Q1 2026 Teva Pharmaceutical Industries Ltd Earnings Call

Operator: For today's call. If you'd like to ask a question at the end of the presentation, you may press Star followed by One on your telephone keypad. I'm gonna hand it over to Christopher Stevo, SVP, Investor Relations. Please go ahead.

Speaker #1: Safe and stays cool. If you'd like to ask a question at the end of the presentation, you may press star followed by 1 on your telephone keypad.

Speaker #1: And I'll hand it over to Chris Stevo, SVP Investor Relations. Please go ahead.

Speaker #2: Thank you, Alex. Good morning and good afternoon, everyone. Thank you for joining us on our first quarter call. I'd like to note that before we posted our press release this morning on earnings, we also posted a press release on the MLX transaction as well as a slide deck relating to that transaction.

Christopher Stevo: Thank you, Alex. Good morning and good afternoon, everyone. Thank you for joining us on our Q1 call. I'd like to note that before we posted our press release this morning on earnings, we also posted a press release on the Amylyx transaction, as well as a slide deck relating to that transaction. You can find those materials in the same section as you can find our earnings materials. Before I turn the call over to our CEO, Richard Francis, I want to remind everyone that we will be making forward-looking statements on this call. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statement due to a variety of factors.

Speaker #1: The, the treatment landscape. Because this will explain why we're so excited about EcoPipa. Patients generally start on paper therapies, and if these fail, families are left with difficult choices.

Speaker #2: And you can find those materials in the same section as you can find our earnings materials. Before I turn the call over to our CEO, Richard Francis, I want to remind everyone that we will be making forward-looking statements on this call.

Speaker #1: They either have alpha-2 antagonists, which generally take, but maybe not offer the efficacy to many patients. The next step is antipsychotics, which can be effective, but come with meaningful metabolic and neurologic side effects that many families discontinue or even avoid them altogether.

Speaker #2: The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors.

Speaker #1: I think we can understand there would be a real hesitation in putting a 10-year-old on an antipsychotic for the next decade. That's not a sustainable long-term solution for a chronic pediatric condition.

Speaker #2: These factors are described in our earnings press release and are most recent 10Q and 10K filed with the SEC. Any statements we make are only as of today and we undertake no obligation to update these statements subsequently.

Christopher Stevo: These factors are described in our earnings press release in our most recent 10-Q and 10-K filed with the SEC. Any statements we make are only as of today, and we undertake no obligation to update these statements subsequently. With that, Richard Francis.

Speaker #1: EcoPipa, I'm changing that equation. It delivers meaningful efficacy with a good psychiatric profile, positioning it to become a preferred later-line therapy, and we fully expect pricing to reflect that value.

Speaker #2: With that, Richard Francis.

Speaker #1: Now, on the next slide, you'll see some of the transaction details. I'll leave this for Eli to go through in more detail, but one theory I wanna highlight is that the asset carries a gross margin significantly above corporate average, and that it will impact our ability to hit our 2027 targets and those beyond.

Speaker #3: Thanks, Chris. Good morning and good afternoon, everybody. Thank you for joining the call. On the call with me today will be my colleague, Dr. Eric Hughes, Head of R&D and Chief Medical Officer, and Eliyahu Kalif, the Chief Financial Officer.

Richard Francis: Thanks, Chris. Good morning and good afternoon, everybody. Thank you for joining the call. On the call with me today will be my colleague, Dr. Eric Hughes, Head of R&D and Chief Medical Officer, and Eli Kalif, the Chief Financial Officer. Starting with, as I always do, on the Pivot to Growth strategy slide. We launched this Pivot to Growth strategy three years ago. It's based on four pillars: deliver on your growth engines, step up innovations, sustain generics powerhouse, and focus the business. As you will see through today's presentation, we've made great progress across all of these pillars. On delivering our growth engines, you'll see AUSTEDO, UZEDY, and AJOVY continue to drive good, solid growth. Step up innovation. You'll hear from Eric about the exciting pipeline we have and some data readouts and milestones we have this year.

Speaker #3: So starting with, as I always do on the Pivot to Growth Strategy slide, we launched this Pivot to Growth Strategy three years ago, and it's based on four pillars: deliver on your growth engines, step up innovations, sustain generics powerhouse, and focus the business.

Speaker #1: Now, with that, I’m going to move into the Q1 results. So, we have a good start to the year—solid performance driven by continued strength of our innovative portfolio, and you’ll see the growth as a steadier study in the colored slides.

Speaker #3: And as you will see through the presentation today, we've made great progress across all of these pillars. On delivering our growth engines, you'll see us steady, and you said in a Jovi, continue to drive good, solid growth.

Speaker #1: Our revenue came as expected, down 1%, or up 7% excluding both the Japan divestment and excluding generic Revlimid. It's great to see that we're able to mitigate the decrease in generic Revlimid revenues also as planned and as I shared with you in the past few months.

Speaker #3: Step up innovation, you'll hear from Eric about the exciting pipeline we have and some data readouts and milestones we have this year. On sustained generics powerhouse, you'll see the start to see the growth of the emergence of our biosimilar portfolio.

Richard Francis: On sustained generics powerhouse, you'll see the start to see the growth and the emergence of our biosimilar portfolio. Lastly, focus our business. You'll see that we remain dedicated to allocating our capital to the highest return opportunities. Eli will walk you through some of this and also give you an update on the organizational effectiveness work we've done and how we're on track to achieve our $700 million of savings in 2027. Before I do that, and to pick up on what Chris has just said, I'd like to talk a bit today about the announcement we made on the acquisition of Amylyx Pharmaceuticals. This is the first acquisition under the Pivot to Growth strategy. With this acquisition of Amylyx, we take ownership of Icatibant, a first-in-class asset with compelling efficacy and favorable tolerability in Tourette syndrome.

Speaker #1: So, the figures. For example, as I said, $4 billion adjusted EBITDA, up 2%, reaching $1.1 billion. Non-GAAP EPS grew 2%, reaching $0.53. Free cash flow grew 76%, reaching $200 million.

Speaker #3: And lastly, focus our business. You'll see that we remain dedicated, allocating our capital to the highest return opportunities. And Eliyahu will walk you through some of this, and also give you an update on the organisational effectiveness work we've done and how we're on track to achieve our 700 million dollars of savings in 2027.

Speaker #1: Net debt to EBITDA is now at 2.42. It's worth noting these are all compared to Q1 2025. But let's double-click and go into a bit more detail on what's behind this 4 billion.

Speaker #1: As you can see, strong growth of our innovative portfolio. All of these are 40% steado, and coincidence could also grow 41%, up to 578 million.

Speaker #3: But before I do that, and to pick up on what Chris has just said, I'd like to talk a bit today about the announcement we made on the acquisition of Amalex Bioscience.

Speaker #3: This is the first acquisition under the Pivot to Growth Strategy. And with this acquisition of Amalex, we take our initiative of EcoPipeline, a first-in-class asset with compelling efficacy and favourable tolerability in Tourette's syndrome.

Speaker #1: You say strong performance, up 62%, 63 million, and the JV also performed well, growing at 35% to 196 million. Our generic revenue performance was as expected, down 13%, excluding Japan, or flat excluding both Japan and generic Revlimid.

Speaker #3: Now, to let you know a bit about Tourette's, this is a serious life-altering paediatric neurological disorder with limited good options today. So this is a market of serious unmet medical need where current therapies really do not satisfy the needs.

Richard Francis: To let you know a bit about Tourette, this is a serious life-altering pediatric neurological disorder with limited good options today. This is a market of serious unmet medical need, where current therapies really do not satisfy the needs. They either have efficacy but have challenges with tolerability, or they don't quite have the efficacy, but they have the tolerability profile. It's because of that failure that only about half of patients are actually treated, and fewer than a third stay on therapy after 1 year. We see this as a clear opportunity to help patients expand the market, something we have successfully done with AUSTEDO and UZEDY. As you know, we have strong CNS capabilities at Teva, whether that's in sales, marketing, market access, patient services, and we believe leveraging these will help drive penetration and growth.

Speaker #1: Now I want to jump to the next slide. This is a really interesting slide. This shows the transition that's been taking place at Teva from a pure play generics company to a world-leading biopharma company.

Speaker #3: They either have efficacy, but have challenges with tolerability, or they don't quite have the efficacy but they have the tolerability profile. Now, it's because of that failure that only about half of patients are actually treated, and a few of them, a third, stay on therapy after one year.

Speaker #1: And as you can see, this is pretty significant, and the speed of change is significant. Since 2022, the amount of revenue that's been, driven by our innovative portfolio is up from 9% to over 20%.

Speaker #3: So we see this as a clear opportunity to help patients expand the market, something we have successfully done with the Stedo and Yusadi. And as you know, we have strong CNS capabilities at Teva, whether that's in sales, marketing, market access, patient services, and we believe leveraging these will help drive penetration and growth.

Speaker #1: And as you can see by this slide, we continue to see this growth to 2030 and beyond. What is an important aspect that I always draw people's attention to is the gross margin, and how our gross margin is fundamentally changing at Teva.

Speaker #1: Because of this portfolio shift, and as you see in 2030, we anticipate a gross margin of above 60%. Now let me dive into the individual products, starting with Steado.

Speaker #3: It's worth noting that this transaction is highly aligned to our Pivot to Growth Business Development Strategy. EcoPipeline has a de-risk mechanism, strong pivotal data, no major development overhangs, and often dynamics that support attractive pricing.

Richard Francis: It's worth noting that this transaction is highly aligned to our Pivot to Growth business development strategy. Icatibant has a de-risked mechanism, strong pivotal data, no major development overhangs, and orphan dynamics that support attractive pricing. In short, this is a high-quality, value-accretive asset that accelerates our shift towards innovative revenue and profitable growth without compromising our balance sheet discipline. I'm just gonna give you an insight into, on the next slide, the treatment landscape, because this will explain why we're so excited about Icatibant. Patients generally start on behavioral therapies, and if these fail, families are left with difficult choices. They either have alpha-2 antagonists, which are generally safe, but maybe do not offer the efficacy for many patients.

Speaker #1: Another important for steado in the US, reaching 559 million, up 41% year over year. With global results mirroring that growth. The growth has been driven by a combination of PRX, where we had a 13% growth, and milligram growth of 20, reflecting new patient growth and improved adherence.

Speaker #3: In short, this is a high-quality, value-creative asset that accelerates our shift towards innovative revenue and profitable growth. Without compromising our balance sheet discipline. Now, I'm just going to just give you an insight into on the next slide, the treatment landscape.

Speaker #1: We continue to see the benefit of the shift was one day once daily steado XR, which now represents over 60% of new patients. And it's clear that the convenience and simplicity of steado XR are proving to be major drivers of the franchise's durability.

Speaker #3: Because this will explain why we're so excited about EcoPipeline. Patients generally start on behavioural therapies. And if these fail, families are left with difficult choices.

Speaker #1: It is worth noting that as we talked about in Q4, what we had, some development inventory in the channel. that has not all been drawn down in Q1.

Speaker #3: They either have alpha-2 antagonists, which are generally safe, but maybe do not offer the efficacy for many patients. The next step is antipsychotics, which can be effective but come with meaningful metabolic and neurologic side effects that leave many families to discontinue or even avoid them altogether.

Richard Francis: The next step is antipsychotics, which can be effective, but come with meaningful metabolic and neurologic side effects that lead many families to discontinue or even avoid them altogether. I think we can understand there would be a real hesitation in putting a ten-year-old on an antipsychotic for the next decade. That is not a sustainable long-term solution for a chronic pediatric condition. Icatibant changes that equation. It delivers meaningful efficacy with a good side effect profile, positioning it to become the preferred later line therapy. We fully expect pricing to reflect that value. Now, on the next slide, you'll see some of the transaction details.

Speaker #1: Now for steado, we're reiterating our guidance of 2.4 to 2.5 billion for the year. Now moving on to USADI. Q1 performance for USADI was strong, with revenues up 62% year on year and underlying growth by continued prescription growth, 75% PRX.

Speaker #3: I think we can understand there would be a real hesitation in putting a 10-year-old on an antipsychotic for the next decade. That is not a sustainable long-term solution for a chronic paediatric condition.

Speaker #1: Now this all reflects the fact that we have a very strong product profile. Subcutaneous, low volume, no loading dose, with therapeutic levels within 24 hours.

Richard Francis: The treatment landscape, because this will explain why we're so excited about ecopipam. Patients generally start on behavioral therapies. If these fail, families are left with difficult choices. They either have alpha-2 antagonists, which are generally safe, but maybe do not offer the efficacy for many patients. The next step is antipsychotics, which can be effective, but come with meaningful metabolic and neurologic side effects that lead many families to discontinue or even avoid them altogether. I think we can understand there would be a real hesitation in putting a 10-year-old on an antipsychotic for the next decade. That is not a sustainable long-term solution for a chronic pediatric condition. Ecopipam changes that equation. It delivers meaningful efficacy with a good side effect profile, positioning it to become the preferred later line therapy, and we fully expect pricing to reflect that value.

Speaker #3: EcoPipeline changes that equation. It delivers meaningful efficacy with a good side effect profile, positioning it to become a preferred later-line therapy, and we fully expect pricing to reflect that value.

Speaker #1: It also highlights the excellent commercial capabilities we have in the United States. Now, I'm pretty proud of some numbers that I'd like to highlight.

Speaker #3: Now, on the next slide, you'll see some of the transaction details. Now, I'll leave this for Eliyahu to go through in more detail, but one area I want to highlight is that the asset carries a gross margin significantly above our corporate average.

Speaker #1: So since USADI was launched, it's nearly doubled the market share of risperidone LAI from 5% to 9%. Now this is a massive accomplishment to drive such a, a, a change in what is being a static market for so long.

Richard Francis: I'll leave this for Eli to go through in more detail, but one theory I wanna highlight is that the asset carries a gross margin significantly above our corporate average and that it has no impact on our ability to hit our 2027 targets and those beyond. With that, I'm gonna move into the Q1 results. We had a good start to the year. Solid performance driven by continued strength of our innovative portfolio, and you'll see the growth of AUSTEDO, AJOVY, and UZEDY in a couple of slides. Our revenues came as expected, down 1% or up 7%, excluding both the Japan divestment and excluding generic REVLIMID. It's great to see that we are able to mitigate the decrease in generic REVLIMID revenues also as planned and as I shared with you in the past few months. The figures.

Speaker #3: And that it has no impact on our ability to hit our 2027 targets and those beyond. Now, with that, I'm going to move into the quarter one results.

Speaker #1: So congratulations to the team. We're also now seeing expansion into the combined market of risperidone and allopuridone LAIs. It's worth noting that USADI is positioned as the player of choice with over 80% of its end PRXs coming from patients transitioning from orals and those who are naive to antipsychotic drug therapy.

Speaker #3: So we had a good start to the year, solid performance driven by continued strength of our innovative portfolio and you'll see the growth of the Stedo and Jovi and Yusadi in a couple of slides.

Speaker #3: Our revenues came as expected, down 1% or up 7% excluding both the Japan divestment and excluding generic Revlimid. It's great to see that we are able to mitigate the decrease in generic Revlimid revenues also as planned and as I shared with you in the past few months.

Speaker #1: Once again, I reiterating our guidance for the year. Now, I can't talk about USADI without talking about the upcoming launch of olanzapine, where we're very excited about this.

Richard Francis: On the next slide, you'll see some of the transaction details. I'll leave this for Eli to go through in more detail, but one theory I wanna highlight is that the asset carries a gross margin significantly above our corporate average, and that it has no impact on our ability to hit our 2027 targets and those beyond. With that, I'm gonna move into the Q1 results. We had a good start to the year. Solid performance driven by continued strength of our innovative portfolio, and you'll see the growth of Austedo, Ajovy, and UZEDY in a couple of slides. Our revenues came as expected, down 1% or up 7%, excluding both the Japan divestment and excluding generic Revlimid.

Speaker #1: Let me explain why we're so excited. Well, the significant global opportunity is clear. Olanzapine currently holds 19% of the oral market, but lacks a viable long-acting option for a patient population that would meaningfully benefit from one.

Speaker #3: So the figures. Revenue down 1%, as I said, at 4 billion, adjusted EBITDA up 2%, reaching 1.1 billion. Non-GAAP EPS grew 2%, reaching 53 cents.

Richard Francis: Revenue down 1%, as I said, at $4 billion. Adjusted EBITDA up 2%, reaching $1.1 billion. Non-GAAP EPS grew 2%, reaching $0.53. Free cash flow grew 76%, reaching $200 million. Net debt to EBITDA is now at 2.42. It's worth noting these are all compared to Q1 2025. Let's double-click and go into a bit more detail on what's behind this $4 billion. As you can see, strong growth by innovative portfolio. All of these grew 41%. AUSTEDO, in coincidence, also grew 41% up to $578 million. UZEDY's strong performance up 62% at $63 million. AJOVY also performed well, growing at 35% to $196 million. Our generics revenue performance was as expected, down 13% excluding Japan, or flat excluding both Japan and generic REVLIMID.

Speaker #3: Free cash flow grew 76%, reaching 200 million. Net debt to EBITDA is now at 2.42. It's worth noting these are all compared to Q1 2025.

Speaker #1: Second, as I've just described with USADI, this is an area where we work clearly. Salesforce, market access, MSLs, patient services, etc. But more than that, we have real know-how.

Speaker #3: But let's double-click and go into a bit more detail on what's behind this 4 billion. As you can see, strong growth of our innovative portfolio.

Speaker #1: The team has built know-how over the last three years with USADI. And as you see on this slide, the investigator excitement is palpable. People are really looking forward to the launch of this product as there is a clear commitment we'll need.

Speaker #3: All of these grew 41%. Stedo and coincidence also grew 41%, up to 578 million. Yusadi's strong performance, up 62% at 63 million. And the Jovi also performed well, growing at 35% to 196 million.

Richard Francis: It's great to see that we are able to mitigate the decrease in generic Revlimid revenues also as planned and as I shared with you in the past few months. The figures. Revenue down 1%, as I said, at $4 billion. Adjusted EBITDA up 2%, reaching $1.1 billion. Non-GAAP EPS grew 2%, reaching $0.53. Free cash flow grew 76%, reaching $200 million. Net debt to EBITDA is now at 2.42. It's worth noting these are all compared to Q1 2025. Let's double-click and go into a bit more detail on what's behind this $4 billion. As you can see, strong growth of our innovative portfolio. All of these grew 41%. Austedo, in coincidence, also grew 41% up to $578 million. UZEDY's strong performance up 62% at $63 million.

Speaker #1: Now moving on to Ajovy. Ajovy is a great example of how well we execute commercially innovative products globally. Despite being entered into the crowded GR principle market, Ajovy has steadily grown, consistently outpacing the overall injectable market, as you can see from the figures on this slide.

Speaker #3: Our generics revenue performance was as expected, down 13%, excluding Japan. All flat, excluding both Japan and generic Revlimid. Now I want to walk you on to the next slide.

Speaker #1: Where we launched generally end up as, what, number one? And as you can see on the slide, Q1 growth was driven primarily by the US and ex-US, Europe particularly.

Richard Francis: Now I want to walk you onto the next slide. I think this is a really interesting slide. This shows the transition that's been taking place at Teva from a pure play generics company to a world-leading biopharma company. As you can see, this is pretty significant, and the speed of change is significant. Since 2022, the amount of revenue that's been driven by our innovative portfolio is up from 9% to over 20%. As you can see by this slide, we continue to see this grow to 2030 and beyond. What is an important aspect that I always draw people's attention to is the gross margin and how our gross margin is fundamentally changing at Teva because of this portfolio shift. As you see in 2030, we anticipate a gross margin of above 60%.

Speaker #3: I think this is a really interesting slide. This shows the transition that's been taking place at Teva from a pure play generics company to a world-leading biopharma company.

Speaker #1: We had market share gains, volume growth, and, and value growth when it comes to access. Now moving on to pipeline. As we struggle to talk about this in great detail 'cause I know Eric likes to talk about it, but I am excited about it.

Speaker #3: And as you can see, this is pretty significant. And the speed of change is significant. Since 2022, the amount of revenue that's been driven by our innovative portfolio is up from 9% to over 20%.

Speaker #1: What I will just say is we have seven milestones we have this year. We'll start the year with the duplicated maintenance data, which we thought was excellent.

Speaker #3: And as you can see by this slide, we continue to see this grow to 2030 and beyond. What is an important aspect that I always draw people's attention to is the gross margin.

Richard Francis: Ajovy also performed well, growing at 35% to $196 million. Our generics revenue performance was as expected, down 13% excluding Japan, or flat excluding both Japan and generic Revlimid. Now I want to walk you onto the next slide. I think this is a really interesting slide. This shows the transition that's been taking place at Teva from a pure-play generics company to a world-leading biopharma company. As you can see, this is pretty significant, and the speed of change is significant. Since 2022, the amount of revenue that's been driven by our innovative portfolio is up from 9% to over 20%. As you can see by this slide, we continue to see this grow to 2030 and beyond.

Speaker #1: But now we're gonna have the antioxidant ligation Q2 and then H2. It's really a lot of, data readouts coming through, whether that's the futility analysis on Omrisolomon, whether that's the 15-day select disease, whether that's the diary conclusion of our phase three results, whether that's the launch of olanzapine LAI, or whether that's the first inhuman PD-1 IL-2.

Speaker #3: And how our gross margin is fundamentally changing at Teva because of this portfolio shift. And as you see in 2030, we anticipate a gross margin of above 60%.

Speaker #3: Now let me dive into the individual products, starting with Stedo. Another strong quarter for Stedo in the US, reaching 559 million up 41% year over year.

Richard Francis: Let me dive into the individual products, starting with AUSTEDO. Another strong quarter for AUSTEDO in the US, reaching $559 million, up 41% year over year, with global results mirroring that growth. Growth has been driven by a combination of TRx, where we had a 13% growth and milligram growth of 20, reflecting new patient growth and improved adherence. We continue to see the benefit from the shift towards once-daily AUSTEDO XR, which now represents over 60% of new patients. It's clear that the convenience and simplicity of AUSTEDO XR are proving to be major drivers of the franchise durability. It is worth noting that as we talked about in Q4, where we had some buildup of inventory in the channel, that has not all been drawn down in Q1.

Speaker #1: Worth noting is that these were all out to over $10 billion of peak sales. Now, moving on to our generics business. Moving to the third pillar of our pivotal strategy.

Speaker #3: With global results mirroring that growth. Now growth has been driven by a combination of TRX, where we had a 13% growth, and milligram growth of 20, reflecting new patient growth and improved adherence.

Speaker #1: This performed as planned. Global generics were down 13%, mainly due to generic Revlimid, all flat if you take out Revlimid. Now looking at the US, we were down 28%, or up 10% excluding Revlimid.

Speaker #3: We continue to see the benefit from the shift towards one daily Stedo XR, which now represents over 60% of new patients. And it's clear that the convenience and simplicity of the Stedo XR are proving to be major drivers of the franchise's durability.

Richard Francis: What is an important aspect that I always draw people's attention to is the gross margin and how our gross margin is fundamentally changing at Teva because of this portfolio shift. As you see in 2030, we anticipate a gross margin of above 60%. Now, let me dive into the individual products, starting with Austedo. Another strong quarter for Austedo in the US, reaching $559 million, up 41% year over year, with global results mirroring that growth. Now, growth has been driven by a combination of TRX, where we had a 13% growth and milligram growth of 20, reflecting new patient growth and improved adherence. We continue to see the benefit from the shift towards once-daily AUSTEDO XR, which now represents over 60% of new patients.

Speaker #1: And this was increased to 90% by the higher revenue from our portfolio by some products. EU was down 1% due to seasonality of some of our products.

Speaker #3: It is worth noting that as we talked about in Q4, what we had some buildup of inventory in the channel. That has not all been drawn down in Q1.

Speaker #1: As well as launches, some markets down 10% excluding Japan. Now, as I have just mentioned, the generic growth in the US was has now to be driven by some of our portfolio.

Speaker #3: Now for Stedo, we're reiterating our guidance of 2.4 to 2.55 billion for the year. Now moving on to Yusadi. Q1 performance for Yusadi was strong, with revenues up 62% year on year.

Richard Francis: Now, for AUSTEDO, we're reiterating our guidance of $2.4 billion to $2.55 billion for the year. Moving on to UZEDY. Q1 performance for UZEDY was strong, with revenues up 62% year on year and underlying growth driven by continued prescription growth of 75% TRx. This all reflects the fact that we have a very strong product profile. Subcutaneous, low volume, no loading dose, reaching therapeutic levels within 24 hours. It also highlights the excellent commercial capabilities we have in the United States. I'm pretty proud of some numbers that I'd like to highlight. Since UZEDY was launched, it's nearly doubled the market share of risperidone LAI from 5% to 9%. This is a massive accomplishment to drive such a change in what has been a static market for so long. Congratulations to the team.

