Teva Pharmaceutical Industries Limited
PART I
ITEM 1. BUSINESS
Business Overview
We are a biopharmaceutical company, enabled by a world-class generics business. For over 120 years, our commitment to bettering health has never wavered. From innovating in the fields of neuroscience and immunology to providing complex generic medicines, biosimilars and pharmacy brands worldwide, we are dedicated to addressing patients’ needs, now and in the future.
We operate worldwide, with headquarters in Israel and a significant presence in the United States, Europe and many other markets around the world. Today, our global network of capabilities consists of approximately 34,000 employees across 57 markets.
Teva was incorporated in Israel on February 13, 1944 and is the successor to a number of Israeli corporations, the oldest of which was established in 1901.
Our Business Segments
We operate our business through three segments: United States, Europe and International Markets. Each business segment manages our entire product portfolio in its region, including generics, which includes biosimilars and over-the-counter (“OTC”) products, as well as innovative medicines. This structure enables strong alignment and integration between operations, commercial regions, R&D, and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas.
In addition to these three segments, we have other activities, primarily the sale of active pharmaceutical ingredients (“API”) to third parties, certain contract manufacturing services, and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis.
For information regarding our major customers, see note 19 to our consolidated financial statements.
Below is an overview of our three business segments:
United States Segment
We are one of the leading generic pharmaceutical companies in the United States. We market more than 350 generic prescription products in more than 1,100 dosage strengths, packaging sizes and forms, including oral solid dosage forms, injectable products, inhaled products, liquids, transdermal patches, ointments and creams. Most of our generic sales in the United States are made to retail drug chains, mail order distributors and wholesalers.
Our innovative medicines portfolio in the United States includes our core therapeutic area of central nervous system (“CNS”), with a strong emphasis on neurodegenerative disorders, movement disorders, migraine, neuropsychiatry, and multiple sclerosis (“MS”). We also have innovative medicines in respiratory, oncology and selected other areas.
Our CNS portfolio includes AUSTEDO® and AUSTEDO XR® (deutetrabenazine) tablets for the treatment of neurodegenerative and movement disorders – chorea associated with Huntington’s disease and tardive dyskinesia, AJOVY® (fremanezumab-vfrm) injection for the preventive treatment of migraine in adults and children and adolescent patients aged 6 to 17 years, UZEDY® (risperidone) extended-release injectable suspension for the treatment of schizophrenia in adults and bipolar 1 disorder (BD-1) in adults, and COPAXONE® (glatiramer acetate) injection for the treatment of relapsing forms of MS.
3
Table of Contents
We maintain a presence in oncology, including innovative, generic and biosimilar medicines, such as TRUXIMA® (rituximab-abbs) injection for intravenous use, our first oncology biosimilar product in the United States for the treatment of Non-Hodgkin’s Lymphoma (“NHL”) and Chronic Lymphocytic Leukemia (“CLL”), and BENDEKA® (bendamustine HCl), which is a liquid, low-volume (50 mL) and short-time 10-minute infusion formulation of bendamustine hydrochloride for the treatment of CLL and indolent B-cell NHL, that we licensed from Eagle Pharmaceuticals, Inc. (“Eagle”).
We maintain a presence in the respiratory business by delivering a range of medicines for the treatment of asthma and chronic obstructive pulmonary disease (“COPD”).
Anda, our distribution business in the United States, distributes generic, biosimilar and innovative medicines, and OTC pharmaceutical products from Teva and various third-party manufacturers, to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States. Anda is able to compete in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.
Europe Segment
Our Europe segment includes the European Union, the United Kingdom and certain other European countries.
Our generics business (including OTC and biosimilars) makes us one of the leading pharmaceutical companies in Europe. We are not substantially dependent on any single country in Europe for our total generic European revenues, which could be affected by pricing reforms or changes in regulations and public policy.
Although the European markets are diverse and highly fragmented, they share many characteristics that allow us to leverage our pan-European presence and broad portfolio.
Our OTC portfolio in Europe includes global brands such as SUDOCREM® as well as local and regional brands such as NasenDuo®, DICLOX FORTE®, OLFEN® Max and FLEGAMINA®.
Our innovative medicines portfolio in Europe focuses on CNS (including migraine) and respiratory therapeutic areas. Our leading products in Europe are AJOVY and COPAXONE. AJOVY was granted EU marketing authorization in 2019 and, as of December 31, 2025, we have launched AJOVY in most European countries. COPAXONE continues to be among the major products for the treatment of MS, although alternative therapies to glatiramer acetate products have been introduced to various European markets. In line with our Pivot to Growth strategy, we are constantly evaluating and optimizing our products portfolio, including through the sale of certain product rights in our Europe segment.
International Markets Segment
Our International Markets segment includes all countries in which we operate other than those in our United States and Europe segments. The International Markets segment covers a substantial portion of the global pharmaceutical industry, including more than 35 countries.
The countries in our International Markets segment include highly regulated, mainly generic markets, such as Canada and Israel, and branded generics-oriented markets, such as Russia and certain Latin America markets. Each market’s strategy is built upon differentiation and addressing the unmet needs of that market. Our integrated sales force enables us to extract synergies across our branded generic, OTC, biosimilars and innovative medicines product offerings and across various channels (e.g., retail, institutional).
On March 31, 2025, we divested our Teva-Takeda business venture in Japan, which included generic products and legacy products. Since the establishment of the business venture and until the completion of its sale,
4
Table of Contents
Teva held 51% of the outstanding common stock of the business venture. On March 31, 2025, we deconsolidated the business venture from our financial statements. For additional information, see note 2 and note 22 to our consolidated financial statements.
Our innovative medicines portfolio in our International Markets segment focuses on three main areas: CNS (including migraine), respiratory and oncology. We launched AJOVY in certain countries within our International Markets segment, including in Canada, Japan, Australia, Israel, South Korea, Brazil and others. AUSTEDO was launched in China and Israel during 2021 and in Brazil in 2022. In April 2025, AUSTEDO received marketing authorization in South Korea.
Pivot to Growth Strategy
In 2025, we continued to execute on the four key pillars of our “Pivot to Growth” strategy, announced in May 2023. As part of this strategy, in 2025, we entered the strategy’s “Accelerate Growth” phase, during which we focus on growing our innovative portfolio, aligning capital allocation to invest in activities we expect to have the highest value, and modernizing our organization and operations to drive both efficiency and cost savings:
| • | On the first pillar, delivering on our growth engines, we continued to show strong performance of our key innovative products, AUSTEDO, AJOVY, and UZEDY, as well as on our recently launched biosimilars SELARSDITM (ustekinumab-aekn) injection and EPYSQLI® (eculizumab-aagh), and the progress we made on our late-stage pipeline of proposed biosimilars to Prolia®, Xgeva®, Eylea®, and Simponi® and Simponi Aria® which were submitted for regulatory review in the U.S. and the EU; |
| • | On the second pillar, stepping up innovation through delivering on our late-stage innovative pipeline, we continued to accelerate the development of certain key pipeline assets, including with the filing of a New Drug Application (“NDA”) for olanzapine LAI in December 2025. Our investigational therapy emrusolmin (TEV-56286) received U.S. FDA Fast Track designation for the treatment of Multiple System Atrophy (“MSA”); Phase 3 programs for duvakitug (anti-TL1A) in ulcerative colitis and Crohn’s disease were initiated by Sanofi and Teva in October 2025; and by the end of 2025, we achieved the targeted initial enrollment levels in the adult and pediatric populations for DARI’s (Dual-action Asthma Rescue Inhaler) Phase 3 trial; |
| • | On the third pillar, sustaining our generic medicines powerhouse, we remain focused on strengthening our world-class global generics business with a focused portfolio of high-value complex generics and biosimilars, a robust pipeline, and an integrated global manufacturing and commercial footprint. Our recently launched biosimilars continue to grow, as well as our legacy biosimilar portfolio; and |
| • | On the fourth pillar, focusing our business to accelerate growth, we are actively transforming and modernizing our business through Teva Transformation programs. On May 7, 2025, we announced that these programs are expected to generate ~$700 million of net savings through 2027. We have achieved our targeted savings for 2025. |
Artificial Intelligence Initiatives
We are committed to integrating, where appropriate, artificial intelligence (“AI”) technologies in our operations, in an effort to deliver innovative solutions to our customers, patients and stakeholders. Our initiatives include leveraging machine learning and generative AI to optimize internal processes and operations, strengthen risk management, and support product research and development. We selectively apply AI across our value chain where it can drive meaningful value, including for clinical trial planning and management, research and development and drug discovery, manufacturing and supply chain automation, financial forecasting, and customer engagement. These efforts are designed to reduce operational complexity and costs, and unlock new growth opportunities while maintaining a strong focus on responsible and ethical AI practices.
