Hello, everybody, and welcome to the Q2 2026 Tevin Pharmaceutical Industries Earnings Conference Call. My name is Elliot. I'll be coordinating your call today. If you would like to ask a question during today's event, please press star followed by one on your telephone keypad. I want to let you hand over to Christopher Steebo. Please go ahead.

Thank you, Elliot. Good morning and good afternoon, everyone. Thank you for joining us on our second quarter call. um obviously our materials are posted to our website this morning so please see those and before i turn the call over to our ceo richard francis i'd like to remind everyone that we'll be making forward-looking statements on this call the company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance actual results may differ materially from those expressed or implied in the forward looking statements due to a variety of factors these factors are described in our earnings press released in our most recent forms 10q and 10k filed with the sec any statements that we make are only as of today and we undertake no obligation to update these statements subsequently with that

richard francis thanks chris and good morning and good afternoon everybody thank you for joining the call today and on me joining me the call today will be dr eric hughes head of global r d and Chief Medical Officer, and Eli Khalif, our Chief Financial Officer. Now moving on to the slide I always start with, the pivot to growth slide, our strategy that we launched in 2023 that's based on these four pillars. We'll summarize how we've performed against these four pillars in quarter two, but just to give you a quick overview, on delivering our growth engines, Estedo, Jovi, and Yoseti all delivered strong Q2 performance, and we are raising our full year revenue guidance for these products. It's worth reminding you that the innovative portfolio is reshaping our financial profile with stronger revenue growth, margins, and free cash flow. As we move on to the second pillar step up, innovation, our pipeline this year will provide eight major milestones, and this now includes EcoPypan, and this gives us the potential for five submissions over the next five years. With regard to creating a generics powerhouse, biosimilars are becoming a growth platform within generics. We now have 15 products in the market and 14 in our pipeline, and we see additional opportunities through further partnerships. And on our final pillar, focus the business, I think we make great progress on our capital allocation. We have one of the agencies of greatest pitch to ingress some grade, and we see the other two doing this in the not too distant future. We also allocated capital to the acquisition of We close that deal in June, and we're expecting the launch next year if FDA approves. And then finally, the conversion of the ADS to ordinary shares and the ability to list on the New York Stock Exchange should make investing in Teva accessible to more investors. Now, moving on to the financials. Now, I'm really proud of this slide, and you may ask why, but let me walk you through why. Now, we have stable revenues despite nearly 8% of headwinds from generic revenue loss year over year. we're growing our profit margin as well 80 basis points improving gross margins year over year driven by strong innovative growth despite this loss of genet revlement we're actually growing our ebitda obviously excluding the mlx acquisition and our free cash flow is up 31 as a result of our disciplined capital allocation now if i go on to the next slide i'll give you a bit more detail As you can see, the innovative portfolio has had a strong quarter, up 43% year-on-year. Estetio up 40%, Yoseti up 43%, and Ajovi up 56%. Generics is down 15%, and this is largely due to lower Generics revenue contribution versus 2025. But if I now go into a bit more detail, starting with Esteto, a core growth driver here. This is another strong quarter. In the U.S., revenue reached $676 million, up 33 percent year-over-year, and global revenue up 40 percent. Demand remains strong, with TRX up 14 percent and milligram growth up 21 percent, supported by new patient starts and adherence. Esteto XR now represents over 60 percent of new patients, strengthening convenience, adherence, and long-term durability. And because of this strong quarter, we're now increasing our outlook by 50 million at the midpoint. so it's now 2.45 billion to 2.6 billion. It's worth noting that the midpoint there is 2.5 billion, which was the target we gave ourselves for 2027, so we have a chance of beating this a year early. But I think more importantly, we see continued momentum and a significant untreated population that still could benefit from Estedo, and hence our confidence in greater than 3 billion of peak sales. Now moving on to USEDI. USEDI continues to grow with strong momentum. It is the fastest growing long-acting injectable treatment for schizophrenia amongst atypical LAIs. Revenue grew 43% to $77 million in Q2 based on strong demand, and that was reflected in our TRX and MOT up 63% year over year. The commercial execution has been impressive, and this can be seen with Yuseti nearly doubling the risperidone long-acting share, and it has now gone from 5% to nearly 10%. And you said he's capturing nearly 80% of the risperidone LAI market. And because of this strong performance, we're increasing the outlook by 15 million at the midpoint. So the new guidance is 270 million to 290 million. Now, this continued excellent execution has given us great confidence in the upcoming launch of olanzapine, which I'll now move on to. So olanzapine represents a meaningful next growth opportunity with FDA action and US launch anticipated in Q4 of this year. The unmet medical need is significant. Elanspene holds roughly 20 percent of U.S. oral prescriptions, while Elanspene LAI uses less than one percent of the LAI market. Now, we know this market. We can really leverage the synergies with USEDI, but also