Teva Pharmaceutical Industries Limited (NYSE: TEVA) Q2 loss driven by R&D charge
Teva Pharmaceutical Industries Limited reported Q2 2026 net revenues of $4,142 million, roughly flat versus $4,176 million a year earlier, but recorded a net loss attributable to Teva of $576 million, compared with net income of $282 million. The loss reflects sharply higher R&D expense of $970 million, including a $724 million in‑process R&D charge from the Emalex Biosciences acquisition, and $230 million of legal settlements and loss contingencies.
For the first six months of 2026, net revenues were $8,124 million and net loss attributable to Teva was $207 million. Operating cash flow was $371 million, while investing activities used $263 million, largely driven by Emalex. At June 30 2026, cash and cash equivalents were $3,655 million, total assets $39,857 million, total equity $7,757 million, short‑term debt $4,500 million and long‑term senior notes and loans $12,092 million. Teva continues to classify its API business as held for sale, with $1,794 million of related assets and $313 million of liabilities, and maintains a $4,854 million provision for legal settlements and loss contingencies related to ongoing matters.
Positive
- Long-term debt reduced to $12,092 million from $14,986 million at December 31, 2025, indicating substantial deleveraging alongside stable cash of $3,655 million and access to an undrawn $1.8 billion revolving credit facility.
Negative
- Q2 2026 swung to a net loss of $576 million from $282 million profit a year earlier, driven by a $724 million in‑process R&D charge for Emalex Biosciences and $230 million in legal settlements and loss contingencies.
Key Figures
Key Terms
in-process R&D financial
sustainability-linked senior notes financial
accounts receivable securitization facility financial
Phase 3 trial medical
Marketing Authorization Application regulatory
Variable consideration financial
AI-generated analysis. How Rhea-AI works. Not financial advice.
FAQ
How did Teva (TEVA) perform financially in Q2 2026?
What drove Teva (TEVA)'s higher R&D expenses in Q2 2026?
What is Teva (TEVA)'s debt and cash position as of June 30, 2026?
What major transactions did Teva (TEVA) undertake in 2026 so far?
What is happening with Teva (TEVA)'s API business classified as held for sale?
How large is Teva (TEVA)'s provision for legal settlements and contingencies?
How did Teva (TEVA)'s operating cash flow look in the first half of 2026?
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Not Applicable | ||
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
American Depositary Shares, each representing one Ordinary Share |
| ☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer |
☐ | Smaller reporting company | ||||
| Emerging growth company | ||||||
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
For an accessible version of this Quarterly Report on Form 10-Q, please visit www.tevapharm.com
INDEX
| PART I. | Financial Statements (unaudited) |
|||||
| Item 1. | Financial Statements (unaudited) |
5 | ||||
| Consolidated Balance Sheets |
5 | |||||
| Consolidated Statements of Income (loss) |
6 | |||||
| Consolidated Statements of Comprehensive Income (loss) |
7 | |||||
| Consolidated statements of changes in equity |
8 | |||||
| Consolidated Statements of Cash Flows |
10 | |||||
| Notes to Consolidated Financial Statements |
12 | |||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
53 | ||||
| Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
79 | ||||
| Item 4. | Controls and Procedures |
79 | ||||
| PART II. | OTHER INFORMATION |
|||||
| Item 1. | Legal Proceedings |
80 | ||||
| Item 1A. | Risk Factors |
80 | ||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
80 | ||||
| Item 3. | Defaults Upon Senior Securities |
80 | ||||
| Item 4. | Mine Safety Disclosures |
80 | ||||
| Item 5. | Other Information |
80 | ||||
| Item 6. | Exhibits |
82 | ||||
| Signatures |
83 | |||||
2
| • | our ability to successfully compete in the marketplace, including: that we are substantially dependent on our generic products; concentration of our customer base and commercial alliances among our customers; competition faced by our generic medicines from other pharmaceutical companies and changes in regulatory policy that may result in costs and delays; delays in launches of new generic products; our ability to develop and commercialize additional pharmaceutical products in a timely manner; intense competition for our innovative medicines; our ability to achieve expected results from investments in our product pipeline; our ability to successfully execute on our Pivot to Growth strategy, including to expand our innovative and biosimilar medicines pipeline and to profitably commercialize our innovative medicines and biosimilar portfolio, whether organically or through business development, to sustain and focus our portfolio of generic medicines, and to execute on our organizational transformation and to achieve expected cost savings; and the effectiveness of our patents and other measures to protect our intellectual property rights; |
| • | our significant indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments; and our potential need to raise additional funds in the future, which may not be available on acceptable terms or at all; |
| • | our business and operations in general, including: the impact of global economic conditions and other macroeconomic developments and the governmental and societal responses thereto, and our exposure to changes in international trade policies, including the imposition of tariffs in the jurisdictions in which we operate, and any effects of such developments on sales of our products and the pricing and availability of raw materials; effectiveness of our optimization efforts; significant disruptions of information technology systems, including cybersecurity attacks, as well as risks and uncertainties related to the adoption of artificial intelligence technologies, and breaches of our data security; interruptions in our supply chain or problems with internal or third party manufacturing; challenges associated with conducting business globally, including political or economic instability, prolonged government shutdowns, widespread outbreaks of major diseases and major hostilities or acts of terrorism, ongoing global conflicts, including in the Middle East and the war involving Iran and the war between Russia and Ukraine; our ability to attract, hire, integrate and retain highly skilled personnel; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and/or integrate acquisitions successfully and cost-effectively; and our prospects and opportunities for growth if we sell or plan to sell assets or business units and close or divest plants and facilities, as well as our ability to successfully and cost-effectively effectuate and consummate such sales and divestitures, including our planned divestiture of our API business; |
| • | compliance, regulatory and litigation matters, including: failure to comply with complex legal and regulatory requirements, the effects of regulatory uncertainty and changes and the results of increased regulatory oversight, including expenditures required to ensure compliance with research, production and quality control regulations and remedial actions taken to address product issues, such as delayed product launches, product recalls, and facility shutdowns; the effects of governmental, regulatory and civil proceedings and litigation which we are, or in the future become, party to; the effects of reforms in healthcare regulation and related reductions in pharmaceutical pricing, reimbursement and coverage, including as a result of the One Big Beautiful Bill signed into law in the U.S. in July 2025 (“OBBBA”), which will likely reduce the number of insured in Medicaid and Health Insurance Exchange markets, potentially altering utilization patterns and shifting negotiating leverage among payors, U.S. Executive Orders issued in April and May 2025 intended to reduce the prices paid for prescription medicines, including most-favored-nation pricing and related regulatory efforts; legal and regulatory actions in connection with public concern over the abuse of opioid medications; our ability to timely make payments required under our nationwide opioids settlement agreement and provide our generic version of Narcan ® (naloxone hydrochloride nasal spray) in the amounts and at the times required under the terms of such agreement; scrutiny from competition and pricing authorities around the world, including our ability to comply with and operate under our deferred prosecution agreement (“DPA”) with the U.S. Department of Justice (“DOJ”); potential liability for intellectual property right infringement; significant product liability claims; claims brought by regulatory agencies; failure to comply with complex Medicare, Medicaid and other governmental programs’ reporting and payment obligations; compliance with sanctions and trade control laws; environmental risks and changes in governmental, investor and societal responses to climate change and sustainability related issues; |
| • | financial, economic and other risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; impairments of our long-lived assets; potential significant increases in tax liabilities; the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business; the impact of any failure to maintain effective internal control over our financial reporting; and our ability to successfully implement the process for terminating our American Depository Share (“ADS”) program and directly listing our ordinary shares in lieu of the ADSs and to achieve our aims as a result of such process, as described in Part II, Item 5 of this Quarterly Report on Form 10-Q; |
ITEM 1. |
FINANCIAL STATEMENTS |
June 30, 2026 |
December 31, 2025 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ |
$ |
||||||
| Accounts receivables, net of allowance for credit losses of $ |
||||||||
| Inventories |
||||||||
| Prepaid expenses |
||||||||
| Other current assets |
||||||||
| Assets held for sale |
||||||||
| |
|
|
|
|||||
| Total current assets |
||||||||
| Deferred income taxes |
||||||||
| Other non-current assets |
||||||||
| Property, plant and equipment, net |
||||||||
| Operating lease right-of-use |
||||||||
| Identifiable intangible assets, net |
||||||||
| Goodwill |
||||||||
| |
|
|
|
|||||
| Total assets |
$ |
$ |
||||||
| |
|
|
|
|||||
| LIABILITIES AND EQUITY |
||||||||
| Current liabilities: |
||||||||
| Short-term debt |
$ |
$ |
||||||
| Sales reserves and allowances |
||||||||
| Accounts payables |
||||||||
| Employee-related obligations |
||||||||
| Accrued expenses |
||||||||
| Other current liabilities |
||||||||
| Liabilities held for sale |
||||||||
| |
|
|
|
|||||
| Total current liabilities |
||||||||
| Long-term liabilities: |
||||||||
| Deferred income taxes |
||||||||
| Other taxes and long-term liabilities |
||||||||
| Senior notes and loans |
||||||||
