TEVA 10-K & 10-Q changes, risk factors and insider trading

Sales of our generic medicines have historically represented and are expected to continue to represent a significant portion of our global business. In 2024,2025, total revenues from sales of our generic medicines in all our business segments were $9,461$9,421 million, or 57.2%55% of our total revenues. As part of our Pivot to Growth strategy, we are focusing on a prioritized portfolio and pipeline of high-value generics opportunities. However, generic pharmaceuticalsmedicines are generally less profitable than innovative medicines,medicines and have faced price erosion in each of our business segments, placing even greater importance on our ability to continually introduce new products. Although we intend to invest in the development of more complex, high-value generic products such as drug device combinations and long-acting injectables, there is no assurance as to when we will be successful in achieving our expected results, if at all.

A significant portion of our sales are made to relatively few U.S. retail drug chains, wholesalers, managed care purchasing organizations, mail order distributors and hospitals. These customers have undergone significant consolidation and formed various commercial alliances, which may continue to increase the pricing pressures that we face in the United States. The presence of large buying groups, and the prevalence and influence of managed care organizations and similar institutions, have increased pressure on price, as well as terms and conditions required to do business. In the United States, several large buying groups account for the majority of generics purchases, enabling each of them with significant bargaining power. Additionally, our customers may form commercial alliances which result in heightened pricing pressure and competition in the markets in which we operate. For example, several major hospital systems in the United States formed a nonprofit company in 2018 to manufacture their own generic medicines. We expect the trend of pricing pressures from our customers and price erosion to continue.

Our generic drugsproducts face intense competition. Prices of generic drugsproducts may, and often do, decline, sometimes dramatically, especially as additional generic pharmaceutical companies receive approvals and enter the market for a given product and competition intensifies. Consequently, our ability to sustain our sales and profitability on any given product over time is affected by the number of companies selling competitive products, including new market entrants, and the timing of their approvals. For example, although in 2024, the majority of the increase in revenues in our U.S. generics business were driven by higher revenues from lenalidomide capsules (the generic version of Revlimid®), this trend mayis not expected to continue due to the intense competition expected in the coming years. The goals established under the Generic Drug User Fee Act, and increased funding of the FDA’s Office of Generic Drugs, have led to more and faster generic approvals, and consequently increased competition for some of our products. The FDA has stated that it has established new steps to enhance competition, promote access and lower drug prices and is approving increasing numbers of generic applications. While these FDA initiatives are expected to benefit our generic product pipeline, they will also benefit competitors that seek to launch products in established generic markets where we currently offer products. In recent years, there has also been an increase in the number of generic manufacturers targeting significant new generic opportunities with exclusivity under the Hatch-Waxman Act, orincluding generic products which are complex to develop. Many of the smaller or emerging generic manufacturers have increased their capabilities, level of sophistication and development resources in recent years. The FDA has also been limiting the availability of exclusivity periods for new products, which reduces the economic benefit from being first-to-file for generic approvals. For example, the 180-day market exclusivity period under the Hatch-Waxman Act for a new product can be forfeited by failure to obtain approval or to launch a product within a specified time or if certain conditions exist, some of which may be outside our control. The failure to maintain our industry-leading performance in the United States on first-to-file opportunities and to develop and commercialize high complexity generic products could adversely affect our sales and profitability.

Furthermore, brand pharmaceutical companies continue to manage products in a challenging environment through marketing agreements with payers, pharmacy benefits managers and generic manufacturers. For example, brand companies often sell or license their own generic versions of their products, known as “authorized generics,” either directly or through other generic pharmaceutical companies. No significant regulatory approvals are required for authorized generics, and brand companies do not face any other significant barriers to entry into such market. Brand companies may seek to delay introductions of generic equivalents through a variety of commercial and regulatory tactics. Many pharmaceutical companies increasingly have used state and federal legislative and regulatory means to delay generic (including biosimilar) competition. These efforts have included pursuing new patents for existing products to extend patent protection; obtaining new regulatory exclusivities; selling the brand product as their own authorized generics; using the Citizen Petition process to request amendments to FDA standards or otherwise delay generic (or biosimilar) drug approvals; seeking changes to U.S. Pharmacopeia, an organization which publishes industry recognized compendia of drug standards; using the legislative and regulatory process to have drugs reclassified or rescheduled; attaching patent extension amendments to unrelated federal legislation; and entering into agreements with pharmacy benefit management companies to block the dispensing of generic (including biosimilar) products. These actions may increase the costs and risks of our efforts to introduce generic products and may delay or prevent such introduction altogether.

In addition, the U.S. Congress and various state legislatures in the United States have passed, or have proposed passing, legislation that could have an adverse impact on pharmaceutical manufacturers’ ability to (i) settle litigation initiated pursuant to the Hatch-Waxman Act and Biologics Price Competition and Innovation Act (“BPCIA”); (ii) secure the full benefit of first-to-file regulatory approval status secured under the Hatch-Waxman Act; and (iii) recover their investments into the development of an innovative, generic or biosimilar product. Hatch-Waxman and BPCIA create various pathways for generic drug manufacturers to secure accelerated approvals of their abbreviated new drug applications and abbreviated biologics license applications. The new laws and proposals from the federal and state governments could serve to change, directly and indirectly, the Hatch-Waxman Act and BPCIA, including the incentives to develop generic and biosimilar products, as well as the ability of generic manufacturers to accelerate the launch of their new generic and biosimilar products. They could also could impact the ability of brand manufacturers to protect their investments in the intellectual property associated with their branded specialty and innovative biologic products.

Additionally, pharmaceutical pricing reforms in the United States have also been introduced through the enactment of the Inflation Reduction Act of 2022 (the “IRA”), which couldhas leadled to greater pricing pressures on our products. For more information, see “—Risks related to compliance, regulation and litigation—Our operations are subject to complex legal and regulatory environments.” If we fail to comply with applicable laws and regulations we may suffer legal consequences that may have a material effect on our business, operations or reputation.

In the European Union, certain exclusivity provisions may prevent companies from applying for marketing approval for a generic product for a certain amountnumber of years,years (data exclusivity), and further, the generic product will be barred from market entry (marketing exclusivity) for an additional two years, which may be extended by a year in certain circumstances. The pharmaceutical legislation in the European Union is currently under review, which may result in changes to the duration of and criteria for obtaining data and market exclusivity once the new legislation comes into force. See “Item 1—Business—Regulation” for more information.

We continue to monitor these legislative developments and evaluate their impacts on us and whether any changes to our business practices and operations are necessary in order to comply with such legislative reforms and advocate for policies that support both innovation and access to high quality medicines for patients.reforms. However, we cannot accurately predict the ultimate impact of such legislative developments on our business or whether additional changes in regulatory policies will occur in the future.

Although we believe we have one of the most extensive pipelines of generic products in the industry, we have in the past been unable to successfully execute a number of generic launches and may face similar challenges in the future. As a result of delays in the timing of launches, we may not be able to realize the anticipated economic benefits anticipated in connection with our planned launch timing.benefits. If we cannot execute timely launches of new products, we may not be able to offset the increasing price erosion on existing products in the United States resulting from pricing pressures and accelerated generics approvals for competing products. Such unsuccessful launches can be caused by many factors, including,including but not limited to, delays in regulatory approvals, lack of operational or clinical readiness or patent litigation. Failure or delays to execute launches of new generic products could have a material adverse effect on our business, financial condition and results of operations.

We aim to be a global leader in biopharmaceuticals. As part of our Pivot to Growth strategy, we have been capitalizing on our late-stage pipeline of biosimilar products. The development, manufacture and commercialization of biosimilar products require specialized expertise and are very costly and subject to complex evolving regulation. Due to the complex process and significant financial and other resources required to develop biosimilars, obstacles and delays, including budget constraints, have in the past and may in the future arise, which increase the cost of development or force us to abandon a potential product in which we may have invested substantial amounts of time and resources. We have made and will continue to make significant investments and collaborations to capitalize on biosimilar opportunities. However, the market for biosimilar products, in particular for key lifecycle products, is facing increasingly intense competition, including from new market entrants, growing pricing pressures, as well as from existing innovative products that maintain a significant market share, and there is no assurance that we will be able to successfully capitalize on biosimilar opportunities. Failure to developdevelop, supply and commercialize biosimilars, either by us or through collaborations with third parties, could have a material adverse effect on our business, financial condition, results of operations and prospects.

