- Revenues of $3.7 billion
- GAAP diluted loss per share of $0.86
- Non-GAAP diluted EPS of $0.55
- Cash flow used in operating activities of $49 million
- Free cash flow of $117 million
- 2022 revenue outlook revised lower to reflect ongoing impact of
foreign exchange fluctuations; COPAXONE® outlook revised lower
mainly to reflect increased competition and foreign exchange
fluctuations; all other key components reaffirmed:
- Revenues of $15.4 - $16.0 billion vs. previous range of $15.6 -
$16.2 billion
- COPAXONE revenues of approximately $750 million vs. previous
outlook of approximately $850 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
Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today
reported results for the quarter ended March 31, 2022.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20220503005141/en/
Mr. Kåre Schultz, Teva's President and CEO, said, 2022 is off to
a solid start with the successful launch of a first generic version
of Revlimid® in the United States, and gains in market share for
AJOVY® both in the United States and in Europe, where it has
solidified its leadership position as the second leading brand.
AUSTEDO® continues to grow as more patients with tardive dyskinesia
are being diagnosed and are receiving treatment. We are also
pleased to continue resolving opioid-related litigations with
recent settlements in Florida and Rhode Island including the
provision of lifesaving opioid treatments and recovery medicines
for those who need them."
Mr. Schultz continued: "While easing of COVID-19 related
restrictions has led to positive momentum in our European business,
we are seeing fluctuations of foreign exchange rates, and have
therefore lowered our 2022 revenue outlook, while reaffirming our
earnings and cash flow guidance."
First Quarter 2022 Consolidated Results
Revenues in the first quarter of 2022 were $3,661
million, a decrease of 8%, or 5% in local currency terms, compared
to the first quarter of 2021. This decrease was mainly due to lower
revenues in our North America segment primarily related to generic
products and COPAXONE, partially offset by higher revenues from
Anda and generic products in our Europe segment.
Exchange rate movements during the first quarter of 2022,
including hedging effects, negatively impacted our revenues by $133
million and our GAAP and non-GAAP operating income by $56 million
and $59 million, respectively.
GAAP gross profit was $1,740 million in the first quarter
of 2022, a decrease of 7% compared to the first quarter of 2021.
GAAP gross profit margin was 47.5% in the first quarter of
2022, compared to 47.2% in the first quarter of 2021. The increase
in gross profit margin was mainly driven by our network
consolidation activities, as well as a change in product portfolio
mix in our International Markets segment, partially offset by the
unfavorable mix of generic products in our North America segment
and lower revenues from COPAXONE. Non-GAAP gross profit was
$1,986 million in the first quarter of 2022, a decrease of 7%
compared to the first quarter of 2021. Non-GAAP gross profit
margin was 54.2% in the first quarter of 2022, compared to
53.8% in the first quarter of 2021.
GAAP Research and Development (R&D) expenses
in the first quarter of 2022 were $225 million, a decrease of 11%
compared to the first quarter of 2021. Non-GAAP R&D
expenses were $221 million, or 6.0% of quarterly revenues, in
the first quarter of 2022, compared to $244 million, or 6.1%, in
the first quarter of 2021. In the first quarter of 2022, our
R&D expenses related primarily to specialty product candidates
in neuroscience (such as migraine, movement disorders/
neurodegeneration and neuropsychiatry, including post-approval
commitments), immunology (such as respiratory medicines) and
selected other areas, as well as generic products including
biosimilars. Our lower R&D expenses in the first quarter of
2022, compared to the first quarter of 2021, were mainly due to a
decrease in neuroscience (in the pain and migraine and headache
therapeutic areas), as well as various generics projects.
GAAP Selling and Marketing (S&M) expenses in
the first quarter of 2022 were $584 million, flat compared to the
first quarter of 2021. Non-GAAP S&M expenses were $552
million, or 15.1% of quarterly revenues, in the first quarter of
2022, compared to $549 million, or 13.8%, in the first quarter of
2021.
GAAP General and Administrative (G&A) expenses in the
first quarter of 2022 were $296 million, an increase of 2% compared
to the first quarter of 2021. Non-GAAP G&A expenses were
$252 million, or 6.9% of quarterly revenues, in the first quarter
of 2022, compared to $278 million, or 7%, in the first quarter of
2021.