Speaker #1: So let me give you a sort of a review of where we are. Excuse me. We currently have 11 biosimilar products on the market, four with recovering $16 billion of native brand sales expected between now and 2027.

Speaker #3: And underlying growth driven by continued prescription growth, 75% TRX. Now this all reflects the fact that we have a very strong product profile. Subcutaneous, low volume, no loading dose, reaching therapeutic levels within 24 hours.

Speaker #1: And another nine more after that, covering 58 billion original brand sales. So what does that mean? It means we have increased our portfolio by over 50% in the last three years, and it's starting to have a meaningful impact on our business.

Richard Francis: It's clear that the convenience and simplicity of AUSTEDO XR are proving to be major drivers of the franchise durability. It is worth noting that, as we talked about in Q4, where we had some buildup of inventory in the channel, that has not all been drawn down in Q1. For Austedo, we're reiterating our guidance of $2.4 to $2.55 billion for the year. Moving on to UZEDY. Q1 performance for UZEDY was strong, with revenues up 62% year on year and underlying growth driven by continued prescription growth, 75% TRx. This all reflects the fact that we have a very strong product profile: subcutaneous, low volume, no loading dose, reaching therapeutic levels within 24 hours. It also highlights the excellent commercial capabilities we have in the United States.

Speaker #3: But it also highlights the excellent commercial capabilities we have in the United States. Now I'm pretty proud of some numbers that I'd like to highlight.

Speaker #1: It is worth noting that when we start to be launching biosimilars on a regular basis, in Europe. So to conclude, before I hand you over to Eric, I want to reiterate our 2027 financial targets on the pivot to growth journey.

Speaker #3: So since Yusadi was launched, it's nearly doubled the market share of risperidone LAI from 5 to 9 percent. Now this is a massive accomplishment to drive such a change in what is being a static market for so long.

Speaker #1: Revenue mid-single digit, non-GAAP operating income of 30%, net debt above level two, and cash savings of 80%. And with that, I will hand over to my colleague, Eric.

Speaker #3: So congratulations to the team. We're also now into seeing expansion into the combined market of risperidone and valoperidone LAIs. It's worth noting that Yusadi is positioned as the LAI of choice with over 86% of its NBRXs coming from patients transitioning from orals and those who are naive to antipsychotic drug therapy.

Richard Francis: We're also now to see expansion into the combined market of risperidone and paliperidone LAIs. It's worth noting that UZEDY is positioned as the LAI of choice, with over 86% of its NBRx coming from patients transitioning from orals and those who are naive to antipsychotic drug therapy. Once again, we are reiterating our guidance for the year. Now, I can't talk about UZEDY without talking about the upcoming launch of olanzapine, where we're very excited about this. Let me explain why we're so excited. Well, the significant global opportunity is clear. Olanzapine currently holds 19% of the oral market, but lacks viable long-acting options for a patient population that would meaningfully benefit from one. Second, as I've just described with UZEDY, this is an area where we will have clear synergies, sales force, market access, MSLs, patient services, et cetera.

Speaker #2: Thank you, Richard. And Richard mentioned I do like to talk about this slide for two good reasons. One, there's a big impact we can make for patients across a number of different indications.

Speaker #3: And once again, we are reiterating our guidance for the year. Now I can't talk about Yusadi without talking about the upcoming launch of olanzapine.

Richard Francis: I'm pretty proud of some numbers that I'd like to highlight. Since UZEDY was launched, it's nearly doubled the market share of risperidone LAI from 5% to 9%. This is a massive accomplishment to drive such a change in what is been a static market for so long. Congratulations to the team. We're also now to see expansion into the combined market of risperidone and paliperidone LAIs. It's worth noting that UZEDY is positioned as the LAI of choice, with over 86% of its NBRXs coming from patients transitioning from orals and those who are naive to antipsychotic drug therapy. Once again, we are reiterating our guidance for the year. I can't talk about UZEDY without talking about the upcoming launch of olanzapine, where we're very excited about this. Let me explain why we're so excited.

Speaker #2: And two, you know, this represents four submissions over the next five years. And when the deal closes for the, MLX deal, that would be five submissions in the next five years.

Speaker #3: Where we're very excited about this. And let me explain why we're so excited. Well, the significant global opportunity is clear. Olanzapine currently holds 19% of the oral market.

Speaker #2: A real accomplishment for the teams that have it in the R&D, group, and we're very excited about this, this future potential for our pipeline.

Speaker #3: But lacks viable long-acting options for a patient population that would meaningfully benefit from one. Second, as I've just described with Yusadi, this is an area where we will have clear synergies.

Speaker #2: First, I wanna talk about olanzapine LAI. I have a little bit of a weight-breaking announcement. We just did our EU submission just yesterday. And we'll be looking forward to the validation of that acceptance by the EU in the coming months.

Speaker #3: Salesforce, market access, MSLs, patient services, etc. But more than that, we have real know-how. The team has built up know-how over the last three years with Yusadi.

Speaker #2: So, very exciting—the team did a great job at accelerating that submission. And, as you know, we've done the submission for the FDA back in December, and we believe the product review is going as planned.

Richard Francis: More than that, we have real know-how. The team has built up know-how over the last three years with UZEDY. As you see on this slide, the investigator excitement is palpable. People are really looking forward to the launch of this product as there is a clear unmet medical need. Moving on to AJOVY. AJOVY is a great example of how well we execute commercially innovative products globally. Despite being a late entrant to the crowded CGRP injectable market, AJOVY has steadily grown, consistently outpacing the overall injectable market, as you can see from the figures on this slide. Where we launch, we generally end up as number one. As you can see on the slide, Q1 growth was driven primarily by the US and ex-US, Europe particularly, where we had market share gains, volume growth, and valuable growth when it comes to access.

Speaker #3: And as you see on this slide, the investigator excitement is palpable. People are really looking forward to the launch of this product as there is a clear unmet medical need.

Speaker #2: And we're looking forward to that approval by the end of this year. Now, on to dual action rescue inhaler from our target product, phase three.

Speaker #3: Now moving on to Ajovy. Ajovy is a great example of how well we execute commercially innovative products globally. And despite being a late entrant to the crowded CGRP injectable market, Ajovy has steadily grown, consistently outpacing the overall injectable market, as you can see from the figures on this slide.

Speaker #2: I'm very excited that we've now completed the enrollment of the large, phase three program called FLAIR, that's being enrolled over 2,700 patients. And the more important thing about this large study is we have a very large sample size of both pediatrics and adolescents in this study, which is very important component of this program 'cause 25% of the patients with, with asthma are pediatrics and adolescents and are unique, dry powder inhaler is positioned to be really advantageous for this patient population.

Richard Francis: Well, the significant global opportunity is clear. olanzapine currently holds 19% of the oral market, but lacks viable long-acting options for a patient population that would meaningfully benefit from one. Second, as I've just described with UZEDY, this is an area where we will have clear synergies, sales force, market access, MSLs, patient services, et cetera. More than that, we have real know-how. The team has built up know-how over the last 3 years with UZEDY. As you see on this slide, the investigator excitement is palpable. People are really looking forward to the launch of this product as there is a clear unmet medical need. Now moving on to Ajovy. Ajovy is a great example of how well we execute commercially innovative products globally.

Speaker #3: Where we launched, we generally end up as number one. And as you can see, on the slide, Q1 growth was driven primarily by the US and ex-US, Europe, particularly, where we had market share gains, volume growth, and valuable growth when it comes to access.

Speaker #2: I'm also happy to report that over 60% of the events that occurred at this time, so we're on track for an end-of-the-year, completion of events, for this study.

Speaker #3: Now moving on to our pipeline. I always struggle not to talk about this in great detail because I know Eric likes to talk about it, but I am excited about it.

Richard Francis: Now moving on to our pipeline. I always struggle not to talk about this in great detail because I know Eric likes to talk about it, but I am excited about it. What I will just say is we have 7 milestone readouts this year. We all started the year with the duvakitug maintenance data, which we thought was excellent. Now we're going to have and the anti-IL-15 V-select data in Q2, and then in H2, it's really a lot of data readouts coming through, whether that's the futility analysis on emrasloman, whether that's the anti-IL-15 data in select disease, whether that's the DARI conclusion of our Phase 3 results, whether that's the launch of olanzapine LAI, or whether that's the first-in-human PD-1/IL-2. The worth noting is that these will all add up to over $10 billion of peak sales.

Speaker #3: What I will just say is we have seven milestone readouts this year. We all started the year with the Duplicated Maintenance Data which we thought was excellent.

Speaker #2: Moving on to our first milestone, we now have press release. Back in February, we're duplicated. That was our maintenance data. And just as a review, remember this study looked at ulcerative colitis and Crohn's disease patients with an induction, period of 14 weeks.

Richard Francis: Despite being a late entrant to the crowded CGRP injectable market, Ajovy has steadily grown, consistently outpacing the overall injectable market, as you can see from the figures on this slide. Where we launch, we generally end up as number one. As you can see on the slide, Q1 growth was driven primarily by the US and ex-US, Europe particularly, where we had market share gains, volume growth, and valuable growth when it comes to access. Now moving on to our pipeline. I always struggle not to talk about this in great detail because I know Eric likes to talk about it, but I am excited about it. What I will just say is we have seven milestone readouts this year. We all started the year with the dupilumab maintenance data, which we thought was excellent.

Speaker #3: But now we're going to have the anti-IL-15 vitiligo data in Q2, and then in H2, it's really a lot of data readouts coming through, whether that's the futility analysis on unresolvement, whether that's the anti-IL-15 data in select disease, whether that's the dairy conclusion of our phase three results, whether that's the launch of olanzapine LAI, or whether that's the first inhuman PD1 IL-2.

Speaker #2: And they rolled over into a maintenance period for 44 weeks. Now, maintenance is very important. Because this is a chronic disease, patients who suffer with, psychotherapy frequently.

Speaker #2: So, having a drug that can maintain its response and continue on for years is very important. So we're very excited to see that the data at our 44-week time point showed great maintenance.

Speaker #3: But the worth noting is that these will all add up to over $10 billion of peak sales. Now moving on to our generics business.

Speaker #2: We had ulcerative colitis patients maintaining 55% of their 56% response at 44 weeks for ulcerative colitis. And for Crohn's disease, for the endoscopic response, they maintained 55% of response at the high dose.

Richard Francis: Moving on to our generics business. Moving into the third pillar of our Pivot to Growth strategy. This performed as planned. Global Generics were down 13%, mainly due to generic REVLIMID or flat if you take out generic REVLIMID. Looking at the US, we were down 28% or up 10% excluding REVLIMID, and this increase was driven mainly by the higher revenues from our portfolio of biosimilar products. EU was down 1% due to seasonality of some of our products as well as launches, and International Markets was down 9% excluding Japan. As I've just mentioned, the generic growth in the US has now started to be driven by our biosimilar portfolio. Let me give you a sort of a review of where we are. Excuse me.

Speaker #3: Moving into the third pillar. Of our pivot to growth strategy. This performed as planned. Global generics were down 13%, mainly due to generic Revlimid, or flat if you take out generic Revlimid.

Speaker #2: And also nice that we had dose response between the low and high dose. And that you should remember, this is given subcutaneously every four weeks maintenance.

Richard Francis: Now we're going to have, and the anti-IL-15 vitiligo data in Q2, and then in H2, it's really a lot of data readouts coming through, whether that's the futility analysis on emricasan, whether that's the anti-IL-15 data in celiac disease, whether that's the DARI conclusion of our phase III results, whether that's the launch of olanzapine LAI, or whether that's the first-in-human PD-1 IL-2. Worth noting is that these will all add up to over $10 billion of peak sales. Moving on to our generics business. Moving into the third pillar of our Pivot to Growth strategy. This performed as planned. Global generics were down 13%, mainly due to generic Revlimid or flat if you take out generic Revlimid.

Speaker #3: Now looking at the US, we were down 28%, or up 10% excluding Revlimid. And this was increased was driven mainly by the higher revenues from our portfolio of biosimilar products.

Speaker #2: The patient-friendly and good results. But how does that compare? You know, we're excited to see data here that, you know, we think is best in class, but you look across the entire landscape, it has the potential to be best in disease.

Speaker #3: EU was down 1% due to seasonality of some of our products. As well as launches. And international markets was down 9% excluding Japan. Now, as I've just mentioned, the generic growth in the US was has now started to be driven by our biosimilar portfolio.

Speaker #2: So you can see that our numbers stack up favorably when you do a cross-study comparison of DNA development, anti-IL-23s. There are approved and the JAKs are that are improved.

Speaker #3: So let me give you a sort of a review of where we are. Excuse me. We currently have 11 biosimilar products on the market, four more, which will be covering 16 billion of originator brand sales, expected between now and 2027.

Speaker #2: So, favorable. We're very hopeful and excited to see what the results of the Phase 3 program look like. So, you know, the fundamentals of DupiCaid are very strong.

Richard Francis: We currently have 11 biosimilar products on the market, four more which will be covering $16 billion of originator brand sales expected between now and 2027, and another 9 more after that covering $58 billion of originator brand sales. What does that mean? It means we have increased our portfolio by over 50% in the last 3 years, and it's starting to have a meaningful impact on our generics business. It is worth noting that we start to be launching biosimilars on a regular basis in Europe. To conclude, and before handing over to Eric, I want to reiterate our 2027 financial targets on the Pivot to Growth journey. Revenue mid-single digit, non-GAAP operating income of 30%, net debt to EBITDA of less than 2, and cash to earnings of 80%.

Speaker #2: The antibody has high potency, high selectivity, immunity. We've shown our induction data that we have very favorable, results. Of that 14-week induction period, all given subcutaneously, and safety profile continues to be, strong and favorable.

Richard Francis: Looking at the US, we were down 28% or up 10% excluding Revlimid, this increase was driven mainly by the higher revenues from our portfolio of biosimilar products. EU was down 1% due to seasonality of some of our products as well as launches, international markets was down 9% excluding Japan. As I have just mentioned, the generic growth in the US has now started to be driven by our biosimilar portfolio. Let me give you a sort of a review of where we are. Excuse me. We currently have 11 biosimilar products on the market, four more which will be covering $16 billion of originator brand sales expected between now and 2027, another nine more after that covering $58 billion of originator brand sales. What does that mean?

Speaker #3: And another nine more after that, covering 58 billion of originator brand sales. So what does that mean? It means we have increased our portfolio by over 50% in the last three years.

Speaker #3: And it's starting to have a meaningful impact on our generics business. It is worth noting that we start to be launching biosimilars on a regular basis in Europe.

Speaker #2: And then we've recapitulated those results with strong maintenance data, out to 44 weeks again with good safety, Q4, dosing, and all subcutaneous. So the fundamentals are there.

Speaker #3: So to conclude, and before handing it over to Eric, I want to reiterate our 2027 financial targets on the pivot to growth journey. Revenue mid-single digit, non-GAAP operating income of 30%, net debt to EBITDA of less than 2, and cash to earnings of 80%.

Speaker #2: And that brings us to the last slide on duplicated, the phase three study. You know, we're working very closely with our synergy. I'm happy to report that the study's on track and has started well.

Speaker #3: And with that, I will hand over to my colleague, Eric.

Richard Francis: With that, I will hand over to my colleague, Eric.

Speaker #2: And we're looking to accelerate this program. The sunscape star program, I think, will be incredibly important for defining this class of molecule. Now, moving on to another Teva-born and raised antibody from our last in Sydney.

Speaker #1: Thank you, Richard. And as Richard mentioned, I do like to talk about this slide. For two good reasons. One, there's a big impact we can make for patients across a number of different indications and two, this represents four submissions over the next five years.

Eric Hughes: Thank you, Richard. As Richard mentioned, I do like to talk about this slide for two good reasons. One, there's a big impact we can make for patients across a number of different indications. Two, you know, this represents four submissions over the next five years. When the deal closes for the Amylyx deal, that would be five submissions in the next five years. A real accomplishment for the teams at Teva and the R&D group, and we're very excited about this future potential for our pipeline. First I want to talk about olanzapine LAI. I have a little bit of a late-breaking announcement. We just did our EU submission just yesterday, and we'll be looking forward to the validation of that acceptance by the EU in the coming months. Very exciting.

Richard Francis: It means we have increased our portfolio by over 50% in the last 3 years, and it's starting to have a meaningful impact on our generics business. It is worth noting that we start to be launching biosimilars on a regular basis in Europe. To conclude, and before handing over to Eric, I want to reiterate our 2027 financial targets on the Pivot to Growth journey. Revenue mid-single digit, non-GAAP operating income of 30%, net debt to EBITDA of less than 2, and cash to earnings of 80%. With that, I will hand over to my colleague, Eric.

Speaker #2: is our anti-IL-15 program. This program is now currently in two proof-of-concept studies for vitiligo and celiac disease. exciting thing about this molecule, similar-similarly to duplicated, it has the potential to be, approved someday in multiple different indications.

Speaker #1: And when the deal closes for the MLX deal, that would be five submissions in the next five years, a real accomplishment for the teams at Teva and the R&D group.

Speaker #1: And we're very excited about this future potential for our pipeline. First, I want to talk about olanzapine LAI. I have a little bit of a late-breaking announcement.

Speaker #2: So we're looking at vitiligo and celiac today. But alopecia areata, atopic dermatitis, and eosinophilic esophagitis are all possible things in the future for this molecule.

Speaker #1: We just did our EU submission just yesterday. And we'll be looking forward to the validation of that acceptance by the EU in the coming months.

Speaker #2: Just as a review, what we're expecting this year—you know, we have a proof-of-concept study running in vitiligo. One thing to take away from this study is it should emphasize what I think will be a potential, great product profile—the fact that we're running a 24-week study.

Eric Hughes: Thank you, Richard. As Richard mentioned, I do like to talk about this slide for two good reasons. One, there's a big impact we can make for patients across a number of different indications. Two, you know, this represents 4 submissions over the next 5 years. When the deal closes for the Amylyx deal, that would be 5 submissions in the next 5 years. A real accomplishment for the teams at Teva and the R&D group, and we're very excited about this future potential for our pipeline. First I want to talk about olanzapine LAI. I have a little bit of a late-breaking announcement. We just did our EU submission just yesterday, and we'll be looking forward to the validation of that acceptance by the EU in the coming months. Very exciting.

Speaker #1: So very exciting. The team did a great job at accelerating that submission. And as you know, we've done the submission for the FDA back in December.

Eric Hughes: The team did a great job at accelerating that submission. As you know, we've done the submission for the FDA back in December, and we believe the process of the review is going as planned, and we're looking forward to that approval by the end of this year. Now on to the dual action rescue inhaler program, our DARI program in Phase 3. I'm very excited that we've now completed the enrollment of the large Phase 3 program called FLAIR. We enrolled over 2,700 patients. More important thing about this large study is we have a very large sample size of both pediatrics and adolescents in this study, which is a very important component of this program because 25% of the patients with asthma are pediatrics and adolescents.

Speaker #1: And we believe the process of the review is going as planned. And we're looking forward to that approval by the end of this year.

Speaker #2: We only have two shots given subcutaneous, once a serum and once it, week 12. And then we'll have a, a week 24 readout for the, the body score.

Speaker #1: Now onto the dual-action rescue inhaler program, our DARI program in phase three. I'm very excited that we've now completed the enrollment of the large phase three program called FLAIR.

Speaker #2: Which is the endpoint for registration in vitiligo. Those results will be coming out at the end of this first half. And then in the second half, our celiac disease program, will readout.

Speaker #1: We enrolled over 2,700 patients. And more important thing about this large study is we have a very large sample size of both pediatrics and adolescents in this study, which is an very important component of this program because 25% of the patients with asthma are pediatrics and adolescents and are unique dry powder inhaler is uniquely positioned to be really advantageous for this patient population.

Speaker #2: Again, showing the product profile. This is a single study with a readout after the 12 weeks of therapy. And here's a classic proof-of-concept study where we give a dose of either aspirin or placebo.

Eric Hughes: The team did a great job at accelerating that submission. As you know, we've done the submission for the FDA back in December, and we believe the process of the review is going as planned, and we're looking forward to that approval by the end of this year. Now on to the dual action rescue inhaler program, our DARI program in phase three. I'm very excited that we've now completed the enrollment of the large phase three program called FLAIR. We enrolled over 2,700 patients. The more important thing about this large study is we have a very large sample size of both pediatrics and adolescents in this study, which is a very important component of this program because 25% of the patients with asthma are pediatrics and adolescents.

Speaker #2: And we challenge the patients with, six weeks, of gluten, about three, three grams per day. So, in that eight weeks, we will get the biopsy.

Eric Hughes: Our unique dry powder inhaler is uniquely positioned to be really advantageous for this patient population. I'm also happy to report that over 60% of the events occurred at this point, so we're on track for an end-of-the-year completion of events for this study. Moving on to our first milestone that we announced and had a press release back in February for duvakitug. That was our maintenance data. Just as a review, remember this study looked at ulcerative colitis and Crohn's disease patients with an induction period of 14 weeks, and they rolled over into a maintenance period for 44 weeks. Now, maintenance is very important because this is a chronic disease, and patients who suffer with it cycle through therapies frequently. Having a drug that can maintain its response and continue on for years is very important.

Speaker #2: And we'll be looking at and reporting in the second half is the protection of the gut from damage according to the villus, the crypt ratio on the endoscopic biopsy.

Speaker #1: I'm also happy to report that over 60% of the events have occurred at this point. So we're on track for an end-of-the-year completion of events for this study.

Speaker #2: So, very exciting program. I think I'm looking forward to the data, and that's going to be the first half for vitiligo and second half for celiac.

Speaker #1: Moving on to our first milestone that we announced and had a press release. Back in February for Duplicated, that was our maintenance data. And just as a review, remember, this study looked at ulcerative colitis and Crohn's disease patients with an induction period of 14 weeks.

Speaker #2: And finally, the last program I wanted to mention because I think it's such an important indication for multiple system atrophy, our emersolmin program. This is a differentiated small molecule brain imaging molecule that attacks the alpha nuclein at the very genesis of the pathogenic aggregations.

Speaker #1: And they rolled over into a maintenance period for 44 weeks. Now, maintenance is very important. Because this is a chronic disease. And patients who suffer with it cycle through therapies frequently.

Speaker #2: we're on track. The enrollment's going very well. In fact, we're gonna over-enroll this study to make sure it's robust while staying on time. and we're on track for the futility analysis analysis at the end of this year.

Eric Hughes: Our unique dry powder inhaler is uniquely positioned to be really advantageous for this patient population. I'm also happy to report that over 60% of the events have been occurred at this point, so we're on track for an end of the year completion of events for this study. Moving on to our first milestone that we announced and had a press release back in February for dupilumab. That was our maintenance data. Just as a review, remember this study looked at ulcerative colitis and Crohn's disease patients with an induction period of 14 weeks, and they rolled over into a maintenance period for 44 weeks. Now, maintenance is very important because this is a chronic disease, and patients who suffer with it cycle through therapies frequently.

Speaker #1: So having a drug that can maintain its response and continue on for years is very important. So we were very excited to see that the data at our 44-week time point showed great maintenance.

Eric Hughes: We were very excited to see that the data at our 44-week time point showed great maintenance. We had ulcerative colitis patients maintaining 55% of their or 56% of their response at 44 weeks for ulcerative colitis. For Crohn's disease, for the endoscopic response, they maintained 55% of that response at the high dose. It is also nice that we had a dose response between the low and high dose, and that you should remember this is given subcutaneously every 4 weeks for maintenance. Patient-friendly and good results. How does that compare? You know, we're excited to see data here that, you know, we think is best in class, but when you look across the entire landscape, this has the potential to be best in disease.

Speaker #2: Again, we have orphan designation and fast-track designation from the FDA. So, I just want to end with our very exciting slide about the milestones that we're achieving this year.

Speaker #1: We had ulcerative colitis patients maintaining 55% of their or 56% of their response. At 44 weeks for ulcerative colitis. And for Crohn's disease, for the endoscopic response, they maintained 55% of that response.

Speaker #2: First, I mentioned duplicated readout maintenance, but there was great data showing the, the value of duplicated. The anti-IL-15 program mentioned vitiligo in the first half readout.

Speaker #1: At the high dose. And it's also nice that we had a dose response between the low and high dose. And that you should remember, this is given subcutaneously every four weeks for maintenance.

Speaker #2: And then celiac disease in the second half. The DART program, fully enrolled, phase three program is on track for the final readout and final exacerbation by December.