5
Table of Contents
Our Product Portfolio and Business Offering
Our product and service portfolio includes generic medicines, biosimilar medicines, innovative medicines, OTC products, a distribution business, API and contract manufacturing. Each region manages the entire range of products and services offered in its area, and our generics, innovative, biosimilars and OTC franchise units optimize our pipeline and product lifecycle across therapeutic areas. In most markets in which we operate, we use an integrated and comprehensive marketing model, offering a broad portfolio of products, including generic products, innovative medicines, biosimilars and OTC products. As part of our Pivot to Growth strategy, we intend to divest our API business, in order to focus on our core business strengths and capital allocation towards growth engines and innovation.
Generic Medicines
Generic medicines are the chemical and therapeutic equivalents of originator medicines and are typically more affordable in comparison to the originator’s products. Generic medicines are required to meet similar governmental requirements as their brand-name equivalents, such as those relating to current Good Manufacturing Practices (“cGMP”), manufacturing processes and health authorities’ inspections, and must receive regulatory approval prior to their sale in any given country. Generic medicines may be manufactured and marketed if relevant patents on their brand-name equivalents (and any additional government-mandated market exclusivity periods) have expired or have been challenged or otherwise circumvented.
We develop, manufacture and sell generic medicines in a variety of dosage forms, including tablets, capsules, injectables, inhalants, liquids, transdermal patches, ointments and creams. We offer a broad range of basic chemical entities, as well as specialized product families, such as sterile products, hormones, high-potency drugs and cytotoxic substances, in both parenteral and solid dosage forms. We also offer generic products with medical devices and combination products.
Our generics business has a wide-reaching commercial presence. We have a top three leadership position in many countries, including the United States and some key European markets. We have a robust product portfolio, comprehensive R&D capabilities and product pipeline, and a global operational network, which enables us to execute key generic launches to further expand our product pipeline and diversify our revenue stream. We use these capabilities to mitigate the effect of price erosion on our generics business.
When considering whether to develop a generic medicine, we take into account a number of factors, including regional and local patient and customer needs, our overall strategy, R&D and manufacturing capabilities, regulatory considerations, commercial factors and the intellectual property landscape. We will challenge patents when appropriate, if we believe they are either invalid or would not be infringed by our generic version. We may seek alliances to acquire rights to products we do not have in our portfolio, to share development costs or litigation risks, or to resolve patent and regulatory barriers to entry.
In recent years, including as part of our Pivot to Growth strategy, we have been optimizing our global generics portfolio through product discontinuation and cost-structure improvements, sale of certain product rights, to continue focusing on pipeline optimization and high-value generics, including complex generics. This has resulted in the ongoing network optimization of our generics business, including our manufacturing and supply network, and in the closure or divestment of a significant number of manufacturing plants around the world in recent years.
In markets such as the United States, the United Kingdom, Canada, the Netherlands and Israel, generic medicines may be substituted by the pharmacist for their brand name equivalent or according to their prescribed International Nonproprietary Name (“INN”). In these so-called “pure generic” markets, physicians and patients have little control over the choice of generic manufacturer, and consequently generic medicines are not actively marketed or promoted to physicians or consumers. Instead, the relationship between the manufacturer and
6
Table of Contents
pharmacy chains, distributors, health funds and other health insurers is critical. Many of these markets have automatic substitution models when generics are available as alternatives to brands. In Russia, Turkey, Ukraine, Kazakhstan and certain Latin American and European countries, generic medicines are generally sold under brand names alongside the originator brand. These markets are referred to as “branded generic” markets and in certain cases are “out of pocket” markets in which consumers can pay for a particular branded generic medicine (as opposed to government or privately funded medical health insurance), often at the recommendation of their physician. Branded generic products are actively promoted and a sales force is necessary to create and maintain brand awareness. Other markets, such as Germany, France, Italy and Spain, are hybrid markets with elements of both approaches.
Our position in the generics market has been supported by our global R&D function, as well as our API R&D and manufacturing activities, which provide vertical integration for many of our products. For information about our product launches and pipeline of generic medicines in the United States and Europe, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Information—United States Segment” and “Item 7—Management’s Discussions and Analysis of Financial Condition and Results of Operations—Segment Information—Europe Segment.”
Biologic medicines are large and complex medicines produced by or made from living cells or organisms. Biosimilars are highly similar to the reference biologic, in both structure and function (e.g., pharmacodynamics, pharmacokinetics, safety, efficacy and immunogenicity) and, for any approved uses, have no clinically meaningful differences from the reference product in terms of safety, purity, and potency.
In recent years, we launched the following biosimilar medicines, including under our strategic collaborations: TRUXIMA® (rituximab-abbs) (U.S.: 2019; Canada: 2020), HERZUMA® (trastuzumab-pkrb) (U.S./Canada: 2020), RANIVISIO® (ranibizumab) (EU/UK: 2022; Canada: 2023), SIMLANDI® (adalimumab-ryvk) (U.S.: 2024), SELARSDI (ustekinumab-aekn) (U.S.: 2025), EPYSQLI® (eculizumab-aagh) (U.S.: 2025) and FYMSKINA®(ustekinumab) (Germany: 2025).
Below are some developments in our biosimilars business in 2025, as we make progress in expanding our global biosimilars portfolio and strategic collaborations, and in optimizing our capital resources, in line with our Pivot to Growth strategy:
Loading financial statements...
Financial statements
data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .
| Line item |
|---|
| Period ending |
| MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Business Overview
We are a biopharmaceutical company, enabled by a world-class generics business. For over 120 years, our commitment to bettering health has never wavered. From innovating in the fields of neuroscience and immunology to providing complex generic medicines, biosimilars and pharmacy brands worldwide, we are dedicated to addressing patients’ needs, now and in the future.
Teva was incorporated in Israel on February 13, 1944 and is the successor to a number of Israeli corporations, the oldest of which was established in 1901.
Our Business Segments
We operate our business through three segments: United States, Europe and International Markets. Each business segment manages our entire product portfolio in its region, including generics, which includes biosimilars and OTC products, as well as innovative medicines. This structure enables strong alignment and integration between operations, commercial regions, R&D and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas.
In addition to these three segments, our other sources of revenues included in “Other Activities” below, consisting primarily of our distribution business in the U.S. through Anda, the sale of APIs to third parties, an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis and certain contract manufacturing services. For additional segment information, see note 15 to our consolidated financial statements.
