管理層發言
Hello, everybody, and welcome to the Q2 2026 Teva Pharmaceutical Industries Earnings Conference Call. My name is Elliott. I'll be coordinating your call today. I would now like to hand over to Christopher Stevo. Please go ahead.
Thank you, Elliott. Good morning and good afternoon, everyone. Thank you for joining us on our second quarter call. Our materials are posted to our website this morning, so please see those. Before I turn the call over to our CEO, Richard Francis, I'd like to remind everyone that we will 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 release and our most recent Forms 10-Q and 10-K 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. Joining me on the call today are Dr. Eric Hughes, Head of Global R&D and Chief Medical Officer, and Eli Kalif, our Chief Financial Officer. Now, moving on to the pivot-to-growth strategy that we launched in 2023, it'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 delivery of our growth engines: AUSTEDO, AJOVY and UZEDY 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. On the second pillar—step-up innovation—our pipeline this year will provide eight major milestones, and this now includes ecopipane, which gives us the potential for five submissions over the next five years.
Regarding creating the 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. On our final pillar, focusing the business, I think we made great progress on our capital allocation. We've had one of the rating agencies, Fitch, upgrade us to investment grade, and we see the other two doing this in the not-too-distant future. We also allocated capital to the acquisition of Amylyx; we closed that deal in June, and we're expecting the launch next year if the FDA approves. 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. I'm really proud of this slide and you may ask why, so let me walk you through why.
We have stable revenues despite nearly 8% headwinds from generic REVLIMID loss year-over-year. We're growing our profit margin by 80 basis points, improving gross margins year-over-year driven by strong innovative growth despite this loss. We've actually grown our EBITDA, excluding the Amylyx acquisition. And our free cash flow is up 31% as a result of our disciplined capital allocation. Going into more detail: the innovative portfolio had a strong quarter, up 43% year-on-year—AUSTEDO up 40%; UZEDY up 43%; AJOVY up 56%. Generics is down 15%, largely due to lower generic contribution versus 2025. Starting with AUSTEDO, a core growth driver: this is another strong quarter. In the U.S., revenue reached $676 million, up 33% year-over-year, and global revenue was up 40%. Demand remained strong with TRx up 14% and milligram growth up 21%, supported by new patient starts and adherence. AUSTEDO XR now represents over 60% of new patients, strengthening convenience, adherence and long-term durability.
Because of this strong quarter, we are increasing our outlook by $50 million at the midpoint to $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 it earlier. More importantly, we see continued momentum and a significant untreated population that still could benefit from AUSTEDO, and hence our confidence in greater than $3 billion of peak sales. Moving on to UZEDY. UZEDY continues to grow with strong momentum and is the fastest-growing long-acting injectable treatment for schizophrenia among atypical LAIs. Revenue grew 43% to $77 million in Q2 based on strong demand, with TRx up 63% year-over-year. Commercial execution has been impressive: UZEDY nearly doubled risperidone long-acting share, going from 5% to nearly 10%, and UZEDY is capturing nearly 80% of the risperidone LAI market.
Because of this strong performance, we are increasing the outlook by $15 million at the midpoint, so the new guidance is $270 million to $290 million. This continued excellent execution gives us great confidence in the upcoming launch of olanzapine. Olanzapine represents a meaningful next growth opportunity with FDA action and U.S. launch anticipated in Q4 of this year. The unmet medical need is significant: olanzapine holds roughly 20% of U.S. all prescriptions while olanzapine LAI uses less than 1% of the LAI market. We know this market and can leverage synergies with UZEDY and our deep knowledge of the schizophrenia market—physicians, patients, nurse practitioners and long-term care facilities. Our direction is clear: deliver a best-in-class launch that expands treatment options and reinforces our leadership in LAIs. Olanzapine together with UZEDY gives us a compelling path to expected peak sales of $1.5 billion to $2 billion of revenue.