Speaker #1: So patient-friendly and good results. But has that compare? We're excited to see data here that we think is best in class. But when you look across the entire landscape, this has the potential to be best in disease.

Speaker #2: Emersolmin, we're on track with the facility analysis. The only LRF program is under FDA review now, and we did our submission just yesterday in the EU.

Eric Hughes: Having a drug that can maintain its response and continue on for years is very important. We were very excited to see that the data at our 44-week time point showed great maintenance. We had ulcerative colitis patients maintaining 55%, or 56% of their response, at 44 weeks for ulcerative colitis. For Crohn's disease, for the endoscopic response, they maintained 55% of that response at the high dose. It's also nice that we had a dose response between the low and high dose, and that you should remember this is given subcutaneously every 4 weeks for maintenance. Patient-friendly and good results. How does that compare?

Speaker #2: And finally, we'll be having, IL-15, P1 IL-2 data, at the end of this year. So it's a great year. I appreciate all the work that's being done in R&D and the extra effort everyone's putting into this.

Speaker #1: So you can see that our numbers stack up favorably when you do a cross-study comparison. Against T1As in development, anti-IL-23s. There are approved and the JAKs that are improved.

Eric Hughes: You can see that our numbers stack up favorably when you do a cross-study comparison against T1As in development, anti-IL-23s that are approved, and the JAKs that are approved. Favorable, we're very hopeful and excited to see what the results of the phase 3 program look like. You know, the fundamentals of duvakitug are very strong. The antibody has high potency, high selectivity, and low immunogenicity. We've shown in our induction data that we have very favorable resultsOf that 14-week induction period, all given subcutaneously, and the safety profile continues to be strong and favorable. We've recapitulated those results with strong maintenance data out to 44 weeks now, again, with good safety, with Q4 dosing and all subcutaneous.

Speaker #2: And with that, I'm gonna pass it off to Eliy.

Speaker #1: Thank you, Eliy. And good morning and good afternoon to everyone. I would like to start my review of Q1 26 results with the following key messages.

Speaker #1: So favorable. We're very hopeful. And excited to see what the results of the phase three program look like. So the fundamentals of Duplicated are very strong.

Speaker #1: First, we started the year with a solid first-class result, driven by continued strength in our innovative portfolio. Second, the increasing mix of our innovative revenue along with our transformation programs give us the confidence to improve margins throughout 2026.

Speaker #1: The antibody has high potency, high selectivity, and low immunogenicity. We've shown in our induction data that we have very favorable results. Of that 14-week induction period, all given subcutaneously.

Speaker #1: And on track to achieve our 30% operating margin target in 2027. Third, we continue to monitor the geopolitical situation in the Middle East. Our operations remain uninterrupted, with no material impact on our 2026 guidance.

Eric Hughes: You know, we're excited to see data here that, you know, we think is best in class, but when you look across the entire landscape, this has the potential to be best in disease. You can see that our numbers stack up favorably when you do a cross study comparison against TL1As in development, IL-23s that are approved and the JAKs that are approved. Favorable, we're very hopeful and excited to see what the results of the Phase III program look like. You know, the fundamentals of duvakitug are very strong. The antibody has high potency, high selectivity, and low immunogenicity. We've shown in our induction data that we have very favorable results of that 14-week induction period, all given subcutaneously, and the safety profile continues to be strong and favorable.

Speaker #1: And the safety profile continues to be strong and favorable. And then we've recapitulated those results with strong maintenance data at the 44 weeks now.

Speaker #1: Again, with good safety, with Q4 dosing, and all subcutaneous. So the fundamentals are there. And that brings us to the last slide on Duplicated, the phase three study.

Speaker #1: And lastly, our capital allocation strategy remains focused on driving our pivotal growth strategy and creating a shareholder value. The agreement with our analysts and potential share buyback program reflect our ongoing commitment to the disciplined approach for capital allocation.

Eric Hughes: The fundamentals are there, and that brings us to the last slide on duvakitug, the Phase 3 study. You know, we're working very closely with our partner, Sanofi. I'm happy to report that the study's on track and has started well, and we're looking to accelerate this program. The SUNSCAPE and STARSCAPE programs, I think will be incredibly important for defining this class of molecule. Now, moving on to another Teva born and raised antibody from our labs in Sydney, is our anti-IL-15 program. This program is now currently in two proof-of-concept studies for vitiligo and celiac disease. The exciting thing about this molecule, similarly to duvakitug, it has the potential to be approved someday in multiple different indications.

Speaker #1: We're working very closely with our partner, Sanofi. I'm happy to report that the study is on track and has started well. And we're looking to accelerate this program.

Speaker #1: The sunscape and star scape programs I think will be incredibly important to defining this class of molecule. Now moving on to another Teva-born and raised antibody from our labs in Sydney.

Speaker #1: Now, moving to slide 35. Before I start with the results, I would like to remind everyone that our Q1 2025 financial results included approximately $75 million revenue contribution from the Japan Business Venture, which was divested on March 31, 2025.

Speaker #1: Is our anti-IL-15 program. This program is now currently in two proof-of-concept studies for vitiligo. And celiac disease. The exciting thing about this molecule, similar to Duplicated, it has the potential to be approved someday in multiple different indications.

Eric Hughes: We recapitulated those results with strong maintenance data out to 44 weeks now, again, with good safety, with Q4 dosing and all subcutaneous. The fundamentals are there, and that brings us to the last slide on duvakitug, the Phase III study. You know, we're working very closely with our partner, Sanofi. I'm happy to report the study's on track and it started well, and we're looking to accelerate this program. The SUNSCAPE and STARSCAPE programs I think will be incredibly important to, for defining this class of molecule. Moving on to another Teva born and raised antibody from our labs in Sydney, is our anti-IL-15 program. This program is now currently in 2 proof of concept studies for vitiligo and celiac disease.

Speaker #1: For light comparison, I will exclude the contribution of this business from last year when discussing our financial results for this quarter. Now, starting with our Q1 25 performance.

Speaker #1: So we're looking at vitiligo and celiac today. But alopecia areata, atopic dermatitis, and eosinophilic esophagitis are all possible things in the future for this molecule.

Eric Hughes: We're looking at vitiligo and celiac today, but alopecia areata, atopic dermatitis, and eosinophilic esophagitis are all possible things in the future for this molecule. Just as a review of what we're expecting this year, you know, we have a proof-of-concept study running in vitiligo. One thing to take away from this study, which it should emphasize what I think will be a potential great product profile, is the fact that we're running a 24-week study, but it only has 2 shots given subcutaneous, once at day 0 and once at week 12. Then we'll have a week 24 readout for the VASI score, which is the endpoint for registration in vitiligo. Those results will be coming out at the end of this H1. Then in the H2, our celiac disease program will read out.

Speaker #1: Our Q1 revenue was approximately 4 billion, up 4% in US dollars or down 1% in local currency compared to Q1 25. Our innovative products, Ocedo, Ajovy, and UZD continue to show strong momentum, largely offsetting lower generics due to loss of revenue from generic revenue that we had expected.

Speaker #1: And just as a review, what we're expecting this year, we have a proof-of-concept study running in vitiligo. One thing to take away from this study, which it should emphasize, what I think will be a potential great product profile, is the fact that we're running a 24-week study.

Speaker #1: Gapnet income, EPS, was 360 million, and 31 cents respectively. Turning now to our non-GAAP performance. Our non-GAAP gross margin in Q1 26 was 52.9%.

Speaker #1: But it only has two shots given subcutaneous. Once a day zero and once at week 12. And then we'll have a week 24 readout for the body score.

Eric Hughes: The exciting thing about this molecule, similarly to duvakitug, it has the potential to be approved someday in multiple different indications. We're looking at vitiligo and celiac today, but alopecia areata, atopic dermatitis, and eosinophilic esophagitis are all possible things in the future for this molecule. Just as a review, what we're expecting this year, you know, we have a proof of concept study running in vitiligo. One thing to take away from this study, which it should emphasize what I think will be a potential great product profile, is the fact that we're running a 24-week study that only has 2 shots given subcutaneous, once at day 0 and once at week 12. Then we'll have a week 24 readout for the VASI score, which is the endpoint for registration in vitiligo.

Speaker #1: Which is the endpoint for registration in vitiligo. Those results will be coming out at the end of this first half. And then in the second half, our celiac disease program will readout.

Speaker #1: This gross margin performance was better than our expectation, mainly driven by continued strong growth in our key innovative product. And a favorable product mix within generics.

Speaker #1: Again, showing the product profile. This is a single-dose study with a readout after the 12 weeks of therapy. And here's a classic proof-of-concept study where we give a dose of either active or placebo.

Eric Hughes: Showing the product profile, this is a single-dose study with a readout after 12 weeks of therapy. Here's a classic proof of concept study where we give a dose of either active or placebo, and we challenge the patients with 6 weeks of gluten, about 3 grams per day. At 8 weeks, we look at the biopsy. What we'll be looking at and reporting in H2 is the protection of the gut from damage according to the villus-to-crypt depth ratio on an endoscopic biopsy. A very exciting program. I think I'm looking forward to the data, that's gonna be H1 for vitiligo and H2 for celiac.

Speaker #1: Now, operating margin increased approximately 50 basis points year over year to 24%, mainly due to higher planned investment in dozen marketing to support our innovative growth.

Speaker #1: And we challenge the patients with six weeks of gluten, about three grams per day. So and then at eight weeks, we look at the biopsy.

Speaker #1: Overall, we ended the quarter with a non-GAAP EPS of 53 cents compared to 52 cents in Q1 25. Our cash flow in Q1 was 188 million, up from 107 million last year.

Speaker #1: And what we'll be looking at and reporting in the second half is the protection of the gut from damage according to the villus, the crypt depth ratio on an endoscopic biopsy.

Speaker #1: As I shared on our previous learning call, our Q1 25 results included approximately 300 million revenue contribution from our generics revenue, excluding this contribution and the divestment in Japan.

Speaker #1: So very exciting program. I think I'm looking forward to the data and that's going to be the first half for vitiligo and second half for celiac.

Eric Hughes: Those results will be coming out at the end of this H1. In the H2, our celiac disease program will read out. Again, showing the product profile, this is a single-dose study with a readout after the 12 weeks of therapy. Here's a classic proof of concept study where we give a dose of either active or placebo, and we challenge the patients with 6 weeks of gluten, about 3 grams per day. At 8 weeks, we look at the biopsy. What we'll be looking at and reporting in the H2 is the protection of the gut from damage according to the villus-to-crypt depth ratio on an endoscopic biopsy. Very exciting program.

Speaker #1: And finally, the last program I want to just mention because I think it's such an important indication for multiple system atrophy, are emersolmin program.

Eric Hughes: The last program I want to just mention because I think it's such an important indication for multiple system atrophy, our emrusolmin program. This is a differentiated small molecule, brain penetrant molecule that attacks the alpha-synuclein at the very genesis of the pathogenic aggregations. We're on track. The enrollment's going very well. In fact, we're gonna over-enroll this study to make sure it's robust while keeping it on time. We're on track for futility analysis at the end of this year. We have orphan designation and fast track designation from FDA. I just wanna end with our very exciting slide about the milestones that we're achieving this year. I mentioned the duvakitug readout and maintenance. We thought there was great data showing the value of duvakitug.

Speaker #1: Our revenue increased by 7% in local currency, and adjusted EBITDA by 28% in Q1 26. On slide 36, I would like to remind everyone of the margin trajectory I shared last year in May.

Speaker #1: This is a differentiated small molecule brain-penetrant molecule that attacks the alpha-synuclein at the very genesis of the pathogenic aggregations. We're on track. The enrollment is going very well.

Speaker #1: In fact, we're going to over-enroll this study to make sure it's robust while keeping it on time. And we're on track for the futility analysis at the end of this year.

Speaker #1: And how we plan to go from approximately 26% operating margin in 25 to our 30% target in 27. This represents approximately 400 basis points improvement over two years, driven by our continued portfolio shift towards high growth and high margin innovative products as well as 700 million of cost savings expected from our transformation programs.

Speaker #1: Again, we have orphan designation and fast-track designation from FDA. So I just want to end with our very exciting slide about the milestones that we're achieving this year.

Eric Hughes: I think I'm looking forward to the data. That's gonna be the H1 for vitiligo and H2 for celiac. Finally, the last program I wanna just mention because I think it's such an important indication for multiple system atrophy, our emrusolmin program. This is a differentiated small molecule, brain-penetrant molecule that attacks the alpha-synuclein at the very genesis of the pathogenic aggregations. We're on track. The enrollment's going very well. In fact, we're gonna over-enroll this study to make sure it's robust while keeping it on time, and we're on track for that futility analysis at the end of this year. We have orphan designation and Fast Track designation from FDA. I just wanna end with our very exciting slide about the milestones that we're achieving this year. I mentioned the duvakitug readout and maintenance.

Speaker #1: First, I mentioned the Duplicated readout and maintenance. We thought there was great data showing the value of Duplicated. The anti-IL-15 program I mentioned, vitiligo in the first half readout.

Speaker #1: And despite the impact of losing revenue from our generics revenue in 2026, in 2025 we made significant progress towards these goals by improving our underlying operating margin to 26.8%, which was ahead of our initial expectations for 2025.

Eric Hughes: The anti-IL-15 program, I mentioned the vitiligo in the H1 readout and then celiac disease in the H2. The DARI program, fully enrolled Phase 3 program on track for the final readout and final exacerbation by December. emrusolmin, we're on track for the futility analysis. The olanzapine LAI program is under FDA review now, and we did our submission just yesterday in the EU. Finally, we'll be having PD-1/IL-2 data at the end of this year. It's a great year. I appreciate all the work that's being done in R&D and the extra effort everyone's putting into this. With that, I'm gonna pass it off to Eli Kalif.

Speaker #1: And then celiac disease in the second half. The DARI program fully enrolled phase three program on track for the final readout and final exacerbation by December.

Speaker #1: Emersolmin, we're on track for the futility analysis. The Ondapine LEI program is under FDA review now. And we did our submission just yesterday in the EU.

Speaker #1: Moving to slide 37. We continue to make progress on our margin expansion journey in '26. With a solid start in the first quarter, overall, we are transforming Teva into a structurally high gross margin business, with a growing innovative portfolio mix and a transformation of our manufacturing cost base.

Speaker #1: And finally, we'll be having IL-15 PD-1, IL-2 data at the end of this year. So it's a great year. I appreciate all the work that's being done in R&D and the extra effort everyone's putting into this.

Speaker #1: And with that, I'm going to pass it off to Eli Kalif.

Speaker #2: Thank you, Eric. And good morning and good afternoon to everyone. I would like to start my review of Q1 26 results with the following key messages.

Eli Kalif: Thank you, Eric, and good morning and good afternoon to everyone. I would like to start my review of Q1 2026 results with the following key messages. First, we started the year with a solid Q1 result, driven by continued strength in our innovative portfolio. Second, the increasing mix of our innovative revenue, along with our transformation programs, give us the confidence to improve margins throughout 2026 and on track to achieve our 30% operating margin target in 2027. Third, we continue to monitor the geopolitical situation in the Middle East. Our operations remain uninterrupted with no material impact on our 2026 guidance. Lastly, our capital allocation strategy remains focused on driving our Pivot to Growth strategy and creating a shareholder value. The agreement to acquire Amylyx and the potential share buyback program reflect our ongoing commitment to the disciplined approach for capital allocation.

Eric Hughes: We thought that was great data showing the value of duvakitug. The anti-IL-15 program I mentioned, the vitiligo in the H1 readout and then celiac disease in the H2. The DARI program, fully enrolled phase III program on track for the final readout and final exacerbation by December. emrusolmin, we're on track for the futility analysis. The olanzapine LAI program is under FDA review now, and we did our submission just yesterday in the EU. Finally, we'll be having PD1/IL-2 data at the end of this year. It's a great year. I appreciate all the work that's being done in R&D and the extra effort everyone's putting into this. With that, I'm gonna pass it off to Eli Kalif.

Speaker #1: In addition, our OPEX transformation allowed us to keep operating expenses as a percentage of revenue stable. As we reinvest significant savings from our GNA towards our innovative portfolio and pipeline to position us for both the short-term and the long-term growth.

Speaker #2: First, we started the year with a solid first quarter result driven by continued strength in our innovative portfolio. Second, the increasing mix of our innovative revenue along with our transformation programs give us the confidence to improve margins throughout 2026.

Speaker #1: Moving to 38. We're also making significant progress in our Teva transformation programs to deliver sustainable margin improvement. During Q1, we continued to execute on our targeted programs and remain on track to achieve approximately two-thirds of our total 700 million savings target to be realized by the end of 2026.

Speaker #2: And on track to achieve our 30% operating margin target in 27. Third, we continue to monitor the geopolitical situation in the Middle East. Our operations remain uninterrupted with no material impact on our 2026 guidance.

Speaker #2: And lastly, our capital allocation strategy remains focused on driving our pivotal growth strategy and creating a shareholder value. The agreement to acquire Emilex and the potential share buyback program reflect our ongoing commitment to the disciplined approach for capital allocation.

Eli Kalif: Thank you, Eric. Good morning and good afternoon to everyone. I would like to start my review of Q1 2026 results with the following key messages. First, we started the year with a solid first quarter result, driven by continuous strength in our innovative portfolio. Second, the increasing mix of our innovative revenue, along with our transformation programs, give us the confidence to improve margins throughout 2026 and on track to achieve our 30% operating margin target in 2027. Third, we continue to monitor the geopolitical situation in the Middle East. Our operations remain uninterrupted with no material impact on our 2026 guidance. Lastly, our capital allocation strategy remains focused on driving our Pivot to Growth strategy and creating a shareholder value. The agreement to acquire Amylyx and the potential share buyback program reflect our ongoing commitment to the disciplined approach for capital allocation.

Speaker #1: In relation to these programs, we have already recorded approximately 205 million in restructuring costs in 2025 and outflow of approximately 100 million. In Q1 26, we recorded an additional restructuring cost of approximately 25 million, and for the full year of 2026, we expected cash outflow of approximately 90 to 100 million, all of which are already incorrupted in our guidance.

Speaker #2: Now, moving to slide 35. Before I start with the results, I would like to remind everyone that our Q1 25 financial results included approximately 75 million revenue contribution from the Japan Business Venture, which was divested on March 31, 2025.

Eli Kalif: Now, moving to slide 35. Before I start with the results, I would like to remind everyone that our Q1 2025 financial results included approximately $75 million revenue contribution from the Japan business venture, which was divested on 31 March 2025. For like-to-like comparison, I will exclude the contribution of this business from last year when discussing our financial results for this quarter. Now, starting with our Q1 GAAP performance. Our Q1 revenue were approximately $4 billion, up 4% in USD or down 1% in local currency compared to Q1 2025. Our key innovative products, AUSTEDO, AJOVY, and UZEDY, continued to show strong momentum, largely offsetting lower generics due to the loss of revenue from generic REVLIMID that we had expected. GAAP net income, EPS, were $360 million and $0.31 respectively.

Speaker #1: The transformation efforts along with our ongoing portfolio shift towards innovative products give us the confidence to grow underlying EBITDA in 26 and in 27 and achieve our 30% operating margin targets by 2027.

Speaker #2: For like-to-like comparison, I will exclude the contribution of this business from last year, when discussing our financial results for this quarter. Now, starting with our Q1 gap performance.

Speaker #1: Now, on slide 39, let me provide some additional details on our agreement to acquire MLX. With a couple of key messages. First, as Richard highlighted earlier, MLX is a highly aligned with our pivotal growth strategy.

Speaker #2: Our Q1 revenue, we're approximately 4 billion up 4% in US dollars or down 1% in local currency compared to Q1 25. Our key innovative product, Ostedo, Ajovi, and Euzeti continue to show strong momentum, largely offsetting lower generics due to the loss of revenue from generics Revelmid that we had expected.

Eli Kalif: Now, moving to slide 35. Before I start with the results, I would like to remind everyone that our Q1 2025 financial results included approximately $75 million revenue contribution from the Japan business venture, which was divested on 31 March 2025. For like-to-like comparison, I will exclude the contribution of this business from last year when discussing our financial results for this quarter. Now, starting with our Q1 GAAP performance. Our Q1 revenue were approximately $4 billion, up 4% in US dollars or down 1% in local currency compared to Q1 2025. Our key innovative products, Otezla, Ajovy, and UZEDY, continued to show strong momentum, largely offsetting lower generics due to the loss of revenue from generic Revlimid that we had expected. GAAP net income, EPS, were $360 million and $0.31 respectively. Turning now to our non-GAAP performance.

Speaker #1: Second, our intent is a strong balance sheet with no change to our 2027 leverage targets of two times net debt to EBITDA. Now, turning to the key terms of the transaction.

Speaker #2: Gap net income, EPS, were 360 million and 31 cents, respectively. Turning now to our non-gap performance. Our non-gap gross margin in Q1 26 was 52.9%.

Speaker #1: The upfront consideration is 700 million dollars in cash, with additional commercial milestones up to 200 million. We expect the transaction to close in late Q2 or early Q3, subjected to customary closing conditions.

Eli Kalif: Turning now to our non-GAAP performance. Our non-GAAP gross margin in Q1 2026 was 52.9%. This gross margin performance was better than our expectation, mainly driven by continued strong growth in our key innovative products and a favorable product mix within generics. Non-GAAP operating margin decreased approximately 50 basis points year over year to 24%, mainly due to higher planned investment in sales and marketing to support our innovative growth. Overall, we ended the quarter with a non-GAAP EPS of $0.53 compared to $0.52 in Q1 2025. Our free cash flow in Q1 was $188 million, up from $107 million last year. As I shared on our previous earning call, our Q1 2025 results included approximately $300 million revenue contribution from our generic REVLIMID.

Speaker #2: This gross margin performance was better than our expectation, mainly driven by continued strong growth in our key innovative product. And a favorable product mix within generics.

Speaker #1: Moving to the financials impact. We expect the product to have a gross margin profile of approximately 80%, subjected to regulatory approval and launch in 2027.

Speaker #2: Non-gap operating margin decreased approximately 50 basis points year over year to 24%, mainly due to higher planned investment in sales and marketing to support our innovative growth.

Speaker #1: I will discuss changes to our 2026 financial guidance to reflect this acquisition on the next slide. But importantly, we expect the MLX to meaningfully contribute to our revenue growth and margin expansion after eco-piping is launched and scaled and be accretive to our non-GAAP EPS starting in 2028.

Speaker #2: Overall, we ended the quarter with a non-gap EPS of 53 cents compared to 52 cents in Q1 25. Our free cash flow in Q1 was 188 million, up from 107 million last year.

Speaker #1: And finally, we remain on track with our 2027 financial targets, including our 30% operating margin. We expect the high operating expenses related to MLX in 2027 to be absorbed by the initial revenue uptake from eco-piping following its launch, as well as additional efficiency measures.

Eli Kalif: Our non-GAAP gross margin in Q1 2026 was 52.9%. This gross margin performance was better than our expectation, mainly driven by continued strong growth in our key innovative products and a favorable product mix within generics. Non-GAAP operating margin decreased approximately 50 basis points year over year to 24%, mainly due to higher planned investment in sales and marketing to support our innovative growth. Overall, we ended the quarter with a non-GAAP EPS of $0.53 compared to $0.52 in Q1 2025. Our free cash flow in Q1 was $188 million, up from $107 million last year. As I shared on our previous earning call, our Q1 2025 results included approximately $300 million revenue contribution from our generic Revlimid.

Speaker #2: As I shared on our previous earning call, our Q1 25 results included approximately 300 million revenue contribution from our generics Revelmid. Excluding this contribution, and the divestment business in Japan, our revenue increased by 7% in local currency and adjusted EBITDA by 28% in Q1 26.

Eli Kalif: Excluding this contribution and the divesting business in Japan, our revenue increased by 7% in local currency and adjusted EBITDA by 28% in Q1 2026. On slide 36, I would like to remind everyone of the margin trajectory I showed last year in May, and how we plan to go from approximately 26% operating margin in 2025 to our 30% target in 2027. This represents approximately 400 basis point improvement over 2 years, driven by our continued portfolio shift towards high growth and high margin innovative products, as well as 700 million of cost savings expected from our transformation programs, and despite the impact of losing revenue from our generic REVLIMID in 2026.

Speaker #1: Now, let me turn to our 2026 outlook on slide 40. As I mentioned earlier, we had a solid start to the year with a strong underlying revenue, margins, cash flow performance in Q1.

Speaker #2: On slide 36, I would like to remind everyone of the margin trajectory I shared last year in May. And how we plan to go from approximately 26% operating margin in 25 to our 30% target in 27.