GAAP other income and Non-GAAP other income in the
first quarter of 2022 was $52 million, compared to $5 million in
the first quarter of 2021. Other income in the first quarter of
2022 was mainly the result of settlement proceeds in our
International Markets segment.
GAAP operating loss in the first quarter of 2022 was $713
million, compared to operating income of $434 million in the first
quarter of 2021. GAAP operating loss in the first quarter of 2022
was mainly affected by legal settlements and loss contingencies,
primarily related to an update of the estimated settlement
provision recorded in connection with the remaining opioid cases.
Non-GAAP operating income in the first quarter of 2022 was
$1,013 million, a decrease of 6%, compared to $1,077 million in the
first quarter of 2021. This decrease in non-GAAP operating income
was mainly due to lower profit in our North America segment,
partially offset by higher profit in our Europe and International
Markets segments. Non-GAAP operating margin was 27.7% in the first
quarter of 2022, compared to 27.1% in the first quarter of
2021.
EBITDA (defined as operating income (loss), excluding
amortization and depreciation expenses) was negative $390 million
in the first quarter of 2022, compared to EBITDA of $809 million in
the first quarter of 2021. Adjusted EBITDA (defined as
non-GAAP operating income excluding depreciation expenses) was
$1,135 million in the first quarter of 2022, a decrease of 6%
compared to $1,206 million in the first quarter of 2021.
GAAP financial expenses, net were $258 million in the
first quarter of 2022, compared to $290 million in the first
quarter of 2021. Financial expenses in the first quarter of 2022,
were mainly comprised of interest expenses of $238 million.
Financial expenses in the first quarter of 2021 were mainly
comprised of interest expenses of $239 million and loss on
revaluations of marketable securities of $64 million. Non-GAAP
financial expenses, net were $247 million in the first
quarter of 2022, compared to $227 million in the first quarter of
2021.
In the first quarter of 2022, we recognized a GAAP tax
expense of $2 million, on pre-tax loss of $971 million. In the
first quarter of 2021, we recognized a tax expense of $62 million,
on pre-tax income of $144 million. Our tax rate for the first
quarter of 2022 was mainly affected by legal settlement charges and
interest expense disallowances. Non-GAAP income taxes in the
first quarter of 2022 were $142 million, or 18.5%, on pre-tax
non-GAAP income of $766 million. Non-GAAP income
taxes in the first quarter of 2021 were $146 million, or
17%, on pre-tax non-GAAP income of $851 million. Our non-GAAP tax
rate in the first quarter of 2022 was mainly affected by the mix of
products we sold and interest expense disallowances.
We expect our annual non-GAAP tax rate for 2022 to be
18%-19%, unchanged from our outlook provided in February 2022.
GAAP net loss attributable to Teva and GAAP diluted
loss per share were $955 million and $0.86, respectively, in
the first quarter of 2022, compared to net income of $77 million
and diluted earnings per share of $0.07 in the first quarter of
2021. Non-GAAP net income attributable to Teva and non-GAAP
diluted earnings per share in the first quarter of 2022 were
$609 million and $0.55, respectively, compared to $699 million and
$0.63 in the first quarter of 2021.
The weighted average diluted shares outstanding
used for the fully diluted share calculation for the three months
ended March 31, 2022 and 2021 was 1,107 million shares. The
weighted average diluted shares outstanding used for the
fully diluted share calculation on a non-GAAP basis for the three
months ended March 31, 2022 and 2021 was 1,112 million and 1,107
million shares, respectively.
As of March 31, 2022 and 2021, the fully diluted share count for
purposes of calculating our market capitalization was approximately
1,145 million and 1,130 million, respectively.