Now moving to AJOVY. AJOVY demonstrates our ability to execute in competitive innovative markets. We continue to outpace the injectable market growth and lead in many markets despite entering late. Q2 global revenue reached $244 million, up 56% year-over-year. U.S. revenue grew 83%, driven by improved contracting, favorable gross-to-net and market share gains. Ex-U.S. momentum remained strong, supported by volume growth and leading brand shares across Europe and international markets. Because of this strong quarter, we're increasing our outlook by $90 million at the midpoint to a range of $850 million to $870 million. Looking beyond 2026, we see a clear path to $1 billion peak sales for AJOVY. Now moving to the newest member of the innovative family, a first-in-class opportunity with compelling efficacy and favorable tolerability in Tourette syndrome, a serious pediatric neurological disorder with limited treatment options.
We've already filed with the FDA with a potential launch in the first half of 2027. 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% remain on therapy after one year. This shows there is a real need for a product with compelling efficacy and favorable tolerability. We are well positioned to execute, leveraging our CNS capabilities and the experience we've garnered with AUSTEDO, AJOVY and soon-to-be long-acting olanzapine. Now, I want to show a slide that highlights our innovative pipeline 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 sequenced: olanzapine in '26, ecopipane in '27, followed by DARI and Q2 '28 to '30, all subject to regulatory approvals. Looking to '35, we see further upside from additional indications we've announced for our assets, and we continue to pursue additional business development and development opportunities.
Moving into our pipeline slide—I'll be brief and allow Eric to cover more details—but it's worth mentioning that this is a near-term pipeline with many catalysts, as I mentioned earlier. We've added ecopitane, which was submitted in June for Tourette syndrome, and two new indications for duvacitub. Together, all these assets represent over $10 billion of peak sales, although I realize we said that before and must remember to update the slide as we add indications. Now, what does this all do for Teva? It fundamentally transforms our growth profile. Our growth is accelerating, with revenue moving from $4.9 billion in 2022 to an expected $16.5 billion to $16.8 billion this year. The portfolio is shifting toward higher-value innovation, with innovative revenue expected to reach 22% of total revenue in 2026, up from 9%, and heading higher into 2030. Regarding margins, we are creating stronger margins: gross margins are expected to expand from 54% to more than 60% by 2030, fueled by our innovative portfolio.
Moving on to our generics business: generics are down 15% versus Q2 2025, but that doesn't tell the full story. Excluding generic REVLIMID, our generics business remained stable. Global Generics was down 2%, the U.S. up 1%, and our ex-U.S. decrease was mainly due to fewer product launches this year and a mild cold and flu season. While 2026 is expected to be somewhat softer, we 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 new product launches. I'm excited about the future of our generics business. One of the main reasons I'm confident is the growth starting to emerge from our biosimilar portfolio and pipeline. Before pivot to growth, we had three biosimilars. Today, we have 15 in the market, and we expect to double that in the next few years. Execution matters: in the U.S., two out of our five products are ranked number one, and our third is neck-and-neck and likely to become number one soon.
In the EU, where we've just launched three biosimilars, early signs are very positive. We continue to seek partnerships to increase this portfolio and believe we are becoming the partner of choice because of our execution. Based on our momentum, we are on track to exceed our $800 million target by 2027. To conclude before I hand over to Eric, we're on track to hit our financial growth targets of mid-single-digit revenue growth, a non-GAAP operating income target of 30%, net debt to EBITDA below 2% and cash conversion of earnings of 80%. With that, I will hand over to Eric.
Thank you, Richard. Now moving on to our first slide here. Richard showed this briefly, but I first wanted to just say it's become very complicated, in a great way. We're looking at five potential submissions over five years. I'll highlight a few important things on the slide. We've now added ecopitane, which was submitted in June for Tourette syndrome. We've also added two new indications for duvacitub: hidradenitis suppurativa and fibrostenotic Crohn's disease. Those are two very important indications that I'll get into in more detail later. It's great to see this pipeline and we're executing on it every day. First, olanzapine LAI: we are on track for the action date in the fourth quarter of this year. We had our EU MAA accepted earlier this year, and we've presented a number of different abstracts at the Psych Congress and related conferences. All things are go on olanzapine LAI, and we're looking forward to an approval at the end of this year.
