Teva Pharmaceuticals Sees Pivot to Growth Accelerating on Branded Drugs, Biosimilars

Key Points

• Teva says its “Pivot to Growth” strategy is accelerating as branded medicines gain momentum, generics stabilize, biosimilars expand and debt reduction strengthens the balance sheet. The company has achieved investment-grade ratings from all three major agencies ahead of schedule.
• Growth products are outperforming expectations: AUSTEDO could eventually exceed $3 billion in sales, while AJOVY is approaching the $1 billion threshold faster than anticipated. UZEDY and long-acting olanzapine together represent a potential $1.5 billion–$2 billion opportunity.
• Teva expects biosimilars to become a larger growth driver, with 11 products already on the market and about nine more planned by the end of the decade. It is also advancing pipeline assets including duvakitug and ecopipam, which could launch in the first half of 2027.

Teva Pharmaceutical Industries NYSE: TEVA said its “Pivot to Growth” strategy has moved into its second phase, with management pointing to momentum in branded medicines, a stabilized generics business, an expanding biosimilars portfolio and a strengthened balance sheet.

Speaking at a Morgan Stanley event, President and Chief Executive Officer Richard Francis said the company began the strategy in 2023 with goals to return to growth, accelerate growth and maintain growth. The strategy is built around four pillars: delivering on its growth engine, stepping up innovation, creating a generics powerhouse, and focusing the business and capital allocation.

Francis said Teva has sought to transform from a pure-play generics company into a biopharmaceutical company, supported by growth products including AUSTEDO, AJOVY and UZEDY. He also highlighted Teva’s first deal with Amylyx as aligned with its central nervous system strategy.

The company has also reduced debt and achieved investment-grade ratings from all three major ratings agencies more than a year earlier than it had projected, according to Francis. He said Teva completed an oversubscribed refinancing in the prior week and had converted ADS shares into ordinary shares, a move he said could broaden investor access to the company.

AUSTEDO and AJOVY Growth Outlook

Francis reiterated his confidence that AUSTEDO can generate more than $3 billion in sales over time. Teva had previously targeted $2.5 billion in AUSTEDO sales, and Francis said the company now appears positioned to reach that milestone a year ahead of its earlier timetable. He did not provide 2027 guidance, saying the company would offer further details after reviewing third- and fourth-quarter data.

He cited a large untreated population of patients with tardive dyskinesia and Teva’s ability to identify patients, move them onto therapy, optimize dosing and support adherence as drivers of the product’s opportunity. Francis acknowledged that the market is competitive, but said Teva has focused on resource allocation and commercial execution rather than commenting on competitors.

AJOVY has also outperformed the injectable CGRP market, according to Francis. He said Teva’s prior ambition was for the migraine treatment to exceed $1 billion in sales, a threshold it is approaching faster than expected. Management may issue updated AJOVY guidance, he said, while cautioning that the duration of its above-market growth remains to be seen.

Francis attributed performance across AJOVY, AUSTEDO and UZEDY to the company’s commercial capabilities and operational focus across regions.

UZEDY, Olanzapine and Generics

On UZEDY, Teva’s long-acting injectable risperidone treatment, Francis said the product has gained traction in a competitive market and that the company is now the leading long-acting injectable in risperidone. He said Teva has doubled the risperidone long-acting injectable market during its time in the category.

Teva sees a potential opportunity to launch its long-acting injectable olanzapine product outside the U.S., although Francis said pricing will be an important consideration. The company has not included an international UZEDY contribution in its forecast, he said.

Combined, Teva has projected UZEDY and olanzapine could generate $1.5 billion to $2 billion. Francis said upside could depend on long-acting injectable penetration, U.S. Medicare access and European launches at appropriate pricing.

For olanzapine in the U.S., Francis said the initial focus will be on sampling and securing hospital formulary access. He identified state-by-state Medicaid access as the principal near-term limiting factor, estimating that roughly 85% of the Medicaid market could be accessible after 12 months. He said Teva does not expect to seek Medicare access through discounts that it considers inconsistent with the product’s value.

In generics, Francis said the business has moved from years of decline to three-year compound annual growth, driven by launches, manufacturing improvements, supply reliability and commercial execution. He said the next major portfolio shift will be a growing contribution from biosimilars.

• Teva has 11 biosimilars in the market, Francis said.
• The company expects to add roughly nine more by the end of the decade.
• Its broader biosimilars portfolio includes approximately 26 to 29 products, he said.

Francis said Teva was on track to exceed its $800 million biosimilars target for 2027 a year early, supported by opportunities in both the U.S. and Europe.

Pipeline and Business Development

Eric Hughes, Teva’s executive vice president of global research and development and chief medical officer, discussed duvakitug, the company’s TL1A therapy being developed with Sanofi for ulcerative colitis and Crohn’s disease. Hughes said phase 2 results showed what he described as the highest results reported for the class, while maintenance data released this year was competitive across both diseases.

Teva believes duvakitug could be within an 18-month window of competitors in ulcerative colitis, Hughes said, while characterizing its Crohn’s disease program as being in the middle of the competitive group. He added that eventual outcomes will depend on late-stage data.

Hughes also cited development work for TL1A in hidradenitis suppurativa, saying the disease has substantial unmet need and that the mechanism could address multiple inflammatory and fibrotic pathways.

For ecopipam, Teva filed a new drug application in June and has received priority review, according to Hughes. The company expects a potential launch in the first half of 2027. Hughes described ecopipam as a first-in-class D1 antagonist for Tourette’s disease and said its studies showed about a 30% effect versus placebo, with a safety profile that did not show the side effects associated with D2 antagonists.

Looking ahead, Francis said Teva is interested in selective business-development opportunities in CNS, immunology, respiratory medicine and rare diseases. He said the company does not face a “desperate need” to make acquisitions, but may pursue thoughtful in-licensing or smaller transactions that can provide additional assets for its development and commercial organizations.

About Teva Pharmaceutical Industries (NYSE:TEVA)

Teva Pharmaceutical Industries Ltd. is a global pharmaceutical company headquartered in Tel Aviv, Israel. The company develops, manufactures and markets generic medicines, innovative specialty medicines, biosimilars, over-the-counter products and active pharmaceutical ingredients. Its portfolio serves a broad range of therapeutic areas, including central nervous system disorders, respiratory conditions, migraine, oncology and movement disorders.

Teva's specialty medicines include treatments for conditions such as multiple sclerosis, migraine and tardive dyskinesia, while its generic medicines business supplies products across numerous therapeutic categories and dosage forms.

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