Non-GAAP information: Net non-GAAP adjustments in the
first quarter of 2022 were $1,564 million. Non-GAAP net income and
non-GAAP EPS for the first quarter of 2022 were adjusted to exclude
the following items:
- Legal settlements and loss contingencies of $1,124
million;
- Amortization of purchased intangible assets of $200 million, of
which $178 million is included in cost of sales and the remaining
$22 million in S&M expenses;
- Impairment of long-lived assets of $165 million, comprised
mainly of impairment of intangible assets of product rights assets
in connection with the Actavis Generics acquisition;
- Restructuring expenses of $57 million;
- Contingent consideration expense of $33 million, mainly related
to an increase in future royalties;
- Equity compensation expenses of $24 million;
- Finance expenses of $11 million;
- Other items of $91 million; and
- Income tax of $140 million.
Teva believes that excluding such items facilitates investors’
understanding of its business.
Commencing in the first quarter of 2022, we no longer exclude
IPR&D acquired in development arrangements from our non-GAAP
financial measures. In our comparable non-GAAP financial measures
for the first quarter of 2021, we excluded $5 million IPR&D
acquired in development arrangements. We are not recasting the
non-GAAP presentation for the first quarter of 2021 since the
adjustment is not significant. We are making this change to our
presentation of non-GAAP financial measures to improve
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 used in operating activities during the first
quarter of 2022 was $49 million, compared to $405 million in the
first quarter of 2021. The lower cash flow used in operating
activities in the first quarter of 2022 was mainly due to changes
in working capital items resulting from a decrease in accounts
receivables net of SR&A in connection with the decrease in
revenues.
Free cash flow (defined as cash flow used in 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 $117
million in the first quarter of 2022, compared to $59 million in
the first quarter of 2021. The increase in the first quarter of
2022 resulted mainly from lower cash flow used in operating
activities, partially offset by lower sales of assets.
As of March 31, 2022, our debt was $22,917 million,
compared to $23,043 million as of December 31, 2021. This decrease
was mainly due to exchange rate fluctuations. Our debt as of March
31, 2022 was effectively denominated in the following currencies:
61% in U.S. dollars, 36% in euros and 3% in Swiss francs. The
portion of total debt classified as short-term as of March 31, 2022
was 9%, compared to 6% as of December 31, 2022. Our financial
leverage was 69% as of March 31, 2022, compared to 67% as of
December 31, 2021. Our average debt maturity was approximately 6.2
years as of March 31, 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 ("RCF") of $1.8
billion with a maturity date of April 2026, with two one-year
extension options, which replaces Teva’s existing revolving credit
facility. 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 First 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 March 31, 2022
and 2021:
Three months ended March
31,
2022
2021
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
1,737
100
%
$
1,989
100
%
Gross profit
890
51.2
%
1,074
54.0
%
R&D expenses
143
8.2
%
160
8.0
%
S&M expenses
245
14.1
%
229
11.5
%
G&A expenses
112
6.4
%
111
5.6
%
Other income
(11
)
(0.7
%)
(3
)
§
Segment profit*
$
402
23.1
%
$
577
29.0
%
* 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 2022 were $1,737 million, a decrease of $251 million, or
13%, compared to the first quarter of 2021, mainly due to a
decrease in revenues from generic products and COPAXONE, partially
offset by higher revenues from ANDA.
Revenues in the United States, our largest market, were
$1,638 million in the first quarter of 2022, a decrease of $216
million or 12% compared to the first 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
March 31, 2022 and 2021:
Three months ended March
31,
Percentage Change
2022
2021
2022-2021
(U.S. $ in millions)
Generic products
$
899
$
1,053
(15
%)
AJOVY
36
31
16
%
AUSTEDO
154
146
6
%
BENDEKA®/TREANDA®
82
91
(10
%)
COPAXONE
86
164
(48
%)
Anda
342
289
18
%
Other
139
215
(35
%)
Total
$
1,737
$
1,989
(13
%)
Generic products revenues in our North America segment
(including biosimilars) in the first quarter of 2022 were $899
million, a decrease of 15% compared to the first quarter of 2021,
mainly due to increased competition on key products and lower
volumes, partially offset by higher revenues from lenalidomide
capsules (the generic version of Revlimid®) and Truxima®.
In the first 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 first
quarter of 2022 increased by 16% to $36 million, compared to the
first quarter of 2021, mainly due to growth in volume.
