Teva at UBS Global Healthcare Conference: Strategic Growth and Innovation

On Monday, 10 November 2025, Teva Pharmaceutical Industries Ltd (NYSE:TEVA) presented at the UBS Global Healthcare Conference 2025. CEO Richard Francis outlined the company's strategic shift towards growth, highlighting both successes and challenges. While Teva has marked its 11th consecutive quarter of growth, it faces the impending loss of Revlimid revenue in 2026. The company is focused on innovative products and maintaining a disciplined approach to market access and pricing.

Key Takeaways

• Teva achieved its 11th consecutive quarter of growth, driven by innovative products.
• The company aims for a mid-single-digit CAGR for revenue and a 30% operating margin by 2027.
• Austedo, UZEDY, and Olanzapine are key products in Teva’s growth strategy.
• Teva is exploring the divestiture of TAPI to align with its biopharma focus.
• The company is navigating market challenges, including IRA impacts and FDA changes.

Financial Results

• Innovative business revenue reached over $800 million in Q3, a 33% increase.
• Austedo sales rose by 38%, Ajovy by 19%, and UZEDY by 24%.
• The generics business grew by 2%, with gross margins expected between 40% and 55%.
• Teva reiterated its 2027 guidance for revenue growth and operating margins.

Operational Updates

• Austedo's growth is driven by patient adherence and compliance, with 85% of potential patients not yet on therapy.
• UZEDY's TRX increased by 119%, emphasizing product quality over discounts.
• Olanzapine LAI filing is planned this quarter, with a launch expected in the second half of next year.
• The Duvakitug phase three trial is underway, targeting conditions like UC and CD.
• The DARI inhaler aims to launch by 2027, addressing a significant patient need.
• Teva is focused on expanding its biosimilars portfolio, aiming for over 30 products.

Future Outlook

• Teva is confident in achieving $2.5 billion to $3 billion in Austedo revenue.
• Olanzapine LAI is projected to generate between $1.5 billion and $2 billion.
• The company aims to have the largest biosimilars portfolio through strategic partnerships.

Q&A Highlights

• Teva is expanding the Austedo market rather than focusing solely on competitors.
• The company prioritizes value and access in managing its product portfolio.
• The IRA's impact on pricing is being strategically managed.
• FDA's simplified clinical trial requirements for biosimilars are seen as beneficial.
• The TAPI divestiture process is being restarted to align with Teva's strategic goals.

For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - UBS Global Healthcare Conference 2025:

Ash Pharma, UBS Analyst, UBS: Good day, everybody. My name is Ash Pharma. Welcome to UBS Global Healthcare Conference. I'm really excited to have Richard Francis from Teva join us. Richard, thanks a lot for making the trip. I know there's a lot of disruption with the flights and everything. Thanks for joining us. It's been a pretty exciting story. We want to go over a few different items of the latest updates that have happened. Maybe just for the audience, if you want to ask any question, there is a QR code, and I'll get that on my iPad here, and we can cover it that way. With that out of the way, Richard, maybe if you can give us a little bit of a sense of high level, where are we in the story? You just reported third quarter earnings.

Just if you hit a couple of few highlights, and then we can go over from there.

Richard Francis, CEO, Teva: Firstly, Ash, thank you for having us. I really appreciate it. Yeah, that's an open-ended first question, so I've got to be careful to keep it quite tight. Where we are in the story, nearly three years ago, the pivot to growth strategy was put in place for Teva. Obviously, they had three phases, which we laid out. One was to return to growth, accelerate growth, and maintain growth. The first few years were about return to growth. After many years of decline, that wasn't a small achievement. We returned to growth. We had our 11th consecutive quarter of growth, Q3. We now enter the phase of accelerate growth.

