests
1,057
1,091
Total equity
14,588
15,063
Total liabilities and equity
55,330
57,470
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(U.S. dollars in
millions)
(Unaudited)
Three months ended March
31,
2020
2019
Operating activities: Net income (loss)
25
$
(97)
Adjustments to reconcile net income (loss) to net cash provided by
operations: Depreciation and amortization
399
443
Impairment of long-lived assets
724
489
Net change in operating assets and liabilities
(666)
(805)
Deferred income taxes – net and uncertain tax positions
(233)
(33)
Stock-based compensation
30
34
Net loss (gain) from sale of long-lived assets and investments
24
(2)
Other items
2
83
Net cash provided by operating activities
305
112
Investing activities: Beneficial interest
collected in exchange for securitized accounts receivables
368
362
Purchases of property, plant and equipment
(128)
(125)
Proceeds from sale of long-lived assets
6
11
Other investing activities
6
24
Net cash provided by investing activities
252
272
Financing activities: Repayment of senior notes and
loans and other long-term liabilities
(700)
(126)
Tax withholding payments made on shares and dividends
-
(52)
Other financing activities
-
(11)
Net cash used in financing activities
(700)
(189)
Translation adjustment on cash and cash equivalents
(28)
(4)
Net change in cash and cash equivalents
(171)
191
Balance of cash and cash equivalents at beginning of period
1,975
1,782
Balance of cash and cash equivalents at end of period
$
1,804
$
1,973
Non-cash financing and investing activities:
Beneficial interest obtained in exchange for securitized accounts
receivables
$
375
$
396
Three Months Ended March 31,
2020
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
Other R&D expenses
Restructuring costs
Costs related to regulatory
actions taken in facilities
Equity compensation
Contingent consideration
Other non-GAAP items
Other items
Cost of sales
2,294
223
4
6
15
2,046
R&D expenses
221
(4)
5
-
221
S&M expenses
613
35
9
-
570
G&A expenses
304
10
4
290
Other (income) expense
(13)
0
(13)
Legal settlements and loss contingencies
(25)
(25)
-
Other assets impairments, restructuring and other items
121
75
39
6
1
-
Intangible assets impairments
649
649
-
Financial expenses, net
224
11
213
Income taxes
(59)
(234)
175
Share in losses of associated companies – net
1
-
1
Net income (loss) attributable to non-controlling interests
(44)
(63)
20
Total reconciled items
258
(25)
724
(4)
39
4
30
6
20
(286)
EPS - Basic
0.06
0.70
0.76
EPS - Diluted
0.06
0.70
0.76
The non-GAAP diluted weighted
average number of shares was 1,096 million for the three months
ended March 31, 2020.
Three Months Ended March 31,
2019
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
Acquisition, integration and
related expenses
Restructuring costs
Costs related to regulatory
actions taken in facilities
Equity compensation
Contingent consideration
Other non-GAAP items
Other items
Corresponding tax effect
Unusual tax item*
Cost of sales**
2,293
248
4
7
35
1,999
R&D expenses
261
6
-
255
S&M expenses
648
35
10
602
G&A expenses
292
12
-
280
Other (income) expense
(6)
(6)
Legal settlements and loss contingencies
57
57
-
Other assets impairments, restructuring and other items
1
20
2
32
(71)
19
-
Intangible assets impairments
469
469
-
Financial expenses, net
218
(2)
220
Income taxes
9
(177)
61
125
Share in losses of associated companies – net
4
-
4
Net income (loss) attributable to non-controlling interests
8
(8)
16
Total reconciled items
283
57
489
2
32
4
34
(71)
54
(10)
(177)
61
EPS - Basic
(0.10)
0.70
0.60
EPS - Diluted
(0.10)
0.70
0.60
* Interest disallowance as a result of the U.S. Tax Cuts and
Jobs Act. **The data presented for prior periods has been revised
to reflect a revision in the presentation of net revenues and cost
of sales in the consolidated financial statements. See note 1c to
our consolidated financial statements for additional information.
The non-GAAP diluted weighted average number of shares was 1,093
million for the three months ended March 31, 2019.
Segment Information
North America
Europe
International Markets
Three months ended March
31,
Three months ended March
31,
Three months ended March
31,
2020
2019
2020
2019
2020
2019
(U.S. $ in millions)
(U.S. $ in millions)
(U.S. $ in millions)
Revenues
$
2,082
$
2,047
$
1,402
$
1,264
$
565
$
521
Gross profit
1,062
1,039
823
730
305
269
R&D expenses
146
165
55
66
15
22
S&M expenses
251
268
202
215
106
115
G&A expenses
118
112
66
48
34
36
Other (income) loss
(2)
(4)
(1)
(1)
(6)
-
Segment profit
$
550
$
498
$
502
$
403
$
156
$
97
Reconciliation of our segment profit to consolidated
income before income taxes
Three months ended March
31,
2020
2019
(U.S.$ in millions)
North America profit
$
550
$
498
Europe profit
502
403
International Markets profit
156
97
Total segment profit
1,208
998
Profit of other activities
36
21
1,244
1,019
Amounts not allocated to segments: Amortization
258
283
Other asset impairments, restructuring and other items
121
1
Intangible asset impairments
649
469
Legal settlements and loss contingencies
(25)
57
Other unallocated amounts
49
75
Consolidated operating income (loss)
191
134
Financial expenses - net
224
218
Consolidated loss before income taxes
$
(33)
$
(84)
Segment revenues by major products and activities
(Unaudited)
Three months ended
March 31,
Percentage Change
2020
2019
2019-2020
(U.S.$ in millions)
North America segment Generic products
$
952
$
966
(1%)
AJOVY
29
20
44%
AUSTEDO
122
74
64%
BENDEKA/TREANDA
105
122
(14%)
COPAXONE
198
208
(5%)
ProAir*
59
59
1%
QVAR
45.497
63.676
(29%)
Anda
426
379
13%
Other
146
155
(6%)
Total
2,082
2,047
2%
Three months ended
March 31,
Percentage Change
2020
2019
2019-2020
(U.S.$ in millions)
Europe segment Generic medicines
$
1,032
$
919
12%
COPAXONE
109
114
(4%)
Respiratory products
106
91
16%
AJOVY
4
-
NA
Other
151
140
7%
Total
1,402
1,264
11%
Three months ended
March 31,
Percentage Change
2020
2019
2019-2020
(U.S.$ in millions)
International Markets segment Generics medicines
$
449
$
441
2%
COPAXONE
12
13
(11%)
Other
104
67
57%
Total
565
521
8%
*The data presented for prior periods have been revised to reflect
a revision in the presentation of net revenues and cost of sales in
the consolidated financial statements.
Free cash flow
reconciliation (Unaudited)
Three months ended March
31,
2020
2019
(U.S. $ in millions)
Net cash provided by operating activities
305
112
Beneficial interest collected in exchange for securitized accounts
receivables, included in investing activities
368
362
Capital investment
(128)
(125)
Proceeds from sale of long lived assets
6
11
Free cash flow
$
551
$
360
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200507005231/en/
IR Contacts United States Kevin C. Mannix (215) 591-8912
Ran Meir 972 (3) 926-7516 PR Contacts United States Kelley
Dougherty (973) 832-2810 Israel Yonatan Beker 972 (54) 888
5898
Teva Pharmaceutical Indu... (NYSE:TEVA)
過去 株価チャート
から 6 2024 まで 7 2024
Teva Pharmaceutical Indu... (NYSE:TEVA)
過去 株価チャート
から 7 2023 まで 7 2024