AUSTEDO revenues in our North America segment in the
first quarter of 2022 increased by 6%, to $154 million, compared to
$146 million in the first quarter of 2021, mainly due to growth in
volume.
BENDEKA and TREANDA combined revenues in our North
America segment in the first quarter of 2022 decreased by 10% to
$82 million, compared to the first 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
first quarter of 2022 decreased by 48% to $86 million, compared to
the first 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 first
quarter of 2022 increased by 18% to $342 million, compared to $289
million in the first quarter of 2021, mainly due to higher demand
for COVID-related products.
North America Gross Profit
Gross profit from our North America segment in the first quarter
of 2022 was $890 million, a decrease of 17%, compared to $1,074
million in the first quarter of 2021. This decrease was mainly due
to lower gross profit from generic products and lower gross profit
from COPAXONE.
Gross profit margin for our North America segment in the first
quarter of 2022 decreased to 51.2%, compared to 54.0% in the first
quarter of 2021. This decrease was mainly due to a change in the
mix of generic products and COPAXONE.
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
2022 was $402 million, a decrease of 30% compared to $577 million
in the first 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 March 31, 2022 and
2021:
Three months ended March
31,
2022
2021
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
1,156
100
%
$
1,214
100
%
Gross profit
694
60.0
%
688
56.6
%
R&D expenses
58
5.0
%
66
5.4
%
S&M expenses
196
17.0
%
214
17.7
%
G&A expenses
59
5.1
%
70
5.8
%
Other income
§
§
§
§
Segment profit*
$
381
32.9
%
$
338
27.8
%
___________
* Segment profit does not include
amortization and certain other items.
§ Represents an amount less than $0.5
million or 0.5%, as applicable.
Revenues from our Europe segment in the first quarter of
2022 were $1,156 million, a decrease of 5%, or $58 million,
compared to the first quarter of 2021. In local currency terms,
revenues increased by 3%. In the first quarter of 2021, our lower
revenues were impacted by the implications of the COVID-19
pandemic. In the first quarter of 2022, our higher 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, as well as higher sales of cough
and cold products. In the first quarter of 2022, revenues were
negatively impacted by exchange rate fluctuations of $67 million,
net of hedging effects.
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,
2022 and 2021:
Three months ended March
31,
Percentage Change
2022
2021
2022-2021
(U.S. $ in millions)
Generic products
$
876
$
865
1
%
AJOVY
30
16
94
%
COPAXONE
72
100
(29
%)
Respiratory products
71
93
(24
%)
Other
107
140
(24
%)
Total
$
1,156
$
1,214
(5
%)
Generic products revenues in our Europe segment in the
first quarter of 2022, including OTC products, increased by 1% to
$876 million, compared to the first quarter of 2021. In local
currency terms, revenues increased by 8%, 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, as well as higher sale of cough and cold
products.
AJOVY revenues in our Europe segment in the first quarter
of 2022 increased to $30 million, compared to $16 million in the
first 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 first
quarter of 2022 decreased by 29% to $72 million, compared to the
first quarter of 2021. In local currency terms, revenues decreased
by 24%, due to price reductions and a decline in volume resulting
from competing glatiramer acetate products.
Respiratory products revenues in our Europe segment in
the first quarter of 2022 decreased by 24% to $71 million compared
to the first quarter of 2021. In local currency terms, revenues
decreased by 19%, mainly due to price reductions.
Europe Gross Profit
Gross profit from our Europe segment in the first quarter of
2022 was $694 million, an increase of 1% compared to $688 million
in the first quarter of 2021.
Gross profit margin for our Europe segment in the first quarter
of 2022 increased to 60.0%, compared to 56.6% in the first quarter
of 2021. This increase was mainly due to lower cost of goods sold,
mainly driven by our network consolidation activities, as well as 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 first quarter of 2022 was
$381 million, an increase of 13%, compared to $338 million in the
first quarter of 2021. This increase was mainly due to higher gross
profit and reduced expenses, 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.
On February 1, 2021, we completed the sale of the majority of
the generic and operational assets of our business venture in
Japan.