On ecopitane: one thing that gets me excited is that this is a brand-new first-in-class mechanism as a D1 antagonist. More importantly, this is the first dedicated launch for a treatment for Tourette syndrome, which will help with disease awareness and providing a new treatment for a large unmet medical need. We have two well-controlled studies: the Phase II showed a decrease in tic severity that was not only statistically significant but clinically meaningful, and the Phase III showed a decrease in relapse rate, both statistically and clinically meaningful with roughly a 50% reduction. Most importantly, this is a treatment that is well tolerated and durable: 66% of patients in the long-term follow-up remained on treatment with a sustained tic reduction. We're looking forward to that approval next year. Moving on to our DARI program, the dual-action rescue inhaler for asthma: we have fully enrolled this study with over 2,700 patients, including pediatric, adolescent and adult patients.
We're on track for the final event; this is an event-driven study with a forecast toward the end of this year, and we expect to present that data in the early half of 2027. This is a great program for patients with asthma and answers an unmet need dictated in the guidelines. We'll be providing a dual-action treatment in a dry powder inhaler that's easy to use and with potential pediatric labeling. Now, Duvaqito: very exciting this year. We had our induction data published for both ulcerative colitis and Crohn's disease. It is great to see the team's work recognized. Our Phase III program with our partner Sanofi is on track—the SUNSCAPE and STARSCAPE programs in ulcerative colitis and Crohn's. We are proud to announce two new indications in our research plan: hidradenitis suppurativa, which unlocks a non-T2-based indication group, and fibrostenotic Crohn's disease, which addresses the fibrotic bucket of indications and expands our intention for IBD labeling in the future.
I'll explain the importance of these two indications. Hidradenitis suppurativa (HS) is an important unmet need. It affects about 1% of the adult population; it can be disfiguring and significantly impact daily life. Anti-TL1A therapy may be well suited because HS is a complex disease involving both Th1 and Th17 pathways and has a significant fibrotic component. TL1A therapy's pleiotropic effects might be particularly effective here. Also, 15% of people with IBD have HS, so there's scientific rationale and a meaningful market. Regarding fibrostenotic Crohn's disease: this is a very important aspect of Crohn's. We've posted Phase II data with great efficacy for duvacitub. Now we are looking at worse cases of Crohn's disease: roughly 50% of Crohn's patients have a fibrostenotic component where fibrosis, inflammation and edema cause almost total obstructions of the gut, leading to hospitalizations, surgeries and increased health care costs.
It's a driver of some of the worst outcomes in Crohn's disease. No therapy has been approved specifically for this indication so far, so it's exciting to advance the science here and to try to achieve a patient-friendly label. Moving on, we showed great data from our proof-of-concept vitiligo study for our anti-IL-15 program. First and foremost, it was great to see the patients' perception of their disease change: 75% of patients reported improvement in their facial vitiligo. We showed two patients who gave consent to show the results after just two injections of our anti-IL-15 antibody over a 24-week period, with notable repigmentation. We also met important regulatory endpoints; the results for facial and total body repigmentation are competitive for systemic therapies in this area. That drove us to move into our Phase IIb/III study, which will start this year. We'll move quickly and are excited to see the data.
Finally, regarding what's coming up next: we'll have a readout in the second half of this year for our second celiac proof-of-concept study. This study looks at biopsy results after a gluten challenge; in celiac disease, the immune reaction to gluten destroys the normal villi in the gut. We hope to see that we protect the villi from that destruction when we use anti-IL-15 treatment. We're looking forward to that readout in the second half of this year. On my final slide, we are marching through our milestones in 2026: we showed maintenance data earlier this year for duvacitub, we filed for ecopitane, and we showed the vitiligo data recently for our anti-IL-15 program. We'll have celiac data in the second half of this year. DARI is on track for the final event by the end of this year, and we'll have that data to talk about in early 2027. Emera Solman is on track for a futility analysis at year end.