| Operating lease liabilities |
||||||||
| |
|
|
|
|||||
| Total long-term liabilities |
||||||||
| |
|
|
|
|||||
| Commitments and contingencies |
||||||||
| Total liabilities |
||||||||
| |
|
|
|
|||||
| Equity: |
||||||||
| Teva shareholders’ equity: |
||||||||
| Ordinary shares of NIS par value per share; June 30, 2026 and December 31, 2025: authorized million shares; issued million shares and million shares, respectively . |
||||||||
| Additional paid-in capital |
||||||||
| Accumulated deficit |
( |
) |
( |
) | ||||
| Accumulated other comprehensive loss |
( |
) |
( |
) | ||||
| Treasury shares as of June 30, 2026 and December 31, 2025: million ordinary shares and million ordinary shares, respectively . |
( |
) |
( |
) | ||||
| |
|
|
|
|||||
| |
|
|
|
|||||
| Non-controlling interests |
||||||||
| |
|
|
|
|||||
| Total equity |
||||||||
| |
|
|
|
|||||
| Total liabilities and equity |
$ |
$ |
||||||
| |
|
|
|
|||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||||
Net revenues |
$ | $ | $ | $ | ||||||||||||
Cost of sales |
||||||||||||||||
Gross profit |
||||||||||||||||
Research and development expenses |
||||||||||||||||
Selling and marketing expenses |
||||||||||||||||
General and administrative expenses |
||||||||||||||||
Intangible assets impairments |
||||||||||||||||
Other assets impairments, restructuring and other items |
||||||||||||||||
Legal settlements and loss contingencies |
||||||||||||||||
Other loss (income) |
( |
) |
( |
) | ||||||||||||
Operating income (loss) |
( |
) | ||||||||||||||
Financial expenses, net |
||||||||||||||||
Income (loss) before income taxes |
( |
) | ( |
) | ||||||||||||
Income taxes (benefit) |
( |
) | ( |
) | ||||||||||||
Share in (profits) losses of associated companies, net |
* | ( |
) | ( |
) | |||||||||||
Net income (loss) |
( |
) | ( |
) | ||||||||||||
Net income (loss) attributable to redeemable and non-redeemable non-controlling interests |
* | * | * | |||||||||||||
Net income (loss) attributable to Teva |
( |
) | ( |
) |
||||||||||||
Earnings (loss) per share attributable to ordinary shareholders: |
||||||||||||||||
Basic |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Diluted |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Weighted average number of shares (in millions): |
||||||||||||||||
Basic |
||||||||||||||||
Diluted |
||||||||||||||||
| * | Represents an amount less than $ |
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||||
| Net income (loss) |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| Other comprehensive income (loss), net of tax: |
||||||||||||||||
| Currency translation adjustment |
( |
) | ||||||||||||||
| Unrealized gain (loss) from derivative financial instruments, net |
( |
) | ( |
) | ||||||||||||
| Unrealized loss on defined benefit plans |
( |
) | — | ( |
) | ( |
) | |||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total other comprehensive income (loss) |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total comprehensive income (loss) |
( |
) | ( |
) | ||||||||||||
| Comprehensive income (loss) attributable to redeemable and non-redeemable non-controlling interests |
* | * | * | |||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Comprehensive income (loss) attributable to Teva |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| * | Represents an amount less than $ |
Teva shareholders’ equity |
||||||||||||||||||||||||||||||||||||
Ordinary shares |
||||||||||||||||||||||||||||||||||||
Number of shares (in millions) |
Stated value |
Additional paid-in capital |
Retained earnings (accumulated deficit) |
Accumulated other comprehensive (loss) |
Treasury shares |
Total Teva shareholders’ equity |
Non- controlling interests |
Total equity |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Balance at March 31, 2026 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net Income (loss) |
( |
) | ( |
) |
* |
( |
) | |||||||||||||||||||||||||||||
Other comprehensive income |
* |
|||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Proceeds from exercise of options |
||||||||||||||||||||||||||||||||||||
Balance at June 30, 2026 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||
| * | Represents an amount less than $ |
Teva shareholders’ equity |
||||||||||||||||||||||||||||||||||||
Ordinary shares |
||||||||||||||||||||||||||||||||||||
Number of shares (in millions) |
Stated value |
Additional paid-in capital |
Retained earnings (accumulated deficit) |
Accumulated other comprehensive (loss) |
Treasury shares |
Total Teva shareholders’ equity |
Non- controlling interests |
Total equity |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2025 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net Income (loss) |
( |
) | ( |
) | * |
( |
) | |||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | * |
( |
) | |||||||||||||||||||||||||||||
Issuance of Shares |
* |
* |
||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Proceeds from exercise of options |
||||||||||||||||||||||||||||||||||||
Balance at June 30, 2026 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||
| * | Represents an amount less than $ |
Teva shareholders’ equity |
||||||||||||||||||||||||||||||||||||
Ordinary shares |
||||||||||||||||||||||||||||||||||||
Number of shares (in millions) |
Stated value |
Additional paid-in capital |
Retained earnings (accumulated deficit) |
Accumulated other comprehensive (loss) |
Treasury shares |
Total Teva shareholders’ equity |
Non- controlling interests |
Total equity |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Balance at March 31, 2025 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net Income (loss) |
* |
|||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
* |
|||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Balance at June 30, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) |
$ | $ | $ | ||||||||||||||||||||||
| * | Represents an amount less than $ |
Teva shareholders’ equity |
||||||||||||||||||||||||||||||||||||
Ordinary shares |
||||||||||||||||||||||||||||||||||||
Number of shares (in millions) |
Stated value |
Additional paid-in capital |
Retained earnings (accumulated deficit) |
Accumulated other comprehensive (loss) |
Treasury shares |
Total Teva shareholders’ equity |
Non- controlling interests |
Total equity |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2024 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net Income (loss) |
* |
|||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
* |
|||||||||||||||||||||||||||||||||||
Issuance of Shares |
* |
* |
||||||||||||||||||||||||||||||||||
Proceeds from exercise of options |
||||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Purchase of shares from non-controlling interests** |
||||||||||||||||||||||||||||||||||||
Balance at June 30, 2025 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||
| * | Represents an amount less than $ |
| ** | In connection with the sale of Teva’s business venture in Japan. |
Three months ended |
Six months ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||||
| Operating activities: |
||||||||||||||||
| Net income (loss) |
$ | ( |
) | $ | ( |
) | ||||||||||
| Adjustments to reconcile net income (loss) to net cash provided by operations: |
||||||||||||||||
| Depreciation and amortization |
||||||||||||||||
| Impairment of long-lived assets and assets held for sale |
||||||||||||||||
| Acquired IPR&D related to Emalex Biosciences, see note 2 |
||||||||||||||||
| Net change in operating assets and liabilities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Deferred income taxes – net and uncertain tax positions |
( |
) | ( |
) | ||||||||||||
| Stock-based compensation |
||||||||||||||||
| Other items |
( |
) | ||||||||||||||
| Net loss (gain) from sale of business and long-lived assets |
( |
) | ( |
) | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net cash provided by (used in) operating activities |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Investing activities: |
||||||||||||||||
| Beneficial interest collected in exchange for securitized trade receivables |
||||||||||||||||
| Purchases of property, plant and equipment and intangible assets |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Proceeds from sale of business and long-lived assets, net |
||||||||||||||||
| Purchase of Emalex Biosciences outstanding shares, see note 2 |
( |
) | ( |
) | ||||||||||||
| Purchases of investments and other assets . |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| Other investing activities |
( |
) | ( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net cash provided by (used in) investing activities |
( |
) |
( |
) |
||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Financing activities: |
||||||||||||||||
| Repayment of senior notes and loans and other long-term liabilities |
( |
) | ( |
) | ( |
) | ||||||||||
| Repayment of convertible debentures |
||||||||||||||||
| Purchase of shares from redeemable and non-redeemable non-controlling interests |
( |
) | ||||||||||||||
| Dividends paid to redeemable and non-redeemable non-controlling interests |
( |
) | ||||||||||||||
| Other financing activities |
( |
) |
||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net cash provided by (used in) financing activities |
( |
) |
( |
) | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Effect of exchange rate changes on cash and cash equivalents |
( |
) |
( |
) |
( |
) |
||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net change in cash and cash equivalents |
( |
) |
( |
) | ||||||||||||
| Balance of cash and cash equivalents at beginning of period |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Balance of cash and cash equivalents at end of period |
$ | $ |
||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Non-cash financing and investing activities: |
||||||||||||||||
| Beneficial interest obtained in exchange for securitized accounts receivables |
$ | $ | ||||||||||||||
Three months ended June 30, |
Six months ended June 30, |
|||||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||||
| Other assets |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| Trade payables, accrued expenses, employee-related obligations and other liabilities |
( |
) | ||||||||||||||
| Trade receivables net of sales reserves and allowances |
( |
) | ||||||||||||||
| Inventories |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||
| |
|
|
|
|
|
|
|
|||||||||
(U.S. $ in millions) |
||||
| Cash consideration for outstanding shares, net of working capital adjustments |
$ | |||
| Transaction costs |
||||
| |
|
|||
| Total consideration allocated |
||||
| |
|
|||
| Other current assets |
||||
| Deferred income taxes |
||||
| Valuation allowance |
( |
) | ||
| Accrued expenses |
$ | ( |
) | |
| Other liabilities |
( |
) | ||
| |
|
|||
| Total identifiable assets and liabilities acquired |
( |
) | ||
| |
|
|||
| Acquired IPR&D |
||||
| |
|
|||
| Total consideration allocated |
$ | |||
| |
|
|||
June 30, |