Speaker #1: Lastly, I think last comparison related to generics revenue revenue last year. We're also excited about MLX acquisition, which is expected to further enhance and build upon our strong commercial infrastructure in the CNS space.

Speaker #2: This represents approximately 400 basis points improvement over two years, driven by our continued portfolio shift towards high growth and high margin innovative products, as well as 700 million of cost savings expected from our transformation programs.

Speaker #1: Based on our Q1 results and our visibility into the rest of the year, we are reaffirming our 2026 outlook range on underlying basis, excluding MLX, for all financial metrics provided on our Q4 earning calls.

Eli Kalif: Excluding this contribution and the divesting business in Japan, our revenue increased by 7% in local currency and adjusted EBITDA by 28% in Q1 2026. On slide 36, I would like to remind everyone of the margin trajectory I showed last year in May, how we plan to go from approximately 26% operating margin in 2025 to our 30% target in 2027. This represents approximately 400 basis point improvement over two years, driven by our continued portfolio shift towards high growth and high margin innovative products, as well as $700 million of cost savings expected from our transformation program, and despite the impact of losing revenue from our generic Revlimid in 2026.

Speaker #2: And despite the impact of losing revenue from our generics Revelmid in 2026, in 2025, we made significant progress towards these goals by improving our underlying operating margin to 26.8%, which was ahead of our initial expectations for 2025.

Eli Kalif: In 2025, we made significant progress towards these goals by improving our underlying operating margin to 26.8%, which was ahead of our initial expectations for 2025. Moving to Slide 37. We continue to make progress on our margin expansion journey in 2026 with a solid start in the first quarter. Overall, we are transforming Teva into a structurally higher gross margin business with a growing innovative portfolio mix and the transformation of our manufacturing cost base. In addition, our OpEx transformation allow us to keep operating expenses as a percentage of revenue stable as we reinvest significant savings from our G&A towards our innovative portfolio and pipeline to position us for both the short-term and the long-term growth. Moving to Slide 38. We are also making significant progress in our Teva transformation programs to deliver sustainable margin improvement.

Speaker #1: Including growing our EBITDA in 2026. However, even though Teva is acquiring 100% of MLX shares, we expect the acquisition will be treated as an exit deal.

Speaker #2: Moving to slide 37. We continue to make progress on our margin expansion journey in 26. With a solid start in the first quarter, overall, we are transforming Teva into a structurally higher gross margin business with a growing innovative portfolio mix and a transformation of our manufacturing cost base.

Speaker #1: And therefore, the upfront consideration of $700 million will flow through the R&D line as IP R&D expenses in the P&L. We also expect approximately $75 million of additional operating expenses in 2026 related to MLX starting in Q3, including the transaction costs.

Speaker #1: The changes to our 2026 guidance range for operating profit, EBITDA, and EPS are slowly reflecting this additional 775 million expenses related to the acquisition.

Speaker #2: In addition, our OPEX transformation, allow us to keep operating expenses as a percentage of revenue stable. As we reinvest significant savings from our GNA towards our innovative portfolio and pipeline to position us for both the short-term and the long-term growth.

Eli Kalif: In 2025, we made significant progress towards these goals by improving our underlying operating margin to 26.8%, which was ahead of our initial expectations for 2025. Moving to slide 37. We continue to make progress on our margin expansion journey in 2026, with a solid start in Q1. Overall, we are transforming Teva into a structurally higher gross margin business with a growing innovative portfolio mix and the transformation of our manufacturing cost base. Our OpEx transformation allow us to keep operating expenses as a percentage of revenue stable as we reinvest significant savings from our G&A towards our innovative portfolio and pipeline to position us for both the short-term and the long-term growth. Moving to slide 38. We're also making significant progress in our Teva transformation programs to deliver sustainable margin improvement.

Speaker #1: There is no change to our free cash flow guidance range of 2 billion to 2.4 billion, excluding the MLX exit acquisition. Our effective tax rate outlook range of 16 to 19% also remains unchanged.

Speaker #2: Moving to slide 38. We're also making significant progress in our Teva transformation programs to deliver sustainable margin improvement. During Q1, we continue to execute on our targeted programs and remain on track to achieve approximately two-thirds of our total 700 million savings target to be realized by the end of 2026.

Speaker #1: Moving on, we continue to expect 2026 non-GAAP margin to be in the range of 54.5% to 55.5% during the year. Our operating expenses are expected to be in the range of 27 to 28% of revenue.

Eli Kalif: During Q1, we continued to execute on our targeted programs and remain on track to achieve approximately two-thirds of our total $700 million savings target to be realized by the end of 2026. In relation to these programs, we have already recorded approximately $205 million in restructuring costs in 2025 and cash outflow of approximately $100 million. In Q1 2026, we recorded an additional restructuring cost of approximately $25 million, and for the full year of 2026, we expected cash outflow of approximately $90 to $100 million, all of which are already incorporated in our guidance. These transformation efforts, along with our ongoing portfolio shift towards innovative products, gives us the confidence to grow underlying EBITDA in 2026 and in 2027 and to achieve our 30% operating margin targets by 2027.

Speaker #1: With the first half of the year higher than the second half, reflecting plenty of investment in the first half, along with the higher impact of the transformation program cost savings in the second half of the year.

Speaker #2: In relation to these programs, we have already recorded approximately 205 million in restructuring costs in 2025 and cash outflow of approximately 100 million. In Q1 26, we recorded an additional restructuring cost of approximately 25 million and for the full year of 2026, we expected cash outflow of approximately 90 to 100 million, all of which are already incorrupted in our guidance.

Speaker #1: Now, with the expected operating expenses and the transaction costs related to MLX, we expected our operating expenses for 2026 to be towards the higher end of our 27 to 28% range.

Speaker #1: Lastly, let me provide you with some directions on how to think about quarterly progression for the rest of 2026. We continue to expect revenue to gradually increase over the course of the year.

Speaker #2: This transformation efforts, along with our ongoing portfolio shift towards innovative products, give us the confidence to grow underlying EBITDA in 26 and in 27 and to achieve our 30% operating margin targets by 2027.

Eli Kalif: During Q1, we continued to execute on our targeted programs and remain on track to achieve approximately two-thirds of our total $700 million savings target to be realized by the end of 2026. In relation to these programs, we have already recorded approximately $205 million in restructuring costs in 2025 and cash outflow of approximately $100 million. In Q1 2026, we recorded an additional restructuring cost of approximately $25 million, and for the full year of 2026, we expected cash outflow of approximately $90 to 100 million, all of which are already incorporated in our guidance. These transformation efforts, along with our ongoing portfolio shift towards innovative products, give us the confidence to grow underlying EBITDA in 2026 and in 2027, and to achieve our 30% operating margin targets by 2027.

Speaker #1: OCEDA Q1 revenue was slightly better than our expectation due to a less than expected de-stocking in the channel and timing of some orders from Q2 to Q1.

Speaker #2: Now, on slide 39, let me provide some additional details on our agreement to acquire Emilex. With a couple of key messages. First, as Richard highlighted earlier, Emilex is a highly aligned with our pivot to growth strategy.

Eli Kalif: Now, on Slide 39, let me provide some additional details on our agreement to acquire Amylyx, with a couple of key messages. First, as Richard highlighted earlier, Amylyx is highly aligned with our Pivot to Grow strategy. Second, we are maintaining a strong balance sheet with no change to our 2027 leverage targets of 2x net debt to EBITDA. Now turning to the key terms of the transaction. The upfront consideration is $700 million in cash, with additional commercial milestones of up to $200 million. We expect the transaction to close in late Q2 or early Q3, subjected to customary closing conditions. Moving to the financials impact. We expect the product to have a gross margin profile of approximately 80% subjected to regulatory approval and launch in 2027.

Speaker #1: Since the inventory levels in the channels remain elevated, we may see these dynamics evolve during the rest of the year. In addition, as mentioned last quarter, we expected OCEDA revenue in Q4 26 to be down year over year due to different pricing options and pricing environment expected ahead of the IRA implementation in January 27.

Speaker #2: Second, we are maintaining a strong balance sheet with no change to our 2027 leverage targets of two times net debt to EBITDA. Now, turning to the key terms of the transactions.

Speaker #2: The upfront consideration is 700 million dollars in cash, with additional commercial milestones up to 200 million. We expect the transaction to close in late Q2 or early Q3, subjected to customer closing conditions.

Speaker #1: Our non-GAAP margins are also expected to gradually ramp up over the course of the year, in line with the revenue trajectory, as well as savings from the ongoing transformation program.

Speaker #1: However, we expect the margin to be stable in Q4 versus Q3, reflecting the anticipated channels dynamics related to OCEDA in Q4 2026. Lastly, our capital allocation strategy remains focused on driving our pivotal growth strategy.

Speaker #2: Moving to the financials impact. We expect the product to have a gross margin profile of approximately 80%, subjected to regulatory approval and launch in 2027.

Eli Kalif: On slide 39, let me provide some additional details on our agreement to acquire Amylyx with a couple of key messages. First, as Richard highlighted earlier, Amylyx is highly aligned with our Pivot to Growth strategy. Second, we're maintaining a strong balance sheet with no change to our 2027 leverage targets of 2x net debt to EBITDA. Turning to the key terms of the transaction. The upfront consideration is $700 million in cash, with additional commercial milestones of up to $200 million. We expect the transaction to close in late Q2 or early Q3, subjected to customary closing conditions. Moving to the financial impact. We expect the product to have a gross margin profile of approximately 80% subjected to regulatory approval and launch in 2027.

Speaker #2: I will discuss changes to our 2026 financial guidance to reflect this acquisition on the next slide. But importantly, we expect the Emilex to meaningfully contribute to our revenue growth and margin expansion after EcoPiping is launched and scaled and be accretive to our non-gap EPS starting in 2028.

Eli Kalif: I will discuss changes to our 2026 financial guidance to reflect this acquisition on the next slide. Importantly, we expect Amylyx to meaningfully contribute to our revenue growth and margin expansion after ecopipam is launched and scaled and be accretive to our non-GAAP EPS starting in 2028. Finally, we remain on track with our 2027 financial targets, including our 30% operating margin. We expect the higher operating expenses related to Amylyx in 2027 to be absorbed by the initial revenue uptake from ecopipam following its launch, as well as additional efficiency measures. Now, let me turn to our 2026 outlook on Slide 40.

Speaker #1: Over the last few years, we have made significant progress to strengthen our balance sheet and are now at a short distance from our target leverage of two times net to EBITDA and achieving an investor-grade credit profile.

Speaker #1: We believe we are well positioned to achieve these goals and our execution has been recognized by the major credit rating agencies. The progress we have been making allows us to continue to invest organically in our innovative portfolio and pipeline, as well as provide flexibility to execute thoughtful and accretive business development to create a long-term shareholder value.

Speaker #2: And finally, we remain on track with our 2027 financial targets, including our 30% operating margin. We expect the higher operating expenses related to Emilex in 2027 to be absorbed by the initial revenue uptake from EcoPiping following its launch, as well as additional efficiency measures.

Speaker #1: As we are doing with MLX. In addition, our board of directors has instructed the management to plan for a share repurchase program that may be implemented subject to meeting applicable legal requirements.

Eli Kalif: I will discuss changes to our 2026 financial guidance to reflect this acquisition on the next slide. Importantly, we expect Amylyx to meaningfully contribute to its revenue growth and margin expansion after ecopipam is launched and scaled and be accretive to our non-GAAP EPS starting in 2028. Finally, we remain on track with our 2027 financial targets, including our 30% operating margin. We expect the higher operating expenses related to Amylyx in 2027 to be absorbed by the initial revenue uptake from ecopipam following its launch, as well as additional efficiency measures. Now, let me turn to our 2026 outlook on slide 40. As I mentioned earlier, we had a solid start to the year with a strong underlying revenue, margins, cash flow performance in Q1, largely offsetting tough comparison related to generic Revlimid revenue last year.

Speaker #2: Now, let me turn to our 2026 outlook on slide 40. As I mentioned earlier, we had a solid start to the year with a strong underlying revenue, margins, cash flow performance, in Q1.

Eli Kalif: As I mentioned earlier, we had a solid start to the year with a strong underlying revenue, margins, cash flow performance in Q1, largely offsetting tough comparison related to generic REVLIMID revenue last year. We're also excited about Amylyx acquisition, which is expected to further sense and build upon our strong commercial infrastructures in the CNS space. Based on our Q1 results and our visibility into the rest of the year, we are reaffirming our 2026 outlook range on an underlying basis, excluding Amylyx, for all financial metrics provided on our Q4 earning calls, including growing our EBITDA in 2026. Even though Teva is acquiring 100% of Amylyx shares, we expect the acquisition will be treated as an asset deal, and therefore, the upfront consideration of $700 million will flow through R&D line as IP R&D expenses in the P&L.

Speaker #1: The timing and the exact amount of repurchase will be subjected to further board approval and will be dependent on various other factors, including market condition, share price, and other investment opportunity aligned with our pivotal growth strategy.

Speaker #2: Largely offsetting tough comparison related to generics Revelmid revenue last year. We're also excited about Emilex acquisition, which is expected to further strengthen and build upon our strong commercial infrastructures in the CNS space.

Speaker #1: We believe this potential use of capital will further enhance long-term shareholder value, while preserving financial flexibility to continue to invest in our business and to execute on our pivotal growth strategy.

Speaker #2: Based on our Q1 results and our visibility into the rest of the year, we are reaffirming our 2026 outlook range on an underlying basis excluding Emilex for all financial metrics provided on our Q4 earning calls.

Speaker #1: With that, I will now hand it back to Richard for his closing remarks. Thank you, Ali. So moving on to this slide, I just wanted to once again reiterate why we are excited by our MLX deal and why if it's perfectly within the strategy of the growth and the criteria we laid out for business development.

Speaker #2: Including growing our EBITDA in 2026. However, even though Teva is acquiring 100% of Emilex shares, we expect the acquisition will be treated as an asset deal, and therefore the upfront consideration of 700 million will flow through R&D line as IP R&D expenses in the P&L.

Speaker #1: Let me just go through those. First, it is a rare and logical asset squarely within our core therapeutic focus area. Second, it's a natural fit for our CNS franchise, leveraging the commercial infrastructure and capabilities we place.

Eli Kalif: We're also excited about Amylyx acquisition, which is expected to further strengthen and build upon our strong commercial infrastructure in the CNS space. Based on our Q1 results and our visibility into the rest of the year, we are reaffirming our 2026 outlook range on an underlying basis, excluding Amylyx for all financial metrics provided on our Q4 earning calls, including growing our EBITDA in 2026. Even though Teva is acquiring 100% of Amylyx shares, we expect the acquisition will be treated as an asset deal, and therefore, the upfront consideration of $700 million will flow through R&D line as IP R&D expenses in the P&L. We also expected approximately $75 million of additional operating expenses in 2026 related to Amylyx starting Q3, including the transaction cost.

Speaker #2: We also expected approximately 75 million of additional operating expenses in 2026 related to Emilex starting Q3, including the transaction cost. The changes to our 2026 guidance range for operating profit, EBITDA, and EPS are slowly reflecting this additional 775 million expenses related to the acquisition.

Eli Kalif: We also expected approximately $75 million of additional operating expenses in 2026 related to Amylyx starting Q3, including the transaction cost. The changes to our 2026 guidance range for operating profit, EBITDA, and EPS are solely reflecting this additional $775 million expenses related to the acquisition. There is no change to our free cash flow guidance range of $2 to 2.4 billion. Excluding the Amylyx acquisition, our effective tax rate outlook range of 16% to 19% also remains unchanged. Moving on, we continue to expect 2026 non-GAAP gross margin to be in the range of 54.5% to 55.5% during the year.

Speaker #1: Third, it is financially accretive, providing revenue growth starting in 2027 expansion and creating both strategic and financial optionality over time. Fourth, the risk profile is attractive.

Speaker #2: There is no change to our free cash flow guidance range of 2 billion to 2.4 billion. Excluding the Emilex acquisition, our effective tax rate outlook range of 16 to 19% also remains unchanged.

Speaker #1: The second half of 2026. And finally, this transaction has no impact on our commitment to by 2027. I suppose, to summarize, this is exactly the type of disciplined, value-creating transaction we said we would pursue.

Speaker #2: Moving on, we continue to expect 2026 non-gap gross margin to be in the range of 54.5% to 55.5% during the year. Our operating expenses are expected to be in the range of 27 to 28% of revenue.

Speaker #1: I'm very excited about the impact this can have for patients who today have very limited treatment options. Before I conclude, let me remind you of some drivers that have attracted investment and how our pivotal growth strategy continues to execute as planned.

Eli Kalif: Our operating expenses are expected to be in the range of 27% to 28% of revenue, with H1 higher than H2, reflecting planned investment in H1, along with the higher impact of the transformation program cost savings in H2. With the expected operating expenses and the transaction cost related to Amylyx, we expected our operating expenses for 2026 to be towards the higher end of our 27% to 28% range. Lastly, let me provide you with some directions on how to think about quarterly progression for the rest of 2026. We continue to expect revenue to gradually increase over the course of the year.

Eli Kalif: The changes to our 2026 guidance range for operating profit, EBITDA and EPS are solely reflecting this additional $775 million expenses related to the acquisition. There is no change to our free cash flow guidance range of $2 billion to 2.4 billion. Excluding the Amylyx acquisition, our effective tax rate outlook range of 16% to 19% also remains unchanged. Moving on, we continue to expect 2026 non-GAAP gross margin to be in the range of 64.5% to 65.5% during the year. Our operating expenses are expected to be in the range of 27% to 28% of revenue, with the H1 of the year higher than the H2, reflecting planned investment in the H1, along with the higher impact of the transformation program cost savings in the H2 of the year.

Speaker #2: With the first half of the year higher than the second half. Reflecting planned investment in the first half along with the higher impact of the transformation program cost savings in the second half of the year.

Speaker #1: Transforming Teva into a leading innovative pharma company. We expect our innovative portfolio to continue driving growth well beyond 2027. It's currently anchored by OCEDA, which we are reiterating our target of reaching more than 2 billion in 2027 and over 3 billion week sales.

Speaker #2: Now, with the expected operating expenses and the transaction cost related to Emilex, we expected our operating expenses for 2026 to be towards the higher end of our 27 to 28% range.

Speaker #1: Along with our innovative products, UCEDA and Ajovy, we'll continue to drive our product mix and profitability. As I said, we're also preparing exciting, innovative launches coming up, starting with Olanzapine this year.

Speaker #2: Lastly, let me provide you with some directions on how to think about quarterly progression for the rest of 2026. We continue to expect revenue to gradually increase over the course of the year.

Speaker #1: And then for my concluding slide—launches: MLX, attractive acquisition of first-in-class neuroscience treatment aligned with our strategy and financial targets, near-term value on milestones from our world-class pipeline, a stable outlook for our genomics powerhouse, accelerating the pivotal growth strategy. And with that, I would like to open the floor to questions.

Speaker #2: OSEDA Q1 revenue was slightly better than our expectation due to a less than expected destocking in the channel and timing of some orders from Q2 to Q1.

Eli Kalif: AUSTEDO Q1 revenue were slightly better than our expectation due to a less than expected destocking in the channel and timing of some orders from Q2 to Q1. Since the inventory levels in the channels remain elevated, we may see these dynamics evolve during the rest of the year. In addition, as mentioned last quarter, we expected AUSTEDO revenue in Q4 2026 to be down year-over-year due to a different purchasing patterns and pricing environment expected ahead of the IRA implementation in January 2027. Our non-GAAP margin are also expected to gradually ramp up over the course of the year in line with the revenue trajectory, as well as savings from the ongoing transformation programs. However, we expect margin to be stable in Q4 versus Q3, reflecting the anticipated channels dynamics related to AUSTEDO in Q4 2026.

Speaker #2: Since the inventory levels in the channels remain elevated, we may see these dynamics evolve during the rest of the year. In addition, as mentioned last quarter, we expected OSEDA revenue in Q4 26 to be down year over year due to a different purchasing patterns and pricing environment expected ahead of the IRA implementation in January 27.

Eli Kalif: With the expected operating expenses and the transaction cost related to Amylyx, we expected our operating expenses for 2026 to be towards the higher end of our 27% to 28% range. Lastly, let me provide you with some directions on how to think about quarterly progression for the rest of 2026. We continue to expect revenue to gradually increase over the course of the year. Austedo Q1 revenue were slightly better than our expectation due to a less than expected destocking in the channel and timing of some orders from Q2 to Q1. Since the inventory levels in the channels remain elevated, we may see these dynamics evolve during the rest of the year.

Speaker #1: Thank you.

Speaker #2: Thank you, Richard. Alex, while you're queuing up the callers, I just want to remind everyone if you could limit yourself to one call and question one follow-up, and we can get back to you in the queue if you have additional questions after that.

Speaker #2: That would be appreciated just so we can make time for as many people as possible.

Speaker #2: Our non-gap margin, our also expected to gradually ramp up over the course of the year in line with the revenue trajectory, as well as savings from the ongoing transformation programs.

Speaker #1: Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. We're using a speakerphone.

Speaker #2: However, we expect margin to be stable in Q4 versus Q3, reflecting the anticipated channels dynamics related to OSEDA in Q4 2026. Lastly, our capital allocation strategy remained focused on driving our pivot to growth strategy.

Speaker #1: Please remember to pick up your handset before asking a question. Thank you. Our first question for today comes from Louise Chen, Scotiabank. Your line's open.

Eli Kalif: Lastly, our capital allocation strategy remains focused on driving our Pivot to Growth strategy. Over the last few years, we have made significant progress to strengthen our balance sheet and are now at a short distance from our target leverage of 2x net debt to EBITDA and achieving an investment-grade credit profile. We believe we are well-positioned to achieve these goals, and our execution has been recognized by the major credit rating agencies. The progress we have been making allows us to continue to invest organically in our innovative portfolio and pipeline, as well as provide flexibility to execute thoughtful and accretive business development to create a long-term shareholder value, as we are doing with Amylyx. In addition, our board of directors has instructed the management to plan for a share repurchase program that may be implemented, subjected to meeting applicable legal requirements.

Speaker #1: Please go ahead.

Eli Kalif: As mentioned last quarter, we expected Austedo revenue in Q4 2026 to be down year over year due to the different purchasing patterns and pricing environment expected ahead of the IRA implementation in January 2027. Our non-GAAP margin are also expected to gradually ramp up over the course of the year in line with the revenue trajectory as well as savings from the ongoing transformation program. We expect margin to be stable in Q4 versus Q3, reflecting the anticipated channel dynamics related to Austedo in Q4 2026. Our capital allocation strategy remains focused on driving our Pivot to Growth strategy. Over the last few years, we have made significant progress to strengthen our balance sheet and are now at a short distance from our target leverage of 2x net debt to EBITDA and achieving an investment-grade credit profile.

Speaker #3: Hi, congratulations on the quarter and thanks for giving me a question. I wanted to ask you about your MLX acquisition. If you could give more color on the series that your CNS franchise, especially on the pediatric side, and then as a follow-up, how do you think about the peak sales potential of this asset and what kind of assumptions to bring that up?

Speaker #2: Over the last few years, we have made significant progress to strengthen our balance sheet and are now at a short distance from our target leverage of two times net debt to EBITDA and achieving an investor-grade credit profile.

Speaker #3: Thank you.

Speaker #2: We believe we are well positioned to achieve these goals and our execution has been recognized by the major credit rating agencies. The progress we have been making allows us to continue to invest organically in our innovative portfolio and pipeline, as well as provide flexibility to execute thoughtful and accretive business development to create a long-term shareholder value.

Speaker #1: Hi, Louise. Thank you for the question. So, yeah, when it comes to EcoPipe, we're very excited about the asset because of the significant unmet medical need.

Speaker #1: Now, there are about 100,000 pediatric patients who suffer from Tourette's. Only about 50,000 of those actually come to therapy. And as I said, 70% stay on therapy after one year.

Speaker #1: So clearly, there is a significant unmet medical need. As I sort of talk about this, we make it very familiar with what we've done with OCEDA and to a certain degree, UCEDA.

Speaker #2: As we are doing with Emilex. In addition, our board of directors has instructed the management to plan for a share repurchase program that may be implemented subjected to meeting applicable legal requirements.

Speaker #1: So then going back to the part of your question around what are the synergies, so we clearly have synergies in many aspects of our business from patient services to managed markets to MSLs and to a certain degree to our sales force.

Speaker #2: The timing and the exact amount of repurchase will be subjected to further board approval and will be depend on the virus of other factors, including market condition, share price, and other investment opportunity aligned with our pivot to growth strategy.