Now, the return to growth, probably the nuggets about that are the intensity, which we focus on our innovative business, our patented business, both in market and in the pipeline, as well as stabilizing our generics business. We have done all of those. I think Q3 was a really good example of how the finances show that, the maths. I always call it the maths. The maths do not lie. In Q3, we grew our innovative business now to over $800 million for the quarter, up 33%, Austedo up 38%, Ajovy up 19%, and UZEDY up 24%. Over $800 million of innovative sales. That throws off a completely different gross margin level of profitability. When I started this journey with the team, our gross margin in Q1 2023, I probably should not mention this, should I? Probably should not. It was 48%.

Now we're tracking to be in the 40%-55%. Why has that happened is, obviously, we've driven efficiencies and a lot of things we should do, but our portfolio shift has happened. Those maths are fundamental, and they will keep changing. I think in Q3, you saw the nuggets of that. A stable generics business growing at 2%, an innovative business growing at 33%, a pipeline that's maturing and getting really close to either being submitted or launched with the landing next year, DARI the year after, Duvakitug in phase three, phase two starting next year. It's a fundamentally different company. Maybe I'll stop because I'll keep going on. When I started this journey with the team, people said, and I remember you asked the first question in New York, which I won't go back to.

People said, this is a crazy idea to move the largest generics company in the world to an innovative company, a leading biopharma company. I remember saying, it may sound like fiction, but over each quarter, it'll become more and more nonfiction. I think today, the reality is we are a biopharma company that has a world-class generics business, and we have a world-class innovative portfolio both in the market and the pipeline.

Ash Pharma, UBS Analyst, UBS: Great. Excellent. Yeah, I'm very, very excited for your success. Yeah, it's been a tremendous turnaround. Austedo, obviously, a big part of it. The third quarter for Austedo was particularly strong. Maybe if you can talk about what are the different dynamics of what is driving that? Is it some part of it volume, some just going from IR to XR, getting that type of an advantage? How much of it is volume versus price?

Richard Francis, CEO, Teva: Yeah, I think this is a really good example of how Teva has completely transformed. I think one of those first questions I was asked is, can Teva sell innovative products? Which, by the way, I was shocked at the question because I used to work at Biogen for many years, and Teva was probably one of the hardest competitors with Copaxone. I always thought they could. Maybe the muscle had atrophied a bit. I think going back to your question on Austedo, what's driving it? There are so many different aspects that the team have put in place here, and Chris Fox is here who runs the US, which are phenomenal. Not just making sure we have the right sales force with the right coverage, with the folks on the right quartile, but understanding the patient journey.

It is how do we move patients from script onto drug? How do we get them titrated in the appropriate way? How are they supported with adherence and compliance? How do we get them on the optimal efficacious dose? All of those things are multi-layered in many different programs we have, and all of those keep getting executed. When people say, how did you grow to 38% in Q3? I probably say, that journey started two years ago. All of those things keep getting honed and refined. Still, the fundamentals are 85% of the patients who should be on therapy are not. The team are getting more of those brought into the office and treated. More of those get titrated on a titration pack sample.

More of those end up on a more optimal dose because as we move to the XR, it's easier for physicians to move them to titrate them. All of those things come together, which allows us to have a strong quarter. There are a couple of things which I mentioned that the comparison to the prior quarter in 2024 was probably a bit favorable because we launched XR in quarter two 2024, and we stocked in more there. I think Q3 2024 was maybe slightly suppressed because of that. There was a little bit of growth in that favorability in Q3 this year, but nothing of any significance that really changes the direction of travel for this. I think it's a multi-layered story. We do lots of different things well every day, and I think that's what's driven it.

Ash Pharma, UBS Analyst, UBS: One of the things that just your competitor, Neurocrine, they have gone into pretty aggressive contracting earlier this year. Sometimes these things happen in cycles that one competitor taking more price hit and then growing volume and then the other competitors turn. I wanted to understand, is there any type of that dynamic going on with Austedo that there is more of a contracting coming as a competitive reaction to what Neurocrine did?