We operate in a highly competitive and rapidly evolving industry and face intense competition to our innovative medicines. As we transform into a leading biopharmaceutical company, and as part of our Pivot to Growth strategy, we have been focused on delivering on our growth engines, mainly AUSTEDO, AJOVY and UZEDY, and stepping up the innovation of our late-stage innovative pipeline assets. However,Our manysuccess depends on our ability to discover, develop, and commercialize innovative products ahead of ourcompetitors. competitorsHowever, numerous pharmaceutical and biotechnology companies, as well as academic institutions and research organizations, are largerengaged and/orin the development of products that may compete directly with ours. Many of these competitors have substantially moregreater experiencefinancial, in the development, acquisitiontechnical, and to some extent marketing ofresources, branded,as innovativewell and consumer-oriented products. They may be able to respondas more quicklyestablished tocommercial new or emerging market preferences or to devote greater resources to the development and marketing of new products and/or technologies than we can.infrastructures. As a result, any products and/or innovations that we develop may become obsolete or noncompetitive before we can recover the expenses incurred in connection with their development. In addition, we must demonstrate the benefits of our products relative to competing products that are often more familiar or otherwise better established towith physicians, patients and third-party payers. IfCompetitors competitorshave in the past and may in the future introduce new products or new variations on their existing products, our marketed products, or even those protected by patents, which have in the past and may in the future be replaced in the marketplace or we may be required to lower our prices. For example, the following may have a significant effect on our financial results and cash flow:

In order to remain competitive, we must invest significant resources to expand our pipeline for innovative medicines and biosimilars, both through our own efforts and through collaborations with, and in-licensing or acquisition of products from, third parties. We have entered into, and expect to pursue, in-licensing, acquisition, collaboration, funding and partnership opportunities to supplement and expand our existing innovative medicines and biosimilar pipeline, such as our collaborations with Alvotech, Medincell, Modag, Sanofi, Royalty Pharma, Biolojic, Launch Therapeutics and mAbxience. However, there is no assurance that suchwe will be able to enter into additional collaborations in the future, or that our existing collaborations will achieve the results we expectexpect, and we or our counterparties could fail to perform the obligations thereunder, including due to the failure to obtain regulatory approvals and increasing competition, pricing pressures and other financial constraints. In addition, we may not be able to achieve the cost savings that we expect to realize within the expected time frame under our Teva Transformation programs announced in May 2025, due to unforeseen risks, which could impact our financial condition and ability to invest in our innovative pipeline and growth drivers.

Furthermore, the development of innovative medicines involves lengthier and more complex processes and greater expertise and resources than those used in the development of generic medicines. For example, the time from discovery to commercial launch of an innovative medicine can be 15 years or more and involves multiple stages, including intensive preclinical and clinical testing and highly complex, lengthy and expensive regulatory approval processes, which vary from country to country. The longer it takes to develop a new product, the less time that remains to recover development costs and generate profits. During each stage, we may encounter obstacles that delay the development process and increase expenses, potentially forcing us to abandon a potential product in which we may have invested substantial amounts of time and resources. These obstacles may include preclinical failures, difficulty enrolling patients in clinical trials, delays in completing formulation and other work needed to support an application for approval, adverse reactions or other safety concerns arising during clinical testing, insufficient clinical trial data to support the safety or efficacy of the product candidate, widespread supply chain breakdowns, delays as a result of new requirements implemented by health authorities such as the U.S. FDA and EMA requirement on material use, or any impact of a prolonged government shutdown, and delays or failures to obtain required regulatory approvals for the product candidate or the facilities in which it is manufactured. In addition, our innovative medicines require much greater use of a direct sales force than does our generics business. Our ability to realize revenues from direct marketing and sales activities depends on our ability to attract and retain qualified sales personnel. Competition for qualified sales personnel is intense. We may also need to enter into co-promotion,co-promotion contractarrangements, or use contracted sales forcepersonnel or other such arrangements with third parties, for example, where our own direct sales force is not large enough or sufficiently well-aligned to achieve maximum market penetration. Any failure to attract or retain qualified sales personnel or to enter into third-party arrangements on favorable terms could prevent us from successfully maintaining current sales levels or commercializing new innovative medicines.

Certain of our leading innovative medicines face patent challenges and impending patent expirations and some have recently become susceptible to generic competition, such as TREANDAProAir inHFA 2022.and QVAR®. Generic equivalents and biosimilars for branded pharmaceutical products are typically sold at lower costs than the branded products. After the introduction of a competing generic (or biosimilar) product, a significant percentage of the prescriptions previously written for the branded product are often written for the generic version. Legislation enacted in most U.S. states allows or, in some instances, mandates that a pharmacist dispense an available generic equivalent (or interchangeable biosimilar) when filling a prescription for a branded product in the absence of specific instructions from the prescribing physician. Branded products typically experience a significant loss in revenues following the introduction of a competing generic (or biosimilar) product, even if the branded product is still subject to an existing patent since generic manufacturers may offer generic (or biosimilar) products while patent litigation is pending. Our innovative medicines arehave orin the past and may in the future become subject to competition from generic equivalents becausedue ourto the expiration of a patent protection expired or mayloss expireof soon.patent protection. In addition, we may notfrom betime successfulto intime our effortsseek to obtain additional patent protection for our innovative medicines through the development and commercialization ofcovering proprietary product improvements and/or new and enhanced dosage forms.forms, but there are no guarantees those efforts will succeed.

Our financial results depend upon our ability to develop and commercialize additional innovative, biosimilar and generic products in a timely manner. Commercialization requires that we successfully develop, test and manufacture pharmaceutical products.products, both through our own efforts and through collaborations with, and in-licensing or acquisition of products from, third parties. All of our products must receive regulatory approval and meet, and continue to comply with, regulatory and safety standards;standards. ifIf health or safety concerns arise with respect to a product, we may be forced to withdraw it from the market. Developing and commercializing additional pharmaceutical products is also subject to difficulties relating to the availability, on commercially reasonable terms, of raw materials, including API and other key ingredients; preclusion from commercialization by the proprietary rights of others; the costs of manufacturemanufacturing and commercialization; costly legal actions brought by our competitors that may delay or prevent the development or commercialization of a new product; and delays and costs associated with the approval process of the FDA and other U.S. and international regulatory agencies.

The success of our innovative medicines business depends substantially on our ability to obtain patents and to defend our intellectual property rights. If we fail to protect our intellectual property adequately, competitors may manufacture and market products identical or similar to ours. We have been issued numerous patents covering our innovative medicines, and have filed, and expect to continue to file, patent applications seeking to protect newly developed technologies and products in various countries, including the United States. Currently pending patent applications may not result in issued patents or be approved on a timely basis or at all.basis. Any existing or future patents issued to or licensed by us may not provide us with any competitive advantages for our products or may be challenged or circumvented by competitors or governments. For additional information see “Risks related to compliance, regulation and litigation,” below.

Efforts to defend the validity of our patents are expensive and time-consuming, and there can be no assurance that such efforts will be successful. Our ability to enforce our patents also depends on the laws and practices of individual countries and each country’s practices regarding the enforcement of intellectual property rights and may also be impacted by regulatory actions taken by governmental authorities that affect our ability to use and maintain our intellectual property rights. The loss of patent protection or regulatory exclusivity on innovative medicines, including potential challenges to our Orange Book patent listings in the United States, could materially impact our business, results of operations, financial condition and prospects. For additional information see “Risks related to compliance, regulation and litigation,” below.

Our unsecured syndicated sustainability-linked revolving credit facility (“RCF”) contains certain covenants, including certain limitations on incurring liens and indebtedness and maintenance of certain financial ratios, including a maximum leverage ratio, which becomes more restrictive over time. Non-compliance with such covenants, under certain circumstances, may result in our inability to borrow under the RCF or an event of default in all borrowings under the RCF. Additionally, non-compliance with such covenants, when greater than a specified threshold amount as set forth in each series of senior notes and when sustainability-linked senior notes isare outstanding, could lead to an event of default under our senior notes and sustainability-linked senior notes due to cross acceleration provisions.

InWe responseconduct toour risingoperations inflationglobally, in recent years, central banksincluding in the marketsUnited States, Europe and our International Markets. Global developments can affect our business in whichmany weways. operate,Our global operations are affected by local economic environments, including theinflation, United States Federal Reserve, have tightened their monetary policiesrecession, and raised interest rates, and any developments to such measures are difficult to predict in anticipation of the macroeconomic and political developments. Higher interest rates and volatility in financial markets could lead to additional economic uncertainty or recession.competition. Increased inflation rates have increasedin the past and may in the future increase our and our suppliers’ operating costs, including labor costs, manufacturing costs and R&D costs. If in the future we are unable to manage rising costs as a result of inflation and its broader effects on the markets in which we operate in the future,operate, our operations may be materially affected. Additionally, divergent or evolving regulatory systems can increase the risks and burdens of operating in numerous countries. For example, recent U.S. tariffs imposed or threatened to be imposed on goods, materials, and products from countries where we do business, and any retaliatory actions taken by such countries could result in us incurring substantial additional costs to source goods, materials, and products, directly and indirectly, from affected countries, and may require us to raise prices on certain products and seek alternative sources of supply. If our competitors do not increase prices, or increase prices to a lesser extent than we do, or are able to offset the impact of tariffs through other actions, our competitive and financial position may be adversely affected. Additionally, if we are not able to find adequate alternate sources of supply, we may experience supply shortages or disruptions. In addition to rising inflation, the global economy has also been impacted by fluctuating foreign exchange rates andrates, geopolitical tensions,tensions which could result inand supply chain disruptions. Supply chain disruptions could continue to result in delays in our production and distribution processes, R&D initiatives and our ability to timely respond to consumer demand. As we have substantial international operations, fluctuations in exchange rates between the currencies in which we operate and the U.S. dollar could increase our operating costs and adversely affect our results of operations, profits and cash flows. The duration and extent of rising inflation, higher interest rates, foreign exchange rate fluctuations, evolving regulatory systems including with respect to recent U.S. tariffs, geopolitical tensions and other macroeconomic headwinds are uncertain and we cannot accurately predict whether we will be able to effectively mitigate their impact on our business.