December 31, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Accounts receivables |
$ | |||||||
| Inventories |
$ | |||||||
| Property, plant and equipment, net |
||||||||
| Identifiable intangible assets, net |
||||||||
| Goodwill |
||||||||
| Other current assets |
||||||||
| Other non-current assets |
||||||||
| Expected loss on sale* |
( |
) | ( |
) | ||||
| |
|
|
|
|||||
| Total assets of the disposal group classified as held for sale in the consolidated balance sheets |
$ | $ | ||||||
| |
|
|
|
|||||
| Accounts payables |
( |
) | ( |
) | ||||
| Other current liabilities |
( |
) | ( |
) | ||||
| Other non-current liabilities |
( |
) | ( |
) | ||||
| Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets |
$ | ( |
) | $ | ( |
) | ||
| |
|
|
|
|||||
* |
Includes an expected loss from reclassification of currency translation adjustments to the consolidated statements of income (loss) upon sale. |
Three months ended June 30, 2026 |
||||||||||||||||||||
United States |
Europe |
International Markets |
Other Activities |
Total |
||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||
| Sale of goods |
||||||||||||||||||||
| Licensing arrangements |
§ | |||||||||||||||||||
| Distribution |
§ | |||||||||||||||||||
| Other |
( |
) | ( |
) | ( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
§ |
Represents an amount less than $0.5 million. |
Three months ended June 30, 2025 |
||||||||||||||||||||
United States |
Europe |
International Markets |
Other Activities |
Total |
||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||
| Sale of goods |
||||||||||||||||||||
| Licensing arrangements |
( |
) | ||||||||||||||||||
| Distribution |
§ | |||||||||||||||||||
| Other |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
§ |
Represents an amount less than $0.5 million. |
Six months ended June 30, 2026 |
||||||||||||||||||||
United States |
Europe |
International Markets |
Other Activities |
Total |
||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||
| Sale of goods |
||||||||||||||||||||
| Licensing arrangements |
§ | |||||||||||||||||||
| Distribution |
§ | |||||||||||||||||||
| Other |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
§ |
Represents an amount less than $0.5 million. |
Six months ended June 30, 2025 |
||||||||||||||||||||
United States |
Europe |
International Markets |
Other Activities |
Total |
||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||
| Sale of goods |
||||||||||||||||||||
| Licensing arrangements |
§ | |||||||||||||||||||
| Distribution |
§ | |||||||||||||||||||
| Other |
||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
$ |
$ |
$ |
$ |
$ |
||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|||||||||||
§ |
Represents an amount less than $0.5 million. |
Sales Reserves and Allowances |
||||||||||||||||||||||||||||||||
Reserves included in Accounts Receivable, net |
Rebates |
Medicaid and other governmental allowances |
Chargebacks |
Returns |
Other |
Total reserves included in Sales Reserves and Allowances |
Total |
|||||||||||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||||||||||||||
| Balance at January 1, 2026 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Provisions related to sales made in current year period |
||||||||||||||||||||||||||||||||
| Provisions related to sales made in prior periods |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ( |
) | ||||||||||||||||||
| Credits and payments |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ( |
) | ||||||||||||||||
| Translation differences |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ( |
) | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at June 30, 2026 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Sales Reserves and Allowances |
||||||||||||||||||||||||||||||||
Reserves included in Accounts Receivable, net |
Rebates |
Medicaid and other governmental allowances |
Chargebacks |
Returns |
Other |
Total reserves included in Sales Reserves and Allowances |
Total |
|||||||||||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||||||||||||||
| Balance at January 1, 2025 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Provisions related to sales made in current year period |
||||||||||||||||||||||||||||||||
| Provisions related to sales made in prior periods |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
| Credits and payments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
| Translation differences |
||||||||||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Balance at June 30, 2025 |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
June 30, |
December 31, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Finished products |
$ | $ | ||||||
| Raw and packaging materials |
||||||||
| Products in process |
||||||||
| Materials in transit and payments on account |
||||||||
| |
|
|
|
|||||
| $ | $ | |||||||
| |
|
|
|
|||||
Gross carrying amount net of impairment |
Accumulated amortization |
Net carrying amount |
||||||||||||||||||||||
June 30, |
December 31, |
June 30, |
December 31, |
June 30, |
December 31, |
|||||||||||||||||||
2026 |
2025 |
2026 |
2025 |
2026 |
2025 |
|||||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||||||
| Product rights |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Trade names |
||||||||||||||||||||||||
| In process research and development |
— | |||||||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| (a) | Identifiable product rights of $ |
| (b) | IPR&D assets of $ |
United States |
Europe |
International Markets |
Other Activities |
Total |
||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||
Balance as of December 31, 2025 (1) |
$ | $ |
$ | $ | $ | |||||||||||||||
Goodwill allocation related to the shift of Anda to Other Activities |
( |
) | ||||||||||||||||||
Balance as of January 1, 2026 |
$ | $ |
$ | $ | $ | |||||||||||||||
Other changes during the period: |
||||||||||||||||||||
Translation differences and other |
( |
) | ( |
) | ( |
) | ||||||||||||||
Balance as of June 30, 2026 (1) |
$ | $ |
$ | $ | $ | |||||||||||||||
| (1) | Cumulative goodwill impairment as of June 30, 2026 and December 31, 2025, was approximately $ |
a. |
Short-term debt: |
Weighted average interest rate as of December 31, 2025 |
Maturity |
June 30, 2026 |
December 31, 2025 |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Convertible debentures (1) |
% | $ | $ | |||||||||||||
Current maturities of long-term liabilities |
||||||||||||||||
Total short-term debt |
$ |
$ | ||||||||||||||
| (1) | In February 2026, Teva repaid $ |
b. |
Long-term debt: |
Interest rate as of June 30, 2026 |
Maturity |
June 30, 2026 |
December 31, 2025 |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Sustainability-linked senior notes USD |
% | |||||||||||||||
Sustainability-linked senior notes EUR |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Sustainability-linked senior notes USD 1 ) |
% | |||||||||||||||
Sustainability-linked senior notes USD 1 ) |
% | |||||||||||||||
Sustainability-linked senior notes EUR 1 |
% | |||||||||||||||
Sustainability-linked senior notes EUR 1 ) |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Sustainability-linked senior notes USD 1 ) |
% | |||||||||||||||
Sustainability-linked senior notes EUR 1 ) |
% | |||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Total senior notes |
||||||||||||||||
Less current maturities |
( |
) | ( |
) | ||||||||||||
Less debt issuance costs |
( |
) | ( |
) | ||||||||||||
Total senior notes and loans |
$ | $ | ||||||||||||||
(1) |
The Company achieved all sustainability performance targets applicable to its sustainability-linked senior notes by the respective target dates. Therefore, no one-time premium or increased interest rate payments will become payable in respect of these notes. |
a. |
Foreign exchange risk management: |
b. |
Interest risk management: |
c. |
Derivative instruments outstanding: |
Fair value |
Fair value |
|||||||||||||||
Designated as hedging instruments |
Not designated as hedging instruments |
|||||||||||||||
June 30, 2026 |
December 31, 2025 |
June 30, 2026 |
December 31, 2025 |
|||||||||||||
Reported under |
(U.S. $ in millions) |
(U.S. $ in millions) |
||||||||||||||
Asset derivatives: |
||||||||||||||||
Other current assets: |
||||||||||||||||
Option and forward contracts |
$ | $ | $ | $ | ||||||||||||
Liability derivatives: |
||||||||||||||||
Other current liabilities: |
||||||||||||||||
Option and forward contracts |
( |
) | ( |
) | ||||||||||||
Other non-current liabilities: |
||||||||||||||||
Cross-currency interest rate swap-cash flow hedge (1) |
( |
) | ( |
) | ||||||||||||
Financial expenses, net |
Other comprehensive income (loss) |
|||||||||||||||
Three months ended, |
Three months ended, |
|||||||||||||||
June 30, 2026 |
June 30, 2025 |
June 30, 2026 |
June 30, 2025 |
|||||||||||||
Reported under |
(U.S. $ in millions) |
|||||||||||||||
Line items in which effects of hedges are recorded |
$ | $ | $ | $ | ||||||||||||
Cross-currency interest rate swap - cash flow hedge (1) |
( |
) | ||||||||||||||
Financial expenses, net |
Other comprehensive income (loss) |
|||||||||||||||
Six months ended, |
Six months ended, |
|||||||||||||||
June 30, 2026 |
June 30, 2025 |
June 30, 2026 |
June 30, 2025 |
|||||||||||||
Reported under |
(U.S. $ in millions) |
|||||||||||||||
Line items in which effects of hedges are recorded |
$ | $ | $ | ( |
) | $ | ||||||||||
Cross-currency interest rate swap - cash flow hedge (1) |
( |
) | ||||||||||||||
Financial expenses, net |
Net revenues |
|||||||||||||||
Three months ended, |
Three months ended, |
|||||||||||||||
June 30, 2026 |
June 30, 2025 |
June 30, 2026 |
June 30, 2025 |
|||||||||||||
| Reported under |
(U.S. $ in millions) |
|||||||||||||||
| Line items in which effects of hedges are recorded |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
| Option and forward contracts (2) |
( |
) | ( |
) | ||||||||||||
| Option and forward contracts economic hedge (3) |
||||||||||||||||
Financial expenses, net |
Net revenues |
|||||||||||||||
Six months ended, |
Six months ended, |
|||||||||||||||
June 30, 2026 |
June 30, 2025 |
June 30, 2026 |
June 30, 2025 |
|||||||||||||
Reported under |
(U.S. $ in millions) |
|||||||||||||||
| Line items in which effects of hedges are recorded |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
| Option and forward contracts (2) |
( |
) | ||||||||||||||
| Option and forward contracts economic hedge (3) |
( |
) | ||||||||||||||
| (1) | In May 2025, Teva entered into a $ |
| (2) | Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses, net. |
(3) |
Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on projected revenues and expenses recorded in euro, Swiss franc, British pound, Russian ruble, Canadian dollar, Polish złoty, new Israeli shekel, Indian rupee and some other currencies to protect its projected operating results in 2026. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as an economic hedge. These derivative instruments, which may include hedging transactions of future projected revenues and expenses, are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. Changes in the fair value of the derivative instruments are recognized in the same line item in the statements of income as the underlying exposure being hedged. Cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows. |
