Teva Pharmaceutical Industries Q1 Earnings: AUSTEDO Surges as Teva Plots $700M Emalex Buyout

Key Points

• Teva reported Q1 revenue of $4.0 billion (down 1%) with adjusted EBITDA rising 2% to $1.1 billion, non‑GAAP EPS of $0.53 and free cash flow up 76% to about $200 million, driven by a 41% increase in its innovative portfolio led by AUSTEDO (up 41% to $578 million) and reaffirmed full‑year AUSTEDO guidance of $2.4B–$2.55B.
• Teva agreed to buy Emalex for $700 million upfront plus up to $200 million in milestones to acquire ecopipam for Tourette syndrome, expects close in late Q2/early Q3 with a projected ~80% gross margin if approved and launched in 2027, and says the deal won’t compromise its goal of reaching 2x net debt/EBITDA by 2027.
• Key 2026 pipeline milestones include an EU submission for an olanzapine long‑acting injectable (FDA decision expected by year‑end), anti‑IL‑15 vitiligo data in H1 and celiac data in H2, and completed enrollment in the Phase III DARI (FLAIR) study.

Teva Pharmaceutical Industries NYSE: TEVA reported first-quarter 2026 results that management said reflect continued execution of its “Pivot to Growth” strategy, while also detailing a planned acquisition designed to expand its neuroscience portfolio.

Q1 results: Innovative portfolio growth offsetting expected generics pressure

Chief Executive Officer Richard Francis said the company “had a good start to the year,” with performance “driven by continued strength of our innovative portfolio.” Teva reported revenue of $4.0 billion for the quarter, down 1% versus the prior year period, while adjusted EBITDA rose 2% to $1.1 billion and non-GAAP EPS increased to $0.53. Free cash flow grew 76% to about $200 million, and net debt to EBITDA was 2.42, Francis said, comparing results to Q1 2025.

Francis emphasized that results were aligned with expectations given the anticipated decline in generic Revlimid revenue. Excluding both the Japan divestment and generic Revlimid, he said revenue was up 7%.

Teva’s key innovative products continued to post strong year-over-year growth. Francis said the company’s innovative portfolio grew 41% in the quarter, driven by:

• AUSTEDO: up 41% to $578 million (U.S. revenue $559 million), with 13% TRx growth and 20% milligram growth; AUSTEDO XR represented more than 60% of new patients.
• AJOVY: up 35% to $196 million, with growth driven by the U.S. and Europe, including market-share gains and improved access.
• UZEDY: up 62% to $63 million, with underlying TRx growth of 75%.

On AUSTEDO, Francis reiterated full-year guidance of $2.4 billion to $2.55 billion in revenue. He also noted that channel inventory built in Q4 was “not all been drawn down in Q1,” a dynamic CFO Eli Kalif said benefited Q1 revenue and could influence quarterly progression. Kalif added that Teva continues to expect AUSTEDO revenue in Q4 2026 to be down year-over-year due to purchasing and pricing dynamics ahead of IRA implementation in January 2027.

Emalex acquisition: Ecopipam aimed at Tourette syndrome unmet need

Management devoted significant time to Teva’s agreement to acquire Emalex Biosciences, which Francis described as the company’s “first acquisition under the Pivot to Growth strategy.” The deal would bring ecopipam, which Francis called a “first-in-class asset with compelling efficacy and favorable tolerability in Tourette syndrome.” He characterized Tourette syndrome as a “serious life-altering pediatric neurological disorder with limited good options today,” arguing that current therapies often force tradeoffs between efficacy and tolerability.

Kalif outlined the key financial terms, saying Teva will pay $700 million in upfront cash consideration, with additional commercial milestones of up to $200 million. Teva expects the transaction to close in late Q2 or early Q3, subject to customary conditions. Kalif said Teva expects the product to have a gross margin profile of about 80% “subjected to regulatory approval and launch in 2027.”

Francis said the deal is aligned with Teva’s business development criteria, citing a “de-risk mechanism,” completed pivotal studies, “no major development overhangs,” and “orphan dynamics that support attractive pricing.” He added that the transaction would not affect Teva’s commitment to reach 2x net debt to EBITDA by 2027.

During Q&A, Francis said there are about 100,000 pediatric Tourette patients, with roughly 50,000 currently treated, and “less than 30% stay on therapy after one year.” He said Teva expects to leverage its CNS capabilities in market access, patient services, medical science liaisons and elements of its sales force, while also adding “a small pediatric sales force.” He declined to provide peak sales estimates, saying Teva would provide more detail as launch approaches.

Pipeline and upcoming milestones, including olanzapine LAI and anti-IL-15 readouts

Head of R&D and Chief Medical Officer Dr. Eric Hughes highlighted multiple expected milestones in 2026. He said Teva submitted its olanzapine long-acting injectable application to the EU “just yesterday,” following an FDA submission in December, and expects an FDA decision “by the end of this year.”

Hughes also said Teva completed enrollment in its Phase III DARI program study (FLAIR), enrolling over 2,700 patients, including a large pediatric and adolescent cohort. He said more than 60% of events have occurred, keeping the program on track for end-of-year event completion.

On duvakitug, Hughes reviewed previously released 44-week maintenance data in ulcerative colitis and Crohn’s disease and said Teva is working with partner Sanofi on Phase III programs that “started well,” with an aim to accelerate development. Regarding future indications, Hughes said Teva and Sanofi have aligned on a pathway and will announce additional indications “before the end of the year.”

Hughes said Teva’s anti-IL-15 antibody program is in proof-of-concept studies in vitiligo and celiac disease, with vitiligo data expected in the first half of the year and celiac data in the second half. When asked about a slide change that now shows an “accelerated path 2031” timeline, Hughes attributed it to “greater confidence in our execution at this point,” rather than citing a specific regulatory interaction.

Margins, cost savings, and capital allocation

Kalif said Teva’s increasing mix of innovative revenue, combined with transformation programs, supports confidence in margin improvement through 2026 and progress toward a 30% operating margin target in 2027. He reported non-GAAP gross margin of 52.9% in Q1, which he said was better than expectations due to product mix, while non-GAAP operating margin was 24%, down about 50 basis points year-over-year due to planned sales and marketing investment.

Kalif said Teva remains on track to achieve about two-thirds of its $700 million transformation savings target by the end of 2026. He also said Teva continues to monitor the geopolitical situation in the Middle East, but operations remain uninterrupted and there is “no material impact” on 2026 guidance, with only “nominal” increases in some transportation and energy-related costs.

Kalif noted Teva’s board has instructed management to plan for a potential share repurchase program, subject to legal requirements and further board approval. He described it as part of the “natural evolution” of Teva’s capital allocation as its balance sheet strengthens, while emphasizing that the company does not expect the Emalex upfront payment to alter its trajectory toward an investment-grade profile.

About Teva Pharmaceutical Industries NYSE: TEVA

Teva Pharmaceutical Industries Ltd. NYSE: TEVA is an Israeli multinational pharmaceutical company and one of the world's largest manufacturers of generic medicines. The company's core activities include the development, production and marketing of generic pharmaceuticals alongside a portfolio of specialty branded medicines. Teva supplies finished dosage forms and active pharmaceutical ingredients (APIs) to markets around the globe and operates manufacturing and research facilities in multiple countries.

Teva's product range covers oral solids, injectables, inhalation products and other dosage forms across therapeutic areas such as central nervous system disorders, respiratory, oncology, pain and infectious disease.

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