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
first 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 March
31, 2022 and 2021:
Three months ended March
31,
2022
2021
(U.S. $ in millions / % of
Segment Revenues)
Revenues
$
492
100
%
$
490
100
%
Gross profit
286
58.1
%
260
53.0
%
R&D expenses
20
4.0
%
18
3.6
%
S&M expenses
97
19.8
%
96
19.6
%
G&A expenses
29
5.9
%
26
5.3
%
Other income
(40
)
(8.1
%)
(2
)
§
Segment profit*
$
179
36.4
%
$
122
24.9
%
__________
* 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
first quarter of 2022 were $492 million, flat compared to the first
quarter of 2021. In local currency terms, revenues increased by 8%
compared to the first quarter of 2021, mainly due to higher
revenues in certain markets, partially offset by lower revenues in
Japan resulting from the divestment mentioned above, as well as
regulatory price reductions and generic competition to off-patented
products. Revenues continued to be affected by the ongoing impact
of the COVID-19 pandemic on markets and on customer stocking and
purchasing patterns.
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, 2022 and 2021:
Three months ended March
31,
Percentage Change
2022
2021
2022-2021
(U.S. $ in millions)
Generic products
$
388
$
392
(1
%)
AJOVY
6
1
315
%
COPAXONE
10
12
(11
%)
Other
88
85
4
%
Total
$
492
$
490
§
Generic products revenues in our International Markets
segment in the first quarter of 2022, which include OTC products,
decreased by 1% in U.S. dollar. In local currency terms, revenues
increased by 9% to $388 million, compared to the first quarter of
2021. This increase was mainly due to higher revenues in certain
markets, partially offset by lower sales in Japan resulting from
the divestment mentioned above, as well as 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 first
quarter of 2022 were $6 million, compared to $1 million in the
first quarter of 2021.
COPAXONE revenues in our International Markets segment in
the first quarter of 2022 were $10 million, compared to $12 million
in the first 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 first
quarter of 2022 was $286 million, an increase of 10% compared to
$260 million in the first quarter of 2021.
Gross profit margin for our International Markets segment in the
first quarter of 2022 increased to 58.1%, compared to 53.0% in the
first quarter of 2021. This increase was mainly due to a change in
product portfolio mix, price increases largely as a result of
rising costs due to inflationary pressure and a positive impact
from hedging activity, partially offset by regulatory price
reductions and generic competition to off-patented products in
Japan.
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 2022 was $179 million, an increase of 47%, compared to
$122 million in the first quarter of 2021. This increase was mainly
due to higher gross profit as well as other income.
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 first quarter
of 2022 were $275 million, a decrease of 5% compared to the first
quarter of 2021. In local currency terms, revenues were flat.
API sales to third parties in the first quarter of 2022
were $181 million, an increase of 2% in both U.S. dollars and local
currency terms, compared to the first quarter of 2021.
Outlook for 2022 Non-GAAP
Results
$ billions, except EPS
May 2022 Outlook
February 2022 Outlook
2021 Actual
Revenues
15.4 - 16.0
15.6 - 16.2
15.9
COPAXONE ($m)
~750
~850
1,005
AUSTEDO ($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
0.6
0.6
0.6
Non-GAAP Tax Rate
18% - 19%
18% - 19%
16.4%
Conference Call
Teva will host a conference call and live webcast including a
slide presentation on Tuesday, May 3, 2022, at 8:00 a.m. ET to
discuss its first quarter 2022 results and overall business
environment. A question & answer session will follow.
In order to participate, please dial the following numbers:
United States: 1 (877) 870-9135
International: +44 (0) 2071 928338
Israel: 1 (809) 213-985
Passcode: 8636304
A live webcast of the call will 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 applicable audio
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 the following numbers: United States 1-866-331-1332;
International +44 (0) 3333 009785; passcode: 8636304.