Pivot to Growth Strategy
In the second quarter of 2026, we continued to execute on the four key pillars of our “Pivot to Growth” strategy, announced in May 2023, which entered into its “Accelerate Growth” phase in 2025. During this phase, we expect to focus on growing our innovative portfolio, aligning capital allocation to invest in activities we expect to have the highest value, and modernizing our organization and operations to drive both efficiency and cost savings. Under Teva’s Transformation programs announced on May 7, 2025, we expect to achieve such cost savings through a variety of initiatives, including examining practices and efficiencies in methods of working, reduction in headcount and optimizing external spend in the following years.
Emalex Biosciences Acquisition
In April 2026, Teva entered into a definitive agreement to acquire all outstanding shares of Emalex Biosciences (“Emalex”), including its primary asset, ecopipam (EBS-101), which has completed Phase 3 for the treatment of Tourette syndrome in a pediatric population. On June 10, 2026, Teva completed the acquisition of Emalex, and paid approximately $700 million to Emalex’s former shareholders. Emalex’s former shareholders and other third parties may be eligible to receive additional milestone payments of up to $200 million and $125 million, respectively, as well as royalties on global net-sales of ecopipam (EBS-101), upon commercialization and subject to regulatory approval. On June 18, 2026, Teva submitted an NDA to the FDA for ecopipam (EBS-101), supported by results from the Phase 3 trial.
The acquisition was accounted for as an ‘asset acquisition’ as it did not meet the definition of a ‘business,’ since substantially all of the fair value of the gross assets acquired was concentrated in an IPR&D asset, under ASC 805, Business Combinations. See ‘Emalex Biosciences’ included in note 2 to our consolidated financial statements.
Macroeconomic and Geopolitical Environment
The ongoing war involving Iran has contributed to increased uncertainty and volatility in global economic conditions. The conflict has affected financial markets, foreign exchange rates and energy prices, and has disrupted international trade routes, supply chains and logistics. In particular, the conflict has disrupted critical global logistics corridors, maritime shipping routes, and air cargo hubs, including those used for the transportation of pharmaceutical products and key inputs. In some cases, such disruptions have resulted in and may continue to result in delays in our production and distribution processes, impacting product availability and our ability to timely respond to consumer demand. Although we have taken measures to mitigate and offset these impacts, the situation remains fluid and the broader economic consequences of the conflict are difficult to predict. Given our global operations, including personnel and several manufacturing and R&D facilities in Israel, as well as our exposure to international markets, continued instability in the region could adversely impact our business operations and financial condition. As of the date of this Quarterly report on Form 10-Q, the impact of this conflict on our results of operations and financial condition was immaterial.
53
Moreover, recent U.S. tariffs imposed, or threatened to be imposed, on materials and products from countries where we do business may impact our business. Any responsive or reciprocal actions taken by such countries, as well as heightened sanctions regimes and trade restrictions arising from geopolitical conflicts, as discussed above, could impact our costs and global operations. The countries subject to tariffs or other trade restrictions, and the tariff rate imposed on each country or scope of applicable restrictions, is dynamic. We continue to monitor and assess the potential impact on our supply chain and global operations, which could be material, and to pursue mitigation strategies for such potential impact, including on certain innovative products manufactured outside of the U.S., some of which are already subject to bilateral trade agreements.
Highlights
Significant highlights in the second quarter of 2026 included:
| • | Revenues in the second quarter of 2026 were $4,142 million, a decrease of 1% in U.S. dollars, or 3% in local currency terms compared to the second quarter of 2025. This decrease was mainly due to lower revenues from generic products, primarily lenalidomide capsules (a generic version of Revlimid®) in our U.S. segment, partially offset by higher revenues from our key innovative products, primarily AUSTEDO and AJOVY. |
| • | Our United States segment generated revenues of $1,702 million, a decrease of 5% compared to the second quarter of 2025. Loss from our U.S. segment in the second quarter of 2026 was $76 million compared to a profit of $699 million in the second quarter of 2025. |
| • | Our Europe segment generated revenues of $1,263 million and segment profit of $367 million in the second quarter of 2026. Revenues decreased by 3% in U.S. dollars, or 8% in local currency terms, compared to the second quarter of 2025. Segment profit increased by 1% compared to the second quarter of 2025. |
| • | Our International Markets segment generated revenues of $550 million and segment profit of $99 million in the second quarter of 2026. Revenues increased by 11% in U.S. dollars, or 7% in local currency terms, compared to the second quarter of 2025. Segment profit increased by 34% compared to the second quarter of 2025. |
| • | Our revenues from Other Activities in the second quarter of 2026 were $627 million, an increase of 5% in both U.S. dollars and local currency terms compared to the second quarter of 2025. |
| • | Exchange rate movements during the second quarter of 2026, including hedging effects, positively impacted revenues by $85 million, compared to the second quarter of 2025. |
| • | Gross profit margin was 52.0% in the second quarter of 2026 compared to 50.3% in the second quarter of 2025. |
| • | R&D expenses, net in the second quarter of 2026 were $970 million, an increase of 298%, compared to $244 million in the second quarter of 2025, primarily due to the acquisition of Emalex and its primary asset ecopipam (EBS-101). This increase was partially offset by a decrease in R&D expenses related to generic projects. See ‘Emalex Biosciences’ included in note 2 to our consolidated financial statements. |
| • | We recorded expenses of $230 million in legal settlements and loss contingencies in the second quarter of 2026, compared to expenses of $166 million in the second quarter of 2025. See note 9 to our consolidated financial statements. |
| • | Operating loss was $231 million in the second quarter of 2026 compared to an operating income of $455 million in the second quarter of 2025. |
| • | In the second quarter of 2026, we recognized a tax expense of $121 million, on pre-tax loss of $455 million. In the second quarter of 2025, we recognized a tax benefit of $78 million, on pre-tax income of $203 million. See note 11 to our consolidated financial statements. |
| • | As of June 30, 2026, our debt was $16,593 million compared to $16,807 million as of December 31, 2025. See note 7 to our consolidated financial statements. |
| • | Cash flow generated from operating activities during the second quarter of 2026 was $411 million, compared to $227 million in the second quarter of 2025. The higher cash flow generated from operating activities in the second quarter of 2026 was mainly due to lower contingent consideration payments and lower tax payments, partially offset by higher legal settlement payments. |
| • | During the second quarter of 2026, we generated free cash flow of $622 million, which we define as comprising $411 million in cash flow generated from operating activities, $311 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $4 million of proceeds from the sale of businesses and long-lived assets, partially offset by $104 million in cash used for capital investments. During the second quarter of 2025, we generated free cash flow of $476 million. The increase in the second quarter of 2026 mainly resulted from higher cash flow generated from operating activities as discussed above. |
54
Results of Operations
Comparison of Three Months Ended June 30, 2026 to Three Months Ended June 30, 2025
Segment Information
United States Segment
The following table presents revenues, expenses and profit for our United States segment for the three months ended June 30, 2026 and 2025:
| Three months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| (U.S. $ in millions / % of Segment Revenues) | ||||||||||||||||
| Revenues |
$ | 1,702 | 100 | % | $ | 1,786 | 100 | % | ||||||||
| Cost of sales |
499 | 29.3 | % | 574 | 32.2 | % | ||||||||||
| Gross profit |
1,203 | 70.7 | % | 1,211 | 67.8 | % | ||||||||||
| R&D expenses* |
883 | 51.9 | % | 152 | 8.5 | % | ||||||||||
| S&M expenses |
294 | 17.3 | % | 250 | 14.0 | % | ||||||||||
| G&A expenses |
107 | 6.3 | % | 111 | 6.2 | % | ||||||||||
| Other |
(5 | ) | § | § | § | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment profit** |
$ | (76 | ) | (4.5 | %) | $ | 699 | 39.1 | % | |||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | In the second quarter of 2026, mainly related to the acquisition of Emalex and its primary asset ecopipam (EBS-101). See ‘Emalex Biosciences’ included in note 2 to our consolidated financial statements. |
| ** | Segment profit does not include amortization and certain other items. |
| § | Represents an amount less than $0.5 million or 0.5%, as applicable. |
United States Revenues
In alignment with our Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under our United States segment. This shift allows the United States segment to continue to manage its entire product portfolio in the region, while strengthening focus on its biopharmaceutical business, growth engines and innovation. As a result, from that date, Anda is reported as part of the Company’s Other Activities. Prior period amounts were recast to reflect this change. See note 15 to our consolidated financial statements.