Due to the complexity of our supply chain, we have experienced supply discontinuities due to macroeconomic issues, regulatory actions, including sanctions and trade restrictions, labor disturbances and approval delays, which have impacted our ability to timely meet demand in certain instances. These adverse market forces have a direct impact on our overall performance. Any such disruptions could have a material adverse impact on our business and our results of operation and financial condition.

WeIn haveaddition, and will continue to implement changes to optimize our business operations and reallocate resources towards growth opportunities. Asas part of such optimization efforts, we have in the past and may in the future face wrongful termination, discrimination or other legal claims from employees affected by ongoing changes in our workforce. We may incur substantial costs defending against such claims, regardless of their merits, and such claims may significantly increase our severance costs.

AnyWorkforce workforcereductions, such as the reduction as part of the Teva Transformation programs announced in May 2025, and site consolidation have in the past and may in the future result in the loss of numerous long-term employees, the loss of institutional knowledge and expertise, the reallocation of certain job responsibilities, the disruption of business continuity and legal claims from affected employees, all of which could negatively affect operational efficiencies and our ability to achieve growth and profitability through the development and sale of new pharmaceutical products. We cannot guarantee that, following such efficiency measures, our business will be more efficient or effective.

We rely extensively on information technology systems (including cloud services) in order to conduct business, including systems managed by third-party service providers. These systems include programs and processes relating to internal and external communications, ordering and managing materials from suppliers, converting materials to finished products, shipping products to customers, processing transactions, summarizing and reporting results of operations, processing payments to employees and vendors, calculating sales receivables, generating our financial results, and complying with information technology security compliance and other regulatory, legal or tax requirements. These information technology systems could be damaged or cease to function properly due to the poor performance or failure of third-party service providers, catastrophic events, power outages, network outages, failed upgrades orand other similar events. If our business continuity plans do not effectively resolve such issues on a timely basis, we may suffer significant interruptions in conducting our business, which may adversely impact our business, financial condition and results of operations.

Furthermore, our systems and networks, and those managed by our third-party service providers, have been, and are expected to continue to be, the target of increasingly advanced and evolving cyber-attacks which may pose a risk to the security of our systems and the confidentiality, availability and integrity of our data, as well as disrupt our operations or damage our facilities or those of third parties. Our exposure to cybersecurity risks may be heightened by the global scope of our operations. Because the techniques, tools and tactics used in cyber-attacks frequently change and may be difficult to detect for periods of time, despite our attention to such threats, we may face difficulties in anticipating and implementing adequate preventative measures or mitigating harms after such an attack. Cybersecurity attacks mayhave become increasingly complex as they are enhanced or facilitated by the emergence of new technologies such as artificial intelligence (“AI”) that are used to identify and target new vulnerabilities in our information technology systems or those of our customers, third-party vendors and other business partners. For example, AI and deepfake technologies could be used to attack information systems by creating more effective phishing emails or social engineering and by exploiting vulnerabilities in electronic security programs utilizing false image or voice recognition. There is no assurance that we, our customers, third-party vendors or other business partners will be able to promptly and effectively respond to such new increasingly sophisticated threats. Additionally, there is no assurance that we will be able to leverage the use of AI technologies within our business, which may position us in a competitive disadvantage relative to our competitors.

Our products are either manufactured at our own facilities or obtained through supply agreements with third parties. Many of our products are the result of complex manufacturing processes, and some require highly specialized raw materials. Problems may arise during manufacturing for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures,procedures including cGMPs, problems with or shortages of raw materials, widespread outbreaks of disease or other public health crises, natural disasters, extreme weather events such as floods, heatwaves, blizzards, hurricanes, wildfires, the rise of sea level, and water stress, and other environmental factors.factors, which could have a material adverse impact on our operations and financial condition. Additionally, as our manufacturing plants and equipment age, they may become more prone to failure. If we are not able to make capital improvements to such plants and equipment, or if they otherwise deteriorate, we could experience disruptions to our operations, manufacturing delays, further obsolescence and increased costs associated with repairs, which could have a material adverse effect on our business and financial condition.

For some of our key raw materials, we have only a single, source of supply, and alternate sources of supply may not be readily available. If our supply of certain raw materials or finished products is interrupted from time to time, or proves insufficient to meet demand, our cash flows and results of operations could be adversely impacted. Additionally, any such supply interruption could result in a supply shortage to patients depending on the number of competitors able to meet the supply needs. Moreover, the streamlining of our manufacturing network may result in our product supply becoming more dependent on a smaller number of specific manufacturing plants. Our inability to timely manufacture or to procure from a third party supplier, any of our key productsproducts, may result in claims and penalties from customers and could have a material adverse effect on our business, financial condition and results of operations as well as result in reputational harm.

We also rely on complex shipping arrangements to and from the various facilities of our supply chain. Customs clearance and shipping by land, air or sea routes rely on and may be affected by factors that are not in our full control or are hard to predict. Any significant disruptions to the shipping arrangements for our products could materially and adversely affect our operations and financial results.

We are a global pharmaceutical company with worldwide operations. While a substantial majority of our sales in 20242025 were in the United States and Europe,Europe and an increasinga portion of our sales and operational network are located in other regions. Certain of the regions in which we operate may be more susceptible to political and economic instability, such as the state of war declared in Israel in October 2023 and the ongoing military activity in the region, as well as the conflict between Russia and Ukraine,Ukraine and in the Middle East, that could result in a loss of sales in such regions. OurAlthough globalto headquartersdate andour severalbusiness manufacturinghas andnot R&Dbeen facilitiesmaterially areimpacted locatedby insuch Israelgeopolitical and currently remain largely unaffected, and we have no manufacturing or R&D facilities in Russia or Ukraine. However,conflicts, the duration, severity and global implications (including potential inflation and devaluation consequences) of these and other geopolitical conflicts that may arise in the future, cannot be predicted at this time and could in the future have ana material and adverse effect on our business, exchange rate exposure, supply chain, operational costs and commercial presence in these markets.

Significant portions of our operations are conducted outside the markets in which our products are sold, and accordingly we often import a substantial number of products into such markets. We may, therefore, be denied access to our customers or suppliers or denied the ability to ship products from any of our sites as a result of a closing of the borders of the countries in which we sell our products, or in which our operations are located, due to economic, legislative, political and military conditions, including hostilities and acts of terror, in such countries. In addition, certain countriescountries, such as Russia, have putimposed regulations in place requiring local manufacturing of goods, while foreign-made products are subject to pricing penalties or even bans from participation in public procurement auctions.auctions in other countries.

Our corporate headquarters and a portion of our manufacturing activities are located in Israel. Our Israeli operations are dependent upon materials imported from outside Israel. Accordingly, our operations and information technology systems could be materially and adversely affected by acts of terrorism, including through cybersecurity threats, or ifby an escalation of major hostilities were to escalate in the Middle EastEast, or a material impairment of trade between Israel and itsother present trading partners were materially impaired,countries, including as a result of acts of terrorism in the United States or elsewhere. The state of war declared in Israel in October 2023, and the ongoingOngoing military activity in the region,Middle East may result in disruption to our operations and facilities, such as our manufacturing and R&D facilities located in Israel, and impact our employees, some of which are military reservists being called to active military duty, and impact the economic, social and political stability of Israel.

Given the size, complexity and global reach of our business and our multiple areas of focus, we are especially reliant upon our ability to recruit and retain highly qualified management and other key employees. Our ability to attract and retain such employees may be diminished by the financial, legal and regulatory challenges and ongoing restructuring and optimization efforts we have faced in recent years, the increased importance of delivering on corporate sustainability goals and their reputational impact as well as increased competition for talent. In addition, the success of our R&D activity depends on our ability to attract and retain sufficient numbers of skilled scientific personnel. Changes in our management as a result of the appointment or departure of members of management and other key employees may also cause disruptions to our business and result in the loss of key personnel with institutional knowledge of our business, negative impacts on our relationships with existing employees and customers and increased operating costs related to integrating new personnel. Any difficulty in recruiting, hiring, integrating, retaining and motivating talented and skilled members of our organization may impairadversely orimpact delay our ability to execute our Pivot to Growth strategy.us.