Richard Francis, CEO, Teva: Yeah, look, I mean, I'm pretty consistent with this. I never talk about competitors, particularly in a market like Austedo, where you have 85% of patients. 85% of nearly 800,000 patients are not treated. To me, this is an opportunity for others in the market to help patients. I say that first and foremost. The other thing we've said consistently is, and actually all the markets we operate in, this is going to be constantly challenging. Managing value and access is a constant discussion that you have to have because I think what we've shown across our portfolio is that you need both. Access without value is an eroder of returns. You need to think about that carefully. I think what we've done is position ourselves well this year. We've positioned ourselves well next year to make sure we balance that value and access.

For me, it goes back to the fundamentals. This is all about getting more patients into the market, getting more physicians to treat those patients because that's the opportunity, and that's a responsibility that we have to help those patients. I think that's the fundamental. We, when we plan and budget across all of our portfolio, we plan for the payer market to get harder and harder every year, forever. Forever. We think like that all the time. When that does happen, I'd like to think we're not shocked. We've prepared for it. We showed that with UZEDY. UZEDY is a great example of the team doing a phenomenal job balancing value and access. Once again, we think our portfolio that we're bringing to the market brings real value, and it has real need in the market.

There are many patients who can benefit from our Austedo, UZEDY, Ajovy, and soon to be Olanzapine. If we think that has value, we need to retain that value. Because long term, we want to give returns. We want to increase the value of this company. We give returns to our investors. To do that, you have to be very disciplined on things like access and making sure you create long-term value.

Ash Pharma, UBS Analyst, UBS: Got it. Got it. I guess pretty exciting update with the third quarter that you reiterated your 2027 guidance. I mean, and yeah, I think with now having a clear line of sight on the long-term goal for the Austedo brand, yeah, what I'm trying to understand is that it's a very promotion-sensitive brand. We get that. In the past, you've talked about how you want to expand the sales and marketing footprint on Austedo. Now that you have a clear line of sight that IRA is not a big impact or something that you can absorb, what's your focus in terms of growing the commercial footprint on Austedo?

Richard Francis, CEO, Teva: Yeah, so maybe we actually approached it slightly differently than you think. We never waited for IRA because I think that's sort of the long term. The $2.5 billion we were comfortable with because we made an assumption in 2023 that was going to happen. Now, obviously, I think we got a lot more comfort in the market, a lot more comfort when we actually negotiated the number, and we knew that the $2.5 billion and the $3 billion were really going to happen. Going back to your sales and marketing, we've always invested to make this brand a global blockbuster because our philosophy is you play to win, and then you deal with failure when it happens, but you don't hedge.

I think with Austedo, we've always, and the commitment we've made to the brand and to the patients we serve is always with a real intent to help them. Now, if things change along the way, we'll adapt. We were not waiting for the IRA. We had always believed, and I'd always believed the team and negotiations were going to work out in line with what we had forecasted. I just want to be clear that this does not open the floodgates. I think we've always allocated the amount of resources required to actually optimize that brand. We'll do that across all of our brands. That comes back to a very thoughtful but disciplined and maybe slightly aggressive capital allocation that we do at Teva. In fact, here's a humorous story, which is, so I'm sure I could share this well.

I'm going to share it anyway. Yesterday, my Head of R&D sent me an audio. He managed to work out to put together some data points to create a podcast on capital allocation. That's from my Head of R&D. That's the coolest thing the Head of R&D sends out. He may live to regret that. Today at breakfast, we were talking about capital allocation and how we have to allocate capital more aggressively to drive long-term value. I just tell you that because it's an interesting story, but one that I think is unique at Teva. We do not think about budgets as something you get every year because you had it last year. We do not think about things just need money because they've always needed it. Sales and marketing for Austedo, a pipeline to Duvakitug, phase two results.

We think about how are we going to drive long-term value and create long-term value for our shareholders. That means we have to be really thoughtful about capital allocation. I thought it was just really nice that Eric Hughes, Head of R&D, did that.

Ash Pharma, UBS Analyst, UBS: Yeah, that's great. I know there is a lot of focus on just the IRA, MSP, where it will come down to, which I don't know if you are willing to talk about that.