d. |
Amortizations due to terminated derivative instruments: |
e. |
Securitization: |
f. |
Supplier Finance Program Obligation |
Three months ended |
Six months ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||||
(U.S. $ in millions) |
(U.S. $ in millions) |
|||||||||||||||
| Impairments of long- lived tangible assets * |
$ | $ | $ | $ | ||||||||||||
| Contingent consideration |
||||||||||||||||
| Restructuring |
||||||||||||||||
| Other |
§ | ( |
) | ( |
) | |||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
$ | $ | $ | $ | ||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| * | Including impairments related to exit and disposal activities. |
| § | Represents an amount less than $0.5 million. |
Three months ended June 30, |
||||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Restructuring |
||||||||
| Employee termination |
$ | $ | ||||||
| Other |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
Six months ended June 30, |
||||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Restructuring |
||||||||
| Employee termination |
$ | $ | ||||||
| Other |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
Employee termination costs |
Other |
Total |
||||||||||
(U.S. $ in millions) |
||||||||||||
| Balance as of January 1, 2026 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| Provision |
( |
) | ( |
) | ( |
) | ||||||
| Utilization and other* |
||||||||||||
| |
|
|
|
|
|
|||||||
| Balance as of June 30, 2026 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
| |
|
|
|
|
|
|||||||
Employee termination costs |
Other |
Total |
||||||||||
(U.S. $ in millions) |
||||||||||||
Balance as of January 1, 2025 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Provision |
( |
) | ( |
) | ( |
) | ||||||
Utilization and other* |
||||||||||||
Balance as of June 30, 2025 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
* |
Includes adjustments for foreign currency translation. |
Three Months Ended |
Six Months Ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
(U.S. $ in millions except share and per share data) |
||||||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||||
Basic earnings (loss) attributable to Teva’s ordinary shareholders (numerator): |
||||||||||||||||
Net income (loss) attributable to Teva’s ordinary shareholders |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Shares (denominator): |
||||||||||||||||
Weighted average shares outstanding |
||||||||||||||||
Basic earnings (loss) attributable to Teva’s ordinary shareholders |
$ | ( |
) |
$ | |
$ | ( |
) | $ | |||||||
Diluted earnings (loss) attributable to Teva’s ordinary shareholders (numerator): |
||||||||||||||||
Net income (loss) attributable to Teva’s ordinary shareholders |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
Shares (denominator): |
||||||||||||||||
Weighted average shares outstanding |
||||||||||||||||
Diluted effect of stock options, RSUs and PSUs |
||||||||||||||||
Total dilutive shares outstanding |
||||||||||||||||
Diluted earnings (loss) attributable to Teva’s ordinary shareholders |
$ | ( |
) | $ | $ | ( |
) |
$ | ||||||||
Net Unrealized Gains (Losses) |
Benefit Plans |
|||||||||||||||
Foreign currency translation adjustments |
Derivative financial instruments |
Actuarial gains (losses) and prior service (costs) credits |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
| Balance as of December 31, 2025, net of taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income (loss) before reclassifications |
( |
) | ( |
) | — | ( |
) | |||||||||
| Amounts reclassified to the statements of income |
— | ( |
) | |||||||||||||
| Release of cumulative translation adjustments |
( |
) | — | — | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net other comprehensive income (loss) before tax |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Corresponding income tax |
( |
) | — | — | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net other comprehensive income (loss) after tax |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Balance as of June 30, 2026, net of taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
Net Unrealized Gains (Losses) |
Benefit Plans |
|||||||||||||||
Foreign currency translation adjustments |
Derivative financial instruments |
Actuarial gains (losses) and prior service (costs) credits |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
| Balance as of December 31, 2024, net of taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
| Other comprehensive income (loss) before reclassifications |
— | — | ||||||||||||||
| Amounts reclassified to the statements of income |
— | ( |
) | |||||||||||||
| Release of cumulative translation adjustments** |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net other comprehensive income (loss) before tax |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Corresponding income tax |
— | — | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Net other comprehensive income (loss) after tax* |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Balance as of June 30, 2025, net of taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
| |
|
|
|
|
|
|
|
|||||||||
| * | Amounts do not include a $ non-redeemable non-controlling interests. |
| ** | In connection with the sale of Teva’s business venture in Japan. |
| (a) | United States segment. |
| (b) | Europe segment, which includes the European Union, the United Kingdom and certain other European countries. |
| (c) | International Markets segment, which includes all countries other than the United States and countries included in the Europe segment. |
a. |
Segment information: |
Three months ended June 30, |
||||||||||||
2026 |
||||||||||||
United States |
Europe |
International Markets |
||||||||||
(U.S. $ in millions) |
||||||||||||
| Revenues |
$ | $ | $ | |||||||||
| Cost of sales |
||||||||||||
| R&D expenses** |
||||||||||||
| S&M expenses |
||||||||||||
| G&A expenses |
||||||||||||
| Other |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Segment profit* |
$ | ( |
) | $ | $ | |||||||
| |
|
|
|
|
|
|||||||
| * | Segment profit includes depreciation expenses of $ |
** |
Mainly related to the acquisition of Emalex and its primary asset ecopipam (EBS-101) in the United States segment. See ‘Emalex Biosciences’ included in note 2. |
Three months ended June 30, |
||||||||||||
2025 |
||||||||||||
United States |
Europe |
International Markets |
||||||||||
(U.S. $ in millions) |
||||||||||||
| Revenues |
$ | $ | $ | |||||||||
| Cost of sales |
||||||||||||
| R&D expenses |
||||||||||||
| S&M expenses |
||||||||||||
| G&A expenses |
||||||||||||
| Other |
§ | § | ( |
) | ||||||||
| |
|
|
|
|
|
|||||||
| Segment profit* |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| * | Segment profit includes depreciation expenses of $ |
§ |
Represents an amount less than $0.5 million. |
Six months ended June 30, |
||||||||||||
2026 |
||||||||||||
United States |
Europe |
International Markets |
||||||||||
(U.S. $ in millions) |
||||||||||||
| Revenues |
$ | $ | $ | |||||||||
| Cost of sales |
||||||||||||
| R&D expenses** |
||||||||||||
| S&M expenses |
||||||||||||
| G&A expenses |
||||||||||||
| Other |
( |
) | ( |
) | ( |
) | ||||||
| |
|
|
|
|
|
|||||||
| Segment profit* |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| * | Segment profit includes depreciation expenses of $ |
** |
Mainly related to the acquisition of Emalex and its primary asset ecopipam (EBS-101) in the United States segment. See ‘Emalex Biosciences’ included in note 2. |
Six months ended June 30, |
||||||||||||
2025 |
||||||||||||
United States |
Europe |
International Markets |
||||||||||
(U.S. $ in millions) |
||||||||||||
| Revenues |
$ | $ | $ | |||||||||
| Cost of sales |
||||||||||||
| R&D expenses |
||||||||||||
| S&M expenses |
||||||||||||
| G&A expenses |
||||||||||||
| Other |
§ | ( |
) | |||||||||
| |
|
|
|
|
|
|||||||
| Segment profit* |
$ | $ | $ | |||||||||
| |
|
|
|
|
|
|||||||
| * | Segment profit includes depreciation expenses of $ |
§ |
Represents an amount less than $0.5 million. |
Three months ended |
Six months ended |
|||||||||||||||
June 30, |
June 30, |
|||||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||||
(U.S. $ in millions) |
(U.S. $ in millions) |
|||||||||||||||
| United States profit (loss) |
$ | ( |
) | $ | $ | $ | ||||||||||
| Europe profit |
||||||||||||||||
| International Markets profit |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total reportable segments profit |
||||||||||||||||
| Profit (loss) of Other Activities |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Amounts not allocated to segments: |
||||||||||||||||
| Amortization |
||||||||||||||||
| Other assets impairments, restructuring and other items |
||||||||||||||||
| Intangible assets impairments |
||||||||||||||||
| Legal settlements and loss contingencies |
||||||||||||||||
| Other unallocated amounts |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Consolidated operating income (loss) |
( |
) | ||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Financial expenses, net |
||||||||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Consolidated income (loss) before income taxes |
$ | ( |
) | $ | $ | ( |
) | $ | ||||||||
| |
|
|
|
|
|
|
|
|||||||||
b. |
Segment revenues by major products and activities: |
United States |
Three months ended June 30, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Generic products (including biosimilars) |
$ | $ | ||||||
| AJOVY ® |
||||||||
| AUSTEDO |
||||||||
| BENDEKA ® and TREANDA® |
||||||||
| COPAXONE |
||||||||
| UZEDY |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| United States | Six months ended June 30, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Generic products (including biosimilars) |
$ | $ | ||||||
| AJOVY |
||||||||
| AUSTEDO |
||||||||
| BENDEKA and TREANDA |
||||||||
| COPAXONE |
||||||||
| UZEDY |
||||||||
| Other |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| Europe | Three months ended June 30, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Generic products (including OTC and biosimilars) |
$ | $ | ||||||
| AJOVY |
||||||||
| COPAXONE |
||||||||
| Respiratory products |
||||||||
| Other* |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| * | Other revenues in the second quarter of 2025 include the sale of certain product rights. |
| Europe | Six months ended June 30, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Generic products (including OTC and biosimilars) |
$ |
$ |
||||||
| AJOVY |
||||||||
| COPAXONE |
||||||||
| Respiratory products |
||||||||
| Other* |
||||||||
| |
|
|
|
|||||
| Total |
$ |
$ |
||||||
| |
|
|
|
|||||
| * | Other revenues in the first six months of 2026 and 2025 include the sale of certain product rights. |