Eli Kalif: The timing and the exact amount of repurchase will be subjected to further board approval and will depend on a variety of other factors, including market conditions, share price, and other investment opportunity aligned with our Pivot to Growth strategy. We believe this potential use of capital will further enhance long-term shareholder value while preserving financial flexibility to continue to invest in our business and to execute on our Pivot to Growth strategy. With that, I will now hand it back to Richard for his closing remarks.

Eli Kalif: We believe we are well-positioned to achieve these goals, and our execution has been recognized by the major credit rating agencies. The progress we have been making allows us to continue to invest organically in our innovative portfolio and pipeline, as well as provide flexibility to execute thoughtful and accretive business development to create a long-term shareholder value as we are doing with Amylyx. In addition, our board of directors has instructed the management to plan for a share repurchase program that may be implemented, subjected to meeting applicable legal requirements.

Speaker #1: We will have to put in place small pediatric sales forces to focus on EcoPipe. That said, it is worth noting just the deep expertise we have in pivotal forces here at Teva.

Speaker #2: We believe this potential use of capital will further enhance long-term shareholder value, while preserving financial flexibility to continue to invest in our business and to execute on our pivot to growth strategy.

Speaker #1: We have with neurologists and we have with the psychiatric community. So I think for that reason, we're very excited about the fact that we can really offer some meaningful hope to what is a very difficult condition for children.

Speaker #2: With that, I will now hand it back to Richard for his closing remarks.

Speaker #1: With regard to your question around peak sales, I'll just go back to the significant opportunity. And as we get closer to launch this product, we'll start to give an idea of what we think this could be.

Speaker #1: Thank you, Ali. So moving on to this slide, I just wanted to once again excited by our Emilex deal and why if it's perfectly with the strategy of pivot to growth and the criteria we laid out for business development.

Richard Francis: Thank you, Eli. Moving on to this slide. I just wanted to once again reiterate why we are excited by our Amylyx deal and why it fits perfectly with the strategy of Pivot to Growth and the criteria we laid out for business development. Let me just go through those. First, it is a rare neurological asset squarely within our core therapeutic focus area. Second, it's a natural fit for our CNS franchise, leveraging the commercial infrastructure and capabilities we already have in place. Third, it is financially accretive, driving revenue growth starting in 2027, margin expansion beginning in 2028, and creating both strategic and financial optionality over time. Fourth, the risk profile is highly attractive.

Eli Kalif: The timing and the exact amount of repurchase will be subjected to further board approval and will be depend on a various of other factors, including market condition, share price, and other investment opportunity aligned with our Pivot to Growth strategy. We believe this potential use of capital will further enhance long-term shareholder value while preserving financial flexibility to continue to invest in our business and to execute on our Pivot to Growth strategy. With that, I will now hand it back to Richard for his closing remarks.

Speaker #1: But I think at this moment, it's worth just thinking about the unmet medical need and the unmet medical need from a patient perspective. Thank you for your question, Louise.

Speaker #1: Let me just go through those. First, it is a rare neurological asset, squarely within our core therapeutic focus area. Second, it's a natural fit for our CNS franchise, leveraging the commercial infrastructure and capabilities we already have in place.

Speaker #2: Thank you. Our next question comes from Matt Glenn at Santangelo of Barclays. Your line's now open. Please go ahead.

Speaker #4: Hi, yeah. Thanks for my question. Richard clearly requested growth in the innovative portfolio, and I think in your closing remarks, you reiterated the greater than 2.5 billion in sales number for OCEDA in 2027.

Speaker #1: Third, it is financially accretive, driving revenue growth starting in 2027, margin expansion beginning in 2028, and creating both strategic and financial optionality over time.

Richard Francis: Thank you, Eli. Moving on to this slide. I just wanted to once again reiterate why we are excited by our Amylyx deal and why it fits perfectly with the Pivot to Growth strategy and the criteria we laid out for business development. Let me just go through those. First, it is a rare neurological asset squarely within our core therapeutic focus area. Second, it is a natural fit for our CNS franchise, leveraging the commercial infrastructure and capabilities we already have in place. Third, it is financially accretive, driving revenue growth starting in 2027, margin expansion beginning in 2028, and creating both strategic and financial optionality over time. Fourth, the risk profile is highly attractive. Studies are complete, the program is well understood, and the regulatory filing is expected in the second half of 2026.

Speaker #1: Fourth, the risk profile is highly attractive, pivotal studies are complete, the program is well understood, and the regulatory filing is expected in the second half of 2026.

Speaker #4: And I'm just trying to sort of reconcile some comments you made earlier this year about 2027 where you expected low single-digit growth. And what we unpacked this quarter and you normalized for FX and the Japan business venture and generic Revlimid, this looks like a 7% growth quarter.

Richard Francis: Pivotal studies are complete, the program is well understood, the regulatory filing is expected in H2 2026. Finally, this transaction has no impact on our commitment to 2x net debt to EBITDA by 2027. I suppose to summarize, this is exactly the type of disciplined value-creating transaction we said we would pursue. I'm very excited about the impact this can have for patients who today have very limited treatment options. Before I conclude, let me remind you of some of the drivers that we believe make Teva an attractive investment and how our Pivot to Growth strategy continues to execute as planned, transforming Teva into a leading innovative biopharma company. We expect our innovative portfolio to continue driving growth well beyond 2027.

Speaker #1: And finally, this transaction has no impact on our commitment to two times net debt to EBITDA by 2027. I suppose to summarize, this is exactly the type of disciplined, value-creating transaction we I'm very excited about the impact this can have for patients who today have very limited treatment options.

Speaker #4: As warned earlier, if you could maybe confirm that. And then I'm trying to reconcile the growth rate in the business currently versus your expectation for that single-digit growth in 2027.

Speaker #1: Before I conclude, let me remind you of some of the drivers that we believe make Teva an attractive investment and how our pivot to growth strategy continues to execute as planned.

Speaker #4: Not that you want to guide on 2027 at this point, obviously, but we're looking down the pipe and you see Olanzapine coming in that EcoPipe, which may be a modest contributor next year.

Speaker #1: Transforming Teva into a leading innovative biopharma company. We expect our innovative portfolio to continue driving growth well beyond 2027. It's currently anchored by OSEDA, which we are reiterating our target of reaching more than 2.5 billion in 27 and over $3 billion peak sales.

Speaker #4: I'm just trying to reconcile all the big moving pieces around how we should be thinking about balancing this year. And growth into next year.

Richard Francis: It's currently anchored by AUSTEDO, which we are reiterating our target of reaching more than $2.5 billion in 2027 and over $3 billion peak sales. Along with our innovative products of UZEDY and AJOVY, we'll continue to drive our product mix and profitability. As I said, we're also preparing for the exciting innovative launches coming up, starting with olanzapine this year. For my concluding slide, the growth journey continues. Innovative brands, double-digit growth for upcoming launches. Amylyx attractive acquisition of first-in-class neuroscience treatment aligned with our strategy and financial targets. Near-term value unlocking milestones from our world-class pipeline. A stable outlook for our generics powerhouse. Accelerating the Pivot to Growth strategy. With that, I would like to open the floor to questions. Thank you.

Speaker #4: Thanks.

Speaker #1: Hi, Glenn. Thanks for your question. I'll try and sort of unpack it. And I think what I'm hearing is maybe and maybe this you can advise me is that maybe you're feeling that we could be a slightly conservative towards 2027.

Speaker #1: Along with our innovative products of UCETI and Ajovi, we'll continue to drive our product mix and profitability. And as I said, we're also preparing for the exciting innovative launches coming up, starting with Olanzapine this year.

Richard Francis: Finally, this transaction has no impact on our commitment to 2x net debt to EBITDA by 2027. I suppose to summarize, this is exactly the type of disciplined value-creating transaction we said we would pursue. I am very excited about the impact this can have for patients who today have very limited treatment options. Before I conclude, let me remind you of some of the drivers that we believe make Teva an attractive investment and how our Pivot to Growth strategy continues to execute as planned, transforming Teva into a leading innovative biopharma company. We expect our innovative portfolio to continue driving growth well beyond 2027. It is currently anchored by Austedo, which we are reiterating our target of reaching more than 2.5 billion in 2027 and over 3 billion peak sales.

Speaker #1: Is that the question?

Speaker #4: Yeah, yeah. It just kind of feels, Richard, that you're growing much faster than that at this point. And you're expecting maybe some modest growth in next year with some contribution from your pipeline next year.

Speaker #1: And then for my concluding slide, the growth journey continues. Innovative brands double-digit growth for upcoming launches. Emilex attractive acquisition of first-in-class neuroscience treatment aligned with our strategy and financial targets.

Speaker #4: I'm just trying to reconcile your thoughts around that low single-digit expectation for next year.

Speaker #1: Near-term value unlocking milestones from our world-class pipeline. A stable outlook for our generics powerhouse. Accelerating the pivot to growth strategy. And with that, I would like to open the floor to questions.

Speaker #1: Okay. Now, so thanks, Glenn. Thanks for that clarification. So I think when it comes to let's start specifically with OCEDA. I think as I pointed out and as Ella pointed out, there's a few moving parts here.

Speaker #1: Thank you.

Speaker #2: Thank you, Richard. Alex, while you're queuing up the callers, I just want to remind everyone if you could limit yourself to one call and sorry, one question and one follow-up, and we can get back to you in the queue if you have additional questions after that.

Christopher Stevo: Thank you, Richard. Alex, while you are queuing up the callers, I just want to remind everyone you could limit yourself to one question and one follow-up. We can get back to you in the queue if you have additional questions after that. That would be appreciated, just so we can make time for as many people as possible.

Speaker #1: And one of those, and probably the biggest moving part, is how the IRA impacts us sort of pre-IRA, which is Q4. What happens to our inventory?

Richard Francis: Along with our innovative products of UZEDY and Ajovy, we'll continue to drive our product mix and profitability. As I said, we're also preparing for the exciting innovative launches coming up, starting with olanzapine this year. For my concluding slide, the growth journey continues. Innovative brands, double-digit growth for upcoming launches. Amylyx's attractive acquisition of first-in-class neurosign treatment aligned with our strategy and financial targets. Near term value unlocking milestones from our world-class pipeline. A stable outlook for our generics powerhouse. Accelerating the Pivot to Growth strategy. With that, I would like to open the floor to questions. Thank you.

Speaker #2: That would be appreciated just so we can make time for as many people as possible.

Speaker #1: What happens to the channel? Will there be a drawdown, excuse me, because of the pricing change in 2027? It's hard to understand and predict that.

Speaker #1: Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. If you are using a speakerphone, please remember to pick up your handset before asking a question.

Operator: Thank you. As a reminder, if you'd like to ask a question, please press star followed by one on your telephone keypad. If you are using a speakerphone, please remember to pick up your handset before asking a question. Thank you. Our first question for today comes from Louise Chen of Scotiabank. Your line is now open. Please go ahead.

Speaker #1: Excuse me. So I think for one of those reasons, for that reason, I think we have to be thoughtful about OCEDA and see how this plays out.

Speaker #1: Do we have any conservatism and concern and worry about the untreated patient population that still need to go on OCEDA? Do we have any worry about our ability to execute and get more patients into OCEDA on the right dose onto the right compliance and hearing programs?

Speaker #1: Thank you. Our first question for today comes from Louise Chen of Scotiabank. Your lines are open. Please go ahead.

Speaker #3: Hi, congratulations on the quarter and thanks for taking my question. I wanted to ask you about your Alex acquisition and if you could give more color on the synergies with your CNS franchise, especially on the pediatric side.

Louise Chen: Hi. Congratulations on the quarter, and thanks for taking my question. I wanted to ask you about your Amylyx acquisition and if you could give more color on the synergies with your CNS franchise, especially on the pediatric side. As a follow-up, how do you think about the peak sales potential of this asset and what kind of assumptions support that thought? Thank you.

Speaker #1: No. Absolutely not. Excuse me. We remain very, very confident about the long-term growth of OCEDA. That's why I reiterated the $3 billion peak sales.

[Company Representative] (Teva Pharmaceutical Industries): Thank you, Richard. Alex, while you're queuing up the callers, I just want to remind everyone you could limit yourself to one question and one follow-up. We can get back to you in the queue if you have additional questions after that. That would be appreciated, just so we can make time for as many people as possible.

Speaker #3: And then as a follow-up, how do you think about the peak sales potential of this asset and what kind of assumptions support that thought?

Speaker #1: It's just a bit of timing there. Glenn, and just seeing how that plays out. With regard to some of the other growth strategies you're saying, and Ajovy and soon-to-be Olanzapine, as you know, we tend to like to really get a couple of quarters under the belt to understand what this looks like.

Speaker #3: Thank you.

Speaker #1: Hi, Louise. Thank you for the question. So yeah, so when it comes to EcoPipe, we're very excited about this asset because of the significant unmet medical need.

Richard Francis: Hi, Louise. Thank you for the question. Yeah. When it comes to ecopipam, we're very excited about this asset because of the significant unmet medical need. Now, there are about 100,000 children pediatrics who suffer from Tourette's. Only about 50,000 of those actually go on to therapy. As I said, less than 30% stay on therapy after 1 year. Clearly there is a significant unmet medical need. As I sort of talk about this probably makes you very familiar with the work we've done with AUSTEDO and to a certain degree, UZEDY. Going back to the part of your question around what are the synergies. We clearly have synergies in many aspects of our business, from patient services to managed markets to MSLs and to a certain degree, to our sales force.

Operator: Thank you. Thank you. Our first question for today comes from Louise Chen of Scotiabank. Your line is now open. Please go ahead.

Speaker #1: Now, there are about 100,000 children pediatrics who suffer from Tourette's. Only about 50,000 of those actually go on to therapy. And as I said, less than 30% stay on therapy after one year.

Speaker #1: So we don't sort of get ahead of ourselves. So that's what we're thinking about. So I think maybe as we talk about 2027 guidance, we'll come to this year and be able to give clarity on that.

Speaker #1: I think one quarter is we're pleased with the quarter. But let's get some more quarters under our belt before we start predicting what the future would be.

Speaker #1: So clearly, there is a significant unmet medical need. As I sort of talk about this, this probably makes you very familiar with the work we've done with OSEDA and to a certain degree, UCETI.

Louise Chen: Hi. Congratulations on the quarter, and thanks for taking my question. I wanted to ask you about your Amylyx acquisition and if you could give more color on the synergies with your CNS franchise, especially on the pediatric side. As a follow-up, how do you think about the peak sales potential of this asset, and what kind of assumptions support that thought? Thank you.

Speaker #1: So hopefully that helps you. But I'm pleased that you see the strength and the underlying innovative business. And let's talk about what that could be in 2027 and beyond.

Speaker #1: So then going back to the part of your question around what are the synergies, so we clearly have synergies in many aspects of our business from patient services to managed markets to MSLs and to a certain degree to our sales force.

Speaker #1: But maybe writing a complete update, it is a bit beyond 2027, 2028, 2029. I hope you can see the opportunity for us to keep growing this company, keep growing our innovative portfolio, and keep our project, and thus keep growing our EPS.

Speaker #1: We will have to put in place a small pediatric sales force to focus on EcoPipe. That said, it is worth noting just the deep expertise we have in movement disorders here at Teva.

Richard Francis: We will have to put in place a small pediatric sales force to focus on ecopipam. That said, it is worth noting just the deep expertise we have in movement disorders here at Teva, we have with neurologists and we have with the psychiatric community. I think for that reason, we're very excited about the fact that we can really offer some meaningful hope to what is a very difficult condition for children. With regard to your question around peak sales, I'll just go back to this is a significant opportunity, and as we get closer to launch this product, we'll start to give an idea of what we think this could be. I think at this moment, it's worth just thinking about the unmet medical need, the lack of treatment options, and a significant unmet medical need from a patient perspective.

Richard Francis: Hi, Louise. Thank you for the question. When it comes to ecopipam, we're very excited about this asset because of the significant unmet medical need. There are about 100,000 children, pediatrics, who suffer from Tourette's. Only about 50,000 of those actually go onto therapy. As I said, less than 30% stay on therapy after 1 year. Clearly there is a significant unmet medical need. As I sort of talk about this probably makes you very familiar with the work we've done with Austedo and to a certain degree, UZEDY. Going back to the part of your question around what are the synergies. We clearly have synergies in many aspects of our business, from patient services to managed markets to MSLs and to a certain degree, to our sales force.

Speaker #1: Thanks for the question, Glenn.

Speaker #2: On the question comes from Matt Delato of Goldman Sachs. Your line's now open. Please go ahead.

Speaker #1: We have with neurologists and we have with the psychiatric community. So I think for that reason, we're very excited about the fact that we can really offer some meaningful hope to what is a very difficult condition for children.

Speaker #5: Great. Good morning, guys. Thanks for taking my question and congrats on the strong quarter and the deal announcement. Maybe first on capital allocation broadly.

Speaker #5: If we think about free cash flow of 2.5 to 3 billion over the next several years, could you maybe comment on what you see as a fair base case at this point on how you might allocate across potentially additional PD, now maybe repurchases, and then further debt pay down?

Speaker #1: With regard to your question around peak sales, I'll just go back to this is a significant opportunity. And as we get closer to launch this product, we'll start to give an idea of what we think this could be.

Speaker #1: But I think at this moment, it's worth just thinking about the unmet medical need, the lack of treatment options, and a significant unmet medical need from a patient perspective.

Speaker #5: And then maybe one of the branded pipeline, what is the latest expectation for the indication expansion strategy for Q2? And is there anything that you're particularly focused on from a competitive landscape perspective this year or over the coming months?

Richard Francis: We will have to put in place a small pediatric sales force to focus on ecopipam. That said, it is worth noting just the deep expertise we have in movement disorders here at Teva, we have with neurologists, and we have with the psychiatric community. I think for that reason, we're very excited about the fact that we can really offer some meaningful hope to what is a very difficult condition for children. With regard to your question around peak sales, I'll just go back to this is a significant opportunity, and as we get closer to launch this product, we'll start to give an idea of what we think this could be. I think at this moment, it's worth just thinking about the unmet medical need, the lack of treatment options, and a significant unmet medical need from a patient perspective.

Speaker #1: Thank you for your question, Louise.

Richard Francis: Thank you for your question, Louise.

Speaker #2: Thank you. Our next question comes from Glenn Santangelo of Barclays. Your lines are open. Please go ahead.

Operator: Thank you. Our next question comes from Glen Santangelo of Barclays. Your line is now open. Please go ahead.

Speaker #4: Oh, yeah. Thanks for taking my question. I mean, Richard, clearly impressive growth in the innovative portfolio. And I think in your closing remarks, you reiterated the greater than 2.5 billion in sales number for OSEDA in '27.

Speaker #5: Thank you.

Glen Santangelo: Yeah, thanks for taking my question. I mean, Richard, clearly impressive growth in the innovative portfolio. I think in your closing remarks, you reiterated the greater than $2.5 billion in sales number for AUSTEDO in 2027. I'm just trying to sort of reconcile some comments you made earlier this year about 2027, where you expected low single-digit growth. You know, when we unpack this quarter and you normalize for FX and the Japan business venture and generic REVLIMID, this looks like a 7% growth quarter to us. I was wondering, Eli, if you could maybe confirm that. I'm trying to reconcile the growth rate in the business currently versus your expectation for that low single-digit growth in 2027.

Speaker #1: Thanks for the question, Matt. And clearly, as I'm suffering for some sore throat, I'm going to quickly take a break and catch up on occasion to Ellie and then the two new indications to Eric.

Speaker #4: And I'm just trying to sort of reconcile some comments you made earlier this year about '27 where you expected low single-digit growth. And when we unpack this quarter and you normalize for FX and the Japan business venture and generic Revlimid, this looks like a 7% growth quarter to us.

Speaker #1: Over to you, Ellie.

Speaker #3: Okay. Thanks for the question, Matt. So look, we ended the quarter with 3.7 billion cash flow balance sheet. If you think about midpoint for this year, like 2.2 free cash flow, we generate almost 200 already.

Speaker #3: It's like another billion to build. So it's getting back to the 5.7. Considering the closing on Amilex, it goes to 5, and we have another tranche by October to pay like 1.8.

Speaker #4: And I was wondering, Ellie, if you could maybe confirm that. And then I'm trying to reconcile the growth rate in the business currently versus your expectation for that low single-digit growth in '27.

Richard Francis: Thank you for your question, Louise.

Speaker #3: So most likely we're going to be north of 3.2 billion by the end of the year, very strong balance sheet from our perspective. So as we move forward and we keep growing our EPS and also strong our growth margin, projections, looking on 2.4 to 3 billion kind of a run rate beyond, I would say, 2026 on free cash flow, what we actually announced this morning about the buyback, this is basically kind of a part of a natural evolution of our capital allocation, which we focus on maximizing all the value.

Operator: Thank you. Our next question comes from Glen Santangelo of Barclays. Your line is now open. Please go ahead.

Glen Santangelo: Not that you want to guide on 2027 at this point, obviously, but you know, we're looking down the pipe and you see olanzapine coming, and now you add ecopipam, which may be a modest contributor next year. I'm just trying to reconcile all the big moving pieces around, you know, how we should be thinking about the balance of this year and the growth rate into next year. Thanks.

Speaker #4: Not that you want to guide on '27 at this point, obviously, but we're looking down the pipe and you see Olanzapine coming in. Now you have EcoPipe, which may be a modest contributor next year.

Glen Santangelo: Yeah, thanks for taking my question. I mean, Richard, clearly impressive growth in the innovative portfolio. I think in your closing remarks, you reiterated the greater than $2.5 billion in sales number for Austedo in 2027. I'm just trying to sort of reconcile some comments you made earlier this year about 2027, where you expected low single-digit growth. You know, when we unpack this quarter and you normalize for FX and the Japan business venture and generic Revlimid, this looks like a 7% growth quarter to us. I was wondering, Eli, if you could maybe confirm that. Then I'm trying to reconcile the growth rate in the business currently versus your expectation for that low single-digit growth in 2027.

Speaker #4: I'm just trying to reconcile all the big moving pieces around how we should be thinking about the balance of this year. And the growth rate into next year.

Speaker #4: Thanks.

Richard Francis: Hi, Glenn. Thanks for your question. I'll try and sort of unpack it. I think what I'm hearing is maybe, and maybe that you can advise me, is that maybe you're feeling that we could be slightly conservative towards 2027. Is that the question?

Speaker #1: Hi, Glenn. Thanks for your question. I'll try and sort of unpack it. And I think what I'm hearing is maybe and maybe this you can advise me is that maybe you're feeling that we could be a slightly conservative towards 2027.

Speaker #3: It's basically giving us kind of a creating additional optionality to the management to allocate capital. And we are able to do it because the balance sheet become more stronger.

Speaker #1: Is that the question?

Speaker #3: What we're going to see going forward, we're going to see maybe another one or two deals with a couple of hundreds of millions. We are not actually going to do something bigger than that in the short term.

Glen Santangelo: Yeah. Yeah. It just kind of feels, Richard, that you're growing much faster than that at this point. You're expecting maybe some modest growth in AUSTEDO next year with some contribution from your pipeline next year. I'm just trying to reconcile your thoughts around that low single-digit expectation for next year.

Speaker #4: Yeah, yeah. It just kind of feels, Richard, that you're growing much faster than that at this point. And you're expecting maybe some modest growth in OSEDA next year with some contribution from your pipeline next year.

Glen Santangelo: Not that you wanna guide on 2027 at this point, obviously, but, you know, we're looking down the pipe and you see olanzapine coming in, now you have ecopipam, which may be a modest contributor next year. I'm just trying to reconcile all the big moving pieces around, you know, how we should be thinking about the balance this year and the growth rate into next year. Thanks.

Speaker #3: If something will come in front of us and we require any other financing, we still have our revolver, like 1.8 billion that we are not utilizing.

Speaker #4: I'm just trying to reconcile your thoughts around that low single-digit expectation for next year.

Richard Francis: Okay. Now I get it. Thanks, Glen. Thanks for that clarification. I think when it comes to, let's start specifically with AUSTEDO. I think as I pointed out and as Eli pointed out, there's a few moving parts here, you know. One of those, and probably the biggest moving part is how the IRA impacts us sort of pre-IRA, which is Q4. You know, what happens to our inventory? What happens to the channel? Will there be a drawdown, excuse me, because of the pricing change in 2027? It's hard to understand and predict that. Excuse me. I think for one of those reasons, for that reason, I think we have to be thoughtful about AUSTEDO and see how this plays out.

Speaker #1: Okay. Now I get it. Okay. So thanks, Glenn. Thanks for that clarification. So I think when it comes to let's start specifically with OSEDA.