the deep knowledge of the schizophrenia market, whether that's physicians, patients, nurse practitioners, or some of the long-term care facilities. Our direction of travel is clear to deliver a best-in-clance launch that expands treatment options and reinforces our leadership in the LAIs. Alanzapine, together with Yuseti, gives us a compelling path to an expected peak sales of $1.5 to $2 billion of revenue. Now moving on to Ajovi. Ajovi generates our ability to execute in competitive and innovative markets wherever they may be. We continue to outpace the injectable market growth and we leading many of the markets despite entering late. Q2 global revenue reached 244 million up 56% year over year. The US revenue grew 83% driven by improved contracting, favorable growth to net and market share gains. Ex-US momentum remains strong supported by volume growth and leading branches across Europe and international markets. Because this strong quarter we're increasing our outlook by 90 million at the midpoint. So now the range is 850 million to 870 million. And looking beyond 2026, we see a clear path to 1 billion peak sales for Ojovi. Now moving on to the newest member of the innovative family, Ikepaipan, a first-in-class opportunity with compelling efficacy and favorable tolerability in Tourette's syndrome, a serious pediatric neurological disorder with limited treatment options. options. We've already filed with the FDA with a potential launch in the first half of 2027. Now the unmet medical need is clear. There are 100,000 pediatric patients who live with Tourette syndrome, only 50,000 are treated, and only 20 to 30 percent remain on therapy after one year. So this shows there is a real need for a product like EcoPyPan with compelling efficacy and favorable tolerability now we're well positioned to execute on this leveraging our cns capabilities and the experience we've garnered with esteto usedi and soon to be long-acting olanzapine now this moves on to a slide which i've never been able to show before actually in my rather long career and i apologize for the small font but we had to get everything on one slide and what this highlights is just the innovative pipeline we have and our potential to launch one asset per year for the next five years, transforming Teva into a leading biopharma company. The near-term launches are clearly sequenced. The lands have been in 2060, a pipe band in 2027, followed by Dowry and Resolman, Dubokituk through 28 to 30, obviously all subject to regulatory approvals. But looking up to 35, we see further upside from the additional indications that we've announced there for Dubokituk, as well as the additional indication anti-R15 as well as our T-slip IL-13. We also are pursuing more business opportunities as well, business development opportunities that is. Now moving into our pipeline slide, I'll try and be short on this and allow Eric to talk more through this, but there are some points which I think are worth mentioning. One is this is a near-term pipeline with many catalysts, as I mentioned in my opening remarks. We've got anti-R15, we saw the vitiligo data where we're going to see the Celiac data in the second half of the year. We've got this near-term launches with the Lanzapine and Ecopypan filed. DARI is progressing well. We've announced two new indications for Dubiketuk. So together, all these assets represent over 10 billion of peak sales. Although I have realized we said that before, and that was prior to actually adding Ecopypan to this slide, as well as the two new indications of Dubiketuk. So I must remember to update it. now what does this all do for Teva well it fundamentally transforms our growth profile our growth is really accelerating with revenue moving from 4.9 billion in 2022 to an expected 16.5 to 16.8 this year and our portfolio is shifting towards higher value innovation with innovative revenue expected to reach 22 percent of total revenue in 2026 up from 9%, and you can see where it's heading to 2030. Now, with regard to margins, we are creating stronger margins, with gross margins expected to expand from 54% to more than 60% by 2030 plus. And this is, once again, fueled by our innovative portfolio. Now, moving on to our generics business. Now, generics business is down 15% versus Q2 2025, but I don't think that tells the full story. If you exclude generic Revlimid, our generic business remains stable. Global Generics was down 2%, the US up 1%, and our ex-US decrease mainly was due to lower product launches this year and a softer cough and cold season. While 2026 is expected to be somewhat softer, we can continue to see a stable generics business capable of delivering 1% to 2% annual growth over the long term, supported by a steady flow of our new product launches. I remain very excited about the future of our generics business, and one of the main reasons I'm confident is the growth rate that is starting to emerge from our biosimilar portfolio and pipeline. Let me move on to this now. So biosimilars are transforming our generics portfolio. Before Pivot to Growth, we had three biosimilars. Today, we have 15 in the market, and in the next few years, we expect to double it. It's not just the size of our portfolio, it's the execution. In the U.S., two out of our five products are ranked number one, and a third is neck and neck, and I believe soon to become a number one. In the U.S., in the EU, where we have just launched three biosimilars, early signs are very positive. We continue to seek partnering to increase this portfolio, and I believe we are becoming the partner of choice because of this excellent execution. And based on our current momentum, we are on track to exceed in our 800 million by 2027. To conclude, before I hand over to Eric, we're on track to hit our 2027 financial growth targets of mid-single revenue growth, non-GAAP operating income target 30%, and a net debt EBITDA below 2%, and cash converse earnings of 80%. And with that, I will hand over to Eric.