International markets |
Three months ended June 30, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Generic products (including OTC and biosimilars) |
$ | $ | ||||||
| AJOVY |
||||||||
| AUSTEDO |
||||||||
| COPAXONE |
||||||||
| Other* |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| * | Other revenues in the second quarter of 2025 include the sale of certain product rights. |
International markets |
Six months ended June 30, |
|||||||
2026 |
2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Generic products (including OTC and biosimilars) |
$ | $ | ||||||
| AJOVY |
||||||||
| AUSTEDO |
||||||||
| COPAXONE |
||||||||
| Other* |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| * | Other revenues in the first six months of 2026 and 2025 include the sale of certain product rights. |
June 30, 2026 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
| Cash and cash equivalents: |
||||||||||||||||
| Money markets |
$ | $ | — | $ | — | $ | ||||||||||
| Cash, deposits and other |
— | — | ||||||||||||||
| Investment in securities: |
||||||||||||||||
| Equity securities |
— | — | ||||||||||||||
| Other |
— | — | ||||||||||||||
| Derivatives: |
||||||||||||||||
| Asset derivatives: |
||||||||||||||||
| Options and forward contracts |
— | — | ||||||||||||||
| Liability derivatives: |
||||||||||||||||
| Options and forward contracts |
— | ( |
) | — | ( |
) | ||||||||||
| Cross currency interest rate swap |
— | ( |
) | — | ( |
) | ||||||||||
| Contingent consideration* |
— | — | ( |
) | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
$ | $ | $ | ( |
) | $ | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
December 31, 2025 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
| Cash and cash equivalents: |
||||||||||||||||
| Money markets |
$ | $ | — | $ | — | $ | ||||||||||
| Cash, deposits and other |
— | — | ||||||||||||||
| Investment in securities: |
||||||||||||||||
| Equity securities |
— | — | ||||||||||||||
| Other |
— | — | ||||||||||||||
| Derivatives: |
||||||||||||||||
| Asset derivatives: |
||||||||||||||||
| Options and forward contracts |
— | — | ||||||||||||||
| Liability derivatives: |
||||||||||||||||
| Options and forward contracts |
— | ( |
) | — | ( |
) | ||||||||||
| Cross currency interest rate swap |
— | ( |
) | — | ( |
) | ||||||||||
| Contingent consideration* |
— | — | ( |
) | ( |
) | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| Total |
$ | $ | $ | ( |
) | $ | ||||||||||
| |
|
|
|
|
|
|
|
|||||||||
| * | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
Six months ended June 30, 2026 |
Six months ended June 30, 2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Fair value at the beginning of the period |
$ | ( |
) | $ | ( |
) | ||
| Adjustments to provisions for contingent consideration: |
||||||||
| Allergan transaction |
( |
) | ||||||
| Eagle transaction |
( |
) | ( |
) | ||||
| Novetide transaction |
( |
) | ( |
) | ||||
| Settlement of contingent consideration: |
||||||||
| Allergan transaction |
||||||||
| Eagle transaction |
||||||||
| Novetide transaction |
||||||||
| |
|
|
|
|||||
| Fair value at the end of the period |
$ | ( |
) | $ | ( |
) | ||
| |
|
|
|
|||||
Estimated fair value* |
||||||||
June 30, 2026 |
December 31, 2025 |
|||||||
(U.S. $ in millions) |
||||||||
| Senior notes and sustainability-linked senior notes included under senior notes and loans |
$ | $ | ||||||
| Senior notes and convertible senior debentures included under short-term debt |
||||||||
| |
|
|
|
|||||
| Total |
$ | $ | ||||||
| |
|
|
|
|||||
| * | The fair value was estimated based on quoted market prices. |
| ITEM 2. | 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 |
$ | (455 | ) | $ | 203 | |||
|
|
|
|
|
|||||
66
Income Taxes
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.
Net Income (Loss) Attributable to Teva
Net loss attributable to Teva was $576 million in the second quarter of 2026, compared to net income of $282 million in the second quarter of 2025. This change was mainly due to the change in operating loss and higher income taxes, primarily due to the acquisition of Emalex and its primary asset ecopipam (EBS-101), as discussed above.
Diluted Shares Outstanding and Earnings (Loss) per Share
The weighted average diluted shares outstanding used for the fully diluted share calculations for the three months ended June 30, 2026 and 2025 was 1,165 million shares and 1,161 million shares, respectively.
Diluted loss per share was $0.49 in the second quarter of 2026, compared to diluted earnings per share of $0.24 in the second quarter of 2025. See note 13 to our consolidated financial statements.
Share Count for Market Capitalization
We calculate share amounts using the outstanding number of shares (i.e., excluding treasury shares) plus shares that would be outstanding upon the exercise of options and vesting of RSUs and PSUs, and the conversion of our convertible senior debentures, in each case, at period end.
As of June 30, 2026 and 2025, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,191 million shares and 1,179 million shares, respectively.
Impact of Currency Fluctuations on Results of Operations
In the second quarter of 2026, approximately 45% of our revenues were denominated in currencies other than the U.S. dollar. Since our results are reported in U.S. dollars, we are subject to significant foreign currency risks. Accordingly, changes in the rate of exchange between the U.S. dollar and local currencies in the markets in which we operate (primarily the euro, Swiss franc, Russian ruble, British pound, Canadian dollar, new Israeli shekel and Polish złoty) impacted our results.
During the second quarter of 2026, the following main currencies relevant to our operations increased in value against the U.S. dollar (each compared on a quarterly average basis): new Israeli shekel by 21%, Hungarian forint by 15%, Brazilian real by 12%, Mexican peso by 12%, Australian dollar by 11%, Russian ruble by 8%, Swiss franc by 5%, Polish złoty by 3% and euro by 3%. The following currencies relevant to our operations decreased in value against the U.S. dollar (each compared on a quarterly average basis): Argentinian peso by 19%, Indian rupee by 9% and Ukrainian hryvna by 6%.
As a result, exchange rate movements during the second quarter of 2026, including hedging effects, positively impacted revenues by $85 million and operating loss by $26 million, compared to the second quarter of 2025.
During the second quarter of 2026, a negative hedging impact of $8 million was recognized under revenues, and a positive hedging impact of $9 million was recognized under cost of sales. During the second quarter of 2025, a negative hedging impact of $32 million was recognized under revenues and a positive hedging impact of $4 million was recognized under cost of sales.
Hedging transactions of future projected revenues and expenses are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. See note 8c to our consolidated financial statements.
Commencing in the third quarter of 2018, the cumulative inflation in Argentina exceeded 100% or more over a three-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.
Commencing in the second quarter of 2022, the cumulative inflation in Turkey exceeded 100% or more over a three-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.
67
Comparison of Six Months Ended June 30, 2026 to Six Months Ended June 30, 2025
Unless specified otherwise, the factors used to explain quarterly changes on a year-over-year basis are also relevant for the comparison of the results for the six months ended June 30, 2026 and 2025. Where there are different factors affecting the six-month comparison, we have described them below.
Segment Information
United States Segment
The following table presents revenues, expenses and profit for our United States segment for the six months ended June 30, 2026 and 2025:
| Six months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| (U.S. $ in millions / % of Segment Revenues) | ||||||||||||||||
| Revenues |
$ | 3,236 | 100 | % | $ | 3,322 | 100 | % | ||||||||
| Cost of sales |
995 | 30.8 | % | 1,097 | 33.0 | % | ||||||||||
| Gross profit |
2,241 | 69.2 | % | 2,225 | 67.0 | % | ||||||||||
| R&D expenses* |
1,030 | 31.8 | % | 306 | 9.2 | % | ||||||||||
| S&M expenses |
593 | 18.3 | % | 493 | 14.9 | % | ||||||||||
| G&A expenses |
197 | 6.1 | % | 206 | 6.2 | % | ||||||||||
| Other |
(9 | ) | § | 3 | § | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment profit** |
$ | 431 | 13.3 | % | $ | 1,216 | 36.6 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | In the first six months of 2026, mainly related to the acquisition of Emalex and its primary asset ecopipam (EBS-101) in the United States segment. See ‘Emalex Biosciences Acquisition’ above, and ‘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%. |
United States Revenues
Revenues from our United States segment in the first six months of 2026 were $3,236 million, a decrease of 3% compared to $3,322 million in the first six months of 2025.
Revenues by Major Products and Activities
The following table presents revenues for our United States segment by major products and activities for the six months ended June 30, 2026 and 2025:
| Six months ended June 30, |
Percentage Change |
|||||||||||
| 2026 | 2025 | 2026-2025 | ||||||||||
| (U.S. $ in millions) | ||||||||||||
| Generic products (including biosimilars) |
$ | 1,272 | $ | 1,809 | (30 | %) | ||||||
| AJOVY |
203 | 117 | 74 | % | ||||||||
| AUSTEDO |
1,236 | 891 | 39 | % | ||||||||
| BENDEKA and TREANDA |
55 | 76 | (28 | %) | ||||||||
| COPAXONE |
124 | 116 | 7 | % | ||||||||
| UZEDY |
140 | 93 | 51 | % | ||||||||
| Other |
206 | 220 | (6 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total |
$ | 3,236 | $ | 3,322 | (3 | %) | ||||||
|
|
|
|
|
|||||||||
68
United States Gross Profit
Gross profit from our United States segment in the first six months of 2026 was $2,241 million, an increase of 1% compared to $2,225 million in the first six months of 2025.
Gross profit margin for our United States segment in the first six months of 2026 increased to 69.2% compared to 67.0% in the first six months of 2025.
United States R&D Expenses
R&D expenses relating to our United States segment in the first six months of 2026 were $1,030 million, an increase of 236% compared to $306 million in the first six months of 2025.
United States S&M Expenses
S&M expenses relating to our United States segment in the first six months of 2026 were $593 million, an increase of 20% compared to $493 million in the first six months of 2025.
United States G&A Expenses
G&A expenses relating to our United States segment in the first six months of 2026 were $197 million, a decrease of 4% compared to $206 million in the first six months of 2025.
United States Profit
Profit from our United States segment in the first six months of 2026 was $431 million, a decrease of 65% compared to $1,216 million in the first six months of 2025.