We're looking forward to approval of olanzapine LAI at the end of this year, and we'll have some anti-PD-1/IL-2 human data by the end of this year as well. Very exciting—we keep executing and we're looking forward to all these events this year. With that, I'll pass to my colleague Eli Kalif.
Thank you, Eric, and good morning and good afternoon to everyone. I would like to start my review of Q2 2026 results with the following key messages: First, we delivered a solid second quarter, driven once again by the continued strength of our innovative portfolio. Second, with the increasing mix of innovative revenues, together with our transformation programs, we remain on track to achieve our 30% operating margin target by 2027. Third, our disciplined capital allocation and execution is increasingly recognized by leading credit rating agencies, including the recent upgrade to investment grade by Fitch. Now moving to the MLX Basins acquisition, which closed in June: as Richard highlighted earlier, it further strengthens our position in CNS where we already have strong commercial and development capabilities. From an accounting perspective, the transaction was treated as an asset acquisition.
As we discussed last quarter, we recorded $724 million as IP R&D expenses during the second quarter; this included the upfront cash consideration, net liabilities acquired and transaction costs. The upfront consideration flows through cash flow from investing activities and therefore does not impact free cash flow. As I go through our Q2 performance, I will reference the MLX-related impact on our financials to provide a better view of underlying performance. Q2 GAAP revenues were approximately $4.1 billion, down 1% in U.S. dollars or 3% in local currency compared to Q2 2025. This decrease was largely driven by lower generics—mainly generic REVLIMID—and was largely offset by continued strong growth of our key innovative products, AUSTEDO, AJOVY and UZEDY. GAAP net loss and loss per share were $576 million and $0.49, respectively. Turning to our non-GAAP performance: our non-GAAP gross margin in Q2 2026 was 55.4%, an increase of 80 basis points, reflecting 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 investments 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 that impact, 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. For additional color, our Q2 2025 results included $318 million revenue and $223 million EBITDA contribution from our generic REVLIMID. Excluding that, our financial results this quarter reflected strong underlying performance. Our operating margin expansion to 30% is driven by two structural elements: the portfolio shift toward higher-growth, higher-margin innovative products, and our transformation program.
Altogether, this is approximately 400 basis points of improvement since we announced the program in May last year, despite the impact of generic REVLIMID. This is the core of our financial transformation, moving from a company historically driven by generics to a broader biopharma company. Looking at the first half of 2026, the underlying business continues to demonstrate the strength of our strategy and execution: strong growth in our innovative portfolio and biosimilars offsetting more than $600 million of revenue impact from generic REVLIMID. Our non-GAAP operating margin in the first half also demonstrates ongoing improvements in our gross margin profile. As I highlighted last quarter, we expected higher operating expenses in the first half versus the second half due to the timing of planned investments to support our growing innovative portfolio and upcoming launches. We expect OpEx to normalize with operating leverage and higher savings from the transformation program in the second half.
Our balance sheet continued to improve and this is a key enabler of our pivot-to-growth strategy, driving EPS and free cash flow. At the end of the period, net debt was $12.9 billion with a net debt-to-EBITDA ratio of 2.8x. Excluding MLX, net debt-to-EBITDA would have been 2.3x, well on track to achieve our 2x target by 2027. As we continue to pay down our debt, finance expenses are expected to be significantly lower by 2030. We have also transformed our working capital management, improving as a percentage of revenue and resulting in a lower cash conversion cycle. These efforts, combined with the fast-growing innovative portfolio and transformation programs, are expected to drive long-term earnings and free cash flow growth. Our execution is increasingly recognized by rating agencies: in May, Fitch upgraded Teva to investment grade—the first time since 2017. This was our third upgrade from Fitch in less than two years, underscoring Teva's transformation journey.