Thank you, Richard. Now, moving on to our first slide here, I know Richard showed this briefly, but I first want to just say it's become very complicated, but it's become very complicated in a great way. We're looking at five potential submissions over five years. I'll just highlight a few important things on this slide. We've now added echopypan, which was submitted in June for Tourette syndrome, and we've now added two new indications for duvacito, that's hydrogenitis supertiva and fibrosanotic Crohn's disease, two very important indications that I'll get into with a little bit more detail later on. But it's great to see this pipeline, and we're executing on it every day. First, I'll start with Alanzapine LAI. We are on track for the action date in the fourth quarter of this year. We've had our EU MAA accepted earlier this year, and we've just presented a number of different abstracts at the Psychelevate conference and the PAGE conference. So all things are a go right now on Alanzapine LAI, and we're looking forward to an approval at the end of this year. On to ECHO PIPEN. Now, one of the things that gets me excited, first, that this is a mechanism, a brand-new first-in-class mechanism of a D1 antagonist. But even more importantly, this is the first dedicated launch for treatment for Tourette's syndrome. So I think that's going to be a very important aspect of this launch with disease awareness and providing a new treatment for a large unmet medical need. I mean, I'm proud of the fact that we have two well-controlled studies, the phase two showing a decrease in the tick syndrome. not only statistically significant, but clinically meaningful reductions. And we also showed in phase three a decrease in the relapse rate, both statistically and clinically with a 50% reduction. I think they're all very good signs, but most importantly, this is a treatment that is well-tolerated and durable. 66% of the patients in the long-term follow-up remained on treatment with a sustained tick reduction. And we're looking forward to that approval next year. So something to look forward to. Now, moving on to our DARI program, the dual action rescue inhaler for asthma. We've fully enrolled this study over 2,700 patients, which includes pediatrics, adolescents, and adults. We're right on track to see that final event. This is an event-driven study. Our forecast is at the end of this year, and we'll be able to present that data in the early half of 2027. But this is a really great program for patients with asthma. It's answering an unmet medical need, answering the need and the treatment that's dictated in the guidelines. We'll be providing a great treatment with a dual-action recidivator with a dry powder inhaler that's easy to use and with a label that includes pediatrics potentially. Now, moving on to Duva Ketuk. Very exciting this year. We had our publication of our induction data in the Lancet for both two parallel manuscripts for ulcerative colitis and Crohn's disease. It's great to see the team's work being recognized by such a high-impact journal, and kudos to their great work. So congratulations to the team. But now, furthermore, on Duva-Ketog, our Phase III program being run with our partner, Sanofi, is right on track, our Sunscape and Starscape program, and ulcerative colitis since Crohn's disease. But today, we're very proud to announce the fact that we're adding two new indications into our research. That includes hydrogenia superotiva, which will unlock that non-T2-based indication group, and fibrosinotic Crohn's disease, which unlocks the fibrotic bucket of indications, but also expands and doubles down on our intention and labeling for IBD in the future. So, this is a very exciting announcement that we're doing with our partners sanofi i'll get into a little bit more about the importance of these two indications next first hydrogenitis superativa this is an area i've worked in before it's an important unmet medical need this is a result of you know painful inflammatory abscesses that form in skin folds in the body these people suffer in silence with many different aspects of the disease can be disfiguring and really impact their daily life it's not uncommon it's about one percent of the adult population. And there are treatments out there that have been approved, but there's a long way to go with the amount of efficacy we can achieve. You know, anti-TL1A therapy in this area I think is perfectly suited. It's a complex disease with multiple different pathways involving both Th1 and Th17 cells, and it has a significant fibrotic component to it. So the pleiotrophic effects of TL1A therapy might really be suited well for this. It's also important to note that, you know, 15% of people with IBD actually have hydrogenitis superteva as well. So there's a lot of scientific rationale here, and it's an important market that we can grow in. In addition, we talked about fibrosynotic Crohn's disease. Now, this is a very important aspect of people with Crohn's You know, we've already posted phase two data with, you know, great efficacy in our phase two study with Duva-Ketog. But now we're looking at even worse cases of Crohn's disease. You know, 50% of people with Crohn's disease have this fibro-stenotic component. And this is where fibrosis, inflammation, and edema causes almost total obstructions of the gut. This leads to more hospitalizations, more surgeries, increased health care costs. It's really a driver of some of the worst parts of Crohn's disease. So we're very happy to advance the science. No one has been approved for this indication at this point. And I think this is showing our confidence in Crohn's disease and how we want to double down and make that label as patient-friendly as possible. So I'm very excited to be exploring this indication with Duva-Ketog. Now, moving on, we showed some great data from our proof of concept study earlier last month with patients with vitiligo in our anti-IL-15 program. I always like to start out by saying, first and foremost, it was great to see the patient's perception of their disease change. So, 75% of the patients reported an improvement in their facial vitiligo, and here I'm showing two patients who gave a special consent to show the results that they've seen in this study. Now, remember, these two patients just had two shots of our anti-IL-15 antibody, and over a 24-week period, you can see quite a change in both the woman on the left and the gentleman on the right. You know, almost total depigmentation of the cheeks on the woman filled in very nicely over 24 weeks, and then the patient on the right, some dramatic changes from total depigmentation with a darker skin color. So, you know, these are results that, you know, change the perception of a patient and is very conveniently done with just two shots. But, you know, as happy as I am about the perception change for the patients, we also met the important regulatory endpoints that, you know, the numbers we posted for the FVASI 50, the FVASI 75, and the TVASI are very competitive for systemic therapies in this area. And this really drove the fact that we went right into our phase 2B3 study, which will be executed and started this year. So we're moving at speed. We're excited to see the data, and we're moving as quickly as possible. And finally, I'll just mention what's coming up next. So we'll have a readout in the second half of this year in our second celiac proof-of-concept study. This study is important because it's actually looking at biopsy results after a gluten challenge. So remember, the basic pathology of celiac disease is the fact that when you have an immune reaction to gluten, there's destruction of the normal villi in the gut, where you have this nice high surface area of villus that absorbs nutrients in the gut. When a patient with celiac disease takes gluten, there's almost a complete destruction of that normal villus that you see on histology. And we hope to see in this gluten challenge by the biopsy that, in fact, we protect the villi from that destruction when we use the anti-ADL-15 treatment. So, we're looking forward to the readout. That will be the second half of this year, but I think this will be a great advance for patients with CELAC potentially based on that data. So, on my final slide, I just want to walk through the fact that we are marching through our milestones in 2026. We showed the maintenance data first this year for Dubokitug. We did the filing for Echopipan, our new player on the field. And then we also showed the vitiligo data just recently for our anti-IL-15 program. We'll have the celiac data in the second half of this year. Dari is on track for that last event, that last exacerbation by the end of this year. And we'll have that data to talk about in the early part of 2027. Emer Solman is on track to have the futility analysis at the end of the year. We're looking forward to the approval of Alanzapine LEI at the end of this year, and then we'll have some anti-PD-1 IL-2 human data by the end of this year as well. So very exciting. We keep executing, and we're looking forward to all these events this year. And with that, I'm going to pass it off to my colleague, Eli Khalif.