Richard Francis, CEO, Teva: Look, it may be early in the morning, but it's no way that early in the morning that you can get me a product.

Ash Pharma, UBS Analyst, UBS: All right. I'll try to ask it in a few different other ways. Let's see. I know you're.

Richard Francis, CEO, Teva: I mean, if it stays amongst you and me, then I can tell you. I do not know what is going to happen.

Ash Pharma, UBS Analyst, UBS: Maybe just asking something that has been disclosed by a lot of companies about their branches, like where is the net pricing that you're realizing at Austedo right now, like before IRA? Is that something that?

Richard Francis, CEO, Teva: See, that's almost a little bit of a Trojan horse there, isn't it? I saw it because it's just big and it's wooden and it's a massive horse. We will move on to the next question.

Ash Pharma, UBS Analyst, UBS: All right. Okay. So yeah, maybe move on. So we'll find out.

Richard Francis, CEO, Teva: By the way, just going back, always due respect, I should apologize, but your previous two questions were about competitive environment and access. There is no way I will give anything that impedes our ability to do the right thing for the brand. We will always help our investors. We will always help the IRA team. We will always help them model and understand what it looks like because I do not want to leave people in the dark. At the same time, from a competitive point of view, I do not want to put my US team at any disadvantage just because I want to carelessly answer a question.

Ash Pharma, UBS Analyst, UBS: Yeah. Yeah. No, that makes sense. Maybe just we switch over to UZEDY. So for UZEDY, I know since you launched, I mean, the uptake has been pretty strong. And one of the things that you talked about was that you want to maintain pricing discipline, not give away discount unless you need to. Where are you in that process? Is it still working out, the slightly premium compared to the other LAIs in the market? Just talk about the uptake of what's resonating with the physicians.

Richard Francis, CEO, Teva: Yeah. No, I think this is a really good example of just the quality of capability we have built and we've utilized and maybe was always there at Teva. So UZEDY competes in a very competitive segment of Risperidone and now I'd say Paliperidone that has been there's some big, big brands in there. It's been genericized as well. And TRX was up 119%. I think that goes to show two things. One is the quality of the product, the product profile. These are really important attributes. The fact that subcutaneous doesn't have to be kept in a fridge, and it can hit therapeutic dose within 24 hours are really important for physicians. We've really found that. The quality of our teams in talking to the physicians, the nurse practitioners, the formally committed members of the hospital.

We're very, very good at that community and the patient associations. That value, we knew we had a valuable product. We knew it made a difference to physicians and patients. We are mindful not to place the easy access, like give a discount and get access, and then volume will follow. We've sort of created a demand from physicians because they value the product, and we'll use that to maintain the value and help improve the access. I think this is a really important story, and I think it's a really important little micro case study of Teva. At a time when you're trying to grow your innovative business, you're trying to move the company from a generic to an innovative pharma company. You're trying to do a turnaround.

You're trying to make people believe all these things, and you want to have a next quarter of growth. The easy thing to do is to discount and get access because you think that would just get you to the next place. That would just help you get there. We didn't. The team didn't. Credit to the team. I talked to them about it, and I said, "Look, should we be going for a bit more access?" They said, "No, this is a great product, long-term value. We need to hold the line." That is the quality of people we have at Teva, and that is what we did. We had all the conditions to maybe challenge that decision, and we did. That is why UZEDY, I think, is a really good opportunity.

That is why when we launch Olanzapine next year, which clearly does not have a competitive market, there are no generics. There are not any big brands. It is a segment that really needs a long acting. We are going to go to those physicians, those formally committed, those nurse practitioners, those payers who we have been working with for two years with UZEDY. I think now we are becoming a real partner in psychiatry and in schizophrenia, but one that really knows the value we have and the value we want. I think Olanzapine obviously has even more of that. That is when I reiterate the $1.5 billion-$2 billion for our schizophrenia franchise. I truly believe that is possible. You put that with the $2.5 billion-$3 billion of Austedo.