S&P and Moody's have also upgraded our rating and outlook in recent quarters. With our continued transition to an innovative biopharma company, we are well positioned for additional rating upgrades. Turning to our 2026 outlook: 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. Some guidance assumptions: first, our innovative portfolio is performing strongly across AUSTEDO, AJOVY and UZEDY. With the strong first half, we are increasing combined guidance for these products by approximately $150 million at the midpoint, reflecting a combined 2026 revenue outlook of approximately $3.7 billion and growth of roughly 17% over 2025. We expect Global Generics revenue for the full year to be flat to down low single digits in local currency compared to 2025, excluding the impact of generic REVLIMID, amid fewer high-value launches in 2026, a lower seasonal cold and OTC season, and increased competition in some markets.
We continue to expect 2026 non-GAAP gross margin to be in the range of 54.5% to 55.5%. In addition to MLX-related expenses this year, operating expenses are expected to be approximately 28% of revenue for the full year, at the higher end of our overall 27% to 28% OpEx range, reflecting deliberate investments in the innovative portfolio and biosimilars. Our guidance range for operating income and EBITDA reflects this higher growth investment in OpEx and less expected in the second half. On quarterly phasing for the rest of the year: overall revenue is expected to increase over the remainder of the year. For AUSTEDO, we continue to see elevated channel inventory and expect normalization over the next two quarters. We also expect AUSTEDO revenue in Q4 2026 to be down year-over-year due to expected changes in purchasing patterns and pricing environments ahead of IRA implementation in January.
We are preparing for a Q4 launch for olanzapine LAI; initial volume is expected to be largely samples or vouchers as we establish payer coverage, and you should expect no significant revenue in Q4. We expect non-GAAP margin improvements in the second half, in line with revenue and higher savings from transformation programs, while gross margins are expected to decline slightly in Q4 versus Q3 due to anticipated revenue dynamics related to AUSTEDO. Operating margins are expected to improve sequentially in Q4, driven by OpEx savings. On capital allocation: we've made significant progress strengthening our balance sheet, providing financial flexibility to invest in our innovative portfolio and pipeline, evaluate value-accretive BD opportunities, and consider returning capital to shareholders through buybacks when appropriate. Finally, I want to touch on our planned transition to a 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, allowing investors to buy ordinary shares directly and facilitating potential inclusion in leading indexes. We look forward to completing this transition in September and believe it represents another example of our focus on creating long-term shareholder value. With that, I will hand it back to Richard for closing remarks.
Thank you, Eli. Once again, I want to highlight that we are at an exciting time at Teva, delivering on the acceleration phase of the pivot-to-growth strategy. As you can see, we have multiple opportunities to drive revenue in the short, medium and long term, and this innovative portfolio is extensive. I'd like to add the number of biosimilars we'll be adding as we start to launch these into the market going forward. In the near future, our incremental growth will come from the next generation of innovation, and we'll have much more to come after that. To conclude, we continue our growth journey. The themes are very clear. In a critical year for Teva, we delivered what we said we were going to do. Our pipeline is advancing at speed and our disciplined capital allocation sets us apart. I look forward to answering your questions with the team. Thank you very much.
And while Elliott is queuing up the questions, I just want to remind everyone to try to ask one question and one brief follow-up so more people get a chance to ask questions; we'll be happy to take you back into the queue if you want to ask subsequent questions. Elliott, whenever you're ready, we can go ahead.
分析師問答
First question comes from Jason Gerberry with Bank of America.
Congrats on the quarter. I wanted to follow up: strong performance on AUSTEDO—I've seen the comment about AUSTEDO XR representing over 60% of new starts. Trying to get a sense of your confidence level going into next year that AUSTEDO won't be disadvantaged in formularies as a lower IRA-negotiated price drug, and that payers won't use the IRA negotiated price point to advantage a competitor drug. Also, as a brief follow-up, any comments on the proposed tariffs in the U.S. and how the supply chain is configured to potentially manage that risk?