Thank you, Eric, and good morning and good afternoon to everyone. I would like to start my review of Q2 26 results with the following key messages. First, we delivered a solid second quarter results, driven once again by the continued strength of our innovative portfolio. Second, with an increasing mix of innovative revenues, together with our transformation programs, we remain on track to achieve our 30% operating margin targets by 2027. And lastly, our disciplined capital allocation strategy and the execution is increasingly recognized by the leading credit rating agencies, including the recent upgrade to investment grade by Fitch. Now moving to slide 34. Before I discuss our Q2 results, let me briefly recap the MLX Biosense acquisitions, which close in June. As Richard highlighted earlier, Ecopypen further strength our position in CNS, where we already have strong commercial and development capabilities. From an accounting perspective, as we discussed last quarter, the transaction was treated as an asset acquisition. As a result, we recorded the $724 million as IPR&D expenses during the second quarter. This included the upfront cash consideration, net liabilities acquired, as well as the transaction costs. The upfront consideration flow through cash flow from investment activities and therefore does not impact free cash flow. As I go through our Q2 performance, I will be making reference to the MLX-related impact on our financials to provide a better view of our underlying performance. Now starting with our Q2 gap performance on slide 35, Q2 revenues were approximately 4.1 billion down one percent in us dollars or three percent in local currency compared to q2 2025. this decrease was largely driven by lord generics mainly generics revelmead and was largely offset by continuous strong growth of our key innovative products ocedo ajov and uzedi gap net loss and loss per share were 576 million and 49 cents respectively. Turning now to our non-GAAP performance. Our non-GAAP gross margin in Q2 26 was 55.4%, an increase of 80 basis points, reflecting a strong growth in our innovative portfolio. Non-GAAP operating margin was 9%, including the impact of MLX-related expenses of $726 million. Excluding MLX, our non-GAAP margin would have been 26.6%, slightly below Q2 last year, mainly reflecting higher planned investment in sales and marketing in the first half of this year to support our innovative growth. Overall, we ended the quarter with a non-GAAP EPS of $0.02. The impact from MLX on EPS was $0.61, without which our non-GAAP EPS would have been $0.63. Our free cash flow in Q2 was strong at $622 million, up 31% versus last year. To provide you with some additional color, our Q225 results included $318 million revenue and $223 million EBITDA contribution from our generics revenue. Our financial results this quarter reflected a strong underlined performance if you exclude the impact of generic travel mid. Moving to the next slide. As a reminder, our operating margin expansion to 30% is driven by two structural elements. The first is the portfolio shift towards higher growth, higher margin innovative products. The second is our transformation programs. Altogether, this is approximately 400 basis points of improvements since we announced these programs in May last year, despite the impact of generics revenue. This is our core of our financial transformation, moving from a company historically driven by generics to a biopharma company. We continue to make progress to achieve these targets as reflected in our 2026 guidance. Moving to slide 37. Looking at the first half of 2026, the underlying business continues to demonstrate the strength of our strategy and execution. As you can see, the first half revenue performance reflects strong growth in our innovative portfolio and biosimilars, offsetting more than $600 million of revenue impact from generics revenue. Our non-GAAP operating margin in the first half also demonstrate ongoing improvements in our gross margin profile. As I highlight last quarter, we expected higher operating expenses in the first half this year versus the second half, mainly due to the timing of planned investment to support our growing innovative portfolio and upcoming launches. We expect OPEX to normalize with operating leverage and higher impact of the transformation program savings in the second half moving to slide 38 our balance sheet continues to improve and this is a key enabler of our pivot to growth strategy driving eps and free cash flow over the last few years we have made significantly improved our leverage profile at the end of q2 our net debt was 12.9 billion with the net debt to EBITDA ratio of 2.8 times. Excluding AMLX, our net debt to EBITDA would have been 2.3 times, well on track to achieve our two times target by 2027. As we continue to pay down our debt, it is expected to result in significantly lower finance expenses by 2030. At the same time, we have continued to transform our working capital management, driving significantly improvement as a percentage of revenue, resulting in lower cash conversion cycle. These efforts, combined with a fast-growing innovative portfolio and transformation programs, are expected to drive a long-term earnings and free cash flow growth. As you can see on the next slide, our execution is increasingly recognized by our leading credit agencies. In May, Fitch which upgraded Teva to an investment grade rating, marking Teva return to IG for the first time since 2017. This was our third upgrade from Fitch in less than two years, underscoring Teva transformation journey. About two quarters ago, S&P and Moody's had also upgraded Teva rating and Outlook respectively. These upgrades are another validation of our disciplined execution and stronger financial profile. with our continued transition to an innovative biopharma company we are well positioned to get additional rating upgrades now turning to our 2026 outlook on slide 40. based on our solid first half results and visibility into the second half we are raising the midpoint of our full year revenue guidance range by 75 million and reaffirming the outlook range for operating profit, adjusted EBITDA, EPS, and free cash flow. Let me provide you some color on our guidance assumption, starting with the revenue. First, our innovative portfolio is performing strongly across all three products, Ocedo, Ajovi, and UZEDI. With the first strong half of performance, we are increasing the combined guidance of this product by approximately 150 million at the midpoint reflecting a combined 2026 revenue outlook of approximately 3.7 billion and growth of approximately 17 percent over 2025. On the other hand we expect our global generics revenue for the full year to be flat to down low single digit in local currency compared to 2025 excluding the impact of generics revenue and the divestment Japan business. This is mainly due to fewer high-value launches in 2016, lower seasonal on OTC, and increased competition in some markets. Moving to the other elements of our financial outlook. We continue to expect the 2026 non-GAAP gross margin to be in the range of 54.5% to 55.5%. In addition to the MLX-related expenses this year, our operating expenses are expected to be approximately 28% of the revenue for the full year. This is the higher range on our overall 27 to 28% OPEX, reflecting a deliberate investment we are making to support our growing innovative portfolio and our biosimilars. Our guidance range for the operating income and EBITDA reflect this higher growth investment in OPEX and also a less favorable ethics expected in the second half. Now let me provide you some additional thoughts on our quarterly phasing for the rest of the year. Overall revenue is expected to be increased over the rest of the year. For Ostedo, we continue to see elevated levels of inventory in the channels and expected normalization of this access inventory in the next two quarters. We also continue to expect OSTEDO revenue in Q4 26 to be down year over year due to the expected changes in purchasing patterns and pricing environments ahead of the IRA implementation in January. In addition, we are preparing for a Q4 launch for our Olanzapin LAI. Since the initial volume is expected to be largely samples or vouchers, as we establish a payer coverage, you should expect no revenue in Q4. On non-GAAP margin, we expected improvements in the second half, in line with the revenue, as well as higher savings from ongoing transformation programs. While gross margin are expected to decline slightly in Q4 versus Q3 due to the anticipated revenue dynamics related to Ocedo, our operating margin are expected to improve sequentially in Q4 driven by the OPEX savings. Moving to the next slide on capital allocation. Over the last few years, we have made significant progress in strengthening our balance sheet. This progress allows us the financial flexibility to invest in our innovative portfolio and pipeline, evaluating value-accretive BD opportunities, along with the optionality of returning capitals to our shareholders through a buyback when appropriate. And lastly, I would like to briefly touch on our planned transition to direct ordinary share listing on the New York Stock Exchange. We believe this change will make Teva shares more accessible to a broader investor base who will be able to buy ordinary shares directly in a seamless manner, in addition to the potential inclusion in the leading indexes. We look forward to completing this transition in September and believe it represents another example of our focus on creating a long-term shareholder value. With that, I will now hand it back to Richard for his closing remarks.