I mean, this is a different company with different numbers and different levels of growth, both top and bottom line for the future.

Ash Pharma, UBS Analyst, UBS: It also has an implication when you're not necessarily giving away free product. What that also means is that your time to get to the $1.5 billion-$2 billion, let's say, for both of these products combined might be a little bit further out. Is that possible 2030 to hit?

Richard Francis, CEO, Teva: Yeah, maybe. It's interesting. I mean, it goes back to maths, doesn't it? I love my maths. It's like less at more value or more at lower value. I mean, the end destination is probably the same. You just get there a different way. I think for me, I haven't necessarily thought about it like that. I've just thought about it as what is the value that we have and we should retain. I think for me, you've got to be very, very carefully thinking volume is going to be the sole going to solve any growth trajectory in innovation. I think ultimately, it's about creating something of value and unmet medical need and helping people understand that deeply. Then you have something really valuable. I think if any time you sort of try and rush forward, those launches are really important.

I've learned throughout my career, those first 6 to 12 months are really important. I think discipline and understanding of the market and the patients, once again, back to the team in the US, that understanding the patient journey and the points of inflection of treatment and decision-making is deep, and it's only going to get better.

Ash Pharma, UBS Analyst, UBS: Got it. Under Olanzapine LAI, so yeah, you have a filing that is planned, and hopefully, everything gets resolved with this government shutdown. Just talk to us about, yeah, what is sort of the base case scenario that you're running with? Is there a possibility of some sort of accelerated path here?

Richard Francis, CEO, Teva: We're really excited about Olanzapine. The things I mentioned, I mean, I think it's going to be an amazing product for patients who really need a long acting. Don't forget that Olanzapine is for moderate to severe patients with schizophrenia, and compliance is key there. Really key. To answer your question, we're going to file it this quarter. I'm hopeful, despite the amount of hours I've spent on tarmac at various airports for the last 10 days around this country, that that's not going to affect the FDA. With regard to whether we use any sort of voucher to accelerate it, we have a big portfolio of a lot of products, both in our innovative and generic, and we're looking at where could be the best use of something like that. We'll come back on that.

We're planning for a launch in the second half of next year, which is sort of, if that can be accelerated, great. Once again, it's that long-term value creation at Teva. If there's other things that could benefit from that within our portfolio, we'd probably think about those as well.

Ash Pharma, UBS Analyst, UBS: Got it. Okay. And then on Duvakitug, so good to see the phase three is being launched on CD and UC. I think one of the other things that you've also talked about is just additional indications. Just what's happening on that front?

Richard Francis, CEO, Teva: Yeah. I listen to Eric a lot, not just on capital allocation. My Head of R&D tells me this is the fastest transition from phase two to phase three for trial in UC and CD. Credit to the team. Why once again, that's from a company that's not supposed to know how to do innovative work. Excited about that. Eric and I exchange messages all the time about recruitment, how it's going. We are going to go into announcing phase twos. Whether we announce them next year or we keep them secret until people go on to clinicaltrials.gov, we'll see.

Look, I think maybe I take this moment to say, isn't it interesting that the first few questions we've had about the $2.5 billion-$3 billion of Austedo, the successful launch of UZEDY and then the potential launch of Olanzapine, Duvakitug again, UC and CD phase three, and two more indications. In less than three years, this definitely doesn't feel like a generic company. It feels like a world-class biopharma company already with assets that can create real long-term value and real value creation for shareholders, in my view. I appreciate you asking the right questions because that's what everyone wants to talk about because this is why it's so exciting to be at Teva right now.

Ash Pharma, UBS Analyst, UBS: Great. On DARI, so that's the other pipeline program. There's a lot of focus on that. I think just in terms of tracking on the timeline here, if you can talk about the enrollment finished by the end of this year and get the data and kind of compare contrast to the GSK's competing product.