Thanks, Jason. I'm glad you recognized the strong performance of AUSTEDO. Just to clarify: the 60% I referred to is 60% of new AUSTEDO patients who are on AUSTEDO XR. That said, we still have very good TRx growth and milligram growth, highlighting the impact AUSTEDO XR has on getting patients to the optimal dose with better adherence. Regarding payer dynamics for 2027, we've spent a lot of time assessing potential scenarios. It's worth highlighting that all Medicare Part D plans are required to cover negotiated products, which would include something like AUSTEDO XR, so that provides baseline coverage. Given the product profile, significant patient demand and physician enthusiasm around AUSTEDO XR, we remain confident in our ability to capture a significant portion of patients as we move into 2027. We'll continue discussions with payers toward the end of the year and provide guidance updates as appropriate, but we remain confident in our above-$3 billion peak sales thesis based on the significant untreated patient population and strong execution.
On the proposed U.S. tariffs: the announcement is new and we're digesting it and understanding what it could mean. We have a number of manufacturing sites in the U.S.; we are one of the largest generic manufacturers in the country. We'll engage with the administration as appropriate, and we have time to work through the implications. Thanks for your question.
We now turn to Umer Raffat with Evercore ISI.
I wanted to spend a second on the IL-15 program ahead of the celiac readout and drill down a couple of dimensions. One, I believe the last patient in was April 7, which means they should have been done by early June with the week 8 endpoint, so I'm trying to understand the timing of data. I would have thought it could have been as early as today perhaps along with earnings, though I realize that's not the expectation—where are you in data analysis? Also, there was prior disclosure on a Phase Ib exploratory celiac study that shows separation versus placebo on a biomarker; what was that biomarker? And finally, could you remind us the amount of gluten per day background used in your ongoing celiac study or your already completed celiac study?
Thanks for the question. You're almost as demanding as I am about seeing results quickly. I'll hand it to Eric to answer the technical details.
Thank you, Umer. Regarding enrollment and timing: the enrollment records you may see in public databases don't always correlate with our database lock timing, so there's variability. We still expect the data in the second half of this year. For the biomarker in the first proof-of-concept study, that was fecal calprotectin. That's a commonly used biomarker to measure gut inflammation, and the separation versus placebo in the gluten challenge was encouraging. In that study, it suggested we were impacting gut inflammation and, intriguingly, it seemed to improve from baseline for some patients, which raises hypotheses about treating smoldering celiac disease. For the ongoing biopsy study, we're giving a gluten challenge of three grams per day for six weeks. That's a significant challenge, and we're grateful to patients willing to participate. I hope that answers your questions.
We now turn to Louise Chen with Scotiabank.
You seem to be talking more about biosimilars now. Could you give us more color on why the growth opportunity is becoming more meaningful? Is anything changing in the U.S. market—regulatory or payer actions—that could open this market more?
Louise, thanks. We're excited about biosimilars for a few reasons. First, the team's performance in the U.S. market has been strong: two of our five U.S. biosimilars are number one and a third is close behind. That reflects our capability to navigate a very complex and fragmented U.S. market. Nothing regulatory has dramatically changed yet—if changes occur, we would benefit—but our strength is executing across that fragmentation. In Europe, where we have been underrepresented in biosimilars, early launches are showing positive signs and our execution is translating to good early performance. As we combine our existing 15 biosimilars with 14 more in the pipeline and additional partnerships, we expect biosimilars to be a major growth driver for generics. We've set a target of $800 million by 2027 and are well on track to exceed it. Thanks for the question.
We now turn to Dennis Ding with Jefferies.
A celiac question: you've referenced the Forte result at about 0.127 placebo-adjusted with wide error bars. Two parts: (1) why shouldn't we use the CALYPSO data as the bar, which I think is around 0.4 to 0.5? And (2) if you get results of, say, 0.15, 0.2 or 0.3, would you consider that clinically meaningful—how should we interpret results?
Over to you, Eric.