Speaker #3: As I mentioned, we are growing EBITDA and we're growing our free cash flow as anything around that, I would say, quantum should not actually depart us from our two-time net to EBITDA.

Speaker #1: I think as I pointed out and as Ellie pointed out, there's a few moving parts here. And one of those, and probably the biggest moving part, is how the IRA impacts us sort of pre-IRA, which is Q4.

Speaker #3: But the rationale here to come to the two-time net to EBITDA and then going forward, looking on our debt management in order to make sure that we have enough flexibility to go to business.

Richard Francis: Hi, Glenn. Thanks for your question. I'll try and sort of unpack it. I think, what I'm hearing is maybe that you can advise me, is that maybe you're feeling that we could be slightly conservative towards 2027. Is that the question?

Speaker #1: What happens to our inventory? What happens to the channel? Will there be a drawdown, excuse me, because of the pricing change in 2027? It's hard to understand and predict that.

Speaker #1: Eric, on the two new indications for Divakuta.

Speaker #2: Yep. Thank you, Matt, for the question. So Divakuta, as we always say, has a great potential across many different indications. We in Sanofi bucket these possibilities and T2, non-T2, and fibrotic indications.

Glen Santangelo: Yeah. Yeah. It just kinda feels, Richard, that you're growing much faster than that at this point, and you're expecting maybe some modest growth in Austedo next year with some contribution from your pipeline next year. I'm just trying to reconcile your thoughts around that low single-digit expectation for next year.

Speaker #1: Excuse me. So I think for one of those reasons, for that reason, I think we have to be thoughtful about OSEDA and see how this plays out.

Richard Francis: Do we have any conservatism and concern and worry about the untreated patient population that still need to go on AUSTEDO? Do we have any worry about our ability to execute and get more patients onto AUSTEDO, onto the right dose, onto the right compliance and hearing programs? No, absolutely not. Excuse me. We remain very, very confident about the long-term growth of AUSTEDO, and that's why I reiterated the $3 billion peak sale. It's just a bit of timing there, Glen, and just seeing how that plays out. With regards to some of the other growth drivers, UZEDY, and AJOVY and soon to be olanzapine. As you know, we tend to like to really get a couple of quarters under the belt to really understand what this looks like, so we don't sort of get ahead of ourselves.

Speaker #1: Do we have any conservatism and concern and worry about the untreated patient population that still need to go on OSEDA? Do we have any worry about our ability to execute and get more patients onto OSEDA, onto the right dose, onto the right compliance and hearing programs?

Speaker #2: And we're very clear pathway on how we choose those based on market size, scientific justification, and regulatory candidates as well as speed. So we've aligned on those indications.

Richard Francis: Now, now I get it. Thanks, Glenn. Thanks for that clarification. I think when it comes to... Let's start specifically with Austedo. I think as I pointed out and as Eli pointed out, there's a few moving parts here, you know. One of those, and probably the biggest moving part, is how the IRA impacts us sort of pre-IRA, which is Q4. You know, what happens to our inventory? What happens to the channel? Will there be a drawdown, excuse me, because of the pricing change in 2027? It's hard to understand and predict that. Excuse me. I think for one of those reasons, for that reason, I think we have to be thoughtful at Austedo and see how this plays out.

Speaker #1: No. Absolutely not. Excuse me. We remain very, very confident about the long-term growth of OSEDA. And that's why I reiterated the $3 billion peak sales.

Speaker #2: We'll be announcing those before the end of the year. I think that's great excitement around that. One of the things I'm glad to see, though, right now is the effort and the speed in which we're interrogating the phase three programs in inflammatory bowel disease.

Speaker #1: It's just a bit of timing there. Glenn and just seeing how that plays out. With regard to some of the other growth drivers, USETI, and Ajovi, and soon to be Olanzapine, as you know, we tend to like to really get a couple of quarters under the belt to really understand what this looks like.

Speaker #2: The opportunity that Matt said, and I think we are highly differentiated from the other molecules out there. And that's the great success that we've been focused on so far.

Speaker #2: But we will be announcing those. I think that the indications across this deal will advance quickly. Thank you.

Speaker #1: So we don't sort of get ahead of ourselves. So that's what we're thinking about. So I think maybe as we talk about 2027 guidance, we'll come to the end of the year and be able to give clarity on that.

Richard Francis: That's what we're thinking about. I think maybe as we talk about 2027 guidance, we'll come to the end of the year and be able to give clarity on that. I think, you know, 1 quarter is, you know. We're pleased with the quarter, but let's get some more quarters under our belt before we start predicting what the future could be. Hopefully that helps you. I'm pleased that you see the strength in the underlying innovative business. Let's talk about what that could be in 2027 and beyond. Maybe for me to conclude, I'd say it is a bit beyond 2027, 2028, 2029.

Speaker #1: Thank you, Eric. Thanks for the question, Matt.

Richard Francis: Do we have any conservatism and concern and worry about the untreated patient population that still need to go on Austedo? Do we have any worry about our ability to execute and get more patients onto Austedo, onto the right dose, onto the right compliance and hearing programs? No, absolutely not. Excuse me. We remain very, very confident about the long-term growth of Austedo, and that's why I reiterated the $3 billion peak sale. It's just a bit of timing there, Glen, and just seeing how that plays out. With regards to some of the other growth drivers, UZEDY, and Ajovy, and soon to be olanzapine. As you know, we tend to like to really get a couple of quarters under the belt to really understand what this looks like, so we don't sort of get ahead of ourselves.

Speaker #2: Thank you. On the question comes from Dennis Thing of Jefferies. Your line's now open. Please go ahead.

Speaker #1: But I think one quarter is we're pleased with the quarter. But let's get some more quarters under our belt before we start predicting what the future could be.

Speaker #4: Hi, good morning. Thanks for taking my question. I have two on the Amilex. Transaction. So your slides don't really mention anything about the adult population but the phase three and adult secondary.

Speaker #1: So hopefully that helps you. But I'm pleased that you see the strength and the underlying innovative business. And let's talk about what that could be in 2027 and beyond.

Speaker #4: So I'm curious if you expect a broad label that covers both peds and adults. And how meaningful can that be on the 10 beyond the children you noted that are on therapy?

Speaker #1: But maybe for me to conclude, I'd say it is a bit beyond 2027, 2028, 2029. I hope you can see the opportunity for us to keep growing this company, keep growing our innovative portfolio, and keep growing our gross margin.

Richard Francis: I hope you can see the opportunity for us to keep growing this company, keep growing our innovative, portfolio, and keep growing our gross margin and thus keep growing our EPS. Thanks for the question, Glen.

Speaker #4: And if you can maybe also comment on the efficacy in the adult-only population as well. And then as a follow-up, can you just help narrow down pricing?

Speaker #1: And thus keep growing our EPS. Thanks for the question, Glenn.

Operator: Thank you. Our next question comes from Matt Delator of Goldman Sachs. Your line is now open. Please go ahead.

Speaker #2: Thank you. Our next question comes from Matt Dellatorre of Goldman Sachs. Your lines are open. Please go ahead.

Speaker #4: I mean, you mentioned rare in your slides, but that's still fairly broad. Thank you.

Richard Francis: That's what we're thinking about. I think maybe as we talk about 2027 guidance, we'll come to the end of the year and be able to give clarity on that. I think, you know, 1 quarter is, you know, pleased with the quarter, let's get some more quarters under our belt before we start predicting what the future could be. Hopefully that helps you, I'm pleased that you see the strength in the underlying innovative business. Let's talk about what that could be in 2027 and beyond. Maybe for me to conclude, I'd say it is a bit beyond 2027, 2028, 2029.

Matt Delator: Great. Good morning, guys. Thanks for taking my question, and congrats on the strong quarter and the deal announcement. Maybe first on capital allocation broadly. You know, if we, if we think about, you know, free cash flow of $2.5 to 3 billion, over the next several years, could you maybe comment on what you see as a fair base case at this point on how you might allocate, across, you know, potentially additional BD, now maybe share repurchases, and then further debt paydown? Then maybe one on the branded pipeline. What is the latest expectation for the indication expansion strategy for duvakitug?

Speaker #1: Thank you, Dennis. Last question. Okay. So thank you, Dennis. I'll tag team the first one with you Eric. So just to be clear, this is a team to be clear about that.

Speaker #5: Great. Good morning, guys. Thanks for taking my question and congrats on the strong quarter and the deal announcement. Maybe first on capital allocation broadly.

Speaker #5: If we think about free cash flow of 2.5 to 3 billion over the next several years, could you maybe comment on what you see as a fair base case at this point on how you might allocate across potentially additional VD, now maybe share repurchases, and then further debt pay down?

Speaker #1: And if you look at the patient population the majority are pediatric. So that answers your question. When it comes to pricing and rare and orphan, yes, we think because of the significant unmet medical need, we think that the size of the population we think that allows us to have a pricing within the range that is normal for orphan and rare.

Richard Francis: I hope you can see the opportunity for us to keep growing this company, keep growing our innovative portfolio, and keep growing our gross margin and thus keep growing our EPS. Thanks for the question, Glen.

Speaker #5: And then maybe one on the branded pipeline. What is the latest expectation for the indication expansion strategy for Dubikitu? And is there anything that you're particularly focused on from a competitive landscape perspective this year or over the coming months?

Matt Delator: Is there anything that you're particularly focused on from a competitive landscape perspective this year or over the coming months? Thank you.

Speaker #1: To answer your question, I think.

Operator: Thank you. Our next question comes from Matt Delator of Goldman Sachs. Your line's now open. Please go ahead.

Speaker #4: And yes, thanks, Dennis. About the question about adults, it was a small population of adults in the phase three study. Those efficacy results trend along with the pediatric results.

Speaker #5: Thank you.

Richard Francis: Thanks for the question, Matt. Clearly, as I'm suffering some sore throat, I'm gonna quickly take a break and hand the capital allocation to Eli and then the two new indications to Eric. Over to you, Eli.

Speaker #1: Thanks for the question, Matt. And clearly, as I'm suffering for some sore throat, I'm going to quickly take a break and hand the capital allocation to Ellie and then the two new indications to Eric.

Matt Delator: Great. Good morning, guys. Thanks for taking my question, and congrats on the strong quarter and the deal announcement. Maybe first on capital allocation broadly. If we think about free cash flow of two and a half to three billion over the next several years, could you maybe comment on what you see as a fair base case at this point on how you might allocate across potentially additional BD, now maybe share repurchases, and then further debt pay down? Maybe one on the branded pipeline. What is the latest expectation for the indication expansion strategy for Dupixent?

Speaker #4: But I would build on what Richard said. The efficacy in the pediatrics is particularly important because when you're thinking about a non-mechanism like the D1 receptor antagonist and the profile of safety, particularly for the pediatric population, there's no way it changes.

Eli Kalif: Okay. Thanks for the question, Matt. Look, we end up the quarter with $3.7 billion cash on the balance sheet. If you think about midpoint for this year, like $2.2 free cash flow, we generate almost $200 already. It's like another $2 billion to build. It gets you like to the $5.7, considering the closing on MLX, it goes to $5, and we have another tranche by October to pay like $1.8. Most likely, we're going to be north of $3.2 billion by end of the year. Very strong balance sheet from our perspective.

Speaker #1: Over to you, Ellie.

Speaker #6: Okay. Thanks for the question, Matt. So look, we end up the quarter with 3.7 billion cash on the balance sheet. If you think about midpoint for this year, like 2.2 free cash flow, we generate almost 200 already.

Speaker #4: There's no extrapyramidal signal that you would see with a D2 receptor antagonist. This is a product that can deliver a great efficacy profile, but more importantly, the safety for the pediatric population.

Speaker #6: It's like another $2 billion to build. So it gets you to the 5.7. Considering the closing on Emilex, it goes to 5. And we have another tranche by October to pay like 1.8.

Speaker #4: It's something we're very proud to be part of. And I think that's the true value.

Speaker #6: So most likely, we're going to be north than 3.2 billion by the end of the year, very strong balance sheet from our perspective. So as we move forward and we keep growing our EBITDA and totally transforming our gross margin projections, looking on 2.4 to 3 billion kind of a run rate beyond, I would say, 26 on free cash flow, what we actually announced this morning about the buyback, this is basically kind of a part of a natural evolution of our capital allocation, which really focused us now on maximizing shareholder value.

Matt Delator: Is there anything that you're particularly focused on from a competitive landscape perspective this year or over the coming months? Thank you.

Speaker #1: Thank you, Eric. Thank you for your question.

Eli Kalif: As we move forward and we keep growing our EBITDA and totally transforming our gross margin projections, looking on $2.4 to 3 billion kind of a run rate beyond, I would say, 2026 on free cash flow. What we actually announced this morning about the buyback, this is basically kind of a part of a natural evolution of our capital allocation, which really focused us now on maximizing shareholder value. It's basically giving us kind of a creating additional optionality to the management to allocate capital. And we are able to do it because the balance sheet become more stronger. What we're going to see going forward, we're going to see maybe another one or two deals with $couple of hundreds of millions.

Speaker #2: Thank you. Our next question comes from Jason Gerbery of Bank of America. Your line's now open. Please go ahead.

Richard Francis: Thanks for the question, Matt. Clearly, as I'm suffering some, for some sore throat, I'm gonna quickly take a break and hand the capital allocation to Eli and then the two new indications to Eric. Over to you, Eli.

Speaker #5: Good morning, guys. I have a generics pipeline question. So, Teva has a settlement to launch generic Kyvace and a nebulizer this year, but it’s chosen not to launch for business reasons.

Eli Kalif: Okay. Thanks for the question, Matt. Look, we end up the quarter with $3.7 billion cash on the balance sheet. If you think about midpoint for this year, like $2.2 billion free cash flow, we generate almost $200 million already. It's like another $2 billion to build. It gets you, like, to the $5.7 billion. Considering the closing on Amylyx, it goes to $5 billion, and we have another tranche by October to pay, like, $1.8 billion. Most likely, we're going to be north than $3.2 billion by end of the year. Very strong balance sheet from our perspective.

Speaker #5: But I'm wondering, if the company would reconsider, given that that drug and dosage format are set to launch in the large IDF category, some analysts have that being at four or five billion dollar indication.

Speaker #6: It basically giving us kind of a creating additional optionality to the management to allocate capital. And we are able to do it because the balance sheet became more stronger.

Speaker #5: And I think a license would give you sole source as a generic for pretty extended period of time. So I was wondering, what's going on there?

Speaker #6: What we're going to see going forward, we're going to see maybe another one or two deals with a couple of hundreds of millions. We are not actually going to do something bigger than that in the short term.

Speaker #5: Is it difficult to get a generic approval? And then as my follow-up, I noticed on your slides with the IL-15 for Vitiligo. It's now listed as 2031 time to BLA versus before it was a range of 31 to 34.

Eli Kalif: We are not actually going to do something bigger than that in the short term. If something will come in front of us and will require any other financing, you know, we still have our revolver, like USD 1.8 billion that we are not utilizing. As I mentioned, we are growing EBITDA, and we are growing our free cash flow. Anything around that, I would say quantum, which should not actually depart us from our 2x net debt to EBITDA. The rationale here is to come to the 2x net debt to EBITDA and then going forward, looking on our debt management in order to make sure that we have enough flexibility to grow the business.

Eli Kalif: As we move forward and we keep growing our EBITDA and totally transforming our gross margin, projections, looking on $2.4 to 3 billion kind of a run rate, beyond, I would say, 2026 on free cash flow. What we actually announced this morning about the buyback, this is basically kind of a part of a natural evolution of our capital allocation, which really focus us now on maximizing shareholder value. It's basically giving us kind of creating additional optionality to the management to allocate capital. We are able to do it because the balance sheet become more stronger. What we're going to see going forward, we're going to see maybe another one or two deals with couple of hundreds of millions.

Speaker #6: If something will come in front of us and we'll require any other financing, we still have our revolver, like 1.8 billion that we are not utilizing.

Speaker #5: So have you had a regulatory interaction, or are you confirmed now on the accelerated pathways?

Speaker #1: Hi, Jason. Thanks for the question. With regard to the generic pipeline, we don't tend to talk about our generic pipeline for competitive reasons. Others.

Speaker #6: As I mentioned, we are growing EBITDA and we're growing our free cash flow. So anything around that, I would say, quantum should not actually depart us from our two-time net debt to EBITDA.

Speaker #1: So I'm sorry, I can't really give you any more color to that. But I'll let Eric give you some color on the NTR-15.

Speaker #6: But the rationale here is to come to the two-times net debt to EBITDA and then going forward, looking on our debt management in order to make sure that we have enough flexibility to grow the business.

Speaker #2: Yeah, yeah. Thank you, Jason. I had a change to be made for this announcement. It's really driven by the fact that the team is executing.

Richard Francis: Thank you, Eli. Now, Eric, on the 2 new indications for duvakitug.

Speaker #2: We have a very clear pathway in which we're going to design our phase three studies. So it's greater confidence in our execution at this point.

Speaker #1: Thank you, Ellie. And now, Eric, on the two new indications for Dubikutu.

Eric Hughes: Thank you, Matt, for the question. You know, duvakitug, as we always say, has a great potential across many different indications. You know, we in Sanofi bucket these possibilities in T2, non T2, and fibrotic indications, and we have a very clear pathway on how we choose those based on market size, scientific justification and, you know, regulatory chances of success as well as speed. We've aligned on those indications. We'll be announcing those, you know, before the end of the year. I think there's great excitement around that. You know, one of the things I'm glad to see though right now is the effort and the speed in which we're interrogating the phase 3 program in the inflammatory bowel space.

Speaker #2: Yeah. Thank you, Matt, for the question. So Dubikitu as we always say, has a great potential across many different indications. We in Sanofi bucket these possibilities and T2, non-T2, and fibrotic indications.

Speaker #2: But thank you for noticing. Thank you. Our next question comes from Umar Rahmat of Evercore ISI. Your line's now open. Please go ahead.

Eli Kalif: We are not actually going to do something bigger than that in the short term. If something will come in front of us, then we'll require any other financing. You know, we still have our revolver, like $1.8 billion that we are not utilizing. As I mentioned, we are growing EBITDA, and we're growing our free cash flow. Anything around that, I would say quantum, we should not actually depart us from our 2x net debt to EBITDA. The rationale here is to come to the 2x net debt to EBITDA and then going forward, looking on our debt management in order to make sure that we have enough flexibility to grow the business.

Speaker #2: And we have a very clear pathway on how we choose those based on market size, scientific justification, and regulatory chances of success, as well as speed.

Speaker #5: Thank you guys for taking my question. I just know I've spent a little bit of time on the acquisition as well. Maybe first, unlike in a traditional pharma company where you sort of inherit a range of molecules which have their own expertise, I feel like the advantage you guys have is you get to decide how you want to stack on the LOEs.

Speaker #2: So we've aligned on those indications. We'll be announcing those before the end of the year. I think that's great excitement around that. One of the things I'm glad to see, though, right now is the effort and the speed in which we're interrogating the phase three programs in inflammatory bowel space.

Speaker #5: And I guess my first question is, knowing that this molecule is a Merck drug, so it's probably not composition patent and the method it uses also likely pegged to early 2030s because of some of the earliest work done in back in 2014.

Eric Hughes: You know, the opportunity there is massive, and I think we are highly differentiated from the other molecules out there, and that's the great success that we've been focused on so far. We will be announcing those. I think that the indications across this field will advance quickly. Thank you.

Richard Francis: Thank you, Eli Kalif. Now, Eric Hughes, on the two new indications for duvakitug.

Speaker #2: The opportunity there is massive. And I think we are highly differentiated from the other molecules out there. And that's the great success that we've been focused on so far.

Eric Hughes: Yep. Thank you, Matt, for the question. You know, duvakitug, as we always say, has a great potential across many different indications. You know, we in Sanofi bucket these possibilities in T2, non T2, and fibrotic indications. We have a very clear pathway on how we choose those based on market size, scientific justification and, you know, regulatory chances of success, as well as speed. We've aligned on those indications. We'll be announcing those, you know, before the end of the year. I think there's great excitement around that. You know, one of the things I'm glad to see though right now is the effort and the speed in which we're interrogating the phase three programs in the inflammatory bowel space.

Speaker #2: But we will be announcing those. I think that the indications across this field will advance quickly. Thank you.

Speaker #5: I guess my question is, is it really just orphan exclusivity? And would that effectively become an overlap with Austedo IPs? That's number one. And number two, is there any preliminary FDA feedback on whether the duration of trials run so far is sufficient to satisfy them on suicide ideation and neuropsych disorders in general?

Richard Francis: Thank you, Eric. Thanks for the question, Matt.

Speaker #1: Thank you, Eric. Thanks for the question, Matt.

Operator: Thank you. Our next question comes from Dennis Ding of Jefferies. Your line is now open. Please go ahead.

Speaker #2: Thank you. Our next question comes from Dennis Ding of Jefferies. Your lines are open. Please go ahead.

Dennis Ding: Hi. Good morning. Thanks for taking my questions. I have two on the Amylyx transaction. Your slides don't really mention anything about the adult population, but the Phase 3 hit on both peds and adults as a secondary. I'm curious if you expect a broad label that covers both peds and adults, and how meaningful can that be beyond the 50,000 children that you noted that are on therapy? If you can maybe also comment on the efficacy in the adult-only population as well. As a follow-up, can you just help us narrow down pricing? I mean, you mentioned rare in your slides, but that's still fairly broad. Thank you.

Speaker #4: Hi. Good morning. Thanks for taking my questions. I have two on the Emilex. Transaction. So your slides don't really mention anything about the adult population, but the phase three hit on both peds and adults as a secondary.

Speaker #5: Thank you very much.

Speaker #1: Hi, Umar. Thanks for the questions. So we expect to become orphan drug exclusivity so that gives us seven years from the date of FDA approval.

Speaker #4: So I'm curious if you expect a broad label that covers both peds and adults. And how meaningful can that be on the TAM beyond the 50,000 children that you noted that are on therapy?

Eric Hughes: You know, the opportunity there is massive, and I think we are highly differentiated from the other molecules out there, and that's the great success that we've been focused on so far. We will be announcing those. I think that the indications across this field will advance quickly. Thank you.

Speaker #1: So that sort of takes us into the 2033, 2034 times. But in addition, Amalex has granted patient expiring in 2035, covering methods of treating Tourette's syndrome using likely to be eligible for patent term extension.

Speaker #4: And if you can maybe also comment on the efficacy in the adult-only population, as well. And then as a follow-up, can you just help us narrow down pricing?

Speaker #4: I mean, you mentioned rare in your slides, but that's still fairly broad. Thank you.

Richard Francis: Thank you, Eric. Thanks for the question, Matt.

Speaker #1: And Amalex has filed an additional application covering methods of treating Tourette's syndrome, which could expire in 2043. So, and then going back to your comment, Umar, on Astello XR, we also believe—we're getting into the detail—that we have a path of patent extension into the 2040s as well for the XR formulation.

Operator: Thank you. Our next question comes from Dennis Ding of Jefferies. Your line is now open. Please go ahead.

Richard Francis: Thank you, Dennis. Was the last part pricing? Okay. Thank you, Dennis. I'll tag team the first one with you, Eric. Just to be clear, this is a pediatric treatment, ecopipam, for pediatric Tourette's. To be clear about that. If you look at the patient population, the majority are pediatric. Hopefully that answers your question. When it comes to pricing and rare and orphan, yes, we think because of the significant unmet medical need, we think about the size of the population, that we think that allows us to have a pricing within the range that is normal for orphan and rare. I hope that answers your question, Dennis. Do you want to add something to it, Eric?

Speaker #1: Thank you, Dennis. Was the last part pricing? Okay. So thank you, Dennis. I'll tag team the first one with you Eric. So just to be clear, this is a pediatric treatment eco pipeline for pediatric Tourette's.

Dennis Ding: Hi, good morning. Thanks for taking my questions. I have two on the Amylyx transaction. Your slides don't really mention anything about the adult population, but the phase 3 hit on both peds and adults for the secondary. I'm curious if you expect a broad label that covers both peds and adults, and how meaningful can that be on the TAM beyond the 50,000 children that you noted that are on therapy? If you can maybe also comment on the efficacy in the adult-only population as well. As a follow-up, can you just help us narrow down pricing? I mean, you mentioned rare in your slides, but that's still fairly broad. Thank you.

Speaker #1: So to be clear about that. And if you look at the patient population the majority are pediatric. So hopefully, that answers your question. When it comes to pricing and rare and orphan, yes, we think because of the significant unmet medical need, we think about the size of the population, that we think that allows us to have a pricing within the range that is normal for orphan and rare.