Europe Segment
The following table presents revenues, expenses and profit for our Europe segment for the six months ended June 30, 2026 and 2025:
| Six months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| (U.S. $ in millions / % of Segment Revenues) | ||||||||||||||||
| Revenues |
$ | 2,603 | 100.0 | % | $ | 2,492 | 100.0 | % | ||||||||
| Cost of sales |
1,165 | 44.8 | % | 1,117 | 44.8 | % | ||||||||||
| Gross profit |
1,438 | 55.2 | % | 1,374 | 55.2 | % | ||||||||||
| R&D expenses |
97 | 3.7 | % | 120 | 4.8 | % | ||||||||||
| S&M expenses |
437 | 16.8 | % | 427 | 17.1 | % | ||||||||||
| G&A expenses |
139 | 5.3 | % | 135 | 5.4 | % | ||||||||||
| Other |
(3 | ) | § | § | § | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment profit* |
$ | 768 | 29.5 | % | $ | 693 | 27.8 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Segment profit does not include amortization and certain other items. |
| § | Represents an amount less than $0.5 million or 0.5%, as applicable. |
Europe Revenues
Our Europe segment includes the European Union, the United Kingdom, and certain other European countries.
Revenues from our Europe segment in the first six months of 2026 were $2,603 million, an increase of $111 million compared to the first six months of 2025. In local currency terms, revenues decreased by 4% compared to the first six months of 2025.
69
Revenues by Major Products and Activities
The following table presents revenues for our Europe segment by major products and activities for the six months ended June 30, 2026 and 2025:
| Six months ended June 30, |
Percentage Change |
|||||||||||
| 2026 | 2025 | 2026-2025 | ||||||||||
| (U.S. $ in millions) | ||||||||||||
| Generic products (including OTC and biosimilars) |
$ | 2,113 | $ | 2,029 | 4 | % | ||||||
| AJOVY |
154 | 129 | 19 | % | ||||||||
| COPAXONE |
89 | 92 | (3 | %) | ||||||||
| Respiratory products |
117 | 110 | 7 | % | ||||||||
| Other* |
130 | 132 | (1 | %) | ||||||||
|
|
|
|
|
|||||||||
| Total |
$ | 2,603 | $ | 2,492 | 4 | % | ||||||
|
|
|
|
|
|||||||||
| * | Other revenues in the first six months of 2026 and 2025 include the sale of certain product rights. |
Europe Gross Profit
Gross profit from our Europe segment in the first six months of 2026 was $1,438 million, an increase of 5% compared to $1,374 million in the first six months of 2025.
Gross profit margin for our Europe segment in the first six months of 2026 was 55.2%, flat compared to the first six months of 2025.
Europe R&D Expenses
R&D expenses relating to our Europe segment in the first six months of 2026 were $97 million, a decrease of 19% compared to $120 million in the first six months of 2025.
Europe S&M Expenses
S&M expenses relating to our Europe segment in the first six months of 2026 were $437 million, an increase of 2% compared to $427 million in the first six months of 2025.
Europe G&A Expenses
G&A expenses relating to our Europe segment in the first six months of 2026 were $139 million, an increase of 2% compared to $135 million in the first six months of 2025.
Europe Profit
Profit from our Europe segment in the first six months of 2026 was $768 million, an increase of 11% compared to $693 million in the first six months of 2025.
International Markets Segment
The following table presents revenues, expenses and profit for our International Markets segment for the six months ended June 30, 2026 and 2025:
| Six months ended June 30, | ||||||||||||||||
| 2026 | 2025 | |||||||||||||||
| (U.S. $ in millions /% of Segment Revenues) | ||||||||||||||||
| Revenues |
$ | 1,074 | 100 | % | $ | 1,077 | 100 | % | ||||||||
| Cost of sales |
547 | 50.9 | % | 556 | 51.6 | % | ||||||||||
| Gross profit |
527 | 49.1 | % | 521 | 48.4 | % | ||||||||||
| R&D expenses |
49 | 4.5 | % | 49 | 4.6 | % | ||||||||||
| S&M expenses |
245 | 22.8 | % | 232 | 21.5 | % | ||||||||||
| G&A expenses |
77 | 7.2 | % | 72 | 6.7 | % | ||||||||||
| Other |
(7 | ) | (0.7 | %) | (2 | ) | § | |||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Segment profit* |
$ | 164 | 15.2 | % | $ | 171 | 15.9 | % | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| * | Segment profit does not include amortization and certain other items. |
| § | Represents an amount less than 0.5%. |
70
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.
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, 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.
Revenues from our International Markets segment in the first six months of 2026 were $1,074 million, a decrease of $3 million compared to the first six months of 2025. In local currency terms, revenues decreased by 7% compared to the first six months of 2025, mainly due to the divestment of our business venture in Japan, partially offset by higher revenues from our key innovative products AJOVY and AUSTEDO, primarily in China.
In the first six months of 2026, revenues were positively impacted by exchange rate fluctuations of $70 million including hedging effects, compared to the first six months of 2025. Revenues in the first six months of 2026 included a negative hedging impact of $11 million compared to a negative hedging impact of $23 million in the first six months 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 six months ended June 30, 2026 and 2025:
| Six months ended June 30, |
Percentage Change |
|||||||||||
| 2026 | 2025 | 2026-2025 | ||||||||||
| (U.S. $ in millions) | ||||||||||||
| Generic products (including OTC and biosimilars) |
$ | 805 | $ | 878 | (8 | %) | ||||||
| AJOVY |
83 | 48 | 72 | % | ||||||||
| AUSTEDO |
39 | 18 | 120 | % | ||||||||
| COPAXONE |
13 | 17 | (23 | %) | ||||||||
| Other* |
134 | 116 | 15 | % | ||||||||
|
|
|
|
|
|||||||||
| Total |
$ | 1,074 | $ | 1,077 | § | |||||||
|
|
|
|
|
|||||||||
| * | Other revenues in the first six months of 2026 and 2025 include the sale of certain product rights. |
| § | Represents an amount less than 0.5%. |
Generic products revenues (including OTC and biosimilar products) in our International Markets segment in the first six months of 2026 were $805 million, a decrease of 8% compared to the first six months of 2025. In local currency terms, revenues decreased by 13%, mainly due to the divestment of our business venture in Japan.
International Markets Gross Profit
Gross profit from our International Markets segment in the first six months of 2026 was $527 million, compared to $521 million in the first six months of 2025.
Gross profit margin for our International Markets segment in the first six months of 2026 was 49.1%, compared to 48.4% in the first six months of 2025.
International Markets R&D Expenses
R&D expenses relating to our International Markets segment in the first six months of 2026 were $49 million, flat compared to the first six months of 2025.
71
International Markets S&M Expenses
S&M expenses relating to our International Markets segment in the first six months of 2026 were $245 million, an increase of 6% compared to $232 million in the first six months of 2025.
International Markets G&A Expenses
G&A expenses relating to our International Markets segment in the first six months of 2026 were $77 million, an increase of 8% compared to $72 million in the first six months of 2025.
International Markets Profit
Profit from our International Markets segment in the first six months of 2026 was $164 million, a decrease of 4% compared to $171 million in the first six months of 2025. This decrease was mainly due to higher S&M expenses.
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.
Our revenues from Other Activities in the first six months of 2026 were $1,211 million, an increase of 3% in U.S. dollars or 2% in local currency terms, compared to the first six months of 2025.
Anda revenues from third-party products in the first six months of 2026 were $792 million, an increase of 7% compared to the first six months of 2025.
API sales to third parties in the first six months of 2026 were $227 million, a decrease of 14% in both U.S. dollars and local currency terms, compared to the first six months of 2025.
Revenues from additional other activities, mainly from Medis and certain contract manufacturing services, in the first six months of 2026 were $192 million, an increase of 11% in U.S. dollars compared to the first six months of 2025. In local currency terms, revenues increased by 4% compared to the first six months of 2025.
Teva Consolidated Results
Revenues
Revenues in the first six months of 2026 were $8,124 million, an increase of 1% compared to the first six months of 2025. In local currency terms, revenues decreased by 3%, compared to the first six months of 2025.
See “—United States Revenues,” “—Europe Revenues,” “—International Markets Revenues” and “—Other Activities” above.
Exchange rate movements during the first six months of 2026, including hedging effects, positively impacted revenues by $304 million, compared to the first six months of 2025. See note 8c to our consolidated financial statements.
Gross Profit
Gross profit in the first six months of 2026 was $4,124 million, an increase of 4% compared to the first six months of 2025.
Gross profit margin was 50.8% in the first six months of 2026, compared to 49.3% in the first six months of 2025.
Research and Development (R&D) Expenses, net
R&D expenses, net in the first six months of 2026 were $1,191 million, an increase of 143% compared to the first six months of 2025.
R&D expenses, net as a percentage of revenues were 14.7% in the first six months of 2026, compared to 6.1% in the first six months of 2025.
72
Selling and Marketing (S&M) Expenses
S&M expenses in the first six months of 2026 were $1,413 million, an increase of 11% compared to the first six months of 2025.
S&M expenses as a percentage of revenues were 17.4% in the first six months of 2026 compared to 15.8% in the first six months of 2025.
General and Administrative (G&A) Expenses
G&A expenses in the first six months of 2026 were $621 million, an increase of 3% compared to the first six months of 2025.
G&A expenses as a percentage of revenues were 7.6% in the first six months of 2026, compared to 7.5% in the first six months of 2025.
Intangible Asset Impairments
We recorded expenses of $30 million for identifiable intangible asset impairments in the first six months of 2026, compared to expenses of $163 million in the first six months of 2025. See note 5 to our consolidated financial statements.
Other Asset Impairments, Restructuring and Other Items
We recorded expenses of $173 million for other asset impairments, restructuring and other items in the first six months of 2026, compared to $210 million in the first six months of 2025. See note 12 to our consolidated financial statements.
Legal Settlements and Loss Contingencies
We recorded expenses of $303 million in legal settlements and loss contingencies in the first six months of 2026, compared to expenses of $252 million in the first six months of 2025. See note 9 to our consolidated financial statements.
Other Loss (Income)
Other income in the first six months of 2026 was $28 million, compared to other loss of $9 million in the first six months of 2025.
Operating Income (Loss)
Operating income was $421 million in the first six months of 2026, compared to $975 million in the first six months of 2025.