Richard Francis, CEO, Teva: Yeah. DARI, our dual action rescue inhaler, the team have done an amazing job. Once again, I emphasize this point because I'm very proud, but we moved Olanzapine faster through a phase three schizophrenia study than anybody's ever done. That's supposed to be really hard. We moved our phase two trial for Duvakitug in UC and CD faster than anybody had done. I think now we're going to do DARI in a phase two in asthma and pediatric faster than anybody's ever done. If anybody says we can't do development, we can. The intensity, once again, I know this enrollment in pediatric adolescents and adults because we have an app that I can look at all the time, which I'm sure Eric sometimes wishes I didn't. We're on track to do all the recruitment by the end of this year.

By the way, this is an exciting opportunity. The guidelines suggest that 10 million Americans should be on a dual action rescue inhaler. We're coming to the market with a great device because we have a lot of experience in devices. We see this as a big market that has real long-term value. We're obviously following AstraZeneca, who are creating the market, getting these guidelines really understood by physicians. Their script data looks very impressive and strong. I think for us, when we come to the market, which will be in 2027, that I'd like to think that we're following the guidelines, which are very well understood. We'll be differentiated not just because of our device, but we'll have pediatric indication, which is 25% of the population. It's 25% of those 10 million.

Ash Pharma, UBS Analyst, UBS: Good. Good. Yeah, now let's switch over to the generics and biosimilar space. Yeah, a lot of different developments on that. I guess the one thing that I wanted to understand, there was a lot of talk recently about just FDA simplifying these clinical trial requirements, right? It can be looked at in a positive or a negative. What I want to understand, how do you think about it? For Teva, what does this mean? Is it a worry that now there'll be all of a sudden a cottage industry that shows up for biosimilar? Or is that not necessarily the case because you think that the quality of the assets that you get to the market are going to be differentiated versus the crowding that might happen?

Richard Francis, CEO, Teva: Yeah, no, it's a fair question. In biosimilars, firstly, a couple of things which I think mean, I think it's a good thing because I just don't think it was actually necessary. I think wasting money on things you shouldn't have to do, clinical trials where you know you've already proven it. I think that's just sensible because we can put that capital to other use to ultimately help society. I think it's a good thing. Does it mean there's going to be a wave of competitors? No. The reason why, especially technically, it's really hard. People forget that. To develop biosimilars, you still have to have a good technical capability. Second, it's still not cheap. It's $70 million-$100 million per biosimilar. For a small company or a generic company, that's a lot of money.

If you want to do five or six, that's going to chew up a lot of money. I think maybe there'll be more. For us, our strategy always was we want to have a huge portfolio. I mean, we have the fastest growing portfolio now, the second largest. I think we'll soon be probably the largest. We want to have over 30 biosimilars. We're doing that through partnerships, which we started three years ago. We saw partnerships as the best way of doing that in a capital-efficient way. For me, maybe that creates an opportunity to have deeper partners, deeper partnerships with, as you saw, we've done one with Samsung. We have some with LabScience, part of Fresenius, and we have Alvotech. We can go deeper on some of these and maybe expand it. You saw we have one with Pharmakon in Europe.

For me, just helps us on that journey to have a bigger portfolio. I think I see it as a positive thing. I think hopefully those comments help you understand that it's not going to create a wave of people coming. One, it takes a lot of time, and the capability is high. The money still, or the capital required, is still not insignificant.

Ash Pharma, UBS Analyst, UBS: Right. When you think about just kind of the pushes and pulls of pursuing this as a partnership opportunity versus doing it in-house, I mean, just given what has happened recently with two different CROs that you've gotten with the partnered asset, how does that play into your thinking that if I'm doing that in-house, maybe sort of potentially less risk and more of a tighter control that you can manage versus trying to get it from a partnership where there can be a potential risk from that?