Speaker #1: So I think there, I think we before. Be good. But when it comes to the FDA question, I'll hand that to Eric.

Speaker #4: Yes. Thank you, Umar, for the question. So yeah, the long development has been a very large data package that's associated with this molecule. It actually started with sharing company I used to work at.

Speaker #4: And then went on to Merck. But the focus on the Tourette's program, this program includes two well-controlled studies. Remember, there was a phase two study that showed on-treatment response and a change in baseline Yale score.

Speaker #1: I hope that answers your question, Dennis. Do you want to add something to it, Eric?

Eric Hughes: Yeah. Yes. Thanks, Dennis. About the question about adults, it was a small population of adults in the phase 3 study. Those efficacy results, you know, trended along with the pediatric results. You know, I would build on what Richard said. The efficacy in the pediatrics is particularly important because, you know, when you're thinking about a novel mechanism like this, a D1 receptor antagonist and the profile of safety, you know, particularly for the pediatric population, you know, there's no weight changes, there's no metabolic findings, there's no extrapyramidal signals that you would see with a D2 receptor antagonist. This is a product that can deliver a great efficacy profile.

Speaker #2: Yeah. And yes, thanks, Dennis. About the question about adult, it was a small population of adults in the phase three study. Those efficacy results trended along with the pediatric results.

Richard Francis: Thank you, Dennis. Was the last part pricing? Okay. Thank you, Dennis. I'll tag team the first one with you, Eric. Just to be clear, this is a pediatric treatment, ecopipam for pediatric Tourette's. To be clear about that, if you look at the patient population, the majority are pediatric. Hopefully that answers your question. When it comes to pricing and rare and orphan, yes, we think because of the significant unmet medical need, we think about the size of the population that we think that allows us to have a pricing within the range that is normal for orphan and rare. I hope that answers your question, Dennis. Do you wanna add something to it, Eric?

Speaker #2: But I would build on what Richard said. The efficacy in the pediatrics is particularly important because when you're thinking about a novel mechanism like this, a D1 receptor antagonist, and the profile of safety, particularly for the pediatric population, there's no weight changes.

Speaker #4: And then there was a randomized withdrawal phase three study that showed a great persistence compared to placebo. Both statistically significant and powerful. And that database from Orphan Disease is robust.

Speaker #4: It doesn't meet all requirements, but from an orphan disease we're fairly confident that's on top of the history of the compound is satisfactory for approval.

Speaker #2: There's no metabolic findings. There's no extrapyramidal signals that you would see with a D2 receptor antagonist. This is a product that can deliver a great efficacy profile.

Speaker #4: Now, according to your, I mean, to address your specific question about suicide ideation, the rate of suicide ideation is extremely low. Just a handful.

Eric Hughes: More importantly, the safety for the pediatric population is something we're very proud to be part of, and I think that's the true value.

Speaker #2: But the more importantly, the safety for the pediatric population. It's something we're very proud to be part of. And I think that's the true value.

Speaker #4: And it was actually balanced within the placebo-controlled parts of the study. And more importantly, the studies were run very carefully with lots of measures on many different aspects, particularly suicidality, extrapyramidal syndromes, and with this intense monitoring, there was actually no signal at all with regards to suicidality and any changes from baseline.

Richard Francis: Thank you, Eric. Thank you for your question, Dennis.

Speaker #1: Thank you, Eric. Thank you for your question, Dennis.

Eric Hughes: Yeah. Yes, thanks, Dennis. About the question about adults, it was a small population of adults in the phase three study. Those efficacy results, you know, trended along with the pediatric results. You know, I would build on what Richard said. The efficacy in the pediatrics is particularly important because, you know, when you're thinking about a novel mechanism like this, a D1 receptor antagonist and the profile of safety, you know, particularly for the pediatric population, you know, there's no weight changes, there's no metabolic findings, there's no extrapyramidal signals that you would see with a D2 receptor antagonist. This is a product that can deliver a great efficacy profile. The more importantly, the safety for the pediatric population is something we're very proud to be part of, and I think that's the true value.

Operator: Thank you. Our next question comes from Jason Gerberry of Bank of America. Your line is now open. Please go ahead.

Speaker #2: Thank you. Our next question comes from Jason Gerberry of Bank of America. Your lines are open. Please go ahead.

Jason Gerberry: Good morning, guys. I've got a generics pipeline question. Teva has a settlement to launch generic YUVAQAZA nebulizer this year, but has chosen not to launch for business reasons. I'm wondering if the company would reconsider, given that that drug and dosage format are set to launch in the large IPF category. I think some analysts have that being a $4 to 5 billion indication. I think a license would give you sole source as a generic for pre-extended period of time. Just wondering what's going on there. Is it simply difficult to get a generic approval? Then as my follow-up, I noticed on your slides with the IL-15 for vitiligo, it's now listed as accelerated path 2031 time to BLA, versus before it was a range of 2031 to 2034.

Speaker #5: Good morning, guys. I've got a generics pipeline question. So Teva has a settlement to launch generic Kyvace and nebulizer this year, but has chosen not to launch for business reasons.

Speaker #4: And more importantly, on the extrapyramidal syndrome, there was no disorder or signal of motor events in this. And the reason I bring all this up is that they were very thorough studies in a placebo-controlled way that showed that there's no way there's no metabolic changes.

Speaker #5: But I'm wondering if the company would reconsider, given that that drug and dosage format are set to launch in the large IPF category. I think some analysts have that being at four to five billion dollar indication.

Speaker #4: There's no extrapyramidal syndrome symptoms of motor dysfunction that you see. This highly differentiates it from the D2 receptor antagonists that as a parent, I would not normally want to put a pediatric patient on a molecule like psychotic.

Speaker #5: And I think a license would give you sole source as a generic for pretty extended period of time. So just wondering what's going on there.

Speaker #5: Is it simply difficult to get a generic approval? And then as my follow-up, I noticed on your slides with the IL-15 for vitiligo. It's now listed as accelerated path 2031 time to BLA versus before it was a range of 31 to 34.

Richard Francis: Thank you, Eric. Thank you for your question, Dennis.

Speaker #4: It causes that sometimes permanent changes. So the profile of a D1 agonist is very I think conducive to this patient population in the side effect profiles very well tolerated.

Operator: Thank you. Our next question comes from Jason Gerberry of Bank of America. Your line's now open. Please go ahead.

Speaker #5: So have you had a regulatory interaction, or are you confirmed now on that accelerated path? Thanks.

Jason Gerberry: Are you confirmed now on that accelerated path? Thanks.

Jason Gerberry: Good morning, guys. I've got a generics pipeline question. Teva has a settlement to launch generic Yupelri nebulizer this year but has chosen not to launch for business reasons. I'm wondering if the company would reconsider given that that drug and dosage format are set to launch in the large IPF category. I think some analysts have that being a $4 to 5 billion indication. I think a license would give you sole source as a generic for pre-extended period of time. Just wondering what's going on there. Is it simply difficult to get a generic approval? Then as my follow-up, I noticed on your slides with the IL-15 for vitiligo, it's now listed as accelerated path 2031 time to BLA versus before it was a range of 2031 to 2034. Have you had a regulatory interaction?

Richard Francis: Hi, Jason. Thanks for the question. With regards to the generic pipeline, we don't tend to talk about our generic pipeline for competitive reasons as well as legal and others. I'm sorry, I can't really give you any more color to that, but I'll let Eric give you some color on the anti-IL-15.

Speaker #1: Hi, Jason. Thanks for the question. With regard to the generic pipeline, we don't tend to talk about our generic pipeline for competitive reasons. As well as legal and others.

Speaker #4: And more importantly, if you had an efficacious drug that the patient can actually stay on, that's the important thing. It doesn't matter what your efficacy is if the patient can't continue.

Speaker #1: So I'm sorry, I can't really give you any more color to that. But I'll let Eric give you some color on the NTR-15.

Speaker #4: In fact, their long-term one-year study in the open label extension after one year 66% of the patients stayed on drug. Compared to 20 or 23% of a normal antipsychotic treatment.

Eric Hughes: Yeah. Yeah. Thank you, Jason, for noticing. That was a change that we made for this announcement. You know, it's really driven by the fact that, you know, the team is executing. We have a very clear pathway in which we're going to design our phase two, phase three study. It's greater confidence in our execution at this point, but thank you for noticing.

Speaker #2: Yeah. Yeah. Thank you, Jason, for noticing. That was a change that we made for this announcement. It's really driven by the fact that the team is executing.

Speaker #2: We have a very clear pathway in which we're going to design our phase two, phase three studies. So it's greater confidence in our execution at this point.

Speaker #4: So the totality of this information, I think, is favorable. And I think that would be appreciated by regulators.

Speaker #1: Thank you, Eric. And thank you, Umar, for the question.

Speaker #2: But thank you for noticing. Thank you. Our next question comes from Umar Rahmat of Evercore ISI. Your lines are open. Please go ahead.

Speaker #2: Our next question comes from David Amsalem of Piper Sandler. Your line's now open. Please go ahead.

Jason Gerberry: Are you confirmed now on that accelerated path? Thanks.

Operator: Thank you. Our next question comes from Umer Raffat of Evercore ISI. Your line is now open. Please go ahead.

Speaker #3: Hi. So on Amalex, just piggybacking the last questions, do you think that there will need to be a REMS here regarding suicidal ideation or potentially other risks?

Richard Francis: Hi, Jason. Thanks for the question. With regards to the generic pipeline, we don't tend to talk about our generic pipeline for competitive reasons as well as legal and others. I'm sorry, I can't really give you any more color to that. I'll let Eric give you some color on the anti-IL-15.

Umer Raffat: Thank you guys for taking my question. I just thought I would spend a little bit of time on the Amylyx acquisition as well. Maybe first, unlike in a traditional pharma company where you sort of inherit a range of molecules which have their own expiries, I feel like the advantage you guys have is you get to decide how you wanna stack on the LOEs. I guess my first question is, knowing that this molecule is an old Merck drug, so there's probably not a composition patent and the method of use is also likely pegged to early 2030s because of some of the earliest work done in Tourette's and back in 2014, I guess my question is it really just orphan exclusivity? Would that effectively become an overlapping with AUSTEDO IP? That's number 1. Number 2, how.

Speaker #5: Thank you, guys, for taking my question. I just thought I would spend a little bit of time on the Emilex acquisition as well. Maybe first, unlike in a traditional pharma company where you sort of inherit a range of molecules which have their own expertise, I feel like the advantage you guys have is you get to decide how you want to stack on the LOEs.

Speaker #3: Just wanted to get some color on your thought process there. And then if you think about other indications, I believe Amalex had a program in restless leg syndrome I believe it was augmentation.

Eric Hughes: Yeah. Yeah. Thank you, Jason, for noticing. That was a change that we made for this announcement. You know, it's really driven by the fact that, you know, the team is executing. We have a very clear pathway in which we're gonna design our phase two, phase three study. It's greater confidence in our execution at this point. Thank you for noticing.

Speaker #5: And I guess my first question is, knowing that this molecule is an old Merck drug, so there's probably not a composition patent, and the method it uses also likely pegged to early 2030s because of some of the earliest work done on Tourette's back in 2014, I guess my question is, is it really just orphan exclusivity?

Speaker #3: So, can you talk about what you're planning to do there? And then lastly, for Richard, I think you've alluded to your M&A strategy in terms of building the neuroscience pipeline, looking at that more inorganically—either via M&A—whereas with immunology, you're going to focus more on organic development.

Speaker #5: And would that effectively become an overlapping with Austedo IPs? That's number one. And number two, how is there any preliminary FDA feedback on whether the duration of trials run so far is sufficient to satisfy them on suicide ideation and neuropsych disorders in general?

Operator: Thank you. Our next question comes from Umer Raffat of Evercore ISI.

Speaker #3: Is that still the case or are you taking more of a flexible approach as you think about those two verticals? Thank you.

Umer Raffat: Is there any preliminary FDA feedback on whether the duration of trials run so far is sufficient to satisfy them on suicide ideation and neuropsych disorders in general? Thank you very much.

Speaker #1: Thanks, David. Thanks for the question. I'll hand those two to Eric.

Umer Raffat: Thank you guys for taking my question. I just thought I would spend a little bit of time on the Amylyx acquisition as well. Maybe first, unlike in a traditional pharma company where you sort of inherit a range of molecules which have their own expiries, I feel like the advantage you guys have is you get to decide how you want to stack on the LOEs. I guess my first question is, knowing that, this molecule is an old Merck drug, so there's probably not a composition patent, and the method of use is also likely pegged to early 2030s because of some of the earliest work done in Tourette's and back in 2014, I guess my question is it really just orphan exclusivity, and would that effectively become an overlapping with Austedo IPs? That's number one. Number two, how

Speaker #4: Yeah. Thank you for the questions. So we don't see that this program having a REMS. Given the class of these drugs, you might expect suicidality, but that's typical of this class of medications.

Speaker #5: Thank you very much.

Richard Francis: Hi, Umer. Thanks for the questions. We expect ecopipam to be covered by orphan drug exclusivity. That gives us 7 years from the date of FDA approval. That sort of takes us into the 2033, 2034 timelines. In addition, Amylyx has-granted patent expiring in 2035 covering methods of treating Tourette's syndrome using Icatibant. This patent is likely to be eligible for patent term extension, and Amylyx has filed an additional application covering methods of treating Tourette's syndrome, which could expire in 2043, if granted. Going back to your comment, Umer, on AUSTEDO XR. We also believe, you know, without going into the detail, that we have a clear path of patent extension into the 2040s as well for the XR formulation.

Speaker #1: Hi, Umar. Thanks for the questions. So we expect eco pipeline to be covered by orphan drug exclusivity. So that gives us seven years from the date of FDA approval.

Speaker #4: We haven't made a final decision on the restless legs syndrome indications, but that's something we maintain in the future.

Speaker #1: So that sort of takes us into the 2033, 2034 timelines. But in addition, Emilex has granted patient expiring in 2035, covering methods of treating Tourette's syndrome using eco pipeline.

Speaker #1: I'd like to the question of M&A. You're right, David. We tend to talk about neuroscience inorganically. We tend to talk about immunology more organically, pipeline point of view.

Speaker #1: Now, this patent is likely to be eligible for patent term extension. And Emilex has filed an additional application covering methods of treating Tourette's syndrome, which could expire in 2043.

Speaker #1: That said, it always goes back to what is our goal at Teva to create a world-class biopharma company and to show we are creating the patient's shareholders.

Umer Raffat: Is there any preliminary FDA feedback on whether the duration of trials run so far is sufficient to satisfy them on suicide ideation and neuropsych disorders in general? Thank you very much.

Speaker #1: And it comes back to capital allocation and what is the most appropriate way to allocate capital. And so, while those themes are true, we still look and scan and think about how we can really add to this pivot-to-growth strategy on a continuous basis.

Speaker #1: If granted. So and then going back to your comment, Umar, on Astello XR, we also believe without going into the detail that we have a clear path of patent extension into the 2040s as well for the XR formulation.

Richard Francis: Hi, Umer. Thanks for the questions. We expect ecopipam to be covered by orphan drug exclusivity, that gives us 7 years from the date of FDA approval. That sort of takes us into the 2033, 2034 timelines. In addition, Amylyx has granted patent expiring in 2035 covering methods of treating Tourette syndrome using ecopipam. Now this patent is likely to be eligible for patent term extension, and Amylyx has filed an additional application covering methods of treating Tourette syndrome, which could expire in 2043 if granted. Going back to your comment, Umer, on Austedo, AUSTEDO XR, we also believe, you know, without going into the detail, that we have a clear path of patent extension into the 2040s as well for the XR formulation.

Speaker #1: Being very disciplined in what we do and how we do it, both internally and externally. When you have a pipeline internally, you do have to allocate capital.

Richard Francis: I think there, I think we feel pretty good. When it goes on to the FDA question, I'll hand that to Eric.

Speaker #1: So I think there, I think we feel pretty good. But when it goes on to the FDA question, I'll hand that to Eric.

Speaker #1: And we think about that as disciplined as we would externally. But broadly, remember correctly, and that fits with our strategy. Thank you.

Eric Hughes: Yes. Thank you, Umer Raffat, for the question. Yeah, there's a long development history and a very large data package that's associated with this molecule. It actually started with Schering-Plough, a company I used to work at, and then went on to Merck. Focusing on the Tourette's program. This program includes two well-controlled studies. Remember, there was a phase two study that showed on treatment responses and changes from baseline in the Yale score. There was a randomized withdraw phase three study that showed a great persistence compared to placebo, both statistically significant and powerful. That database from orphan disease is robust. It doesn't meet all requirements, but from an orphan disease, we're fairly confident that on top of the history of the compound is satisfactory for approval.

Speaker #2: Yes. Thank you, Umar, for the question. So yeah, there is a long development history and a very large data package that's associated with this molecule.

Speaker #2: It actually started with sharing plow company I used to work at. And then went on to Merck. But the focusing on the Tourette's program, this program includes two well-controlled studies.

Speaker #2: Thank you. Our next question comes from Chris Scott of New Morgan. Your line's now open. Please go ahead.

Speaker #4: I agree. Thanks so much for the question. Congrats on the acquisition. I was not going to comment on details, but any comments on how we should think about the RAMP post-approval here given unmet need?

Speaker #2: Remember, there was a phase two study that showed on-treatment responses and changes from baseline in the Yale score. And then there was a randomized withdrawal phase three study that showed a great persistence compared to placebo.

Speaker #4: I'm just trying to get my hands around dynamics that could slow RAMP or something that go relatively quickly just given the market as it exists today?

Speaker #2: Both statistically significant and powerful. And that database from Orphan Disease is robust. It doesn't meet all requirements, but from an orphan disease we're fairly confident that on top of the history of the compound is satisfactory for approval.

Speaker #4: Second one for me was just coming back to Esteto. And quarterly meeting dynamics. I totally understand what you're saying about 4Q, but can you just talk about the next few quarters?

Richard Francis: I think that, I think we feel pretty good. When it goes on to the FDA question, I'll hand that to Eric.

Speaker #4: It seems like they're there was some destocking that was expected this quarter that didn't occur. Is there anything you just need to keep in mind for 2Q and 3Q that could result in maybe growth rates that are below the underlying volumes, etc., or anything that'd be great?

Eric Hughes: I mean, to address your specific question about suicidality. The rates of suicidality were extremely low, just a handful. It was actually balanced within the placebo-controlled parts of these studies. More importantly, the studies were run very carefully with lots of measures on many different aspects, particularly suicidality, extrapyramidal syndrome. With this intense monitoring, there was actually no signal at all with regards to suicidality and any changes from baseline. More importantly, on this extrapyramidal syndrome, there was no disorder or signal of motor events in this.

Eric Hughes: Yes. Thank you, Umer, for the question. Yeah, there's a long development history and a very large data package that's associated with this molecule. It actually started with Schering-Plough, a company I used to work at, and then went on to Merck. Focusing on the Tourette's program, this program includes 2 well-controlled studies. Remember, there was a phase 2 study that showed on-treatment responses and changes from baseline in the Yale score, and then there was a randomized withdraw phase 3 study that showed a great persistence compared to placebo, both statistically significant and powerful. That database from orphan disease is robust. It doesn't meet all requirements, but from an orphan disease, we're fairly confident that on top of the history of the compound is satisfactory for approval.

Speaker #2: Now, according to your I mean, to address your specific question about suicidality, the rates of suicidality, we're extremely low. Just a handful. And it was actually balanced within the placebo-controlled parts of these studies.

Speaker #2: So and more importantly, the studies were run very carefully with lots of measures. On many different aspects, particularly suicidality, extrapyramidal syndrome, and with this intense monitoring, there was actually no signal at all with regards to suicidality and any changes from baseline.

Speaker #1: Hi, Chris. Thanks for the questions. So with regard to Amalex, I'm not giving peak cell guidance, but giving RAMP guidance. So I identified in your question is a significant unmet need in a patient population which is pediatric, which obviously gets a lot of focus and attention.

Speaker #2: And more importantly, on the extrapyramidal syndrome, there was no disorder or signal of motor events in this. And the reason I bring all this up is that there were very thorough studies in a placebo-controlled way that shows that there's no weight gain.

Speaker #1: That said, as is usual with Teva, we like to be very thoughtful and diligent and really understand what this could look like. Big unmet need.

Eric Hughes: The reason I bring all this up is that they were very thorough studies in a placebo-controlled way that shows that, you know, there's no weight gain, there's no metabolic changes, no extrapyramidal syndrome symptoms of motor dysfunction that you see. This highly differentiates it from the D2 receptor antagonist that, you know, as a parent, I would not normally want to put a pediatric patient on a molecule like an anti-psychotic that causes that, you know, sometimes permanent changes. The profile of a D1 agonist is very, I think, conducive to this patient population. The side effect profile is very well-tolerated. More importantly, if you had an efficacious drug that the patient can actually stay on, that's the important thing. It doesn't matter what your efficacy is if the patient can't continue.

Speaker #1: We are excited about it. So I don't want to be too coy but when it comes down to the things you've touched upon which are around patients getting on therapy, good access, appropriate access, those things we like to think through.

Eric Hughes: Now, according to your, I mean, to address your specific question about suicidality, the rates of suicidality were extremely low, just a handful, and it was actually balanced within the placebo-controlled parts of these studies. More importantly, the studies were run very carefully with lots of measures on many different aspects, particularly suicidality, extrapyramidal syndrome. With this intense monitoring, there was actually no signal at all with regards to suicidality and any changes from baseline, and more importantly, on this extrapyramidal syndrome. There was no disorder or signal of motor events in this.

Speaker #2: There's no metabolic changes. There's no extrapyramidal syndrome symptoms of motor dysfunction that you see. This highly differentiates it from the D2 receptor antagonists that as a parent, I would not normally want to put a pediatric patient on a molecule like an antipsychotic that causes that sometimes permanent changes.

Speaker #1: So I think you're excitement, which I sense within the question, is appropriate. But we'll need a bit more time, but we'll start to give you a real line of sight on that.

Speaker #1: With regard to Esteto, yeah, so we just didn't see the drawdown in Q1 that we expected. So how does that play out? Probably plays out a bit into Q2 and Q3.

Speaker #2: So the profile of a D1 agonist is very I think conducive to this patient population that side effect profiles very well tolerated. And more importantly, if you had an efficacious drug that the patient can actually stay on, that's the important thing.

Speaker #1: But then there's the fundamental question about Q4. So we just have to see how this goes. What I always go back to when I'm having these conversations internally is, "Okay, but what are we doing on the lead indicators, the TRX developments, all the things we're doing around our coverage, new prescribers, the depth of prescribing?" And all of those indicators are looking very much on track.

Speaker #2: It doesn't matter what your efficacy is if the patient can't continue. In fact, their long-term one-year study in the open-label extension at the one year 66% of the patients stayed on drug.

Eric Hughes: The reason I bring all this up is that they were very thorough studies in a placebo-controlled way that shows that, you know, there's no weight gain, there's no metabolic changes, there's no extrapyramidal syndrome, symptoms of motor dysfunction that you see. This highly differentiates it from the D2 receptor antagonist that, you know, as a parent, I would not normally want to put a pediatric patient on a molecule like an antipsychotic that causes that, you know, sometimes permanent changes. The profile of a D1 agonist is very, I think conducive to this patient population. The side effect profile is very well-tolerated. More importantly, if you have an efficacious drug that the patient can actually stay on, that's the important thing. It doesn't matter what your efficacy is if the patient can't continue.

Eric Hughes: In fact, their long-term one-year study in the open-label extension at the one year, 66% of the patients stayed on drug, compared to, you know, 20% or 23% of a normal antipsychotic treatment. The totality of this information, I think is favorable, and I think that would be appreciated by regulators.

Speaker #1: So I feel very good about that because my line of sight is 3 billion plus. It's not so much the short term. I feel we have that line of sight clearly laid out.

Speaker #2: Compared to 20 or 23% of a normal antipsychotic treatment. So the totality of this information, I think, is favorable. And I think that would be appreciated by regulators.

Speaker #1: That's how I think about how that plays into Q2 and Q3. Just keep those in mind, underline indicators are good, destocking, let's see how that plays out in Q2.

Richard Francis: Thank you, Eric, and thank you, Uma, for the question.

Speaker #1: Thank you, Eric. And thank you, Umar, for the question.

Operator: Thank you. Our next question comes from David Amsellem of Piper Sandler. Your line is now open. Please go ahead.

Speaker #5: Thank you. Our next question comes from David Amsellem of Piper Sandler. Your lines are open. Please go ahead.

Speaker #1: And it'll give you some probably more indications as we get that data in Q2 ourselves to say, "This is how we think it could trend for the rest of the year." So I hope that helps, Chris.