Thank you, Eli. So once again, I want to just highlight the fact that we are at a really exciting time at Teva, living on our acceleration phase of the Pivot to Growth strategy. As you can see from this slide, we have multiple opportunities to drive the revenue in the short term, medium, and long term. and this innovative portfolio is very extensive. I'd also like to add the number of biosimilars we'll be adding as we start to launch these into the market as well going forward. So in the near future, our incremental growth will come from the next generation of innovation, but we'll have much more to come after that. And so to conclude, we continue our growth journey. Three themes are very clear. In a critical year for Teva, we delivered exactly what we said we were going to do. Our pipeline is advancing at speed, and our ruthless discipline capital allocation, we believe, is what sets us apart. And with that, I look forward to answering some of your questions with the team here. Thank you very much.

And while Elliot's queuing up the questions, I just want to remind everyone if you could try to ask one question and one brief follow-up, and we'll be happy to take you back into the queue if you want to ask subsequent questions but just so as many people get a chance to ask questions as possible so elliot whenever you're ready we can go ahead thank you if you would like to ask a question please press star followed by one on your telephone keypad if you would like to withdraw your question please press star followed by two when preparing to ask your question please ensure your device is unmuted locally and as a reminder if you're using a speakerphone, please remember to pick up your handset before asking the question. First question comes from Jason Gerberi with Bank of America. Your line is open. Please go ahead.

Hey, guys. Thanks for taking my question, and congrats on the quarter. So, I just wanted to follow up. So, strong performance on Esteto. I think you mentioned 60 percent new patient start share. Trying to get a sense of your confidence level going into next year, that Esteta won't be disadvantaged in formularies as a lower WAC price drug, that the payers will be observant of the fact that they shouldn't be using the IRA-negotiated price point to advantage the competitor drug. So, I just wanted to get your overall sense there. And just as my brief follow-up, any comments on the tariff update in the U.S. and how the supply chain is configured to potentially manage that risk?

Thanks, Jason. So could you repeat the last question? I just missed it.

Yeah, sorry. The last question was just any thoughts on Trump's proposed tariffs in the U.S. and how the supply chain is configured to mitigate that risk?

Okay. Thanks for the question, Jason. So I'm glad you sort of recognized the strong performance of Estero of 40%. I do want to maybe slightly correct you. I think you said 60% of new starts. The 60% I refer to as 60% of new Aestheto starts are on the Aestheto XR, just as a clarification. That said, you know, we still have very good TRX growth and very good milligram growth, highlighting the impact that Aestheto XR does have on the ability for patients to get on the optimal dose and adhere and comply better. And then to your question on the pair dynamics for 2027. You know, I think this is something that we've spent a lot of time looking at. There's a few, obviously, scenarios that can play out this way, but it's worth highlighting that all Medicare plans are required to cover IRA-negotiated products in their Part D formaries. That would be like, obviously, Esteto XR. And so based on that, I think, and based on the product profile and the significant patient demand as well as the physician excitement around Estedo XR. I think we remain confident in our ability to continue to make sure we can capture a significant amount of patients as we move into 2027. Obviously, how this impacts revenue, we're not really talking about that. We've highlighted the fact that when we give guidance on the company, we'll get more data as we go through, and obviously, we end up having more discussions with some of the payers towards the end of the year. But remain very confident about that. And I'd just like to highlight what I said in my notes. Very committed and to above 3 billion of peak sales based on the significant untreated patient population and clearly the momentum that we have around the brand and the execution of the team. Now we can cut to your second question on the recent announcement from the administration on the Trump tariffs. You know, obviously this news has only just come out. So we're digesting this and understanding what that could look like. But I would also point out that we do have a number of factories in the United States, six. I think we're one of the largest generic manufacturers in the U.S. But we have a bit of time to work this one out and understand what the administration is trying to do. And as you can imagine, we've always been in close discussions with the administration being such a contributor to the healthcare system in the United States. So thanks for your question.

Thank you.

We now turn to Uma Rafat with Evercore ISI. Your line is open. Please go ahead.

Hi, guys. Thanks for taking my question. I just wanted to spend a second on the IL-15 ahead of the celiac readout and just drill down a couple of dimensions. One, I believe the last patient in was April 7th, which means they should have been done by early June with the week 8 endpoint. So I'm just trying to understand sort of the timing of data. I would have thought it could have been as early as today, perhaps along with earnings. I realize that's not what the expectation was, but just wanted to understand the timing and sort of where you are in data analysis. Also, there's some prior disclosure you've shown on a Phase I-B exploratory celiac study, which shows this separation versus placebo. But the biomarker that it was shown for on the y-axis was not laid out. What was the biomarker? And then finally, could you remind us, what's the amount of gluten-per-day background that's being used in your ongoing celiac study or your already completed celiac study? Thank you very much.

Thanks for the question, Umar. I feel you're almost as demanding as I am with regard to wanting to see results as fast as possible. But with that, I'll hand it over to Eric to answer.

Thank you, Umar. Thank you for the very specific and up-to-date question. So first, the question about the enrollment. So, you know, the enrollment that you see on clinicaldrives.gov and the changes you see there don't always correlate to when we're doing the database lock. So, that's the simple answer I have there. So, there's nothing slow or fast about it. It's just as it is. So, we'll have that data in the second half of this year. With regards to the question about the biomarker in the first POC. So, that was FSBP, free acid binding protein. I think I got that right. free acid binding protein. And that's a biomarker that's not uncommonly used to measure gut inflammation. And that separation we saw from placebo versus active upon that gluten challenge is really, I mean, it was exciting to me to see that because that really indicated that we're having an impact. And one of the things I always like to mention, if you speculate or overread the data, not only did we protect the gut with this biomarker by that readout, but it seemed to actually we get better from the baseline. So whether we are treating a smoldering celiac in those patients is something fun to speculate about. So it was this free acid binding protein in that study. And then your final question was the amount of gluten challenge we're giving in the biopsy study that's going to read out in the second half of this year. So we're giving three grams every day for six weeks. That's a significant challenge in that study. And I think that the team thought about it. There's various different ways you can do it, but that's a significant amount. I'm always impressed to see that we can enroll patients that are willing to do that. So hopefully that answers all your questions.

Thanks for the question, Nua. Next question.

We now turn to Louise Chen with Scotiabank. Your line is open. Please go ahead.

Hi. Thanks for taking my question. Congrats on the quarter. I wanted to ask you about your biosimilars opportunity. You seem to be talking about that more. And just curious if you could give us a little bit more color on why the growth opportunity is becoming more meaningful now to you. And is there anything in the U.S. market that's changing here? Any potential actions from the regulators or payers on the horizon that could open up this market even more? Thank you.