Revenues from our United States segment in the second quarter of 2026 were $1,702 million, a decrease of 5% compared to the second quarter of 2025, mainly due to lower revenues from generic products, primarily lenalidomide capsules (a generic version of Revlimid®), partially offset by higher revenues from our key innovative products, primarily AUSTEDO.
55
Revenues by Major Products and Activities
The following table presents revenues for our United States segment by major products and activities for the three months ended June 30, 2026 and 2025:
| Three months ended June 30, |
Percentage Change |
|||||||||||
| 2026 | 2025 | 2026-2025 | ||||||||||
| (U.S. $ in millions) | ||||||||||||
| Generic products (including biosimilars) |
$ | 660 | $ | 961 | (31 | %) | ||||||
| AJOVY |
116 | 63 | 83 | % | ||||||||
| AUSTEDO |
676 | 495 | 37 | % | ||||||||
| BENDEKA and TREANDA |
28 | 40 | (30 | %) | ||||||||
| COPAXONE |
61 | 62 | (2 | %) | ||||||||
| UZEDY |
77 | 54 | 43 | % | ||||||||
| Other |
84 | 111 | (25 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total |
$ | 1,702 | $ | 1,786 | (5 | %) | ||||||
|
|
|
|
|
|||||||||
Generic products (including biosimilar products) revenues in our United States segment in the second quarter of 2026 were $660 million, a decrease of 31% compared to the second quarter of 2025. This decrease was mainly driven by lower revenues from lenalidomide capsules (a generic version of Revlimid®) due to increased generic competition in the U.S., partially offset by higher revenues from our portfolio of biosimilar products.
Among the most significant generic products we sold in the United States in the second quarter of 2026 were Truxima® (a biosimilar to Rituxan®), epinephrine injectable solution (a generic equivalent of EpiPen® and EpiPen Jr®) and SIMLANDI (a biosimilar to Humira®). In the second quarter of 2026, our total prescriptions were approximately 237 million (based on trailing twelve months), representing 6.1% of total U.S. generic prescriptions, compared to approximately 266 million (based on trailing twelve months), representing 6.9% of total U.S. generic prescriptions in the second quarter of 2025, all according to IQVIA data.
AJOVY revenues in our United States segment in the second quarter of 2026 were $116 million, an increase of 83% compared to the second quarter of 2025, mainly due to a reduction in sales allowance as well as growth in volume. In the second quarter of 2026, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 32.5% out of the subcutaneous injectable anti- CGRP class, compared to 31.0% in the second quarter of 2025.
AJOVY was launched in the United States in 2018 for the preventive treatment of migraine in adults, and in August 2025, the FDA approved AJOVY for the preventive treatment of episodic migraine in children and adolescent patients aged 6 to 17 years. AJOVY is the only anti-CGRP subcutaneous product indicated for both quarterly and monthly dosing options. AJOVY faces competition from multiple other products.
AJOVY is protected worldwide by patents expiring in 2026 at the earliest; extensions have been granted in several countries, including the United States and in Europe, until 2031. Additional patents relating to the use of AJOVY in the treatment of migraine have also been issued in the United States and in Europe and will expire between 2035 and 2039. Such patents are also pending in other countries. AJOVY is also protected by regulatory marketing exclusivity until 2030 in the United States and until 2029 in Europe. For our patent litigation related to other anti-CGRP products, see note 10 to our consolidated financial statements.
AUSTEDO revenues (which include AUSTEDO XR®) in our United States segment in the second quarter of 2026 were $676 million, an increase of 37% compared to the second quarter of 2025. This increase was mainly due to growth in volume and a favorable business mix including improved net-price realization.
During 2025, Teva and the Centers for Medicare and Medicaid Services (“CMS”) negotiated a maximum fair price for AUSTEDO and AUSTEDO XR, based on their inclusion in CMS’s list of prescription medicines selected for price-setting discussions. An agreement was announced by CMS in November 2025. The revised prices set by the U.S. Government will become effective on January 1, 2027 and will apply to eligible Medicare patients.
AUSTEDO was launched in the United States in 2017. It is indicated for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia in adults.
56
AUSTEDO is protected in the United States by 14 Orange Book patents expiring between 2031 and 2038. We received notice letters from two ANDA filers regarding the filing of their ANDAs with paragraph (IV) certifications for certain of the patents listed in the Orange Book for AUSTEDO. In 2022, we reached agreements with two drug companies to sell their generic versions beginning in April 2033 or earlier under certain circumstances. On March 9, 2022, the U.S. Patent Trial and Appeal Board of the U.S. Patent and Trademark Office rejected a separate challenge filed by Apotex, which had sought to invalidate our patent for an AUSTEDO compound. Currently, there are no further patent litigations pending regarding AUSTEDO.
AUSTEDO XR (deutetrabenazine) extended-release tablets was approved by the FDA on February 17, 2023 in three doses of 6, 12 and 24 mg, and became commercially available in the U.S. in May 2023. The FDA approved AUSTEDO XR as a one-pill, once-daily treatment option in doses of 30, 36, 42, and 48 mg in May 2024 and in 18 mg in July 2024. AUSTEDO XR is a once-daily formulation indicated in adults for tardive dyskinesia and chorea associated with Huntington’s disease, which is additional to the twice-daily AUSTEDO. AUSTEDO XR is protected by 13 Orange Book patents expiring between 2031 and 2041. We received notice letters from an ANDA filer, Alkem Laboratories Limited (“Alkem”), regarding the filing of its ANDA with paragraph (IV) certifications; and on June 5, 2026. we filed a complaint for patent infringement against Alkem and its affiliate Ascend Laboratories LLC, in the District Court of New Jersey. In July 2026, we received a notice letter from an additional ANDA filer regarding the filing of its ANDA with paragraph (IV) certifications.
UZEDY (risperidone) extended-release injectable suspension revenues in our United States segment in the second quarter of 2026 were $77 million, an increase of 43% compared to the second quarter of 2025, mainly due to growth in volume, partially offset by higher sales allowances.
UZEDY was approved by the FDA on April 28, 2023 for the treatment of schizophrenia in adults, and was launched in the U.S. in May 2023. UZEDY is a subcutaneous, long-acting formulation that controls the steady release of risperidone. UZEDY is protected by six Orange Book patents expiring between 2027 and 2042. On October 10, 2025, it was announced that the FDA approved UZEDY as a once-monthly extended-release injectable suspension as monotherapy or as adjunctive therapy to lithium or valproate for the maintenance treatment of bipolar 1 disorder (BD-1) in adults. UZEDY was protected by regulatory exclusivity until April 28, 2026. We are evaluating plans to launch UZEDY in other countries around the world. UZEDY faces competition from multiple products.
BENDEKA and TREANDA combined revenues in our United States segment in the second quarter of 2026 were $28 million, a decrease of 30% compared to the second quarter of 2025, mainly due to competition from alternative therapies, as well as from branded and generic bendamustine products.