In addition to pursuing organic growth opportunities, we intend to continue to evaluate and pursue potential acquisitions, strategic alliances, joint ventures and licenses, among other transactions, as part of our strategy to optimize our business and product portfolio and reallocate resources to fund growth. Relying on such transactions as sources of new innovative medicines, biosimilar and other products, or as a means of growth, involves risks that could adversely affect our future revenues and operating results. We may not be successful in seeking or consummating appropriate opportunities to enable us to execute on our business strategy. We may not be able to pursue opportunities due to financial capacity constraints, we may not be able to obtain necessary regulatory approvals, and we may fail to consummate an announced transaction. We may fail to integrate acquired assets successfully into our existing business, and could incur or assume significant debt and unknown or contingent liabilities, including, among others, patent infringement, product liability or breach of diligence claims. In addition, we, or the partners with which we may enter into licensing or other collaboration agreements, may not be able to perform effectively under such agreements, impairing our ability to monetize opportunities related to them.

We will continue to consider selling, closing or otherwise divesting certain business units, assets and facilities as the focus of our business evolves, including as part of our Pivot to Growth strategy, if we determine that such assets are not critical to our strategy or we believe the opportunity to monetize the asset is attractive or for various other reasons, including for the reduction of indebtedness. For example, as previously announced, we intend to divest our API business, which divestiture is subject to various conditions, including reaching an agreement withidentifying a prospective purchaser and reaching an agreement on terms satisfactory to Teva, satisfying any conditions to closing the divestiture and obtaining any necessary approvals. We have also closed or divested a significant number of manufacturing plants and R&D facilities in the past and may close or divest additional plants and facilities as part of our ongoing efforts regarding optimizing our business. There can be no assurance that we will be able to complete any divestitures of our business units, assets or facilities, including our intended divestiture of our API business, on the timing or upon the terms we expect, if at all. Such divestitures may also divert management’s attention from our core business operations, increase our expenses in the short-term and disrupt our relationships with existing employees, customers or suppliers.

We may fail to identify appropriate opportunities to divest assets on terms acceptable to us or may fail to transition employees and continuing operations from closed sites and disposed businesses efficiently. If divestiture opportunities are found, consummation of any such divestiture may be subject to closing conditions, including obtaining necessary regulatory approvals, and we may fail to consummate an anticipated divestiture. Although our expectation is to engage in asset sales only if they advance or otherwise support our overall strategy, any such sale could result in disruptions to our business operations, result in unanticipated expenses and reduce the size or scope of our business, the capabilities or durability of our manufacturing network, our market share in particular markets or our opportunities with respect to certain markets. If we are unable to complete our planned divestitures in a timely and cost-effective manner, or we do not realize the anticipated cost savings or other benefits of such transactions, our prospects and opportunities for growth may be negatively impacted.

We operate around the world in complex legal and regulatory environments. For instance, we must comply with requirements of the FDA, EMA, U.S. state licensure bodies, and other healthcare regulators with respect to the manufacture, labeling, sale, distribution, marketing, advertising, promotion and development of pharmaceutical products, as further described below. We are also subject to pricing laws, including newly-enacted state laws in the United States, which impose price controls such as penalties for pricing certain products above state-defined threshold,thresholds, as well as competition laws, economic sanctions, export controls, import and trade laws and regulations, healthcare fraud and abuse (including anti-bribery laws,laws), privacy laws, cGMP requirements, labor laws and health and safety laws. Any failure to comply with applicable laws, rules and regulations may result in civil and/or criminal legal proceedings and lead to fines, damages, mandatory compliance programs and other sanctions and remedies that may materially affect our business and operations as well as our reputation. In addition, as rules and regulations change or as interpretations of those rules and regulations evolve, our prior conduct may be investigated.

Our business operations are subject to extensive regulation by the FDA and various other U.S. federal and state regulatory authorities, the EMA and other foreign regulatory authorities that establish requirements relating to, among other things, manufacturing practices, product labeling, and advertising and post marketing reporting, including adverse event reports and field alerts due to manufacturing quality concerns. Notably, in September 2025, the FDA announced its intent to rein in direct-to-consumer advertising by increasing enforcement and revising existing regulations to be more restrictive. On September 9, 2025, Teva received two untitled letters from the FDA regarding claims in AUSTEDO television advertisements to which Teva has responded. The process of obtaining regulatory approvals to market a drug or medical device can be costly and time-consuming, and approvals might not be granted for future products, or additional indications or uses of existing products, on a timely basis, if at all. Delays in the receipt of, or failure to obtain approvals for, future products, or new indications and uses, could result in delayed realization of product revenues, reduction in revenues and substantial additional costs. We may continue to experience similar delays. No assurance can be given that we will remain in compliance with applicable FDA and other regulatory requirements once approval or marketing authorization has been obtained for a product.

Additionally, our research and development, laboratory, and manufacturing facilities are subject to ongoing regulation, including periodic inspection by the FDA in the U.S., the EMA in the EU, and other regulatory authorities, and we must incur expense and expend significant effort to maintain adequate controls over our operations and ensure compliance with these complex regulations. Following an inspection,inspection anor agencyother inquiry by or interaction with the regulator, regulatory agencies have in the past and may in the future issue a notice listing conditions that are believed to violate cGMP or other laboratory, clinical, or manufacturing regulations, or take other regulatory action, including issuing a warning letter for violations of “regulatory significance” that may result in enforcement actionactions if not promptly and adequately corrected. In recent years, regulatory agencies around the world have increased their scrutiny of pharmaceutical manufacturers. This has resulted in requests for product recalls, temporary plant shutdowns to address specific issuescompanies, and otherour remedialR&D actions. Ourand manufacturing facilities, as well as those of our vendors and manufacturing partners, have also been the subject of increased regulatory oversight, leading to increased expenditures required to ensure compliance with new or more stringent research, production and quality control regulations. This has resulted in delayed product launches, product recalls, and facility shutdowns, among other measures and remedial actions, to address specific issues. These regulatory actions have in the past and may in the future adversely impact our ability to supply various products around the world and to obtain approvals for new products developed and manufactured at the affected facilities. If any regulatory body were to require one or more of our significant manufacturing facilities to cease or limit production, or to halt the approval of new or pending regulatory applications, our business and reputation could be adversely affected. In addition, because regulatory approval to develop or manufacture a drug is site-specific, the delay and cost of remedial actions or obtaining approval to develop or manufacture at a specific facility could have a material adverse effect on our business, financial condition and results of operations.

Additionally, the enactment of the IRA represents the most significant pharmaceutical pricing reform in the United States to date and includes legislative changes that could lead to greater pricing pressures on our products, which could be material, such as amendments to (i) eliminate the “donut hole” under the Medicare Part D program beginningwhich began in 2025; (ii) modify the “noninterference” provisions of the Medicare Part D enabling statute to require the U.S. Department of Health and Human Services to set the prices of a subset of drugs and biologics with the highest annual expenditures under Medicare Parts B and D, which as of January 2025 includesincluded AUSTEDO and AUSTEDO XR effective as of January 1, 2027, and in the future, could include other innovative products and biologics within our portfolio of products; and (iii) impose manufacturer rebates on certain single-source Part B and Part D drugs when prices rise faster thatthan the rate of inflation.

ASeveral numberstates ofhave established prescription drug affordability boards with authority to review high-cost drugs and, in some cases, set upper payment limits similar to IRA pricing mechanisms. Additional state legislatures have been consideringconsidered legislation that would implement similar IRA-like frameworks or adopt federally set prices for state regulated insurance markets. There are uncertainties as to the extent to which the IRA and similar frameworks will be implemented under the incoming U.S. administration. We continue to monitor these legislative developments and evaluate whether any changes to our business practices and operations are necessary in order to comply with such legislative reforms and to advocate for policies that support both innovation and access to high quality medicines for patients. However, we cannot accurately predict the ultimate impact of such legislative developments on our business in the longer term, or whether additional changes in regulatory policies will occur in the future.

Additionally, the incoming U.S. administration may propose policy changes that create additional uncertainty for Teva’s business.business, such as its executive order from May 2025 titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients”, see “Item 1—Business—Regulation” for more information. These may include new price restrictions on products Teva sells to Medicaid, Medicare or other government purchasers, or other regulatory changes impacting reimbursement or competitive dynamics in multisource markets.

Failure to comply with all applicable regulatory requirements may subject us to operating restrictions and criminal prosecution, monetary penalties and other disciplinary actions, including,including but not limited to, sanctions, warning letters, product seizures, recalls, fines, injunctions, suspension, shutdown of production, revocation of approvals or the inability to obtain future approvals, or exclusion from future participation in government healthcare programs. Any of these events could disrupt our business and have a material adverse effect on our revenues, profitability and financial condition.

GovernmentalGovernmental, regulatory and civil proceedings and litigation which we are, or in the future become, party to may have an adverse impact on our business.

