Since publishing its financial results for 2024 at the end of January, the share price of Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has struggled to recover as about $6 billion has been wiped off its market cap, to its current market cap of $18.8 billion. In 2024, the Israeli pharmaceutical company's share price had more than doubled. The financial results were actually positive, at the higher end of analysts' forecasts, but profit guidance for 2025 disappointed the market.
Teva CEO Richard Francis said that he had not expected such a harsh reaction from the market but he sees a positive side to it. "When we gave the forecast, there were people who were a little disappointed," Francis said at the company's annual meeting with journalists at Teva headquarters in Tel Aviv. "It wasn't the reaction we wanted or expected, but it indicates a change in Teva.
"Today's Teva is seen as a company that can do more, and there is a change in expectations from it, whereas in the past the question was whether Teva could even survive and pay its debts, to the question today of whether it can grow more." Francis added, "We are investing in the business. Our strategy is to grow Teva in the long term, and you can't achieve that without investing in the right areas."
"Eight consecutive quarters of growth"
Francis became Teva CEO at the start of 2023, after Kare Schultz stepped down, having led an extensive streamlining plan. Francis has presented his strategic plan based on growth including an emphasis on Teva's branded drugs.
"In 2023, the environment was challenging and that was the narrative. Two years later, we have had eight consecutive quarters of growth, we have raised forecasts twice, the innovative portfolio is growing and we have reduced debt," said Francis.
Teva's debt at the end of 2024 was $17.8 billion ($14.5 billion net debt). Of this, about $8.1 billion is scheduled to mature in 2025-2027 (mainly in the next two years) and Teva will probably need to refinance debt, although it is not under pressure to do so now. Recently, the company filed a shelf prospectus that would allow it to issue ADSs (equity) or debt, which also weighed on the stock, due to concerns about dilution. However, the company insists there is no plan to raise capital and the prospectus was filed to renew its validity.
Francis is enthusiastic about Teva's branded drugs, and presented the developments of prominent products. On Austedo ( for tardive dyskinesia and Huntington's disease chorea.), which is already on the market, he said, "In the past, analysts thought that at its peak the drug would sell for $1.4 billion, today the estimates are $2 billion. We said that we would reach $2.5 billion by 2027 and we showed that it is achievable."
He continued, "People underestimate Teva's capabilities, despite the legacy of Copaxone. They used to say that Teva can't develop branded products, but we do it even better than companies that specialize in the field. We make things happen."
On the branded drug Duvakitug, which Teva is developing with Sanofi, for the treatment of ulcerative colitis and Crohn's disease, and which surprised in December with strong clinical results, Francis said that it could be expanded to other medical indications. "The results amazed people," Francis observed. "We knew we had the best product, and the data show it. This is the beginning of an exciting journey to bring the product to market and meet an unmet medical need."
On biosimilars, (a generic version of a biological drug), he said, "We were a little late to the biosimilar party, but we are working to close the gap." He also sees growth opportunities there. Regarding generics, Teva's traditional activity, he said it will grow, and the company is focused on growth there.
Francis says that 2025 will be "more of the same": "We know what to do: accelerate innovation, optimize sites, and allocate money for growth." He also referred to the war and stressed that the results were achieved despite the war, and that he is proud of Teva's support for citizens, especially in the field of mental health care.