Dennis, the main comparator available publicly is the Forte result of 0.127, which is the delta between placebo and active in that study. There are differences across studies in design and the gluten challenge used, so cross-study comparisons require care. I'm not familiar with the specific CALYPSO data you're referencing in detail, so we can follow up if you can point me to it. Importantly, our study was designed with a robust gluten challenge and biopsy endpoints to assess protection of villi; beyond the biopsy results, we'll also look at symptomatic endpoints, and those together will inform clinical meaningfulness. The field doesn't have a single definitive bar; we will interpret our data in the context of available comparators, the biopsy outcomes and symptom improvements.
We now turn to David Amsellem with Piper Sandler.
Two broad questions. One, on anti-IL-15: how do you view your approach mechanistically versus compounds that focus on CD122 and act on IL-15 and IL-2? Any advantage or differences, particularly across indications like vitiligo and celiac? Two, on ecopitane: what is the positioning in the marketplace as a D1 antagonist? Could it be used ahead of currently approved antipsychotics that are primarily D2 acting, given many of those agents are generically available?
Thank you, David. On anti-IL-15 versus CD122-targeting approaches: both strategies have merits. We target the ligand (IL-15), which is a clean approach—hitting the free cytokine—and allows us to measure target engagement by monitoring free IL-15 in the system. That gives us a clear, evidence-based way to select dose and schedule; we've shown suppression of free IL-15 out to 80 to 90 days on a single dose, which supports a quarterly subcutaneous dosing strategy. Hitting the receptor is also a valid approach; each has different pharmacologic considerations. For positioning, we're confident in our modeling and in the potential convenience of quarterly subcutaneous dosing. On ecopitane: current treatment for Tourette starts with behavioral therapy, then off-label drugs with modest effects, and antipsychotics with activity but poor tolerability—particularly problematic in pediatric populations. Ecopitane's D1 antagonism is a novel mechanism with favorable tolerability demonstrated in Phase II and Phase III, which could make it an attractive alternative to antipsychotics. Initially it may not be first-line, but over time, with demonstrated tolerability and efficacy, it could move earlier in treatment algorithms.
If I can add: the numbers support the unmet need. There are 100,000 pediatric patients with Tourette syndrome, only 50,000 are treated, and only 20% to 30% remain on therapy after one year. That suggests tolerability and efficacy gaps; parents and clinicians are reluctant to keep children on antipsychotics long term. Coupling ecopitane's profile with Teva's commercial expertise in CNS—AUSTEDO, UZEDY and AJOVY—we're excited about the potential to help these patients.
We now turn to Ashwani (Ash) Verma with UBS.
Can you discuss the TL1A new indications—specifically the fibrostenotic Crohn's indication—and provide a sense of the addressable market in the U.S. and Europe? For hidradenitis suppurativa, what would the development path and trial design look like—typical Phase II/Phase III with a HiSCR or similar primary endpoint?
Thanks, Ash. I'll hand that to Eric for the clinical detail.
Thanks. We chose HS and fibrostenotic Crohn's because of scientific rationale—TL1A is upregulated in both—and because they meet our criteria: scientific justification, market opportunity, regulatory probability and speed of execution. HS is a growing market with high unmet need; endpoints commonly read out at 16 weeks and we'd likely pursue a Phase IIb that can lead to Phase III. Fibrostenotic Crohn's disease is a major unmet need—no approved therapies specifically for this phenotype—and we have Phase II signals that support further exploration. If we show antifibrotic effects, that could be a labeled indication and differentiate the product in IBD, potentially changing long-term outcomes like hospitalizations and surgeries. The path will be a traditional Phase IIb to Phase III approach, targeted to show meaningful clinical and structural benefits.
Our next question comes from Glen Santangelo with Barclays.
Two quick questions. Last quarter you discussed AUSTEDO channel inventory issues and expected those levels to come down this quarter, but it seems they remained elevated. How should we think about that in 3Q and 4Q within the guidance assumptions you laid out? Second, given the strength in innovative brands and gross margin, you maintained EBITDA guidance—any color on expense outlook that explains maintaining that EBITDA guidance?