Richard Francis, CEO, Teva: Yeah. First, I'd say that the thing you have to talk about internally, which we did, is opportunity cost. It's not unlimited capital. If we do this internally, and yeah, I'm sure Eric could actually do this, but what's the opportunity cost of doing it? Does that mean we don't do another phase two in Duvakitug? Does that mean we don't accelerate Emrysoma? Does that mean we don't do a third indication in AntiR15? There's an opportunity cost. Capital has to be allocated really thoughtfully with a mindset. The great thing about Teva now is we're in a position where we can have a discussion. Do we do biosimilar development internally, or do we do all this innovative? Do we give more sales and marketing to Austedo, UZEDY, Olanzapine? We have those capital allocation discussions. We operate as an enterprise team.

We do not operate in a functional way. So here's the thing. When we did the pivot to growth back in the first quarter of 2023, we did analysis, and we looked at the RNPV of revenue and Epidar, if we did a partnership or if we do it internally in biosimilars. And it's the same. Actually, Epidar is slightly better if you do a partnership on a risk-adjusted NPV. So I give that example. That's how we think, right? And so could we do it better? Here's the other thing I always say. It's like we always think. Every company always thinks they can do things better than others, right? In some instances, maybe we could. But in others, we're very good at picking people of really good capability and being, I think, humble enough to say, actually, those guys could do it.

We have a lot of partners across our whole generics business, so biosimilars and injectables, some interesting technologies. I think picking the right partner, which has the right capabilities, is the right thing. I stand by it. Now, capital allocation is really important. Opportunity cost, understanding the opportunity cost, and being mindful. Otherwise, you're just going to keep spending money, and then you keep promising a return in the future. As we know, the future never happens. It's always in the future.

Ash Pharma, UBS Analyst, UBS: Yeah. Maybe just taking a pause. Yeah, for the audience in the room, if you have any questions that you want us to bring up, feel free to submit that, and I'll get this on my iPad. Just a couple of others while we are waiting for that to get populated. Yeah, I think there is a lot of focus, obviously, on the 2026 dynamics. I guess it's a very good thing to see that you're kind of reiterating that mid-single digit kegger on revenue. 2026 has a little bit of a unique dynamic that you have Revlimid going away. Yeah, I'm trying to understand what is the growth? What is essentially the growth levels that you're pulling to offset that? Can you stay on this path of going towards mid-single digit?

Richard Francis, CEO, Teva: Yeah. Look, I think this is a question I like because I think it shows a lot about the discipline at Teva now. We knew we were going to lose Revlimid in 2026. We did not take that as an opportunity to say, "Okay, can you give us a break? It was a big product. We're going to lose it now. Let's just discount 2026, and let's just move on to 2027." We did. We put a few things in place. One, we made sure we were accelerating our innovative pipeline and our products in the market. Our innovative growth, we talked about being at 33%. If we keep driving our innovative growth in 2026, that's going to throw off a significant amount of revenue, which has a very high gross margin, which is a significant amount of profit.

We put that together with our organizational effectiveness programs, which are going to save two-thirds of $700 million by the end of next year. As well as we're going to launch more biosimilars, launch more complex generics next year, and our base generic business will keep improving the efficiency. That is why we've been able to say we'll grow EBITDA next year. We'll grow EBITDA in absolute numbers, and we'll grow it in operating margin. That is not easy, but we've planned for it. We also understood that we had a transformation of our portfolio coming through. I think for me, there is a bit about the revenue and the CAGR, which I think we feel comfortable on.

The thing I'm really proud of is what we can do on the level of profitability and keep driving the company towards our 2027 targets, which are mid-single digit CAGR growth in revenue, but a 30% operating margin. Those things to do together when you lose a product like Revlimid, which is high margin, I think that shows a real discipline in the company and a real focus on really wanting to lean into these challenges, not accept them. I think that's why I expanded on your question a bit because I think for us, 2026 is a moment where I'd like to think that people can see this company has really moved from where maybe it was historically a few years ago and to where it's heading.

I think both on planning ahead, the transformation of our portfolio, the thoughtful approach to costs and expenses and capital, and that sort of comes together in 2026.

