Teva Pharmaceutical Industries Limited

Q2 2026 revenue was approximately $4.1 billion, down 1% in U.S. dollars and 3% in local currency versus Q2 2025. GAAP net loss was $576 million, or $0.49 per share; non-GAAP EPS was $0.02, and non-GAAP gross margin was 55.4%, up 80 basis points year over year. Non-GAAP operating margin was 9% including $726 million of MLX-related expenses; excluding MLX, it would have been 26.6%. Free cash flow was $622 million, up 31% year over year. For 2026, Teva raised the midpoint of full-year revenue guidance by $75 million, lifted combined AUSTEDO/AJOVY/UZEDY guidance by about $150 million at the midpoint to roughly $3.7 billion, and kept operating profit, adjusted EBITDA, EPS and free cash flow guidance unchanged. The company now expects 2026 non-GAAP gross margin of 54.5% to 55.5% and global generics revenue to be flat to down low single digits in local currency, excluding generic REVLIMID and the Japan divestiture.

Richard Francis framed the quarter as evidence that Teva’s “pivot to growth” strategy is working, citing stronger innovative revenue, improving margins and better free cash flow. He emphasized that the company is reshaping its profile toward innovation, with multiple near-term and longer-term launches and a pipeline he said could support one asset launch per year for the next five years. His tone was upbeat and confident, especially around AUSTEDO, UZEDY, AJOVY, biosimilars and the company’s ability to execute launches.

Eliyahu Kalif said the quarter was solid and driven by the innovative portfolio, with revenue of about $4.1 billion, non-GAAP gross margin of 55.4%, and free cash flow of $622 million. He highlighted the MLX acquisition accounting impact, including $724 million recorded as in-process R&D expense and a $0.61 EPS impact; excluding MLX, non-GAAP EPS would have been $0.63 and non-GAAP operating margin would have been 26.6%. On guidance, he said Teva raised the revenue midpoint by $75 million, kept full-year operating profit/EBITDA/EPS/free cash flow guidance intact, and expects 2026 gross margin of 54.5% to 55.5% with OpEx around 28% of revenue as it invests in innovation and biosimilars. He also noted net debt of $12.9 billion and net debt-to-EBITDA of 2.8x, or 2.3x excluding MLX, with a target of 2x by 2027.

Analysts pressed management on AUSTEDO’s 2027 payer/formulary risk tied to IRA pricing, and Francis said Medicare plans must cover negotiated products in Part D formularies and that Teva remains confident in AUSTEDO XR’s ability to capture patients. They also asked about U.S. tariffs, and Francis said Teva is still assessing the proposal but has multiple U.S. factories and close government relationships. On celiac disease, Eric Hughes clarified that the study timing is driven by database lock rather than the clinicaltrials.gov enrollment date, identified the biomarker in an earlier study as free fatty acid binding protein, and said the current gluten challenge is 3 grams per day for 6 weeks. Questions on biosimilars drew management’s view that Teva’s execution is improving, with 2 of 5 U.S. products ranked #1, Europe early launch signs positive, and the $800 million by 2027 goal now seen as beatable.