In April 2019, we signed an amendment to the license agreement with Eagle Pharmaceuticals, Inc. (“Eagle”) extending the royalty term applicable to the United States to the full period for which we sell BENDEKA and increased the royalty rate. In consideration, Eagle agreed to assume a portion of BENDEKA-related patent litigation expenses.
There are 20 patents listed in the U.S. Orange Book for BENDEKA, one of which expired in 2026 and the rest with expiration dates in 2031. In August 2021, the Court of Appeals for the Federal Circuit affirmed the district court’s decision upholding the validity of all of the asserted patents and finding infringement by two remaining ANDA filers. Another ANDA filer did not join the appeal, and Teva also settled with two ANDA filers.
Teva has also settled litigation against four 505(b)(2) applicants: Hospira, Inc. (“Hospira”), Dr. Reddy’s Laboratories (“DRL”) and Accord Healthcare (“Accord”), and Almaject, Inc. / Alvogen, Inc. (“Almaject”). Based on these settlement agreements, Hospira, Accord, DRL and Almaject can launch their products on November 17, 2027, or earlier under certain circumstances. In 2023, Teva and Eagle also filed suit against BendaRx Corp. in the U.S. District Court for the District of Delaware, following its filing of a 505(b)(2) NDA for a bendamustine product, and that litigation is still pending, though it is currently stayed.
In addition to the settlement with Eagle regarding its bendamustine 505(b)(2) NDA, between 2015 and 2020, we reached final settlements with 22 ANDA filers for generic versions of the lyophilized form of TREANDA and one 505(b)(2) NDA filer for a generic version of the liquid form of TREANDA, providing for the launch of generic versions of TREANDA prior to patent expiration. Currently, there are multiple generic TREANDA products on the market.
COPAXONE revenues in our United States segment in the second quarter of 2026 were $61 million, a decrease of 2% compared to the second quarter of 2025, mainly due to lower volumes, partially offset by a reduction in sales allowance.
COPAXONE continues to face competition from alternative therapies, generic versions of COPAXONE, and generic treatments for multiple sclerosis.
57
Product Launches and Pipeline
In the second quarter of 2026, we launched a generic version of the following branded products in the United States:
| Product Name |
Brand Name |
Launch Date | Total Annual U.S. Branded Sales at Time of Launch (U.S. $ in millions (IQVIA))* |
|||||
| Dapagliflozin Tablets |
Farxiga® tablets | April | $ | 9,980 | ||||
| Glycerol Phenylbutyrate Oral Liquid |
Ravicti® Oral Liquid | April | $ | 104 | ||||
| Budesonide and Formoterol Fumarate Dihydrate Inhalation Aerosol |
Symbicort® Inhalation Aerosol | May | $ | 3,009 | ||||
| Sitagliptin Tablets, USP |
Januvia® tablets | May | $ | 2,695 | ||||
| Macitentan Tablets |
Opsumit® tablets | June | $ | 1,196 | ||||
| * | The figures presented are for the twelve months ended in the calendar quarter immediately prior to our launch or re-launch. |
As of June 30, 2026, our generic products pipeline in the United States includes 101 product applications awaiting FDA approval, including 59 tentative approvals. This total reflects all pending ANDAs, supplements for product line extensions and tentatively approved applications and includes some instances where more than one application was submitted for the same reference product. Excluding overlaps, the branded products underlying these pending applications had U.S. sales for the twelve months ended March 31, 2026 of approximately $102 billion, according to IQVIA. About 80% of our pending drug applications challenge at least one patent held by the brand-name manufacturer. We believe we are first to file with respect to 48 of these products, or 71 products including final approvals where launch is pending a settlement agreement or court decision. Collectively, these first to file opportunities represent over $66 billion in U.S. brand sales for the twelve months ended March 31, 2026, according to IQVIA.
IQVIA reported brand sales are one of the many indicators of future potential value of a launch, but equally important are the mix and timing of competition, as well as cost effectiveness. The potential advantages of being the first filer with respect to some of these products may be subject to forfeiture, shared exclusivity or competition from so-called “authorized generics,” which may ultimately affect the value derived.
In the second quarter of 2026, we received tentative approvals for generic equivalents of the products listed in the table below, excluding overlapping applications. A “tentative approval” indicates that the FDA has substantially completed its review of an application and final approval is expected once the relevant patent expires, a court decision is reached, a 30-month regulatory stay lapses or a 180-day exclusivity period awarded to another manufacturer either expires or is forfeited.
| Generic Name |
Brand Name | Total Annual U.S. Branded Sales (U.S. $ in millions (IQVIA))* |
||||
| Revefenacin Inhalation Solution, 175mcg/3mL |
Yupelri® | $ | 261 | |||
| Trilaciclib for Injection, 300 mg/vial |
Cosela® | $ | 73 | |||
| * | The figures presented are for the twelve months ended in the calendar quarter immediately prior to our tentative approval date. |
For information regarding our innovative and biosimilar products pipeline, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.
58
United States Gross Profit
Gross profit from our United States segment in the second quarter of 2026 was $1,203 million, a decrease of 1%, compared to the second quarter of 2025.
Gross profit margin for our United States segment in the second quarter of 2026 increased to 70.7%, compared to 67.8% in the second quarter of 2025. This increase was mainly due to a favorable mix of products, primarily higher revenues from our key innovative products, largely AUSTEDO, partially offset by lower revenues from lenalidomide capsules (a generic version of Revlimid®).
United States R&D Expenses
R&D expenses relating to our United States segment in the second quarter of 2026 were $883 million, an increase of 482%, compared to the second quarter of 2025 mainly related to the acquisition of Emalex and its primary asset ecopipam (EBS-101). See ‘Emalex Biosciences Acquisition’ above, and ‘Emalex Biosciences’ included in note 2 to our consolidated financial statements.
For a description of our R&D expenses in the second quarter of 2026, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.
United States S&M Expenses
S&M expenses relating to our United States segment in the second quarter of 2026 were $294 million, an increase of 18%, compared to the second quarter of 2025. This increase was mainly due to promotional activities related to our key innovative products, primarily AUSTEDO.
United States G&A Expenses
G&A expenses relating to our United States segment in the second quarter of 2026 were $107 million, a decrease of 4% compared to the second quarter of 2025.
United States Profit
Profit from our United States segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.
Loss from our United States segment in the second quarter of 2026 was $76 million, compared to a profit of $699 million in the second quarter of 2025. This change was mainly due to higher R&D expenses, as discussed above.
Europe Segment
The following table presents revenues, expenses and profit for our Europe segment for the three months ended June 30, 2026 and 2025:
| Three months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| (U.S. $ in millions / % of Segment Revenues) |
||||||||||||||||
| Revenues |
$ | 1,263 | 100 | % | $ | 1,298 | 100 | % | ||||||||
| Cost of sales |
559 | 44.3 | % | 581 | 44.8 | % | ||||||||||
| Gross profit |
704 | 55.7 | % | 717 | 55.2 | % | ||||||||||
| R&D expenses |
52 | 4.1 | % | 59 | 4.6 | % | ||||||||||
| S&M expenses |
222 | 17.6 | % | 228 | 17.5 | % | ||||||||||
| G&A expenses |
66 | 5.2 | % | 66 | 5.1 | % | ||||||||||
| Other |
(3 | ) | § | § | § | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment profit* |
$ | 367 | 29.1 | % | $ | 364 | 28.0 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Segment profit does not include amortization and certain other items. |
| § | Represents an amount less than $0.5 million or 0.5%, as applicable. |
59
Europe Revenues
Our Europe segment includes the European Union, the United Kingdom and certain other European countries.