Hi, Louise. Thanks for the question. So you're right. We are excited. I am excited about the biosimilars. We've been working on this hard to get the portfolio and to get this to market. And I think there are a couple of reasons why I'm excited. One is just the performance of the team we have in the U.S. in the market. And to give you some context, we have not always been first to the market. But what we've shown and what I highlighted today is two out of our five products in the U.S. market are number one. And I think a third one's about to become number one. And that just shows, I think, our capability, which leads a bit into part of your second question, what is changing the US market? Well, actually, nothing really is changing. It's actually a very difficult, complex, fragmented market. And why do I sound somewhat positive about that? I'm not. But what I know is with Teva, because of our reach and our scale and our scope of what we do, we're able to navigate what is a very fragmented, complex market. And I think that's why you're seeing my excitement about the performance we have in the U.S. If this changes, I think that will be positive as well, because we'll benefit from that. But we have more and more products coming to the U.S. Now in Europe, where we really have been starved of biosimilars, and now we start to launch them in Europe, what we're seeing is the first indications are that when we launch them, as you would expect once again from Teva, which is a major player in all European markets, our ability to perform very well early on, early signs are saying that we can do that. So the reason why in totality I'm excited is as you put these 15 biosimilars together, another 14 that are coming through and more partnerships we're doing, I think this will be a major growth driver for our generics business as a whole. And so that's where my enthusiasm lies. And I hope we'll have a lot more data points to highlight that. Maybe to conclude, we did set ourselves a target for 800 million by 2027. As I said today in the call, you know, we're well on track to exceed that already. So, thanks for the question, Luis.

We now turn to Dennis Ding with Jeffries. Your line is open. Please go ahead.

Hey, good morning. I had a question on celiac. So, you guys have talked about using Forte Phase I-B as the bar on VHCD, but that was 0.127 placebo adjusted and had very wide error bars. So, this is actually a two-part question. Number one, why shouldn't we use the Calypso data as a bar, which is around, I think, 0.4 to 0.45. And then number two, if you can comment on the interpretability of your data, if you get, let's say, 0.15, 0.2, or 0.3, if you would consider that clinically meaningful, or is there anything else in your data disclosure that you should point us to? Thanks so much.

Over to you, Eric.

Thank you, Richard. So, Dennis, you know, we're using the bars that we can report against. I'm sorry. You know, Forte is the one that's reported the number of 0.127. The Calypso data, I'm not sure if that's something readily available to us right now. So, you know, if we can get that data, that would be great to compare to. I think the important thing is that you have to remember these are all somewhat artificial gluten challenge studies that are different from study to study. We designed a study that, you know, we think will give a nice result based on a single dose. Remember, we're doing a single dose, looking at a six-week challenge with a pretty good burden of gluten. The important thing is that we see that delta between the, you know, the placebo, which should change the most, and hopefully the active will stay similar. So, the one that's documented the most, and I think is most comparable is the forte uh uh result of 0.127 that you mentioned and that's the delta between placebo and active so i'm still kind of saying that that's going to be what we're going to measure ourself against with regards to results that we have access to um the clip so data i'm not familiar with that i'm not sure if that was posted or is available right now so maybe we can follow up with you on comparing that you know there's a lot of different things we're going to get we're going to learn from this study not only the you know the the biopsy data which is critically important for you know determining how we set up the phase two and three studies but also you know you know experiential or uh symptomatology data so um a lot to come there but i think we're

going to stick with comparing to forte at this point thanks thanks thanks for the question dennis we now turn to david amsalem with parker sandler your line is open please go ahead um Thanks.

So one on 408 and then one on EchoPyPAM. On 408, particularly with Forte getting acquired, I wanted to get your thoughts, Eric, on how you view 408 mechanistically versus compounds that focus on CD122 and act on IL-15 and IL-2 and how you think those agents may or may not have an advantage with respect to 408. So that's a broad question, and I guess multiple indications encompassing vitiligo and celiac and maybe others. And then secondly, on ECHO-PYPAM, can you talk to positioning in the marketplace? As you think about D1 antagonism activity, do you think that there's potential that this could be used ahead of the currently approved antipsychotics that are primarily D2 acting. How do you think about that and particularly considering that those agents are generically available? Thanks a lot. Okay.

Do you want to start on the ANTI-AL15?

Thank you for the question. So, first, maybe discuss the competition and, you know, how we approach the development of the anti-AL15 versus how Forte has approached it. There's nothing wrong with the two different approaches. You know, you can hit the receptor like Forte has done, or you can hit the ligand like we have with the anti-AL15. There's a couple of things that we consider strategically when we design molecules. You know, we like to go after the ligand. It's clean. You hit the free ligand and the cytokine in the system. When you hit a receptor, you run the risk of creating some off-target complications doing that. So we just by strategy do it a different way, but there's nothing wrong with either way. One other more subtle thing that you can do when you hit the ligand is you can measure target engagement. We measure the free anti-IL-15 level in the system. So that gives us a good idea of how much activity we are seeing at any one point over time. So we've shown the suppression of free IL-15 for out to 80 or 90 days on a single dose. That really drives an evidence-based way of choosing your dose selection and schedule. That's why we are interrogating a dose given once every three months. This is a quarterly shot that we're developing as a subcutaneous shot. So there's just strategic differences. Whether one is better than the other. We don't know. I'm just very confident in our modeling and simulation of how we'll move forward with a simple-to-give subcutaneous shot every three months. So those are the biggest differences I see. It's great to see the acquisition. I mean, it shows the value people are putting in these indications like vitiligo and celiac disease. You know, I'm fairly confident these will be indications that grow, just like we saw psoriasis grow, just like we atopic dermatitis. Once we get good treatments that are easy to give, they will be used and the market will increase. So that's your first answer. For echopypan, you know, the positioning of echopypan, you know, right now people go through first behavioral treatments for Tourette's disease, then they try off-label drugs like glyphenosine and other, you know, treatments that aren't approved but actually have some modest effect they're not great but they're they're well tolerated then they advance on to antipsychotics which have activity but are their tolerability is poor particularly in a pediatric population so the differentiation the thing we're bringing to to the table with echopypan is a brand new uh mode of action it's a d1 antagonist it's much more tolerable we believe in our hands it was very tolerable in the phase threes and phase two studies. And we think that at first, they might not be first-line therapies, but over time when people see the tolerability and the efficacy, that it would probably advance over time. So that's how I see the order of entry and the value proposition that we have with EchopiPen.