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
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 first 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
March 31,
2022
2021
(Unaudited)
(Unaudited)
Net revenues
3,661
3,982
Cost of sales
1,921
2,104
Gross profit
1,740
1,878
Research and development expenses
225
254
Selling and marketing expenses
584
585
General and administrative expenses
296
290
Intangible assets impairments
149
79
Other asset impairments, restructuring and other items
128
137
Legal settlements and loss contingencies
1,124
104
Other income
(52
)
(5
)
Operating income (loss)
(713
)
434
Financial expenses, net
258
290
Income (loss) before income taxes
(971
)
144
Income taxes (benefit)
2
62
Share in (profits) losses of associated companies, net
(21
)
(3
)
Net income (loss)
(952
)
84
Net income (loss) attributable to non-controlling interests
3
7
Net income (loss) attributable to Teva
(955
)
77
Earnings (loss) per share attributable to
Teva: Basic ($)
(0.86
)
0.07
Diluted ($)
(0.86
)
0.07
Weighted average number of shares (in millions):
Basic
1,107
1,099
Diluted
1,107
1,107
Non-GAAP net income attributable to Teva:*
609
699
Non-GAAP net income attributable to Teva for diluted earnings
per share:
609
699
Non-GAAP earnings per share attributable to Teva:*
Basic ($)
0.55
0.64
Diluted ($)
0.55
0.63
Non-GAAP average number of shares (in millions):
Basic
1,107
1,099
Diluted
1,112
1,107
* See reconciliation attached.
Condensed Consolidated Balance Sheets
(U.S. dollars in millions)
March 31,
December 31,
2022
2021
ASSETS
(Unaudited)
(Audited)
Current assets: Cash and cash equivalents
2,175
2,165
Accounts receivables, net of allowance for credit losses of
$91million and $90 million as of March 31, 2022 and December
31,2021.
4,253
4,529
Inventories
4,012
3,818
Prepaid expenses
1,064
1,075
Other current assets
933
965
Assets held for sale
13
19
Total current assets
12,451
12,573
Deferred income taxes
637
596
Other non-current assets
472
515
Property, plant and equipment, net
5,932
5,982
Operating lease right-of-use assets
464
495
Identifiable intangible assets, net
7,116
7,466
Goodwill
19,986
20,040
Total assets
47,059
47,666
LIABILITIES & EQUITY Current liabilities:
Short-term debt
2,077
1,426
Sales reserves and allowances
3,807
4,241
Accounts payables
1,750
1,686
Employee-related obligations
481
563
Accrued expenses
2,597
2,208
Other current liabilities
900
903
Total current liabilities
11,613
11,027
Long-term liabilities: Deferred income taxes
666
784
Other taxes and long-term liabilities
3,288
2,578
Senior notes and loans
20,840
21,617
Operating lease liabilities
393
416
Total long-term liabilities
25,186
25,395
Equity: Teva shareholders’ equity
9,344
10,278
Non-controlling interests
916
966
Total equity
10,260
11,244
Total liabilities and equity
47,059
47,666
TEVA PHARMACEUTICAL INDUSTRIES LIMITED CONSOLIDATED
STATEMENTS OF CASH FLOWS (U.S. dollars in millions)
(Unaudited)
Three months ended
March 31,
2022
2021
Operating activities: Net income (loss) $
(952
)
$
84
Adjustments to reconcile net income (loss) to net cash provided by
operations: Depreciation and amortization
323
376
Impairment of long-lived assets and assets held for sale
165
127
Net change in operating assets and liabilities
559
(1,076
)
Deferred income taxes – net and uncertain tax positions
(175
)
(11
)
Stock-based compensation
24
31
Other items
30
(10
)
Net loss (gain) from investments and from sale of long lived assets
(23
)
74
Net cash provided by (used in) operating activities
(49
)
(405
)
Investing activities: Beneficial interest
collected in exchange for securitized accounts receivables
305
476
Proceeds from sale of business and long-lived assets
25
138
Acquisition of businesses, net of cash acquired
(7
)
-
Purchases of property, plant and equipment
(157
)
(150
)
Purchases of investments and other assets
(4
)
(2
)
Proceeds from sale of investments
-
46
Other investing activities
(1
)
-
Net cash provided by (used in) investing activities
161
508
Financing activities: Redemption of convertible
senior notes
-
(491
)
Other financing activities
2
(2
)
Net cash provided by (used in) financing activities
2
(493
)
Translation adjustment on cash and cash equivalents
(62
)
(44
)
Net change in cash, cash equivalents and restricted cash
52
(434
)
Balance of cash, cash equivalents and restricted cash at
beginning of period
2,198
2,177
Balance of cash, cash equivalents and restricted cash at end of
period $
2,250
$