Operating income as a percentage of revenues was 5.2% in the first six months of 2026, compared to 12.1% in the first six months of 2025.
Financial Expenses, Net
In the first six months of 2026, financial expenses, net were $440 million, mainly comprised of net interest expenses of $396 million. In the first six months of 2025, financial expenses, net were $477 million, mainly comprised of net interest expenses of $415 million.
73
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 six months ended June 30, 2026 and 2025:
| Six months ended | ||||||||
| June 30, | ||||||||
| 2026 | 2025 | |||||||
| (U.S. $ in millions) | ||||||||
| United States profit |
$ | 431 | $ | 1,216 | ||||
| Europe profit |
768 | 693 | ||||||
| International Markets profit |
164 | 171 | ||||||
|
|
|
|
|
|||||
| Total reportable segments profit |
1,363 | 2,080 | ||||||
| Profit (loss) of Other Activities |
(32 | ) | (1 | ) | ||||
|
|
|
|
|
|||||
| Amounts not allocated to segments: |
||||||||
| Amortization |
276 | 292 | ||||||
| Other assets impairments, restructuring and other items |
173 | 210 | ||||||
| Intangible asset impairments |
30 | 163 | ||||||
| Legal settlements and loss contingencies |
302 | 249 | ||||||
| Other unallocated amounts |
128 | 190 | ||||||
|
|
|
|
|
|||||
| Consolidated operating income (loss) |
421 | 975 | ||||||
|
|
|
|
|
|||||
| Financial expenses, net |
440 | 477 | ||||||
|
|
|
|
|
|||||
| Consolidated income (loss) before income taxes |
$ | (18 | ) | $ | 497 | |||
|
|
|
|
|
|||||
Income Taxes
In the first six months of 2026, we recognized a tax expense of $188 million, on pre-tax loss of $18 million. In the first six months of 2025, we recognized a tax benefit of $4 million, on pre-tax income of $497 million. See note 11 to our consolidated financial statements.
Net Income (Loss) Attributable to Teva
Net loss attributable to Teva was $207 million in the first six months of 2026, compared to a net income of $497 million in the first six months of 2025.
Diluted Shares Outstanding and Earnings (Loss) per Share
The weighted average diluted shares outstanding used for the fully diluted share calculations for the six months ended June 30, 2026 and 2025 was 1,160 million shares and 1,159 million shares, respectively.
Diluted loss per share was $0.18 for the six months ended June 30, 2026, compared to diluted earnings per share of $0.43 for the six months ended June 30, 2025. See note 13 to our consolidated financial statements.
Impact of Currency Fluctuations on Results of Operations
In the first six months of 2026, approximately 47% of our revenues were denominated in currencies other than the U.S. dollar. Because our results are reported in U.S. dollars, we are subject to significant foreign currency risks. Accordingly, changes in the exchange rate between the U.S. dollar and local currencies in the markets in which we operate (primarily the euro, Swiss franc, Russian ruble, British pound, Canadian dollar, new Israeli shekel, Polish złoty, Swedish krona, Chilean peso and Indian rupee) impacted our results.
During the first six months of 2026, the following main currencies relevant to our operations increased in value against the U.S. dollar (all compared on a six-month average basis): new Israeli shekel by 18%, Hungarian forint by 16%, Russian ruble by 14%, Mexican peso by 14%, Brazilian real by 12%, Norwegian krone by 12%, Australian dollar by 11%, Swedish krona by 10%, Swiss franc by 10%, euro by 7%, Polish złoty by 7%, British pound by 4% and Canadian dollar by 2%. The following main currencies relevant to our operations decreased in value against the U.S. dollar (all compared on a six-month average basis): Argentinian peso by 22%, Indian rupee by 7%, Japanese yen by 6% and Ukrainian hryvna by 5%.
As a result, exchange rate movements during the first six months of 2026, including hedging effects, positively impacted overall revenues by $304 million and our operating income by $98 million, compared to the first six months of 2025.
74
In the first six months of 2026, a positive hedging impact of $3 million was recognized under revenues, and a positive hedging impact of $6 million was recognized under cost of sales. In the first six months of 2025, a negative hedging impact of $60 million was recognized under revenues and a positive hedging impact of $3 million was recognized under cost of sales.
Hedging transactions of future projected revenues and expenses are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. See note 8c to our consolidated financial statements.
2026 Aggregated Contractual Obligations
There have not been any material changes in our assessment of material contractual obligations and commitments as set forth in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.
Liquidity and Capital Resources
Total balance sheet assets were $39,857 million as of June 30, 2026, compared to $40,748 million as of December 31, 2025.
Our working capital balance, which includes accounts receivables net of SR&A, inventories, prepaid expenses and other current assets, accounts payables, employee-related obligations, accrued expenses and other current liabilities, was negative $2,521 million as of June 30, 2026, compared to negative $2,733 million as of December 31, 2025. This change was mainly due to a decrease in employee-related obligations as discussed below. Net changes in working capital items were neutral. We continue our efforts to optimize our working capital management.
Employee-related obligations, as of June 30, 2026 were $488 million, compared to $739 million as of December 31, 2025. The decrease in the first six months of 2026 was mainly due to performance incentive payments to employees for 2025, partially offset by an accrual for performance incentive payments to employees for 2026.
Cash investment in property, plant and equipment and intangible assets in the second quarter of 2026 was $104 million compared to $96 million in the second quarter of 2025. Depreciation in the second quarter of 2026 was $102 million compared to $103 million in the second quarter of 2025.
Cash and cash equivalents as of June 30, 2026, were $3,655 million, compared to $3,556 million as of December 31, 2025. See also the statement of cash flows included in our consolidated financial statements.
Our cash on hand that is not used for ongoing operations is generally invested in bank deposits as well as liquid securities that bear fixed and floating rates.
Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily its $1.8 billion unsecured syndicated sustainability-linked revolving credit facility, entered into in April 2022, as amended most recently in December 2025 (“RCF”). See note 7 to our consolidated financial statements.
Debt Balance and Movements
As of June 30, 2026, our debt was $16,593 million, compared to $16,807 million as of December 31, 2025. This decrease was mainly due to $201 million in exchange rate fluctuations.
In February 2026, we repaid $23 million of the 0.25% convertible senior debentures at maturity.
As of June 30, 2026, 57% of our debt was denominated in U.S. dollars, with the remainder denominated in euros.
The portion of total debt classified as short-term as of June 30, 2026 was 27% compared to 11% as of December 31, 2025.
Our financial leverage, which is the ratio between our debt and the sum of our debt and equity, was 68% as of June 30, 2026 and December 31, 2025. Our average debt maturity was approximately 5.1 years as of June 30, 2026, compared to 5.6 years as of December 31, 2025.
Total Equity
Total equity was $7,757 million as of June 30, 2026, compared to $7,914 million as of December 31, 2025. This decrease was mainly due to net loss attributable to Teva of $207 million.
75
Exchange rate fluctuations affected our balance sheet, as approximately 60% of our net assets as of June 30, 2026 (including both monetary and non-monetary assets) were in currencies other than the U.S. dollar. When compared to December 31, 2025, changes in currency rates as of June 30, 2026, had a negative impact of $71 million on our equity. The following main currencies decreased in value against the U.S. dollar: Indian rupee by 5%, Polish złoty by 4%, Canadian dollar by 4%, Japanese yen by 3%, euro by 3%, Chilean peso by 2%, Peruvian nuevo sol by 2%, British pound by 2% and Swiss franc by 2%. The following main currencies increased in value against the U.S. dollar: Russian ruble by 3% and Mexican peso by 3%. All comparisons are on a year-to-date basis.
Cash Flow
We continually seek to improve the efficiency of our working capital management. Periodically, as part of our cash and commercial relationship management activities, we make decisions in our commercial, supply chain, and other activities which drive an optimization of our inventory levels, an acceleration of receivable payments from customers, or deceleration of payments to vendors, including timing of payments related to legal settlements, tax authorities and other matters. These have the effect of increasing or decreasing cash from operations, as well as working capital balance items during any given period. Increased cash from operations has the effect of reducing our leverage ratio, which is measured net of cash and cash equivalents, as of the end of such period. In connection with these efforts, we have been able to secure more favorable payment terms from many of our vendors and expect to continue with these efforts in future periods. In addition, in periods in which collections from customers are delayed, we have and expect we may in the future extend the time to pay certain vendors, so as to balance our liquidity position. Such decisions have had and may in the future have a material impact on our annual operating cash flow measurement and results of operations.
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, which we define as comprising $227 million in cash flow generated from operating activities, $336 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $9 million of proceeds from the sale of businesses and long-lived assets, partially offset by $96 million in cash used for capital investments. The increase in the second quarter of 2026 resulted mainly from higher cash flow generated from operating activities, as discussed above.
Dividends
We have not paid dividends on our ordinary shares or American Depositary Shares (ADSs) since December 2017.
Commitments
In addition to financing obligations under short-term debt and long-term senior notes and loans and debentures, our major contractual obligations and commercial commitments include leases, royalty payments, contingent payments pursuant to acquisition agreements, collaboration agreements, development funding agreements and participation in joint ventures associated with R&D activities. For further information on these agreements see note 2 to our consolidated financial statements.
We are committed to paying royalties, subject to the terms of applicable agreements, to the owners of know-how, partners in alliances and certain other arrangements, and to parties that financed R&D at a wide range of rates as a percentage of sales of certain products, as defined in the agreements. In some cases, the royalty period is not defined under the applicable agreement; in other cases, royalties will be paid over various periods not exceeding 20 years.
In connection with certain development, supply and marketing, and research and collaboration or services agreements, we are required to indemnify the parties to such agreements against third-party claims relating to (i) infringement or violation of intellectual property or other rights of such third party; or (ii) damages to users of the related products. Except as described in our financial statements, we are not aware of any material pending action that may result in the counterparties to these agreements claiming such indemnification.