Yeah, and if I can add to that, Eric, I think the numbers back it up. As I said, there's 100,000 pediatric patients who suffer from Tourette's syndrome. Only 50% are treated, and I think that highlights. Why are they not treated? And I think it goes to that there isn't a product that gives efficacy and safety. And then that theory is further endorsed by the fact that only 20 to 30 percent remain on therapy. And once again, an assumption around that is I'm not sure parents want their children to be on antipsychotic long term or some of the other drugs don't work that effectively. So either way you look at it, I think there's a big unmet medical need for an efficacious, safe, well-tolerated product. And I combine that with the expertise we have in the U.S. with Estedo, Yoseti, and Ajovi at how to treat certain patient populations and our experience with psychiatrists and neurologists. And I think that's why we have a lot of excitement around how we can help these patients, these children with this very distressing condition.

We now turn to Ash Verma with UBS. Your line is open. Please go ahead.

Great. Thanks for taking our questions. Can you talk about the TL1A new indication just for the fibro stenostic Crohn's indication that you mentioned? What type of addressable market is that in terms of U.S. and European patients? And then for HS, what would be the development path and trial design look like? Is it typical phase two, phase three with a focus on high score 50 as a primary endpoint?

Hi, Ash. Thanks for the question. I'll hand that one to Eric. You're having a busy day today.

Yeah, so thanks for the question. You know, the two indications, I'm very excited about these two indications, you know, and just to review how we think about the indications with our partner, Sanofi, you know, first, the scientific justification has to be there, the market opportunity, you know, the possibility of regulatory success, and of course, the speed. Those are the four benchmarks we use when choosing it. So why then HS and fibrosinotic chronosies? Well, HS, there's a lot of great science around, you know, the fact that T1A is upregulated in these disease areas, the fact that, you know, Th1 and Th17 cells are involved. You need a drug like Duviketog that has potential effects on multiple different pathways. And then you add in the fact that there's a potential direct effect on fibrosis. All those things add up to the fact that, you know, HS is probably a very good indication going to. not to mention the fact that 15% of patients who have IBD also have HS. So there's a lot of science and reason to believe that this is a good treatment. HS is another market that's growing. You see this out there with the competition. It's a high-end medical need. This will continue to grow, so the market opportunity is definitely there. I think we have a good chance on the probability of success, and it's something we can execute very quickly. Usually these primary endpoints around 16 weeks you can that's how we'll approach it most likely and you know at this point in development we'll do a traditional phase 2b study that will drive then a phase 3 program so that's what the timelines are looking at for hs now turning to fibro stenotic Crohn's disease this is another one i really think is a great idea this is an area that's great on medical need there's no approved therapies for the indication of fibro stenotic Crohn's disease And this is really one of the main drivers of the complications of Crohn's disease, where you have, you know, potential obstruction, you have hospitalizations, you have, you know, increased costs, increased symptomatology. So if you can have a drug that potentially not only blocks the inflammation, but then really starts to work on these, you know, majorly obstructive fibrotic indemnus lesions in patients with Crohn's disease, that's a major differentiator for a drug launching into IBD. So, you know, hopefully someday we're not just talking about turning off inflammation in Crohn's disease. We're talking about changing the structure and the major complications within the disease. So when I think about the opportunity here, it's not just scientifically unlocking fibrosis. It's driving a better label, a broader opportunity for patients, and a broader opportunity for the market for the company. So that's the thinking behind the two indications. I think that they're spot on.

Thanks, Eric. Thanks, Ash. I think we have time for one more question. Is that right?

Yeah. Our next question comes from Sneha Muthay with Barclays. Your line is open. Please go ahead.

Yeah, this is Glenn Santangelo. I think you got the name wrong. But essentially, Ellie, I just had two quick questions for you, if I could. I mean, essentially, last quarter, I think you talked about the Osteto inventory sort of issues. And I thought the expectation was that those inventory levels would come down a little bit this quarter. But it seems like that wasn't the case. And I think you suggested that those inventory levels remain sort of elevated. So how should we think about that, you know, in 3Q and 4Q within the guidance expectations that you laid out? And then secondly, you know, I did want to ask you about EBITDA. I mean, given the strength in the innovative brands this quarter and how well you did on revenues and gross margin, you maintain the EBITDA guidance. And I was just kind of curious if there was anything, you know, different, you know, in terms of your expense outlook that's kind of worth calling out, given that you maintain that EBITDA guidance. Thanks so much.

Hi, Glenn. Richard, thanks for the question. I'll start with Estet and then I'll hand to Ellie for the EBITDA question. So with regard to this inventory, you're right. We had that inventory built in Q4 2025, and we're expecting to draw down. We saw some of that draw down occur in the first half of the year, but not fully complete. And so we need to see the rest of that come down in the second half of the year in Q4. And then just to reiterate what I think we've also been saying is how will Q4 inventory levels play out anyway, knowing that the IRA price effectuation comes in in Q1, 2026. And I think that sort of is something that we also are keeping in mind when we think about guidance and esteto. And then, you know, I go back to the fundamentals. Is the TRX good? Yes. Are the milligrams growth good? Yes. Is our breadth and depth of prescribers good? Yes. So I think that gives us obviously confidence about where the product's heading, why we feel confident about $3 billion plus in peak sales. But just those are dynamics as we manage through this inventory, both the early part of it from Q425 and then understanding how that's going to play out in Q4 of this year. And then on the EBITDA, I'll hand that one to Eli. Thanks for the question.

Yes. So, look, as I mentioned in our prepared remarks and you saw from the slides, the three main products of CEDO, Ajovia and Uzedi, at the midpoint now moving to 150 million and but net net net what you see on on the top of our top line you see a midpoint of 75 million and this is related to kind of an offset this is that we see due to some softness in generics as i mentioned and all in all it's very important to remember like this is a really strong performance and mainly when you think about context on the tough prior year comps with removing 1.1 billion revenue and 700 million dollars equivalent EBITDA from revenue now if you go through to the range on the on the EBITDA that we're saying it and we need to understand that i mentioned that we're going to be at the higher range of the opex around 28 percent and this is related to some continuous investment that we are doing in order to make sure that our innovative portfolio and both similars are performing and also we had the slightly a bit on on less variable fx i will mention and some other you know in lances cost that we had and in our first half and going to have in the second half it's you saw the pool pharma announcement on ocrobus and and small here small there so it's kind of a maybe very small 20 30 basis point um on the total if you look on annual revenue but this is all dynamics related to investment related to supporting our innovative and biosimilars portfolio thanks for the question glenn and i've realized actually we're actually going to take some more questions there uh some two more questions so uh next question we're now attending matt de la torre with goldman sachs your line is open please go ahead Great.