In the ordinary course of our business, we are exposed to lawsuits, claims, proceedings and government investigations that could preclude or delay the commercialization of our products or disrupt our business operations. We are currently subject to several governmental and civil proceedings and(including civil litigations brought by governmental agencies and/or private plaintiffs) relating to our pricingpricing, marketing, and research and development and manufacturing practices, employment matters, intellectual property, product liability, competition matters, opioids, securities disclosures, financial reporting and accounting practices, corporate governancegovernance, contractual relationships with third parties (e.g. customers and suppliers), and environmental matters. These investigations and litigations are costly and involve a significant diversion of management attention. Such proceedings are unpredictable and may develop over lengthy periods of time. An adverse resolution of these proceedings may result in large monetary fines, damages, additional litigation, such as securities and derivative actions, and other non-monetary sanctions and remedies, such as mandated compliance agreements, all of which can be expensive and disruptive to our operations and business, and can impact decisions related to our product offerings and portfolio.

The continuing increase in expenditures for healthcare has been the subject of considerable government attention almost everywhere we conduct business. Private health insurers and government health authorities continue to seek ways to reduce or contain healthcare costs, including by reducing or eliminating coverage for certain products and lowering reimbursement levels. The focus on reducing or containing healthcare costs has been fueled by controversies, political debate and publicity about prices for pharmaceutical products that some consider excessive, including Congressional and other inquiries into drug pricing, including with respect to our innovative medicines, which could have a material adverse effect on our reputation. In most of the countries and regions where we operate, including the United States, Western Europe, Israel, Russia, Japan, certain countries in Central and Eastern Europe and several countries in Latin America, pharmaceutical prices are subject to new government policies designed to reduce healthcare costs, and may be subject to additional regulatory efforts, funding restrictions, legislative proposals, policy interpretations, investigations and legal proceedings regarding pricing practices. These changes frequently adversely affect pricing and profitability and may cause delays in market entry, or decisions to forgo or discontinue development programs for our products. Certain U.S. states have implemented or are considering,considering pharmaceutical price controls or patient access constraints under the Medicaid program, and some jurisdictions have implemented or are considering price-control regimes that would apply to broader segments of their populations that are not Medicaid-eligible. Private third-party payers, such as health plans, increasingly challenge pharmaceutical product pricing, which could result in lower prices, lower reimbursement rates and a reduction in demand for our products.

Under federal law, companies participating in the Medicaid Drug Rebate program must also participate in the Public Health Service’s 340B drug pricing program. See “Item 1—Business—Regulation” above for more information.

The incomingcurrent U.S. administration may propose policy changes that create additional uncertainty for Teva’s business. These may include changes to the level of scrutiny applied by HRSA to enforce 340B program non-compliance, new price restrictionsrestrictions, such as efforts to reduce prescription drug prices by encouraging manufacturers to voluntarily adopt “Most Favored Nation” (MFN) pricing models on products Teva sells to Medicaid, Medicare or other government purchasers, or other regulatory changes impacting reimbursement or competitive dynamics in multisource markets. Additionally, in its June 2024 decision in Loper Bright Enterprises v. Raimondo (the “Loper decision”), the U.S. Supreme Court overturned the longstanding Chevron doctrine, under which courts were required to give deference to regulatory agencies’ reasonable interpretations of ambiguous federal statutes. The Loper decision could result in additional legal challenges to regulations and guidance issued by federal agencies applicable to our operations, including those issued by the FDA. Additionally, the Loper decision may result in increased regulatory uncertainty, inconsistent judicial interpretations and other impacts to the agency rulemaking process. We cannot predict which additional measures may be adopted or the impact of current and additional measures on the marketing, pricing and demand for our products, whichand any such measures could have a material adverse effect on our business, financial condition and results of operations.

Increased purchasing power of entities that negotiate on behalf of Medicare, Medicaid, and private sector beneficiaries may result in increased pricing pressure by influencing the reimbursement policies of third-party payers. HealthcareRecent healthcare reform legislationlegislation, hasincluding increasedthe enactment of the One Big Beautiful Bill Act (“OBBBA”), will likely reduce the number of patientsinsured whoin haveMedicaid insurance coverage for our products, but provisions such asand the assessmentHealth ofInsurance aExchange brandedmarkets, pharmaceuticalwhich manufacturermay feealter utilization patterns and anshift increasenegotiating inleverage theamong amountpayers. ofIncreased rebatesfinancial thatpressure manufacturerson paythird-party forpayers coveragefrom ofhealthcare theirreform drugs by Medicaid programslegislation may have an adverse effect on us.us by increasing the amount of rebates we pay for coverage of our drugs by Medicaid programs. It is uncertain how current and future reforms, including any new legislation enacted duringby the incoming U.S. administration, in these areas will influence the future of our business operations and financial condition. In addition, “tender systems” for generic pharmaceuticals have been implemented (by both public and private entities) in a number of significant markets in which we operate, including in some European markets, in an effort to lower prices. Under such tender systems, manufacturers submit bids that establish prices for generic pharmaceutical products. These measures impact marketing practices and reimbursement of drugs and may further increase pressure on reimbursement margins. Certain other countries may consider the implementation of a tender system. Failing to win tenders or our withdrawal from participating in tenders, or the implementation of similar systems in other markets leading to further price declines, could have a material adverse effect on our business, financial position and results of operations.

We operate worldwide, with headquarters in Israel and a significant presence in the United States, Europe and many other markets around the world. Today, our global network of capabilities enablesconsists ourof approximately 37,00034,000 employees across 57 markets to push the boundaries of scientific innovation and deliver quality medicines to help improve health outcomes for millions of patients every day.markets.

We operate our business through three segments: United States (previously referred to as the North America segment, see below “—United States Segment”),States, Europe and International Markets. Each business segment manages our entire product portfolio in its region, including generics, which includes biosimilars and OTC products, as well as innovative medicines. This structure enables strong alignment and integration between operations, commercial regions, R&D and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas.

Macroeconomic and Geopolitical Environment

Generic products (including biosimilars) revenues in our United States segment in 20242025 increased by 15%2% to $3,599$3,657 million, compared to 2023,2024, mainly duedriven toby higher revenues from lenalidomideour capsules (the generic versionportfolio of Revlimid®),biosimilar the launch of liraglutide injection 1.8mg (an authorized generic of Victoza®)products and thenew launchproduct of SIMLANDI (adalimumab-ryvk) injection (the biosimilar to Humira®), partially offset by increased competition to other generic products.launches.

Among the most significant generic products we sold in the United States in 20242025 were lenalidomide capsules (the generic version of Revlimid®), Truxima® (the biosimilar to Rituxan®), epinephrine injectable solution (the generic equivalent of EpiPen® and EpiPen Jr®), Truximaand SIMLANDI® (the biosimilar to Rituxan®) and liraglutide 1.8 mg injection (an authorized generic of VictozaHumira®).

AJOVY revenues in our United States segment in 20242025 decreasedincreased by 2%42% to $207$295 million, compared to 2023,2024, mainly due to unfavorable net pricing including an increase in sales allowance due to a non-recurring item, partially offset by growth in volume. In 2024,2025, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 29.6%,33.3%, out of the subcutaneous injectable anti-CGRP class, compared to 25.7%29.6% in 2023.2024.

AUSTEDO revenues (which include AUSTEDO XR) in our United States segment in 20242025 increased by 34%35% to $1,642$2,217 million, compared to 2023,2024, mainly due to growth in volume including the launch of AUSTEDO XR in May 2023, as well as expanded access for patients.volume.

UZEDY revenues in our United States segment in 20242025 wereincreased $117by million.63% to $191 million compared to 2024, mainly due to growth in volume.

BENDEKA and TREANDA combined revenues in our United States segment in 20242025 decreased by 29%13% to $168$147 million, compared to 2023,2024, mainly due to competition from alternative therapies, as well as the entry offrom generic bendamustine products into the market. The orphan drug exclusivity that was attached to bendamustine products expired in December 2022.products.

COPAXONE revenues in our United States segment in 20242025 decreasedincreased by 18%6% to $242$255 million, compared to 2023,2024, mainly due to marketreduction sharein erosionsales and competition,allowance, partially offset by alower reduction in sales allowance.volumes.

Anda revenues from third parties in our United States segment in 20242025 decreased by 3% to $1,536$1,496 million, compared to 2023,2024, mainly due to lower volumes. Anda, our distribution business in the United States, distributes generic, biosimilar and innovative medicines and OTC pharmaceutical products from Teva and various third-party manufacturers,manufacturers to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States. Anda is able to compete in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.

As of December 31, 2024,2025, our generic products pipeline in the United States includes 127116 product applications awaiting FDA approval, including 6566 tentative approvals. This total reflects all pending ANDAs, supplements for product line extensions and tentatively approved applications and includes some instances where more than one application was submitted for the same reference product. Excluding overlaps, the branded products underlying these pending applications had U.S. sales for the twelve months ended September 30, 20242025 of approximately $122$124 billion, according to IQVIA. Approximately 78%80% of pending applications include a paragraph IV patent challenge and we believe we are first to filefirst-to-file with respect to 54 of these products, or 8277 products including final approvals where launch is pending a settlement agreement or court decision. Collectively, these first to filefirst-to-file opportunities represent over $80$85 billion in U.S. brand sales for the twelve months ended September 30, 2024,2025, according to IQVIA.