Revenues from our Europe segment in the second quarter of 2026 were $1,263 million, a decrease of 3% compared to the second quarter of 2025. In local currency terms, revenues decreased by 8% compared to the second quarter of 2025, mainly due to lower proceeds from the sale of certain product rights and lower revenues from generic products.
In the second quarter of 2026, revenues were positively impacted by exchange rate fluctuations of $63 million, including hedging effects, compared to the second quarter of 2025. Revenues in the second quarter of 2026 included $3 million from a positive hedging impact, while revenues in the second quarter of 2025 included $25 million from a negative hedging impact, which is included in “Other” in the table below. See note 8c to our consolidated financial statements.
Revenues by Major Products and Activities
The following table presents revenues for our Europe segment by major products and activities for the three months ended June 30, 2026 and 2025:
| Three months ended June 30, |
Percentage Change |
|||||||||||
| 2026 | 2025 | 2026-2025 | ||||||||||
| (U.S. $ in millions) | ||||||||||||
| Generic products (including OTC and biosimilars) |
$ | 1,024 | $ | 1,040 | (2 | %) | ||||||
| AJOVY |
78 | 71 | 10 | % | ||||||||
| COPAXONE |
49 | 50 | (2 | %) | ||||||||
| Respiratory products |
58 | 55 | 6 | % | ||||||||
| Other* |
54 | 81 | (34 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total |
$ | 1,263 | $ | 1,298 | (3 | %) | ||||||
|
|
|
|
|
|||||||||
| * | Other revenues in the second quarter of 2025 include the sale of certain product rights. |
Generic products revenues (including OTC and biosimilar products) in our Europe segment in the second quarter of 2026, were $1,024 million, a decrease of 2% compared to the second quarter of 2025. In local currency terms, revenues decreased by 4%, mainly due to lower sales of generic products and seasonal OTC products, partially offset by higher revenues from recently launched products.
AJOVY revenues in our Europe segment in the second quarter of 2026 were $78 million, an increase of 10% compared to the second quarter of 2025. In local currency terms revenues increased by 7% due to growth in volume.
For information about AJOVY patent protection, see “—United States Revenues—Revenues by Major Products and Activities” above.
COPAXONE revenues in our Europe segment in the second quarter of 2026 were $49 million, a decrease of 2% compared to the second quarter of 2025. In local currency terms revenues decreased by 5%, mainly due to price reductions and lower volumes resulting from the availability of alternative therapies, partially offset by a decrease in sales allowance due to a non-recurring item.
Respiratory products revenues in our Europe segment in the second quarter of 2026 were $58 million, an increase of 6% compared to the second quarter of 2025. In local currency terms, revenues increased by 3%, mainly due to higher volumes as a result of increased supply.
Product Launches and Pipeline
As of June 30, 2026, our generic products pipeline in Europe included 267 generic approvals relating to 33 compounds in 74 formulations. In addition, approximately 1,426 marketing authorization applications are pending approval in 37 European countries, relating to 99 compounds in 225 formulations. One application is pending with the European Medicines Agency (“EMA”).
For information regarding our innovative medicines and biosimilar products pipeline, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.
60
Europe Gross Profit
Gross profit from our Europe segment in the second quarter of 2026 was $704 million, a decrease of 2% compared to the second quarter of 2025.
Gross profit margin for our Europe segment in the second quarter of 2026 increased to 55.7%, compared to 55.2% in the second quarter of 2025. This increase was mainly due to a positive impact from hedging activities, partially offset by lower proceeds from the sale of certain product rights in the second quarter of 2026.
Europe R&D Expenses
R&D expenses relating to our Europe segment in the second quarter of 2026 were $52 million, a decrease of 12% compared to the second quarter of 2025.
For a description of our R&D expenses in the second quarter of 2026, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.
Europe S&M Expenses
S&M expenses relating to our Europe segment in the second quarter of 2026 were $222 million, a decrease of 2% compared to the second quarter of 2025.
Europe G&A Expenses
G&A expenses relating to our Europe segment in the second quarter of 2026 were $66 million, a decrease of 1% compared to the second quarter of 2025.
Europe Profit
Profit from our Europe segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.
Profit from our Europe segment in the second quarter of 2026 was $367 million, an increase of 1%, compared to the second quarter of 2025.
International Markets Segment
The following table presents revenues, expenses and profit for our International Markets segment for the three months ended June 30, 2026 and 2025:
| Three months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| (U.S. $ in millions /% of Segment Revenues) | ||||||||||||||||
| Revenues |
$ | 550 | 100 | % | $ | 495 | 100 | % | ||||||||
| Cost of sales |
266 | 48.3 | % | 251 | 50.8 | % | ||||||||||
| Gross profit |
284 | 51.7 | % | 243 | 49.2 | % | ||||||||||
| R&D expenses |
26 | 4.8 | % | 24 | 4.9 | % | ||||||||||
| S&M expenses |
128 | 23.3 | % | 114 | 23.0 | % | ||||||||||
| G&A expenses |
38 | 6.9 | % | 32 | 6.6 | % | ||||||||||
| Other |
(8 | ) | (1.4 | %) | (1 | ) | § | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment profit* |
$ | 99 | 18.0 | % | $ | 74 | 14.9 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Segment profit does not include amortization and certain other items. |
| § | Represents an amount less than 0.5%. |
61
International Markets Revenues
Our International Markets segment includes all countries in which we operate other than the United States and the countries included in our Europe segment. The International Markets segment covers a substantial portion of the global pharmaceutical industry, including more than 35 countries. The countries in our International Markets segment include highly regulated, mainly generic markets, such as Canada and Israel, and branded generics-oriented markets, such as Russia and certain Latin America markets.
As of the date of this Quarterly Report on Form 10-Q, sustained conflict between Russia and Ukraine and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results and we have no manufacturing or R&D facilities in these markets. In the second quarter of 2026, the impact of this conflict on our International Markets segment was immaterial.
Revenues from our International Markets segment in the second quarter of 2026 were $550 million, an increase of 11% compared to the second quarter of 2025. In local currency terms, revenues increased by 7% compared to the second quarter of 2025, mainly due to higher revenues from our key innovative products AJOVY and AUSTEDO, primarily in China.
In the second quarter of 2026, revenues were positively impacted by exchange rate fluctuations of $19 million, net of hedging effects, compared to the second quarter of 2025. Revenues in the second quarter of 2026 included $11 million from a negative hedging impact, compared to a negative hedging impact of $8 million in the second quarter of 2025, which are included in “Other” in the table below. See note 8c to our consolidated financial statements.
Revenues by Major Products and Activities
The following table presents revenues for our International Markets segment by major products and activities for the three months ended June 30, 2026 and 2025:
| Three months ended June 30, |
Percentage Change 2026-2025 |
|||||||||||
| 2026 | 2025 | |||||||||||
| (U.S. $ in millions) |
|
|||||||||||
| Generic products (including OTC and biosimilars) |
$ | 419 | $ | 410 | 2 | % | ||||||
| AJOVY |
49 | 20 | 146 | % | ||||||||
| AUSTEDO |
20 | 3 | 571 | % | ||||||||
| COPAXONE |
8 | 7 | 7 | % | ||||||||
| Other* |
55 | 55 | (1 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total |
$ | 550 | $ | 495 | 11 | % | ||||||
|
|
|
|
|
|||||||||
| * | Other revenues in the second quarter of 2025 include the sale of certain product rights. |
Generic products revenues (including OTC and biosimilar products) in our International Markets segment in the second quarter of 2026 were $419 million, an increase of 2% compared to the second quarter of 2025. In local currency terms, revenues decreased by 1%.