Good morning, guys, and thanks for squeezing me in. Coming back to T01A, it seems like you guys are leaning kind of fairly heavily into these fibrosis-heavy diseases. So I guess maybe how far could you go in that direction in terms of additional fibrotic indications? Are you going to kind of see how these play out and then go from there? um and then and then eric you touched on this briefly but i guess how should we think about fscd in the sense of would this be primarily a differentiator on your cd label um or could it be a separately you know indication different label um and then and then maybe just briefly touching on the commercial side you know i know you guys are prepping for two major launches over the next 12 months with uh lai alanzapine and eco pfam maybe just walk us through you know launch preparations so far and what you guys are just most focused on from an execution perspective for both those launches. Thank you.

Hi, Matt. Thanks for the questions. I'll let Eric start with the TL1A duplicity. Over to Eric.

Yeah. So thanks for the questions, Matt. And, you know, first to start with the TL1A, you know, the choice of HS and fibrosanotic Crohn's disease, you know, first and foremost, they are inflammatory diseases with a major fibrotic component to it. So these are great ways to get into the field and show whether we're having a true effect. We still have to prove that TL1A has that antifibrotic effect, but these are great avenues to get in there and learn. Once we've shown that, yes, maybe we could in the future go to truly only antifibrotic or fibrotic diseases, such as IPF or something like that. But right now, we need to prove the principle, and these are great indications because on the way to learning those things, we will show great value in indications that have a high medical need. Now, going on to the question of fibrofenotic Crohn's disease and what is our hope for what those will do in the future, I believe and I hope to have that as a labeled indication someday if we show good results. So that's the intention of those. So that really could differentiate us within the space of inflammatory bowel disease. So that's the intention there. And then the question about the launch of the EchoPipe panel and our preparations, maybe, Richard, did you want to take that?

Yes. No, we do, as you framed it, Matt, have two major launches we're very excited about. I think with regard to Lanzapine, I think it's worth noting that we've been preparing for this launch for some time, thinking about how best to approach it. But that preparation has really been high quality, not just because of the team's thinking, because we're out in the market every day understanding the physicians, the patients, the payers, the intricacies of this market. And so the team has put a huge amount of effort into preparing for this, which is why, you know, we're very optimistic and enthusiastic about our ability to really help these patients who need a long-acting therapy for these severe schizophrenia patients. So I think I'm very confident and looking forward to seeing that launch. with regard to EcoPyPan. Based on the timeline of the FDA, this will probably, you know, could come out in the later part of Q2 next year. So once again, the asset's been transacted. We have it. We've been working and thinking about this for some time when we got close to the transaction. And we think this falls into our wheelhouse again. It's a rare disease, undertreated patient population. How do we get these patients motivated to seek therapy? How do we educate the physicians on a new therapy? This probably sounds very much like the things we've been saying around Estedo, because it is. And so that capability and that knowledge will leverage significantly. Obviously, putting the resources in place and getting the right people in place, we're very good at that. The unmet need is significant. So very excited about that. And I think the timing actually works out. You know, these are over a year apart. And, you know, we've got to get used to this because, as I said in my remarks, we'll be launching a new product every year. So this is a muscle that we've been building. We're enthusiastic about it. We're not in awe of it. We're leaning into it. And so I think you'll see an excellent launch of EcoPypeBand. But obviously, we'll give you more updates as we get closer to that. So thanks for your questions, Matt. Next question. I think, is this our last question? Yeah, this is our last question. So who is it?

Next to last question. Next to last.

We have two more.

The penultimate.

So next question, please. Our next question comes from Chris Schatz with JP Morgan.

Your line is open. please go ahead uh thank you so much for squeezing me in uh just uh this is a katarina on for chris just uh two very quick ones so first just on a jovi you know guidance for the year is coming up nicely just how much of this is volume versus price and any other kind of color you can provide in terms of the trends you're seeing for that product and then just uh on europe very quickly um coming in a little lighter than expected just again anything to call out there and how should we think about results in the second half for uh europe thanks all right katarina thanks for your thanks for your question.

So on a job, you're very pleased with the performance of this. And as I said, this is across all markets. So, you know, we've got good growth in international, good growth in Europe and good growth in the US. As I highlighted in my remarks, the US, there is some favorability on the contracting and what we've done there on gross to net, but it also market share gains in the US. We've also got market share gains in Europe and in international markets. And it's important to note that we are growing above the market in all of our regions. So that, I think it gives us an underlying good trajectory across all regions, but some good work there. And I always remind people, you know, when we started this journey with Pivot to Growth, Ajovi had been forgotten about. And now we're talking a billion dollar asset. I think that's credit to the teams across all three of the regions that have been able to do that. Now you also asked a question around Europe and the softness in Europe. And I think this goes back to something I mentioned also, is we don't have as many high-value launches as we had last year. We also had a very low cough and cold season, and we have a particularly significant portfolio in cough and cold, so that impacted us. On the positive side, we are launching more biosimilar. They've only just started, so we haven't really seen the traction of those. But we have more and more to come into Europe, which is very attractive biosimilar market, and it's one that I've been disappointed that we haven't been in, but we've done a lot of work on this portfolio and we'll be bringing more and more biosimps to the market almost year on year. As I said, we have 14 more to launch and we're going to consistently add more to that portfolio and we'll end up with a portfolio, you know, mid-30s, close to 40, that's our ambition. So hopefully that answers your questions, Katerina, but thanks for the questions. And then, do we have one more? I'm a bit confused. Nope, we don't have any more. So thank you, everybody, for your time and attention today. Thanks for the questions, and thank you, as always, for the interest in Teva.

Ladies and gentlemen, today's call is now concluded. We'd like to thank you for your participation. You may now disconnect your lines.