Gross profit margin for our United States segment in 20242025 decreasedincreased to 54.6%,61.2%, compared to 55.7%54.6% in 2023.2024. This decreaseincrease was mainly due to anthe upfrontdevelopment paymentmilestone payments received in 2023connection related towith the collaborationinitiation onof ourPhase 3 studies for duvakitug (anti-TL1A), asset, partially offset byand a favorable mix of products primarily driven by higher revenues from AUSTEDO and lenalidomide capsules (the generic version of Revlimid®).AUSTEDO.

R&D expenses relating to our United States segment in 20242025 were $633 million, an increase of 5%flat compared to $604 million in 2023.2024.

For a description of our R&D expenses in 2024,2025, see “—Teva Consolidated Results—Research and Development (R&D) ExpensesExpenses, net” below.

S&M expenses relating to our United States segment in 20242025 were $1,049$1,172 million, an increase of 12% compared to $938$1,049 million in 2023.2024. This increase was mainly due to promotional activities related to AUSTEDO,our primarilykey consistinginnovative ofproducts amainly direct-to-consumer advertising campaignAUSTEDO and our patient support programs.UZEDY.

Profit from our United States segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and any other lossexpenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our United States segment in 20242025 was $2,296$3,356 million, aan decreaseincrease of 4%46% compared to $2,394$2,296 million in 2023.2024. This decreaseincrease was mainly due to higher operationalgross expenses,profit, partially offset by higher revenues,S&M and G&A expenses, as discussed above.

Revenues from our Europe segment in 20242025 were $5,103$5,040 million, ana increasedecrease of $266$63 million, or 5%,1%, compared to 2023.2024. In local currency terms, revenues increaseddecreased by 4%,5%, mainly due to higherthe year-over-year impact from the sale of certain product rights, lower revenues from generic and OTC productsproducts, as well as higher revenues from AJOVY,COPAXONE, partially offset by lowerhigher revenues from COPAXONE, respiratory products and other products. Our revenues in 2024 and 2023 were also impacted by the sale of certain product rights.AJOVY.

In 2024,2025, revenues were positively impacted by exchange rate fluctuations of $64$173 million, includingnet of hedging effects, compared to 2023.2024. Revenues in 20242025 were affected by a $21$31 million positivenegative hedging impact, compared to a $12 million negativepositive hedging impact of $21 million in 2023,2024, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

Generic products revenues (including OTC and biosimilar products) in our Europe segment in 20242025 increased by 7%3% to $3,926$4,044 million compared to 2023.2024. In local currency terms, revenues increaseddecreased by 6%,2%, mainly due to lower volumes and price increasesreductions as a result of market conditionsdynamics, suchand aslower inflationarysales pressuresof inseasonal certainOTC markets,products, aspartially welloffset asby higher revenues from recently launched products.

AJOVY revenues in our Europe segment in 20242025 were $216$270 million, an increase of 34%,25%, in both U.S. dollarsdollars. andIn local currency terms, revenues increased by 19%, compared to 2023.2024. This increase was due to growth in volumes.volume.

COPAXONE revenues in our Europe segment in 20242025 decreasedwere by 8% to $213$181 million, compareda todecrease 2023,of 15% in both U.S. dollarsdollars. andIn local currency terms, revenues decreased by 19%, compared to 2023.2024. This decrease was mainly due to price reductions and alower decline in volumevolumes resulting from the availability of alternative therapies and competing glatiramer acetate products.therapies.

As of December 31, 2024,2025, our generic products pipeline in Europe included 686622 generic approvals relating to 7161 compounds in 149125 formulationsformulations, andwith oneno EMA approvalapprovals received during 2024.received. In addition, approximately 1,4831,537 marketing authorization applications are pending approval in 37 European countries, which approvals relate to 9295 compounds in 212229 formulations. No applications are pending with the EMA.

Gross profit from our Europe segment in 20242025 was $2,905$2,747 million, ana increasedecrease of 7%5% compared to $2,726$2,905 million in 2023.2024.

Gross profit margin for our Europe segment in 20242025 increaseddecreased to 56.9%,54.5%, compared to 56.4%56.9% in 2023,2024, mainly due to a positivechange in the mix of products, lower proceeds from the sale of certain product rights, and a negative impact from hedging activities, as well as a decrease in our operational costs.activities.

For a description of our R&D expenses in 2024,2025, see “—Teva Consolidated Results—Research and Development (R&D) ExpensesExpenses, net” below.

S&M expenses relating to our Europe segment in 20242025 were $826$902 million, an increase of 8%9% compared to $767$826 million in 2023.2024. This increase was mainly to support revenue growth.growth of our generic and key innovative products, including new launches, and due to a negative impact from exchange rate fluctuations.

Profit of our Europe segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and any other lossexpenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in 20242025 was $1,575$1,303 million, ana increasedecrease of 7%17% compared to $1,478$1,575 million in 2023,2024, mainly due to higherlower revenuesgross inprofit, 2024,as partiallywell offset byas higher S&Moperational expenses.expenses, as discussed above.

Our International Markets segment includes all countries in which we operate other than the United States and the countries included in our Europe segments.segment, and commencing January 1, 2024, also includes Canada. The International Markets segment covers a substantial portion of the global pharmaceutical industry, including more than 35 countries. As part of a recent shift in executive management responsibilities, commencing January 1, 2024, Canada is reported under our International Markets segment and is no longer included as part of our United States segment. Prior period amounts were recast to reflect this change. See note 19 to our consolidated financial statements.

The countries in our International Markets segment include highly regulated, mainly generic markets, such as Canada and Israel, and branded generics-oriented markets, such as Russia and certain Latin America markets and hybrid markets, such as Japan.markets.

On DecemberMarch 5,31, 2024,2025, we announced that we entered into an agreement with JKI Co. Ltd., established by the fund managed and operated by private equity firm J-Will Partners Co. Ltd., to selldivested our Teva-Takeda business venture in Japan, which includesincluded generic products and legacy products,products. withSince anthe expected closing dateestablishment of Aprilthe 1,business venture and until the completion of its sale, Teva held 51% of the outstanding common stock of the business venture. On March 31, 2025, subjectwe todeconsolidated standardthe closingbusiness conditions.venture Seefrom our financial statements. For additional information, see notes 2 and 22 to our consolidated financial statements.

Revenues from our International Markets segment in 20242025 were $2,463$2,162 million, ana increasedecrease of $112$301 million, or 5%,12%, compared to 2023.2024. In local currency terms, revenues increaseddecreased by 18%11% compared to 2023,2024. This decrease was mainly due to the divestment of our business venture in Japan, lower proceeds from the sale of certain product rights, as well as a negative hedging impact, partially offset by higher revenues from generic products in mostother markets, partially offset by regulatory price reductionsmarkets and generic competition to off-patented products in Japan. The higher revenues in our International Markets segment in 2024 were impacted by the sale of certain product rights.AJOVY.

In 2024,2025, revenues were negatively impacted by exchange rate fluctuations of $321$36 million net of hedging effects, compared to 2023.2024. Revenues in 2024,2025, were affected by a $34 million negative hedging impact, compared to a $13 million positive hedging impact, compared to a $9 million positive hedging impact in 2023,2024, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

Generic products revenues (including OTC and biosimilar products) in our International Markets segment in 20242025 were flat,$1,721, a decrease of 11% in both U.S. dollars and local currency terms compared to 2023.2024. InThis localdecrease currency terms, revenues increased by 15%,was mainly due to higherthe revenuesdivestment of our business venture in most markets, as well as price increases, largely as a result of higher costs due to inflationary pressure,Japan, partially offset by regulatoryhigher price reductions and generic competition to off-patented productsrevenues in Japan.other markets.

AJOVY was launched in certain countries in our International Markets segment, including in Canada, Japan, Australia, Israel, South Korea, Brazil and others. AJOVY revenues in our International Markets segment in 20242025 increased by 33%28% to $84$108 million, compared to 2023.2024. In local currency terms, revenues increased by 39%,27%, due to growth in existing markets in which AJOVY was launched.

COPAXONEAUSTEDO revenues in our International Markets segment were $43 million in 20242025, decreaseda bydecrease 24%of to6%, $48in million,both U.S. dollars and local currency terms compared to 2023.2024. InThis localdecrease currency terms, revenues decreased by 11%,was mainly due to markettiming shareof erosion and competition.shipments.

In addition to these three segments, we haveour other activities,sources of revenues included in “Other Activities” below, consisting primarily of our distribution business in the U.S. through Anda, the sale of APIs to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis.Medis Suchand activitiescertain arecontract includedmanufacturing under “Other Activities” below.services. For additional segment information, see note 15 to our consolidated financial statements.