David Amsellem: Hey, a couple from me. On Amylyx, just piggybacking the last questions. Do you think that there will need to be a REMS here regarding suicidal ideation or potentially other risks? Just wanted to get some color on your thought process there. As you think about other indications, I believe Amylyx had a program in restless legs syndrome. I believe there was augmentation. Can you talk about what you're planning to do there? Lastly for Richard, I think you've alluded to, in terms of M&A strategy, in terms of building the neuroscience pipeline, looking at that more inorganically, either via M&A, whereas immunology, you're gonna focus more on organic development.

Speaker #6: Hey, a couple for me. So on Emilex, just piggybacking the last questions, do you think that there will need to be a REMS here regarding suicidal ideation or potentially other risks?

Speaker #1: Thanks for the question.

Speaker #2: Thank you. Our next question comes from Ash Verma of UBS. Your line's now open. Please go ahead.

Eric Hughes: In fact, their long-term 1-year study in the open-label extension at the 1 year, 66% of the patients stayed on drug, compared to, you know, 20% or 23% of a normal antipsychotic treatment. The totality of this information I think is favorable, and I think that would be appreciated by regulators.

Speaker #5: Hi, guys. Morning. For screening me in here. So just in terms of the 700 million payout for BD that you're doing in your timeline to get investment with that, is that something that can still be achieved this year?

Speaker #6: Just wanted to get some color on your thought process there. And then as you think about other indications, I believe Emilex had a program in restless leg syndrome I believe it was augmentation.

Speaker #6: So can you talk about what you're planning to do there? And then lastly, for Richard, I think you've alluded to in terms of M&A strategy, in terms of building the neuroscience pipeline, looking at that more inorganically, either via M&A whereas immunology, you're going to focus more on organic development.

Speaker #5: And just as a follow-up, the geopolitical developments in the Middle East, is that creating any kind of an impact on your shipping or freight cost or any challenges in terms of getting materials in and out of different geographies?

Richard Francis: Thank you, Eric, and thank you, Umer, for the question.

Operator: Thank you. Our next question comes from David Amsellem of Piper Sandler. Your line is now open. Please go ahead.

Speaker #5: Thanks.

Speaker #1: Hi, Ash. Thanks for the questions. I'll hand both of those. Over to Ellie.

David Amsellem: Hey, a couple from me. On Amylyx, just piggybacking the last questions, do you think that there will need to be a REMS here regarding suicidal ideation or potentially other risks? Just wanted to get some color on your thought process there. As you, as you think about other indications, I believe Amylyx had a program in restless legs syndrome. I believe it was augmentation. Can you talk about what you're planning to do there? Lastly, for Richard, I think you've alluded to in terms of M&A strategy, in terms of building the neuroscience pipeline, looking at that more inorganically either via M&A, whereas immunology, you're gonna focus more on organic development.

David Amsellem: Is that still the case, or are you taking more of a flexible approach as you think about those two verticals? Thank you.

Speaker #6: Is that still the case? Or are you taking more of a flexible approach as you think about those two verticals? Thank you.

Speaker #3: Ash, thanks for the question. So first of all, nothing changed in terms of trajectory to reach investor grade this year. The $700 million, actually, it's a number that will flow as expected from the nation of the deal to the IP R&D line.

Richard Francis: Thanks, David. Thanks for the question. I'll hand the first two to Eric.

Speaker #1: Thanks, David. Thanks for the question. I'll hand the first two to Eric.

Eric Hughes: Yeah, thank you for the question. We don't see this program having a REMS. You know, given the class of these drugs, you might expect a black box for suicidality, but that's typical of this class of medications. You know, we haven't made a final decision on the restless legs syndrome indications, but that's something we can entertain in the future.

Speaker #2: Yeah. Thank you for the question, Joe. So we don't see that this program having a REMS. Given the class of these drugs, you might expect a black box for suicidality, but that's typical of this class of medications.

Speaker #3: As well, from our balance sheet from cash perspective, but according to our trajectory on going to be done this year, and keep generating cash, we don't see this one impacting on all those metrics that we need to achieve to become investor grade.

Speaker #2: We haven't made a final decision on the restless legs syndrome indications, but that's something we can entertain in the future.

Richard Francis: Then to the question of M&A. You're right, David. We tend to talk about neuroscience inorganically, and we tend to talk about immunology more organically from a pipeline point of view. That said, it always goes back to what is our goal at Teva, to create a world-class biopharma company and to make sure we are creating value for patients and shareholders. It comes back to capital allocation and what is the most appropriate way to allocate capital. While those themes are true, we still look and scour and think about how we can really add to this Pivot to Growth strategy on a continuous basis, being very disciplined in what we do and how we do it, both internally and externally.

Speaker #3: And on the other end, look, we're monitoring very closely the situation on the cough link with Iran and in the Middle East. And I can tell you that there was a kind of few elements I call it nominal in order to transportation and some energies, but these ones are very minimal and we're able to monitor it and everything.

Speaker #1: And then to the question of M&A, you're right, David. We tend to talk about neuroscience inorganically. And we tend to talk about immunology more organically from a pipeline point of view.

Speaker #1: That said, it always goes back to what is our goal at Teva to create a world-class biopharma company and to make sure we are creating value for patients and shareholders.

David Amsellem: Is that still the case, or are you taking more of a flexible approach as you think about those two verticals? Thank you.

Speaker #1: And it comes back to capital allocation and what is the most appropriate way to allocate capital. And so while those themes are true, we still look and scour and think about how we can really add to this pivot to growth strategy on a continuous basis.

Speaker #3: But considering our cost base for 2026 is already in the range in our guidance.

Richard Francis: Thanks, David. Thanks for the question. I'll hand the first two to Eric.

Speaker #1: Excellent. Thanks, Ash. Next question. Final question, I believe.

Eric Hughes: Yeah. Thank you for the question, David. We don't see this program having a REMS. You know, given the class of these drugs, you might expect a black box for suicidality, but that's typical of this class of medications. You know, we haven't made a final decision on the restless legs syndrome indications, but that's something we can entertain in the future.

Speaker #2: Thank you. Our final question for today comes from Les Soluski of Trust. Your line's now open. Please go ahead.

Speaker #1: Being very disciplined in what we do and how we do it, both internally and externally. When you have a pipeline internally, you do have to allocate capital.

Richard Francis: You know, when you have a pipeline internally, you do have to allocate capital, and we think about that as disciplined as we would externally. Broadly, you remember correctly and that fits with our strategy. Thank you.

Speaker #1: And we think about that as disciplined as we would externally. But broadly, you remember correctly, and that fits with our strategy. Thank you.

Speaker #6: Thank you for getting me in, guys. Just one for me on the IL15. So what's your level for the upcoming rebound and later in Celia given the Sanofi and Amgen readouts?

Richard Francis: The question of M&A. You're right, David, we tend to talk about neuroscience inorganically, and we tend to talk about immunology more organically from a pipeline point of view. That said, it always goes back to what is our goal at Teva, to create a world-class biopharma company and to make sure we are creating value for patients and shareholders. It comes back to capital allocation and what is the most appropriate way to allocate capital. While those themes are true, we still look and scour and think about how we can really add to this Pivot to Growth strategy on a continuous basis, being very disciplined in what we do and how we do it, both internally and externally.

Operator: Thank you. Our next question comes from Christopher Schott of J.P. Morgan. Your line's now open. Please go ahead.

Speaker #6: And then second on that is how competitive do you think the data versus what we've seen from the dual division approach of the IL2, IL15?

Speaker #5: Thank you. Our next question comes from Chris Schott of JP Morgan. Your lines are open. Please go ahead.

Christopher Schott: Great. Thanks so much for the questions, and congrats on the acquisition. I just had two here. Maybe first on the Amylyx acquisition. I know you're not gonna comment on peak sales. Any comments on how we should think about the ramp post-approval here, given unmet need? I'm just trying to get my hands around are there payer dynamics that could result in a slower ramp, or is this something that could go relatively quickly just given the market as it exists today? Second one for me was just coming back to AUSTEDO and kind of quarterly gating dynamics. Totally understand what you're saying about Q4. Can you just talk about the next few quarters? It seems like there was some destocking that was expected this quarter that maybe didn't fully occur.

Speaker #2: I agree. Thanks so much for the questions. And congrats on the acquisition. I just had two here. Maybe first on the Emilex acquisition. I know you're not going to comment on peak sales, but any comments on how we should think about the ramp post-approval here given unmet need?

Speaker #6: Thank you.

Speaker #1: Thanks, Les. Thanks for the question. I'm going to hand that straight to Eric.

Speaker #4: Yeah. Thanks for the question. So the IL15 program, I think the target is becoming more and more validated at this point. I think that the bar here is to look at what phase two results and phase three results have been most recently for the oral JAKs.

Speaker #2: I'm just trying to get my hands around. Are there payer dynamics that could result in a slower ramp, or is this something that goes relatively quickly just given the market as it exists today?

Speaker #4: Those are systemic treatments at this point. And I think the most recent data is a good target. Remember, we're coming out with 24-week data, always compare the times because the endpoints that the disease matures on treatment over time.

Speaker #2: Second one for me was just coming back to Esteto. And kind of quarterly dating dynamics totally understand what you're saying about 4Q, but can you just talk about the next few quarters?

Richard Francis: You know, when you have a pipeline internally, you do have to allocate capital, and we think about that as disciplined as you would externally. Broadly, you remember correctly, and that fits with our strategy. Thank you.

Speaker #2: It seems like they're there was some destocking that was expected this quarter that maybe didn't fully occur. Is there anything we should just be keeping in mind for 2Q and 3Q that could result in maybe growth rates that are below the underlying volumes, etc.?

Christopher Schott: Is there anything we should just be keeping in mind for Q2 and Q3 that could result in maybe growth rates that are below the underlying volumes, et cetera? Just saying anything there would be great.

Speaker #4: So we're going to be showing you 24-week data. So I choose that probably from the phase two and the phase three of the results.

Operator: Thank you. Our next question comes from Chris Schott of JP Morgan. Your line's now open. Please go ahead.

Speaker #4: And I think our program has to be competitive and also have the chance to be a systemic therapy that's easily taken every quarter as a subcutaneous shot.

Speaker #2: Anything there would be great.

Richard Francis: Hi, Chris. Yeah, thanks for the questions. With regard to Amylyx, I'm not giving peak sale guidance but giving ramp-up guidance. Look, I think we go back to, I think what you've identified in your question is a significant unmet need in a patient population, which is pediatric, which obviously gets a lot of focus and attention. That said, as usual with Teva, we like to be very thoughtful and diligent and really understand what this could look like. There is a big unmet need. We are excited about it, I don't want to be too coy. When it comes down to the things you've touched upon, which are around patients getting onto therapy, good access, appropriate access, those are the things we like to think through.

Chris Schott: Great. Thanks so much for the questions and congrats on the acquisition. I just had two here. Maybe first on the Amylyx acquisition. I know you're not gonna comment on peak sales, but any comments on how we should think about the ramp post-approval here, given unmet need? I'm just trying to get my hands around, are there payer dynamics that could result in a slower ramp, or is this something that could go relatively quickly just given the market as it exists today? Second one for me was just coming back to Austedo and kind of quarterly dating dynamics. Totally understand what you're saying about Q4. Can you just talk about the next few quarters? It seems like there was some destocking that was expected this quarter that maybe didn't fully occur.

Speaker #4: Hi, Chris. Yeah. Thanks for the questions. So with regard to Emilex and not giving peak sale guidance, but giving ramp-up guidance, so I look, I think we go back to I think what you've identified in your question is a significant unmet need in a patient population which is pediatric, which obviously gets a lot of folks' attention.

Speaker #4: So it really is differentiating profile from what's being developed now.

Speaker #1: Thanks, Eric. I think that concludes Ernie's call. Thank you for all your questions and interest in Teva. Looking forward to giving you an update again in Q2.

Speaker #1: Thank you very much. Bye-bye.

Speaker #4: That said, as is usual with Teva, we like to be very thoughtful and diligent and really understand what this could look like. There is a big unmet need.

Speaker #4: We are excited about it. So I don't want to be too coy but when it comes down to the things you've touched upon which are around patients getting onto therapy, good access, appropriate access, those are the things we like to think through.

Chris Schott: Is there anything we should just be keeping in mind for Q2 and Q3, that could result in maybe growth rates that are below the underlying volumes, et cetera? Anything there would be great.

Richard Francis: I think your excitement, which I sense within the question, is appropriate, but we'll need a bit more time before we start to sort of give you a real line of sight on that. With regard to AUSTEDO, we just didn't see the drawdown in Q1 that we expected. How does that play out? Probably plays out a bit into Q2 and Q3, but then there's the fundamental question about Q4. You know, we just have to see how this goes. What I always go back to when I'm having these conversations internally is, okay, but what are we doing on the leading indicators, the TRX, the milligrams, all the things we're doing around our coverage, new prescribers, the depth of prescribing?

Speaker #4: So I think your excitement, which I sense within the question, is appropriate. But we'll need a bit more time before we start to sort of give you a real line of sight on that.

Richard Francis: Hi, Chris. Thanks for the questions. With regard to Amylyx, I'm not giving peak sale guidance but giving ramp-up guidance. I think we go back to, I think what you've identified in your question is a significant unmet need in a patient population, which is pediatric, which obviously gets a lot of focus and attention. That said, as usual with Teva, we like to be very thoughtful and diligent and really understand what this could look like. There is a big unmet need. We are excited about it, so I don't want to be too coy. When it comes down to the things you've touched upon, which are around patients getting onto therapy, good access, appropriate access, those are the things we like to think through.

Speaker #4: With regard to Esteto, yeah, so we just didn't see the drawdown in Q1 that we expected. So how does that play out? Probably plays out a bit into Q2 and Q3.

Speaker #4: But then there's the fundamental question about Q4. So we just have to see how this goes. What I always go back to when I'm having these conversations internally is, okay, but what are we doing on the leading indicators, the TRX, the milligrams?

Speaker #4: All the things we're doing around our coverage, new prescribers, the depth of prescribing. And all of those indicators are looking very much on track.

Richard Francis: All of those indicators are looking very much on track, so I feel very good about that because, you know, my line of sight is the $3 billion plus. It's not so much the short term. I feel we have that line of sight clearly laid out. That's how I think about how does that play out into Q2 and Q3. Just keep those in mind. Underlying indicators are good. Destocking, let's see how that plays out in Q2. We'll give you some probably more indications as we get that data in Q2 ourselves to say, this is how we think it could trend for the rest of the year. Hope that helps, Chris. Thanks for the question.

Speaker #4: So I feel very good about that because my line of sight is the 3 billion plus. It's not so much the short term. I feel we have that line of sight clearly laid out.

Richard Francis: I think your excitement, which I sense within the question, is appropriate, but we'll need a bit more time before we start to give you a real line of sight on that. With regard to Austedo, we just didn't see the drawdown in Q1 that we expected. How does that play out? Probably plays out a bit into Q2 and Q3, but then there's the fundamental question about Q4. You know, we just have to see how this goes. What I always go back to when I'm having these conversations internally is, okay, but what are we doing on the leading indicators, the TRx, the milligrams, all the things we're doing around our coverage, new prescribers, the depth of prescribing?

Speaker #4: But that's how I think about it. How does that play out into Q2 and Q3? Just keep those in mind, underline indicators are good, destocking, let's see how that plays out in Q2.

Speaker #4: And then we'll give you some probably more indications as we get that data in Q2 ourselves to say, this is how we think it could trend for the rest of the year.

Speaker #4: So I hope that helps, Chris. Thanks for the question.

Operator: Thank you. Our next question comes from Ashwani Verma of UBS. Your line's now open. Please go ahead.

Speaker #5: Thank you. Our next question comes from Ash Verma of UBS. Your line's now open. Please go ahead.

Ashwani Verma: Hey, guys. Good morning. Thanks for squeezing me in here. Just in terms of the $700 million payout for BD that you're doing, how does that change your timeline to get to investment grade debt? Is that something that can still be achieved this year? Just as a follow-up, with the geopolitical developments in the Middle East, is that creating any kind of impact on your shipping or freight cost or any challenges in terms of getting materials in and out of different geographies? Thanks.

Speaker #6: Hi, guys. Good morning. Thanks for squeezing me in here. So just in terms of the 700 million payout for BD that you're doing how does that change your timeline to get to investment grade net?

Richard Francis: All of those indicators are looking very much on track, so I feel very good about that because, you know, my line of sight is the $3 billion plus. It's not so much the short term. I feel we have that line of sight clearly laid out. That's how I think about it. How does that play out into Q2 and Q3? Just keep those in mind. Underlying indicators are good. Destocking, let's see how that plays out in Q2. Then we'll give you some probably more indications as we get that data in Q2 ourselves to say, This is how we think it could trend for the rest of the year. I hope that helps, Chris. Thanks for the question.

Speaker #6: Is that something that can still be achieved this year? And just as a follow-up, with the geopolitical developments in the Middle East, is that creating any kind of an impact on your shipping or freight cost or any challenges in terms of getting materials in and out of different geographies?

Speaker #6: Thanks.

Richard Francis: Hi, Ash. Thanks for the questions. I'll hand both of those over to Eli.

Speaker #1: Hi, Ash. Thanks for the questions. I'll hand both of those. Over to Ellie.

Eli Kalif: Ash, thanks for the question. First of all, nothing going to change in terms of trajectory to reach investor grade this year. The $700 million actually it's a number that will flow as expected from the nature of the deal to the IP R&D line as well from our balance sheet from cash perspective. According to our trajectory on growing EBITDA this year and keep generating cash, we don't see this one impacting on all those metrics that we need to achieve to become investor grade. On the other element, look, we are monitoring very closely the situation on the conflict with Iran and in the Middle East.

Speaker #4: Ash, thanks for the question. So first of all, nothing going to change in terms of trajectory to reach investor grade this year. The 700 million actually, it's a number that will flow as expected from the nature of the deal to the IP R&D line.

Operator: Thank you. Our next question comes from Ashwani Verma of UBS. Your line's now open. Please go ahead.

Ashwani Verma: Hey, guys. Good morning. Thanks for squeezing me in here. Just in terms of the $700 million payout for BD that you're doing, how does that change your timeline to get to investment grade debt? Is that something that can still be achieved this year? Just as a follow-up, with the geopolitical developments in the Middle East, is that creating any kind of impact on your shipping or freight cost or any challenges in terms of getting materials in and out of different geographies? Thanks.

Speaker #4: As well, from our balance sheet, from cash perspective, but according to our trajectory on growing EBITDA this year, and keep generating cash, we don't see this one impacting on all those metrics that we need to achieve to become investor grade.

Speaker #4: On the other element, look, we are monitoring very closely the situation on the cough link with Iran and in the Middle East. And I can tell you that there was a kind of a few elements I call it nominal increase on some spends related to transportation and some energies, but these ones are very minimal and we're able to monitor it and everything that consider in our cost base for 2026 is already in the range in our guidance.

Eli Kalif: I can tell you that there was a kind of a few element, I call it nominal, increase on some spends related to transportation and some energies, but this one are very minimal, and we're able to monitor it. Everything that considering our cost base for 2026 is already in the range in our guidance.

Richard Francis: Hi, Ash. Thanks for the questions. I will hand both of those over to Eli.

Eric Hughes: Ash, thanks for the question. First of all, nothing's going to change in terms of trajectory to reach

Eli Kalif: That's a great this year. The $700 million, actually it's a number that will flow, as expected, from the nature of the deal, to the IP R&D line, as well, from our balance sheet from cash perspective. According to our trajectory on growing EBITDA this year and keep generating cash, we don't see this one impacting on all those metrics that we need to achieve to become investor-grade. On the other element, look, we are monitoring very closely the situation on the conflict with Iran and in the Middle East. I can tell you that there was a kind of a few, an element, I call it nominal, increase on some spends related to transportation and some energies.

Richard Francis: Thanks, Eli. Thanks, Ash. Next question. I think final question, I believe.

Speaker #1: Thanks, Ellie. Thanks, Ash. Next question. I think final question, I believe.

Operator: Thank you. Our final question for today comes from Les Funtleyder of Truist.

Speaker #5: Thank you. Our final question for today comes from Les Sulewski of Tourist. Your line's now open. Please go ahead.

Les Funtleyder: Thank you for getting me in, guys. Just one for me on the IL-15. What is your confidence level for the upcoming anti-IL-15 readout, and later in celiac, given the Sanofi and Amgen readouts? Second on that is how competitive do you think the data has to be versus what we've seen from the dual inhibition approach of the IL-2, IL-15? Thank you.

Speaker #7: Thank you for getting me in, guys. Just one for me on the IL15. So what's your confidence level for the upcoming weekly goal readout and later in Celia given the Sanofi and Amgen readouts?

Speaker #7: And then second on that is how competitive do you think the data has to be versus what we've seen from the dual inhibition approach of the IL2/IL15?

Speaker #7: Thank you.

Richard Francis: Thanks, Les. Thanks for the question. I'm gonna hand that straight to Eric.

Speaker #1: Thanks, Les. Thanks for the question. I'm going to hand that straight to Eric.

Eric Hughes: Yeah. Thank you for the question. The IL-15 program, you know, I think the target is becoming more and more validated at this point. I think that the bar here is to look at what phase II results and phase III results have been, you know, most recently for the oral JAKs. You know, those are systemic treatments at this point. I think the most recent data is a good target. Remember, we're coming out with 24-week data. Always compare the times because the endpoint, the disease matures on treatment over time, so we're gonna be showing you 24-week data.

Speaker #2: Yeah. Thank you for the question. So the IL15 program, I think the target is becoming more and more validated at this point. I think that the bar here is to look at what phase two results and phase three results have been most recently for the oral JAKs.

Eli Kalif: This one are very minimal, and we're able to monitor it. Everything that considering our cost base for 2026 is already in the range in our guidance.

Richard Francis: Thanks, Eli Kalif. Thanks, Ashwani Verma. Next question. I think final question, I believe.

Speaker #2: Those are systemic treatments at this point. And I think the most recent data is a good target. Remember, we're coming out with 24-week data.

Operator: Thank you. Our final question for today comes from Les Funtleyder of Truist. Your line's now open. Please go ahead.

Les Funtleyder: Thank you for getting me in, guys. Just one for me on the IL-15. What's your confidence level for the upcoming vitiligo readout, and later in celiac disease, given the Sanofi and Amgen readouts? Second on that is how competitive do you think the data has to be versus what we've seen from the dual inhibition approach of the IL-2, IL-15? Thank you.

Speaker #2: Always compare the times because the endpoints the disease matures on treatment over time. So we're going to be showing you 24-week data. So I choose that probably from the phase two and the phase three of the results.

Eric Hughes: I choose that probably from the phase two and the phase three of the results, and I think our program has the chance to be competitive and also have the chance to be a systemic therapy that's easily taken every quarter as a subcutaneous shot. That really is a differentiating profile from what's being developed now.

Speaker #2: And I think our program has the chance to be competitive. And also have the chance to be a systemic therapy that's easily taken every quarter as a subcutaneous shot.

Speaker #2: So that really is a differentiating profile from what's being developed now.

Richard Francis: Thanks, Les. Thanks for the question. I'm gonna hand that straight to Eric.

Eric Hughes: Yeah. Thank you for the question. The IL-15 program, you know, I think the target is becoming more and more validated at this point. I think that the bar here is to look at what phase 2 results and phase 3 results have been, you know, most recently for the oral JAKs. You know, those are systemic treatments at this point. I think the most recent data is a good target. Remember, we're coming out with 24-week data. Always compare the times because the endpoint, the disease matures on treatment over time, so we're gonna be showing you 24-week data.

Richard Francis: Thanks, Eric. I think that concludes our earnings call. Thank you for all your questions and interest in Teva. Look forward to giving you an update again in Q2. Thank you very much. Bye-bye.

Speaker #1: Thanks, Eric. I think that concludes our earnings call. Thank you for all your questions and interest in Teva. Look forward to giving you an update again in Q2.

Speaker #1: Thank you very much. Bye-bye.

Operator: This concludes today's conference call. Thank you all for joining. You may now disconnect your lines.

Eric Hughes: I choose that probably from the phase two and the phase three of the results, and I think our program has the chance to be competitive, and also has the chance to be a systemic therapy that's easily taken every quarter as a subcutaneous shot. That really is a differentiating profile from what's being developed now.

Richard Francis: Thanks, Eric. I think that concludes our earnings call. Thank you for all your questions and interest in Teva. Look forward to giving you an update again in Q2. Thank you very much. Bye-bye.

Operator: This concludes today's conference call. Thank you all for joining. You may now disconnect your lines.