Ash Pharma, UBS Analyst, UBS: Great. Just in the last couple of minutes, yeah, I know a lot of focus on TAPI as well, and it has taken a life of its own, like divesting and not divesting it. What is the latest? I'm just curious to understand, I think, your decision to restart the process. Why do that versus retaining the business at this point?

Richard Francis, CEO, Teva: It goes back to strategy and capital allocation. The pivot to growth strategy is not a tagline. It is a detailed plan for the next 10 years. We know exactly what we have to do each year. Tapi is an amazing API business. It is second largest globally. Does it help us fulfill our goals of becoming a world-class biopharma company with a valuation that we think is appropriate? No, it does not, despite how good it is. Because of that, it is not aligned to the strategy. We should stick with that principle. What we have learned throughout this process, though, is that Teva is in a position now that it goes a bit back to access. We do not get forced into doing things that we do not think will give a return to shareholders and will help this company be successful going forward.

If we see that we know what we want when it comes to TAPI, particularly from a partnership agreement, because we'll obviously be partners with whoever acquires this for 10 years plus. That is really important. We also know the changing geopolitical situation has changed dramatically since we started this process. I think we can think of this very differently. We are in a position now, in a financial position, where we can be really thoughtful. It ultimately goes back to all the decisions we have to make and we should make. Are they in the best interest of the company? Are they in the best interest of driving sustainability long-term? Ultimately, if we do those, they'll be in the best interest of shareholders, which is what we are paid to do. I think we should stay disciplined on those.

I think there's a few questions you've asked, which I hope show our thoughtful, disciplined approach to decisions. I feel very comfortable with what we did on TAPI. We will start the process again. I think the world has an opportunity now that was not maybe there in 2024 to come back to the table and take another look at TAPI.

Ash Pharma, UBS Analyst, UBS: Right. Good. Are there any other non-core parts of your portfolio? I know investors like to think about OTC, which is growing pretty well, and it's kind of customary to divest that for a lot of companies. Is that a?

Richard Francis, CEO, Teva: Is that the standard play? Everybody, if you've got an OTC business, you quickly sell it. OTC business, I think a couple of things is. One, I suppose it goes back to our core principle is how do we create value, long-term value in this company? We can be a bit cookie-cutter about that. We can think, what's driving long-term value? What's going to drive our gross margin? What's going to drive our long-term operating margin? What's going to drive long-term EPS growth? Our OTC business right now has a real purpose in driving our pivot to growth. It's a slightly different OTC business. It's very pharmacy benefit based. It's not your sort of toothpaste or stuff like that. It's really medicines. Right now, we see a lot of synergies with our generics business. We see it helping us drive our financials.

It's part of the people say, how do you replace $1 billion of generic Revlimid? I say, well, we have our generics business. We have 10 complex generics. We have another 10 biosimilars we're launching. And we have our OTC business that grows at double digits. Once again, it's aligned to the strategy. It's aligned to profitability. It's synergistic with what we do. People come to us all the time asking about it, bankers asking whether we would. I say it's aligned to our strategy. It's really clear. It's a really easy decision. Every year, we reassess where's our capital, what's absorbing capital, where could we put capital, and what's the best return for the medium to long-term? Our goal is to create a long-term prosperous Teva. Long-term, we're talking they will never, ever see the challenges it saw in the past.

It'll be here way after I've gone, and it will be set up for success. That is about making these thoughtful decisions on where you put capital now and how you're going to keep allocating capital going forward. I suppose it's a long answer to your question. We'll always look at parts of the business and say, are they aligned to our strategy? Are they worthy of receiving capital versus other things? If they do not adhere to those, then we'll say, maybe there's another owner of that. That is how we sort of look through it.

Ash Pharma, UBS Analyst, UBS: Great. All right. With that, thank you so much for your time, and looking forward to learning more about Teva.

Richard Francis, CEO, Teva: Thanks, Ash. Appreciate your hosting us today. Thank you for everybody.

Ash Pharma, UBS Analyst, UBS: Thanks everybody.

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