In the firstsecond quarter of 2026, we continued to execute on the four key pillars of our “Pivot to Growth” strategy, announced in May 2023, which entered into its second“Accelerate Growth” phase in 2025. During this second phase of “Accelerate Growth,”phase, we expect to focus on growing our innovative portfolio, aligning capital allocation to invest in activities we expect to have the highest value, and modernizing our organization and operations to drive both efficiency and cost savings. Under Teva’s Transformation programs announced on May 7, 2025, we expect to achieve such cost savings through a variety of initiativesinitiatives, including examining practices and efficiencies in methods of working, reduction in headcount and optimizing external spend in the following years.

In April 2026, Teva entered into a definitive agreement to acquire all outstanding shares of Emalex Biosciences (“Emalex”), including its leadprimary asset, ecopipam,ecopipam (EBS-101), which has completed Phase 3 for the treatment of Tourette syndrome in a pediatric population. UponOn closing,June 10, 2026, Teva willcompleted paythe acquisition of Emalex, and paid approximately $700 million to Emalex’s existingformer shareholders, which is expected to be funded with existing cash on hand. In addition,shareholders. Emalex’s existingformer shareholders and other third parties may be eligible to receive additional milestone payments of up to $200 million and $125 million, respectively, as well as royalties on global net-sales of ecopipam,ecopipam (EBS-101), upon commercialization and subject to regulatory approval. TheOn transactionJune is18, subject2026, Teva submitted an NDA to customarythe closingFDA conditions,for includingecopipam receipt(EBS-101), of necessary regulatory approvals, and is currently anticipated to closesupported by results from the thirdPhase quarter3 of 2026. See note 2 to our consolidated financial statements.trial.

The ongoing war involving Iran has contributed to increased uncertainty and volatility in global economic conditions. The conflict has affected financial markets, foreign exchange rates and energy prices, and has disrupted international trade routes, supply chains and logistics. In particular, the conflict has disrupted critical global logistics corridors, maritime shipping routes, and air cargo hubs, including those used for the transportation of pharmaceutical products and key inputs. In some cases, such disruptions have resulted in and may continue to result in delays in our production and distribution processes, impacting product availability and our ability to timely respond to consumer demand. Although we have taken measures to mitigate and offset these impacts, the situation remains fluid and the duration, severity and broader economic consequences of the conflict are difficult to predict. Given our global operations, including personnel and several manufacturing and R&D facilities in Israel, as well as our exposure to international markets, continued instability in the region could adversely impact our business operations and financial condition. As of the date of this quarterlyQuarterly report on Form 10-Q, the impact of this conflict on our results of operationoperations and financial condition was immaterial.

Moreover, recent U.S. tariffs imposed, or threatened to be imposed, on materials and products from countries where we do business may impact our business. Any responsive or reciprocal actions taken by such countries, as well as heightened sanctions regimes and trade restrictions arising from geopolitical conflicts, as discussed above, could impact our costs and global operations. The countries subject to tariffs or other trade restrictions, and the tariff rate imposed on each country or scope of applicable restrictions, is uncertaindynamic. and dynamic, and weWe continue to monitor and assess the potential impact on our supply chain and global operations, which could be material, and to evaluatepursue pathwaysmitigation tostrategies mitigatefor such potential impact.impact, including on certain innovative products manufactured outside of the U.S., some of which are already subject to bilateral trade agreements.

Significant highlights in the firstsecond quarter of 2026 included:

Comparison of Three Months Ended MarchJune 31,30, 2026 to Three Months Ended MarchJune 31,30, 2025

The following table presents revenues, expenses and profit for our United States segment for the three months ended MarchJune 31,30, 2026 and 2025:

Revenues from our United States segment in the firstsecond quarter of 2026 were $1,534$1,702 million, flata decrease of 5% compared to the firstsecond quarter of 2025, mainly due to lower revenues from generic products, primarily lenalidomide capsules (thea generic version of Revlimid®), partially offset by higher revenues from our key innovative products, primarily AUSTEDO.

The following table presents revenues for our United States segment by major products and activities for the three months ended MarchJune 31,30, 2026 and 2025:

Generic products (including biosimilar products) revenues in our United States segment in the firstsecond quarter of 2026 were $612$660 million, a decrease of 28%31% compared to the firstsecond quarter of 2025. This decrease was mainly driven by lower revenues from lenalidomide capsules (thea generic version of Revlimid®) due to increased generic competition in the U.S., partially offset by higher revenues from our portfolio of biosimilar products.

Among the most significant generic products we sold in the United States in the firstsecond quarter of 2026 were Truxima® (thea biosimilar to Rituxan®), epinephrine injectable solution (thea generic equivalent of EpiPen® and EpiPen Jr®) and SIMLANDI® (thea biosimilar to Humira®). In the firstsecond quarter of 2026, our total prescriptions were approximately 246237 million (based on trailing twelve months), representing 6.3%6.1% of total U.S. generic prescriptions, compared to approximately 273266 million (based on trailing twelve months), representing 7.1%6.9% of total U.S. generic prescriptions in the firstsecond quarter of 2025, all according to IQVIA data.

AJOVY revenues in our United States segment in the firstsecond quarter of 2026 were $87$116 million, an increase of 64%83% compared to the firstsecond quarter of 2025, mainly due to a reduction in sales allowance.allowance as well as growth in volume. In the firstsecond quarter of 2026, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 32.0%32.5% out of the subcutaneous injectable anti- CGRP class, compared to 30.2%31.0% in the firstsecond quarter of 2025.

AJOVY is protected worldwide by patents expiring in 2026 at the earliest; extensions have been granted in several countries, including the United States and in Europe, until 2031. Additional patents relating to the use of AJOVY in the treatment of migraine have also been issued in the United States and in Europe and will expire between 2035 and 2039. Such patents are also pending in other countries. AJOVY willis also be protected by regulatory marketing exclusivity foruntil 12 years from marketing approval2030 in the United States (obtainedand until 2029 in September 2018) and 10 years from marketing approval in Europe (obtained in April 2019).Europe. For our patent litigation related to other anti-CGRP products, see note 10 to our consolidated financial statement.statements.

AUSTEDO revenues (which include AUSTEDO XR®) in our United States segment in the firstsecond quarter of 2026 were $559$676 million, an increase of 41%,37% compared to the firstsecond quarter of 2025. This increase was mainly due to growth in volume.volume and a favorable business mix including improved net-price realization.

AUSTEDO is protected in the United States by 14 Orange Book patents expiring between 2031 and 2038. We received notice letters from two ANDA filers regarding the filing of their ANDAs with paragraph (IV) certifications for certain of the patents listed in the Orange Book for AUSTEDO. In 2022, we reached agreements with Lupintwo anddrug Aurobindo, respectively,companies to sell their generic productsversions beginning in April 2033,2033 or earlier under certain circumstances. On March 9, 2022, the U.S. Patent Trial and Trial Appeal Board of the U.S. Patent and Trademark Office declinedrejected toa instituteseparate an IPRchallenge filed by ApotexApotex, regardingwhich thehad deutetrabenazinesought compoundto patent.invalidate our patent for an AUSTEDO compound. Currently, there are no further patent litigations pending regarding AUSTEDO.

AUSTEDO XR (deutetrabenazine) extended-release tablets was approved by the FDA on February 17, 2023 in three doses of 6, 12 and 24 mg, and became commercially available in the U.S. in May 2023. The FDA approved AUSTEDO XR as a one pill,one-pill, once-daily treatment option in doses of 30, 36, 42, and 48 mg in May 2024 and in 18 mg in July 2024. AUSTEDO XR is a once-daily formulation indicated in adults for tardive dyskinesia and chorea associated with Huntington’s disease, which is additional to the twice-daily AUSTEDO. AUSTEDO XR is protected by 1113 Orange Book patents expiring between 2031 and 2041. We received notice letters from an ANDA filer, Alkem Laboratories Limited (“Alkem”), regarding the filing of its ANDA with paragraph (IV) certifications; and on June 5, 2026. we filed a complaint for patent infringement against Alkem and its affiliate Ascend Laboratories LLC, in the District Court of New Jersey. In July 2026, we received a notice letter from an additional ANDA filer regarding the filing of its ANDA with paragraph (IV) certifications.

UZEDY (risperidone) extended-release injectable suspension revenues in our United States segment in the firstsecond quarter of 2026 were $63$77 million, an increase of 62%43% compared to the firstsecond quarter of 2025, mainly due to growth in volume.volume, partially offset by higher sales allowances.

UZEDY was approved by the FDA on April 28, 2023 for the treatment of schizophrenia in adults, and was launched in the U.S. in May 2023. UZEDY is a subcutaneous, long-acting formulation that controls the steady release of risperidone. UZEDY is protected by six Orange Book patents expiring between 2027 and 2042. On October 10, 2025, it was announced that the FDA approved UZEDY as a once-monthly extended-release injectable suspension as monotherapy or as adjunctive therapy to lithium or valproate for the maintenance treatment of bipolar 1 disorder (BD-1) in adults. UZEDY iswas protected by regulatory exclusivity until April 28, 2026. We are evaluating plans to launch UZEDY in other countries around the world. UZEDY faces competition from multiple products.