AJOVY revenues in our International Markets segment in the second quarter of 2026 were $49 million, an increase of 146% compared to the second quarter of 2025. In local currency terms, revenues increased by 141%, mainly due to milestone payments received in China, as well as growth in other markets. In April 2026, we announced a strategic partnership for the marketing and distribution of AJOVY in China with Nuerogen (Zhuhai) Pharmaceutical Company Ltd.
AUSTEDO revenues in our International Markets segment in the second quarter of 2026 were $20 million, compared to $3 million in the second quarter of 2025. This increase was mainly due to timing of shipments, as well as growth in China.
AUSTEDO was launched in China and Israel in 2021 and in Brazil in 2022, for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia. In February 2024, we announced a strategic partnership for the marketing and distribution of AUSTEDO in China with Jiangsu Nhwa Hexin Pharmaceutical Marketing Co., Ltd. In April 2025, AUSTEDO received marketing authorization in South Korea. We continue to evaluate additional submissions in various other markets.
COPAXONE revenues in our International Markets segment in the second quarter of 2026 were $8 million, an increase of 7% compared to the second quarter of 2025.
62
International Markets Gross Profit
Gross profit from our International Markets segment in the second quarter of 2026 was $284 million, an increase of 17% compared to the second quarter of 2025.
Gross profit margin for our International Markets segment in the second quarter of 2026 increased to 51.7%, compared to 49.2% in the second quarter of 2025. This increase was mainly due to higher revenues from AJOVY and AUSTEDO as discussed above.
International Markets R&D Expenses
R&D expenses relating to our International Markets segment in the second quarter of 2026 were $26 million, an increase of 8% compared to the second quarter of 2025.
For a description of our R&D expenses in the second quarter of 2026, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.
International Markets S&M Expenses
S&M expenses relating to our International Markets segment in the second quarter of 2026 were $128 million, an increase of 13% compared to the second quarter of 2025. This increase was mainly due to promotional activities related to our key innovative products, primarily AUSTEDO, as well as an impact from exchange rate fluctuations.
International Markets G&A Expenses
G&A expenses relating to our International Markets segment in the second quarter of 2026 were $38 million, an increase of 17% compared to the second quarter of 2025.
International Markets Profit
Profit from our International Markets segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.
Profit from our International Markets segment in the second quarter of 2026 was $99 million, an increase of 34%, compared to the second quarter of 2025. This increase was mainly due to higher revenues, as discussed above.
Other Activities
We have other sources of revenues, primarily our distribution business in the United States through Anda, the sale of APIs to third parties, an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis and certain contract manufacturing services. Our Other Activities are not included in our United States, Europe or International Markets segments described above.
In alignment with our Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under our United States segment. As a result, from that date, Anda is reported as part of our Other Activities. Prior period amounts were recast to reflect this change. See note 15 to our consolidated financial statements.
In 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale. The intention to divest is in alignment with our Pivot to Growth strategy, and Teva is conducting a sales process for this matter. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be completed at all. For further information, see note 2 to our consolidated financial statements.
Our revenues from Other Activities in the second quarter of 2026 were $627 million, an increase of 5% in both U.S. dollars and in local currency terms, compared to the second quarter of 2025.
Anda revenues from third-party products in the second quarter of 2026 were $413 million, an increase of 13%, compared to the second quarter of 2025, mainly due to higher volumes. Anda, our distribution business in the United States, operates independently and distributes generic and innovative medicines and OTC pharmaceutical products from various manufacturers to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States. Anda competes in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.
63
API sales to third parties in the second quarter of 2026 were $118 million, a decrease of 12% in both U.S. dollars and local currency terms, compared to the second quarter of 2025. This decrease was mainly due to lower demand resulting from market dynamics and price reductions.
Revenues from additional other activities, mainly from Medis and certain contract manufacturing services, were $95 million in the second quarter of 2026, a decrease of 3% in U.S. dollars, or 5% in local currency terms compared to the second quarter of 2025.
Teva Consolidated Results
Revenues
Revenues in the second quarter of 2026 were $4,142 million, a decrease of 1% in U.S. dollars, or 3% in local currency terms compared to the second quarter of 2025. This decrease was mainly due to lower revenues from generic products, primarily lenalidomide capsules (a generic version of Revlimid®) in our U.S. segment, partially offset by higher revenues from our key innovative products, primarily AUSTEDO and AJOVY.
See “—United States Revenues,” “—Europe Revenues,” “—International Markets Revenues” and “—Other Activities” above.
Exchange rate movements in the second quarter of 2026, including hedging effects, positively impacted revenues by $85 million, compared to the second quarter of 2025. See note 8c to our consolidated financial statements.
Gross Profit
Gross profit in the second quarter of 2026 was $2,153 million, an increase of 2% compared to $2,102 million in the second quarter of 2025.
Gross profit margin was 52.0% in the second quarter of 2026, compared to 50.3% in the second quarter of 2025. This increase was mainly due to a favorable mix of products, primarily higher revenues from AUSTEDO and AJOVY, partially offset by lower revenues from generic products, primarily lenalidomide capsules (a generic version of Revlimid®).
Research and Development (R&D) Expenses, net
Our R&D activities for innovative medicines and biosimilar products, including through our collaborations, in each of our segments include costs of discovery research, preclinical work, drug formulation, early- and late-stage clinical development, upfront and milestone payments and product registration costs. These expenditures are reported net of contributions received from collaboration partners. Our spending takes place throughout the development process, including (i) early-stage projects in both discovery and preclinical phases; (ii) middle-stage projects in clinical programs up to Phase 3; (iii) late-stage projects in Phase 3 programs, including where a new drug application is currently pending approval; (iv) post-approval studies for marketed products; and (v) indirect expenses, such as costs of infrastructure and personnel.
Our R&D activities for generic products in each of our segments include both (i) direct expenses relating to product formulation, analytical method development, stability testing, management of bioequivalence and other clinical studies and regulatory filings; and (ii) indirect expenses, such as costs of infrastructure and personnel.
IPR&D that is acquired in connection with an asset acquisition and not a business combination is expensed on its acquisition date unless it has an alternative future use.
In the second quarter of 2026, our R&D expenses, net, were primarily related to our innovative product pipeline in neuroscience, including rare neuroscience diseases, immunology, and selected other areas, as well as our generics and biosimilars pipeline.
R&D expenses, net in the second quarter of 2026, were $970 million, an increase of 298% compared to $244 million in the second quarter of 2025, primarily due to the acquisition of Emalex and its primary asset ecopipam (EBS-101). This increase was partially offset by a decrease in expenses related to our generic projects. See ‘Emalex Biosciences Acquisition’ above, and ‘Emalex Biosciences’ included in note 2 to our consolidated financial statements.
64
Our R&D expenses, net in the second quarters of 2026 and 2025, were also impacted by reimbursements and cost sharing from our strategic partnerships and collaborations entered into in recent years. See note 2 to our consolidated financial statements.
R&D expenses, net as a percentage of revenues were 23.4% in the second quarter of 2026, compared to 5.8% in the second quarter of 2025.