Non-GAAP Net Income and Non-GAAP EPS Data
We present non-GAAP net income and non-GAAP earnings per share (“EPS”) as management believes that such data provide useful information to investors because they are used by management and our Board of Directors, in conjunction with other performance metrics, to evaluate our operational performance, to prepare and evaluate our work plans and annual budgets and ultimately to evaluate the performance of management, including annual compensation. While other qualitative factors and judgment also affect annual compensation, the principal quantitative elements in the determination of such compensation are performance targets tied to the work plan, which are based on these non-GAAP measures.
76
Non-GAAP financial measures have no standardized meaning and accordingly have limitations in their usefulness to investors. Investors are cautioned that, unlike financial measures prepared in accordance with U.S. GAAP, non-GAAP measures may not be comparable with the calculation of similar measures for other companies. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses our performance. The limitations of using non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all events during a period and may not provide a comparable view of our performance to other companies in the pharmaceutical industry. Investors should consider non-GAAP net income and non-GAAP EPS in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.
In preparing our non-GAAP net income and non-GAAP EPS data, we exclude items that either have a non-recurring impact on our financial performance or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not excluded, potentially cause investors to extrapolate future performance from an improper base that is not reflective of our underlying business performance. Certain of these items are also excluded because of the difficulty in predicting their timing and scope. The items excluded from our non-GAAP net income and non-GAAP EPS include:
| • | amortization of purchased intangible assets; |
| • | certain legal settlements and material litigation fees and/or loss contingencies, due to the difficulty in predicting their timing and scope; |
| • | impairments of long-lived assets, including intangibles, property, plant and equipment and goodwill; |
| • | restructuring expenses, including severance, retention costs, contract cancellation costs and certain accelerated depreciation expenses primarily related to the rationalization of our plants or to certain other strategic activities, such as the realignment of R&D focus or other similar activities; |
| • | acquisition- or divestment-related items, including loss (gain) on sale of businesses, changes in contingent consideration, integration costs, banker and other professional fees and inventory step-up; |
| • | expenses related to our equity compensation; |
| • | significant one-time financing costs, amortization of issuance costs and terminated derivative instruments, and marketable securities investment valuation gains/losses; |
| • | unusual tax items; |
| • | other awards or settlement amounts, either paid or received; |
| • | other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as impacts due to significant costs for remediation of plants, or other unusual events; and |
| • | corresponding tax effects of the foregoing items. |
77
The following tables present our non-GAAP net income and non-GAAP EPS for the three and six months ended June 30, 2026 and 2025, as well as reconciliations of each measure to their nearest GAAP equivalents:
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| ($ in millions except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Net income (Loss) attributable to Teva |
($) | (576 | ) | 282 | ($) | (207 | ) | 497 | ||||||||
| Increase (decrease) for excluded items: |
||||||||||||||||
| Amortization of purchased intangible assets |
139 | 148 | 276 | 292 | ||||||||||||
| Legal settlements and loss contingencies(1) |
230 | 166 | 302 | 249 | ||||||||||||
| Impairment of long-lived assets(2) |
113 | 99 | 122 | 177 | ||||||||||||
| Restructuring costs(3) |
38 | 154 | 63 | 168 | ||||||||||||
| Equity compensation |
40 | 38 | 83 | 72 | ||||||||||||
| Contingent consideration |
17 | 19 | 22 | 30 | ||||||||||||
| Financial expenses |
8 | 37 | 21 | 51 | ||||||||||||
| Other non-GAAP items(4) |
29 | 53 | 41 | 118 | ||||||||||||
| Corresponding tax effects and unusual tax items(5) |
(17 | ) | (228 | ) | (82 | ) | (283 | ) | ||||||||
| Non-GAAP net income attributable to Teva |
($) | 21 | 769 | ($) | 642 | 1,371 | ||||||||||
| Non-GAAP tax rate(6) |
86.7 | % | 16.4 | % | 29.6 | % | 16.9 | % | ||||||||
| GAAP diluted earnings (loss) per share attributable to Teva |
($) | (0.49 | ) | 0.24 | ($) | (0.18 | ) | 0.43 | ||||||||
| EPS difference(7) |
0.51 | 0.42 | 0.72 | 0.75 | ||||||||||||
| Non-GAAP diluted EPS attributable to Teva(7) |
($) | 0.02 | 0.66 | ($) | 0.54 | 1.18 | ||||||||||
| Non-GAAP average number of shares (in millions)(7) |
1,181 | 1,161 | 1,179 | 1,159 | ||||||||||||
| (1) | For the three and six months ended June 30, 2026, adjustments for legal settlements and loss contingencies mainly consisted of (a) an estimated provision recorded in connection with one of the Company’s ongoing antitrust litigations in the amount of $117 million, and (b) an update to the estimated settlement provision for the opioid cases (mainly the effect of the passage of time on the net present value of the discounted payments) in the amount of $49 million and $97 million, respectively. |
For the three and six months ended June 30, 2025, adjustments of legal settlements and loss contingencies mainly consisted of (a) an update to the estimated settlement provision for the opioid cases (mainly the effect of the passage of time on the net present value of the discounted payments) in the amount of $47 million and $97 million, respectively, and (b) an update to the estimated provision recorded for the claims brought by attorneys general representing states and territories throughout the United States in the generic drug antitrust litigation in the amount of $55 million.
| (2) | The expense for the three and six months ended June 30, 2026, was mainly related to an impairment charge of $70 million in connection with a manufacturing facility in Europe. |
For the three months ended June 30, 2025, the adjustment for impairment of long-lived assets consisted of (a) impairment of long-lived assets of $42 million mainly related to products in the U.S. and Europe, and (b) $55 million related to the held for sale measurement of the API business (including its R&D, manufacturing and commercial activities), which includes a favorable impact related to the expected gain from the reclassification of currency translation adjustments. For the six months ended June 30, 2025, the adjustment for impairment of long-lived assets was mainly related to products in the U.S. and Europe.
| (3) | In the three and six months ended June 30, 2025, Teva recorded $154 million and $168 million, respectively, of restructuring expenses primarily related to optimization activities in connection with Teva’s Transformation programs related to Teva’s global organization and operations mainly through headcount reduction. |
| (4) | Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, primarily related to the rationalization of our plants, accelerated depreciation, material litigation fees and other unusual events. |
| (5) | Adjustments for corresponding tax effects and unusual tax items exclusively consisted of the tax impact directly attributable to the pre-tax items that are excluded from non-GAAP net income included in the other adjustments to this table. |
| (6) | Non-GAAP tax rate is tax expenses (benefit) excluding the impact of non-GAAP tax adjustments presented above as a percentage of income (loss) before income taxes excluding the impact of non-GAAP adjustments presented above. Our non-GAAP tax rate in the second quarter of 2026 was mainly affected by an unfavorable tax impact of a non-deductible acquired IPR&D charge related to the acquisition of Emalex and its primary asset ecopipam (EBS-101), the generation of profits in various jurisdictions in which tax rates are different than the Israeli tax rate and other infrequent or non-recurring items. |
| (7) | EPS difference and diluted non-GAAP EPS are calculated by dividing our non-GAAP net income attributable to Teva by our non-GAAP diluted weighted average number of shares. |
78
Off-Balance Sheet Arrangements
We do not have any material off-balance sheet arrangements, except for: (i) surety underwritten guarantees Teva has provided the European Commission in an amount of euro 462.2 million, together with specified post-decision interest, which remain in force for three years, and which includes substantially similar covenants as our RCF, as disclosed in note 7 to our consolidated financial statements, and (ii) securitization transactions, which are disclosed in note 10f to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical Accounting Policies
For a summary of our significant accounting policies, see note 1 to our consolidated financial statements and “Critical Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Recently Issued Accounting Pronouncements
See note 1 to our consolidated financial statements.
| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
There has not been any material change in our assessment of market risk as set forth in Part II, Item 7A to our Annual Report on Form 10-K for the year ended December 31, 2025.
| ITEM 4. | CONTROLS AND PROCEDURES |
Disclosure Controls and Procedures
Teva maintains “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) that are designed to provide reasonable assurance that information required to be disclosed in Teva’s reports filed or submitted under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Teva’s management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective.
After evaluating the effectiveness of our disclosure controls and procedures as of June 30, 2026, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, Teva’s disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
During the three months ended June 30, 2026, there was no change in Teva’s internal control over financial reporting that materially affected or is reasonably likely to materially affect Teva’s internal control over financial reporting.
79
ITEM 1. |
LEGAL PROCEEDINGS |
ITEM 1A. |
RISK FACTORS |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
OTHER INFORMATION |
| Name and Title |
Date |
Expiration Date |
Maximum Shares Subject to Plan (1) |
|||||||
| |
||||||||||
| |
||||||||||
| |
||||||||||
(1) |
Certain plans include shares to be sold solely to cover tax withholding obligations. |
ITEM 6. EXHIBITS
| 4.1 | Form of Amendment No. 1 to Second Amended and Restated Deposit Agreement among Teva Pharmaceutical Industries Limited, Citibank, N.A., as depositary, and the holders from time to time of Shares * | |
| 31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
| 31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
| 32 | Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 * | |
| 99.1 | Form of Notice of Amendment of the Deposit Agreement and Termination of the ADS Program for Teva Pharmaceutical Industries Limited to Holders of ADSs of Teva Pharmaceutical Industries Limited * | |
| 101.INS | Inline XBRL Taxonomy Instance Document | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |
| * | Filed herewith. |
82
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TEVA PHARMACEUTICAL INDUSTRIES LIMITED | ||||||
| Date: July 29, 2026 | By: | /s/ Eli Kalif | ||||
| Name: |
Eli Kalif | |||||
| Title: |
Executive Vice President, Chief Financial Officer (Duly Authorized Officer) | |||||
83