Thanks, Glen. Regarding inventory: we had an inventory build in Q4 2025, and we expected to draw it down. We saw some drawdown in the first half, but not fully complete, so we expect the remainder to come down in the second half and Q4. We are also considering Q4 dynamics given expected IRA-driven purchasing changes in January; that will affect Q4 purchasing patterns. Fundamentally, TRx and milligram growth remain strong and our prescriber breadth is healthy, which supports our confidence in the brand and in our peak sales thesis. Eli, do you want to address the EBITDA question?
Thanks, Glen. As I mentioned earlier, the three main innovative products—AUSTEDO, AJOVY and UZEDY—have driven a stronger top line, and we've increased midpoint guidance by about $150 million combined for those products. At the same time, generics is softer, partly due to fewer high-value launches and the loss of REVLIMID contribution, which accounted for $1.1 billion revenue and roughly $700 million EBITDA last year. We're also deliberately investing in commercial and R&D to support our innovative and biosimilars portfolios, which keeps OpEx at the higher end of our 27% to 28% range (around 28% this year). There are also some small items and timing-related costs affecting the year. Net-net, that combination explains why we maintained the full-year EBITDA guidance while raising revenue midpoint.
Thanks, Glen. We do have time for a couple more questions. Elliott, next?
We now turn to Matthew (Matt) Dellatorre with Goldman Sachs.
On TL1A, you seem to be leaning into fibrosis-heavy diseases. How far could you go directionally into other fibrotic indications depending on results here? Would fibrostenotic Crohn's be a differentiator on the Crohn's label or a separate indication? And on the commercial side, you have two major launches over the next 12 months—olanzapine and ecopitane—walk us through launch preparations and what you're most focused on for execution for both products.
Thanks, Matt. On TL1A and fibrosis: we're starting with indications that combine inflammation and fibrosis, like HS and fibrostenotic Crohn's, as proof of principle. If we demonstrate antifibrotic effects, it opens the door to other fibrotic diseases, but first we need to show the principle in these targeted indications. For fibrostenotic Crohn's, our aim is to secure a labeled indication if the data support it, which would differentiate the product within IBD. That could be very valuable clinically and commercially. Regarding launches: for olanzapine LAI, we've prepared extensively—market understanding, payer and physician engagement, and positioning strategies that leverage our existing LAI capabilities from UZEDY. For ecopitane, it's a patient population with significant unmet need and we'll leverage our CNS commercial experience with AUSTEDO and UZEDY to educate physicians and patients. Both launches are being planned carefully with dedicated resources to execute well.
To add: we've been preparing for these launches for some time. Olanzapine launch preparation has been high quality—market insights, payer, physician and patient engagement—and we're confident in our launch readiness for schizophrenia patients who need long-acting therapy. Ecopitane timing likely places its approval and U.S. launch in later Q2 next year; the asset fits our rare-disease, under-treated expertise and will leverage the team's CNS experience. We're building the launch muscle to deliver a new product roughly once a year, and we're enthusiastic about executing these plans. We'll provide more updates as we get closer.
Our next question comes from Chris Schott with JPMorgan.
Two quick questions. First, AJOVY guidance is improving nicely—how much of the improvement is volume versus price, and any color on trends you're seeing for AJOVY? Second, Europe came in a little lighter than expected—anything to call out there and how should we think about results in the second half for Europe?
On AJOVY, we're pleased with performance across all markets. Growth is driven by market share gains, volume increases and improved contracting and gross-to-net in the U.S. We are growing above the market in our regions—with share gains in Europe and international markets as well as the U.S.—which supports the stronger guidance. Regarding Europe being lighter: it's partly due to fewer high-value launches versus last year and a milder cold and flu season that reduced OTC sales; both factors impacted performance. On the positive side, we have more biosimilar launches coming in Europe, and early signs from recent launches are encouraging. Over time, we expect those biosimilars to contribute meaningfully. Thank you for the question.
Ladies and gentlemen, today's call has now concluded. We'd like to thank you for your participation. You may now disconnect your lines.