1,743
Reconciliation of cash, cash equivalents and
restricted cash reported in theconsolidated balance sheets:
Cash and cash equivalents
2,175
1,743
Restricted cash included in other current assets
75
-
Total cash, cash equivalents and restricted cash shown in the
statements of cashflows
2,250
1,743
Non-cash financing and investing activities:
Beneficial interest obtained in exchange for securitized accounts
receivables $
299
$
448
Three Months Ended March 31, 2022 U.S. $ and shares in
millions (except per share amounts) GAAP Excluded for non-GAAP
measurement Non-GAAP Amortization of purchasedintangible assets
Legal settlements and losscontingencies Impairment of longlived
assets Restructuringcosts Costs related toregulatory actionstaken
in facilities Equity compensation Contingentconsideration Other
non-GAAP items* Other items Net revenues
3,661
3,661
Cost of sales
1,921
178
1
5
62
1,675
Gross profit
1,740
178
1
5
62
1,986
Gross profit margin
47.5
%
54.2
%
R&D expenses
225
4
221
S&M expenses
584
22
7
3
552
G&A expenses
296
8
36
252
Other income
(52
)
-
(52
)
Legal settlements and loss contingencies
1,124
1,124
-
Other assets impairments, restructuring and otheritems
128
16
57
33
21
-
Intangible assets impairments
149
149
-
Operating income (loss)
(713
)
200
1,124
165
57
1
24
33
123
1,013
Financial expenses, net
258
11
247
Income (loss) before income taxes
(971
)
200
1,124
165
57
1
24
33
123
11
766
Income taxes
2
(140
)
142
Share in (profits) losses of associated companies –net
(21
)
(22
)
1
Net income (loss)
(952
)
200
1,124
165
57
1
24
33
123
(152
)
623
Net income (loss) attributable to non-controllinginterests
3
(11
)
14
Net income (loss) attributable to Teva
(955
)
200
1,124
165
57
1
24
33
123
(163
)
609
EPS - Basic
(0.86
)
1.41
0.55
EPS - Diluted
(0.86
)
1.41
0.55
The non-GAAP diluted weighted average number of shares was
1,112 million for the three months ended March 31, 2022. Non-GAAP
income taxes for the three months ended March 31, 2022 were 18.5%
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)
(713
)
Add: Depreciation
123
Amortization
200
EBITDA
(390
)
Legal settlements and loss contingencies
1,124
Impairment of long lived assets
165
Restructuring costs
57
Costs related to regulatory actions taken infacilities
1
Equity compensation
24
Contingent consideration
33
Other non-GAAP items (excluding accelerated depreciation of $1.3
million)*
122
Adjusted EBITDA
1,135
* 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.
Three Months Ended March 31, 2021
U.S. $ and shares in millions (except per share amounts)
GAAP Excluded for non-GAAP measurement Non-GAAP Amortization
ofpurchasedintangible assets Legal settlementsand losscontingencies
Impairment oflong lived assets Other R&Dexpenses
Restructuringcosts Costs related toregulatory actionstaken in
facilities Equitycompensation Contingentconsideration Other
non-GAAPitems* Other items Net revenues
3,982
3,982
Cost of sales
2,104
215
5
6
41
1,838
Gross profit
1,878
215
5
6
41
2,144
Gross profit margin
47.2
%
53.8
%
R&D expenses
254
5
5
244
S&M expenses
585
27
9
549
G&A expenses
290
11
-
278
Other income
(5
)
-
(5
)
Legal settlements and loss contingencies
104
104
-
Other assets impairments, restructuring and otheritems
137
48
81
3
4
-
Intangible assets impairments
79
79
-
Operating income (loss)
434
242
104
127
5
81
5
31
3
45
1,077
Financial expenses, net
290
64
227
Income (loss) before income taxes
144
242
104
127
5
81
5
31
3
45
64
851
Income taxes
62
(85
)
146
Share in (profit) losses of associatedcompanies – net
(3
)
2
(4
)
Net income (loss)
84
242
104
127
5
81
5
31
3
45
(19
)
709
Net income (loss) attributable to non-controllinginterests
7
(3
)
10
Net income (loss) attributable to Teva
77
242
104
127
5
81
5
31
3
45
(22
)
699
EPS - Basic
0.07
0.57
0.64
EPS - Diluted
0.07
0.56
0.63
The non-GAAP diluted weighted average number of shares was
1,107 million for the three months ended March 31, 2021. Non-GAAP
income taxes for the three months ended March 31, 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)
434
Add: Depreciation
134
Amortization
242
EBITDA
809
Legal settlements and loss contingencies
104
Impairment of long lived assets
127
Other R&D expenses
5
Restructuring costs
81
Costs related to regulatory actions taken in facilities
5
Equity compensation
31
Contingent consideration
3
Other non-GAAP items (excludingaccelerated depreciation of $5
million)*
40
Adjusted EBITDA
1,206
* 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.