Innovative Medicines Pipeline
Below is a description of key products in our innovative medicines pipeline as of July 29, 2026:
| Phase 2 |
Phase 3 |
Submitted for Regulatory Review | ||||
| Neuroscience | olanzapine LAI (TEV-‘749) Schizophrenia (December 2025) | |||||
| ecopipam (EBS-101) Tourette syndrome (June 2026) | ||||||
| Immunology | Anti-IL-15 (TEV-’408) Celiac disease |
Dual Action Asthma |
||||
| emrusolmin(1) (TEV-‘286) Multiple System Atrophy |
duvakitug (anti-TL1A)(3) (TEV-’574) Inflammatory Bowel Disease (October 2025) |
|||||
| (1) | In collaboration with Modag. |
| (2) | In collaboration with Launch Therapeutics. |
| (3) | In collaboration with Sanofi. |
Biosimilar Products Pipeline
We have biosimilar products in development internally and with our partners that are in various stages of development, including confirmatory clinical trials for TEV-‘292, the proposed biosimilar to Eylea® HD (aflibercept), and Entyvio® SC (vedolizumab), which are in collaboration with Alvotech for the U.S. market; and TEV-‘333 and TEV-‘316, both in collaboration with mAbxience. Our proposed biosimilar to Xgeva® (denosumab) and our proposed biosimilars to Entyvio® IV (vedolizumab), Simponi®, Simponi Aria® (golimumab), and Eylea® (aflibercept), which are in collaboration with Alvotech, were submitted for regulatory review in the U.S. Our proposed biosimilar to Xolair® (omalizumab) was submitted for regulatory review in the U.S. and Europe.
Selling and Marketing (S&M) Expenses
S&M expenses in the second quarter of 2026, were $717 million, an increase of 10% compared to the second quarter of 2025. This increase was mainly a result of the factors discussed above under “—United States segment—S&M Expenses” and “—International Markets segment— S&M Expenses.”
S&M expenses as a percentage of revenues were 17.3% in the second quarter of 2026, compared to 15.7% in the second quarter of 2025.
General and Administrative (G&A) Expenses
G&A expenses in the second quarter of 2026 were $317 million, an increase of 4% compared to the second quarter of 2025.
G&A expenses as a percentage of revenues were 7.7% in the second quarter of 2026, compared to 7.3% in the second quarter of 2025.
65
Intangible Asset Impairments
We recorded expenses of $22 million for identifiable intangible asset impairments in the second quarter of 2026, compared to expenses of $42 million in the second quarter of 2025. See note 5 to our consolidated financial statements.
Other Asset Impairments, Restructuring and Other Items
We recorded expenses of $147 million for other asset impairments, restructuring and other items in the second quarter of 2026, compared to $232 million in the second quarter of 2025. See note 12 to our consolidated financial statements.
Legal Settlements and Loss Contingencies
We recorded expenses of $230 million in legal settlements and loss contingencies in the second quarter of 2026, compared to expenses of $166 million in the second quarter of 2025. See note 9 to our consolidated financial statements.
Other Loss (Income)
Other income in the second quarter of 2026 was $19 million, compared to other loss of $4 million in the second quarter of 2025.
Operating Income (Loss)
Operating loss was $231 million in the second quarter of 2026, compared to an operating income of $455 million in the second quarter of 2025. This change was mainly due to higher R&D expenses primarily related to the acquisition of Emalex and its primary asset ecopipam (EBS-101). See ‘Emalex Biosciences Acquisition’ above, and ‘Emalex Biosciences’ included in note 2 to our consolidated financial statements.
Operating loss as a percentage of revenues was 5.6% in the second quarter of 2026, compared to operating income as a percentage of revenues of 10.9% in the second quarter of 2025.
Financial Expenses, Net
In the second quarter of 2026, financial expenses, net were $224 million, mainly comprised of net interest expenses of $195 million. In the second quarter of 2025, financial expenses, net were $252 million, mainly comprised of net interest expenses of $203 million.
Reconciliation Table to Consolidated Income (Loss) Before Income Taxes
The following table presents a reconciliation of our segment profits to our consolidated operating income (loss) and to consolidated income (loss) before income taxes for the three months ended June 30, 2026 and 2025:
| Three months ended June 30, |
||||||||
| 2026 | 2025 | |||||||
| (U.S. $ in millions) | ||||||||
| United States profit (loss) |
$ | (76 | ) | $ | 699 | |||
| Europe profit |
367 | 364 | ||||||
| International Markets profit |
99 | 74 | ||||||
|
|
|
|
|
|||||
| Total reportable segments profit |
391 | 1,136 | ||||||
| Profit (loss) of Other Activities |
(16 | ) | (3 | ) | ||||
|
|
|
|
|
|||||
| Amounts not allocated to segments: |
||||||||
| Amortization |
139 | 148 | ||||||
| Other assets impairments, restructuring and other items |
147 | 232 | ||||||
| Intangible assets impairments |
22 | 42 | ||||||
| Legal settlements and loss contingencies |
230 | 166 | ||||||
| Other unallocated amounts |
68 | 91 | ||||||
|
|
|
|
|
|||||
| Consolidated operating income (loss) |
(231 | ) | 455 | |||||
|
|
|
|
|
|||||
| Financial expenses, net |
224 | 252 | ||||||
|
|
|
|
|
|||||
| Consolidated income (loss) before income taxes |
$ | |||||||
Recent insider activity
| Date | Insider | Role | Action | Shares | Price | Value |
|---|---|---|---|---|---|---|
| 2026-06-18 | Shields Matthew | EVP, Global Operations | Sell | -9,989 | $32.19 | -$321,547 |
| 2026-06-11 | Kalif Eliyahu Sharon | EVP, Chief Financial Officer | Sell | -106,563 | $34.10 | -$3,633,308 |
| 2026-06-05 | Francis Richard D | President and CEO | Sell | -6,153 | $34.35 | -$211,356 |
| 2026-06-03 | Shields Matthew | EVP, Global Operations | Sell | -16,195 | $32.87 | -$532,330 |
| 2026-05-14 | Lippman Evan | EVP, Business Development | Sell | -41,658 ×2 | $35.58 | -$1,482,367 |
| 2026-05-14 | Kalif Eliyahu Sharon | EVP, Chief Financial Officer | Sell | -153,251 | $35.61 | -$5,457,375 |
| 2026-05-06 | Weiss Amir | Chief Accounting Officer | Sell | -10,679 | $36.00 | -$384,444 |
| 2026-05-05 | Daniell Richard | EVP, Europe Commercial | Sell | -30,000 | $35.40 | -$1,062,000 |
| 2026-05-01 | Sabag Mark | See "Remarks" | Sell | -144,180 | $34.99 | -$5,045,118 |
Source: SEC Form 4 filings.
Next expected filings
- ~2026-11-04 10-Q expected by 2026-11-09 (in 97 days)
- ~2027-02-03 10-K expected by 2027-02-22 (in 188 days)
- ~2027-04-28 10-Q expected by 2027-05-03 (in 272 days)
- ~2027-07-28 10-Q expected by 2027-08-02 (in 363 days)
Predicted from historical filing cadence; not an SEC commitment.
Recent SEC filings
- 2026-07-29 8-K Earnings Release; Financial Statements and Exhibits
- 2026-07-29 10-Q Quarterly Report
- 2026-04-29 8-K Earnings Release; Regulation FD Disclosure; Financial Statements and Exhibits
- 2026-04-29 10-Q Quarterly Report
- 2026-02-03 10-K Annual Report
- 2026-01-28 8-K Earnings Release; Financial Statements and Exhibits
- 2026-01-12 8-K Earnings Release; Financial Statements and Exhibits
- 2025-12-11 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-11-05 10-Q Quarterly Report
- 2025-11-05 8-K Earnings Release; Financial Statements and Exhibits
- 2025-07-30 10-Q Quarterly Report
- 2025-07-30 8-K Earnings Release; Financial Statements and Exhibits
- 2025-05-28 8-K Material Agreement Entered; Material Financial Obligation; Financial Statements and Exhibits
- 2025-05-22 8-K Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
- 2025-05-07 10-Q Quarterly Report