Segment Information
North America
Europe
International Markets
Three months ended March
31,
Three months ended March
31,
Three months ended March
31,
2022
2021
2022
2021
2022
2021
(U.S. $ in millions)
(U.S. $ in millions)
(U.S. $ in millions)
Revenues $
1,737
$
1,989
$
1,156
$
1,214
$
492
$
490
Gross profit
890
1,074
694
688
286
260
R&D expenses
143
160
58
66
20
18
S&M expenses
245
229
196
214
97
96
G&A expenses
112
111
59
70
29
26
Other income
(11
)
(3
)
§ §
(40
)
(2
)
Segment profit $
402
$
577
$
381
$
338
$
179
$
122
§ Represents an amount less than $1 million.
Reconciliation of our segment profit to consolidated
income before income taxes
Three months ended
March 31,
2022
2021
(U.S.$ in millions) North America profit $
402
$
577
Europe profit
381
338
International Markets profit
179
122
Total reportable segment profit
962
1,036
Profit of other activities
52
41
1,013
1,077
Amounts not allocated to segments: Amortization
200
242
Other asset impairments, restructuring and other items
128
137
Intangible asset impairments
149
79
Legal settlements and loss contingencies
1,124
104
Other unallocated amounts
127
82
Consolidated operating income (loss)
(713
)
434
Financial expenses - net
258
290
Consolidated income (loss) before income taxes $
(971
)
$
144
Segment revenues by major products and activities
(Unaudited)
Three months ended
March 31,
Percentage Change
2022
2021
2021-2022
(U.S.$ in millions) North America segment Generic
products $
899
$
1,053
(15
%)
AJOVY
36
31
16
%
AUSTEDO
154
146
6
%
BENDEKA/TREANDA
82
91
(10
%)
COPAXONE
86
164
(48
%)
Anda
342
289
18
%
Other
139
215
(35
%)
Total
1,737
1,989
(13
%)
Three months ended
March 31,
Percentage Change
2022
2021
2021-2022
(U.S.$ in millions) Europe segment Generic products $
876
$
865
1
%
AJOVY
30
16
94
%
COPAXONE
72
100
(29
%)
Respiratory products
71
93
(24
%)
Other
107
140
(24
%)
Total
1,156
1,214
(5
%)
Three months ended
March 31,
Percentage Change
2022
2021
2021-2022
(U.S.$ in millions) International Markets segment
Generic products $
388
$
392
(1
%)
AJOVY
6
1
315
%
COPAXONE
10
12
(11
%)
Other
88
85
4
%
Total
492
490
§ Free cash flow reconciliation (Unaudited)
Three months ended March
31,
2022
2021
(U.S. $ in millions) Net cash provided by
(used in) operating activities
(49
)
(405
)
Beneficial interest collected in exchange for securitized trade
receivables
305
476
Purchases of property, plant and equipment
(157
)
(150
)
Proceeds from sale of business and long lived assets
25
138
Acquisition of businesses, net of cash acquired
(7
)
-
Free cash flow $
117
$
59
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503005141/en/
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
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