BENDEKA and TREANDA combined revenues in our United States segment in the firstsecond quarter of 2026 were $27$28 million, a decrease of 26%30% compared to the firstsecond quarter of 2025, mainly due to competition from alternative therapies, as well as from branded and generic bendamustine products.

Teva has also settled litigation against four 505(b)(2) applicants: Hospira, Inc. (“Hospira”), Dr. Reddy’s Laboratories (“DRL”) and Accord Healthcare (“Accord”), and Almaject, Inc. / Alvogen, Inc. (“Almaject”). Based on these settlement agreements, Hospira, Accord, DRL and Almaject can launch their products on November 17, 2027, or earlier under certain circumstances. In 2023, Teva and Eagle also filed suit against BendaRx Corp. in the U.S. District Court for the District of Delaware, following its filing of a 505(b)(2) NDA for a bendamustine product, and that litigation is still pending, though it is currently stayed.

COPAXONE revenues in our United States segment in the firstsecond quarter of 2026 were $62$61 million, ana increasedecrease of 16%2% compared to the firstsecond quarter of 2025, mainly due to lower volumes, partially offset by a reduction in sales allowance, partially offset by lower volumes.allowance.

COPAXONE continues to face competition from existing alternative therapies, generic versions of COPAXONE, and generic treatments for multiple sclerosis, injectable products, as well as from monoclonal antibodies.sclerosis.

In the firstsecond quarter of 2026, we launched thea generic version of the following branded products in the United States:

As of MarchJune 31,30, 2026, our generic products pipeline in the United States includes 112101 product applications awaiting FDA approval, including 6559 tentative approvals. This total reflects all pending ANDAs, supplements for product line extensions and tentatively approved applications and includes some instances where more than one application was submitted for the same reference product. Excluding overlaps, the branded products underlying these pending applications had U.S. sales for the twelve months ended DecemberMarch 31, 20252026 of approximately $128$102 billion, according to IQVIA. ApproximatelyAbout 81%80% of our pending drug applications includechallenge aat paragraphleast IVone patent challenge,held andby wethe brand-name manufacturer. We believe we are first-to-filefirst to file with respect to 5348 of these products, or 7671 products including final approvals where launch is pending a settlement agreement or court decision. Collectively, these first-to-filefirst to file opportunities represent over $84$66 billion in U.S. brand sales for the twelve months ended DecemberMarch 31, 2025,2026, according to IQVIA.

IQVIA reported brand sales are one of the many indicators of future potential value of a launch, but equally important are the mix and timing of competition, as well as cost effectiveness. The potential advantages of being the first filer with respect to some of these products may be either forfeited, or subject to forfeiture, shared exclusivity or competition from so-called “authorized generics,” which may ultimately affect the value derived.

In the firstsecond quarter of 2026, we did not receive anyreceived tentative approvals for generic products.equivalents of the products listed in the table below, excluding overlapping applications. A “tentative approval” indicates that the FDA has substantially completed its review of an application and final approval is expected once the relevant patent expires, a court decision is reached, a 30-month regulatory stay lapses or a 180-day exclusivity period awarded to another manufacturer either expires or is forfeited.

Gross profit from our United States segment in the firstsecond quarter of 2026 was $1,038$1,203 million, ana increasedecrease of 2%,1%, compared to the firstsecond quarter of 2025.

Gross profit margin for our United States segment in the firstsecond quarter of 2026 increased to 67.7%,70.7%, compared to 65.9%67.8% in the firstsecond quarter of 2025. This increase was mainly due to a favorable mix of products, primarily higher revenues from our key innovative products, largely AUSTEDO, partially offset by lower revenues from generic products, primarily lenalidomide capsules (thea generic version of Revlimid®).

R&D expenses relating to our United States segment in the firstsecond quarter of 2026 were $147$883 million, aan decreaseincrease of 5%,482%, compared to the firstsecond quarter of 2025.2025 mainly related to the acquisition of Emalex and its primary asset ecopipam (EBS-101). See ‘Emalex Biosciences Acquisition’ above, and ‘Emalex Biosciences’ included in note 2 to our consolidated financial statements.

For a description of our R&D expenses in the firstsecond quarter of 2026, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

S&M expenses relating to our United States segment in the firstsecond quarter of 2026 were $298$294 million, an increase of 22%,18%, compared to the firstsecond quarter of 2025. This increase was mainly due to promotional activities related to our key innovative products, primarily AUSTEDO.

G&A expenses relating to our United States segment in the firstsecond quarter of 2026 were $90$107 million, a decrease of 5%4% compared to the firstsecond quarter of 2025.

ProfitLoss from our United States segment in the firstsecond quarter of 2026 was $507$76 million, a decrease of 2%, compared to a profit of $699 million in the firstsecond quarter of 2025. This decreasechange was mainly due to higher SR&MD expenses, partially offset by higher gross profit, as discussed above.

The following table presents revenues, expenses and profit for our Europe segment for the three months ended MarchJune 31,30, 2026 and 2025:

Revenues from our Europe segment in the firstsecond quarter of 2026 were $1,340$1,263 million, ana increasedecrease of 12%3% compared to the firstsecond quarter of 2025. In local currency terms, revenues decreased by 1%8% compared to the firstsecond quarter of 2025, mainly due to lower proceeds from the sale of certain product rights and lower revenues from generic products, partially offset by higher revenues from AJOVY.products.

In the firstsecond quarter of 2026, revenues were positively impacted by exchange rate fluctuations of $159$63 million, including hedging effects, compared to the firstsecond quarter of 2025. Revenues in the firstsecond quarter of 2026,2026 included $10$3 million from a positive hedging impact, whichwhile is included in “Other”revenues in the table below. Revenues in the firstsecond quarter of 2025 included $12$25 million from a negative hedging impact, which is included in “Other” in the table below. See note 8c to our consolidated financial statements.

The following table presents revenues for our Europe segment by major products and activities for the three months ended MarchJune 31,30, 2026 and 2025:

Generic products revenues (including OTC and biosimilar products) in our Europe segment in the firstsecond quarter of 2026, were $1,089$1,024 million, ana increasedecrease of 10%2% compared to the firstsecond quarter of 2025. In local currency terms, revenues decreased by 1%,4%, mainly due to lower sales of generic products and seasonal OTC products, partially offset by higher revenues from recently launched products.

AJOVY revenues in our Europe segment in the firstsecond quarter of 2026 were $76$78 million, an increase of 31%,10% compared to the firstsecond quarter of 2025. In local currency terms,terms revenues increased by 17%7% due to growth in volume.

COPAXONE revenues in our Europe segment in the firstsecond quarter of 2026 were $40$49 million, a decrease of 4%2% compared to the firstsecond quarter of 2025. In local currency terms,terms revenues decreased by 14%,5%, mainly due to price reductions and lower volumes resulting from the availability of alternative therapies.therapies, partially offset by a decrease in sales allowance due to a non-recurring item.

Respiratory products revenues in our Europe segment in the firstsecond quarter of 2026 were $59$58 million, an increase of 8%6% compared to the firstsecond quarter of 2025. In local currency terms, revenues decreasedincreased by 2%,3%, mainly due to nethigher pricevolumes reductionsas anda lowerresult volumes.of increased supply.

As of MarchJune 31,30, 2026, our generic products pipeline in Europe included 89267 generic approvals relating to 1933 compounds in 4774 formulations. In addition, approximately 1,4081,426 marketing authorization applications are pending approval in 37 European countries, relating to 9499 compounds in 215225 formulations. One application is pending with the European Medicines Agency (“EMA”).

Gross profit from our Europe segment in the firstsecond quarter of 2026 was $734$704 million, ana increasedecrease of 12%2% compared to the firstsecond quarter of 2025.

Gross profit margin for our Europe segment in the firstsecond quarter of 2026 decreasedincreased to 54.8%,55.7%, compared to 55.1%55.2% in the firstsecond quarter of 2025. This increase was mainly due to a positive impact from hedging activities, partially offset by lower proceeds from the sale of certain product rights in the second quarter of 2026.

R&D expenses relating to our Europe segment in the firstsecond quarter of 2026 were $45$52 million, a decrease of 25%12% compared to the firstsecond quarter of 2025.

For a description of our R&D expenses in the firstsecond quarter of 2026, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

S&M expenses relating to our Europe segment in the firstsecond quarter of 2026 were $215$222 million, ana increasedecrease of 8%2% compared to the firstsecond quarter of 2025. This increase was mainly due to a negative impact from exchange rate fluctuations.

G&A expenses relating to our Europe segment in the firstsecond quarter of 2026 were $73$66 million, ana increasedecrease of 6%1% compared to the firstsecond quarter of 2025. This increase was mainly due to a negative impact from exchange rate fluctuations.

Profit from our Europe segment in the firstsecond quarter of 2026 was $401$367 million, an increase of 22%,1%, compared to the firstsecond quarter of 2025. This increase was mainly due to higher gross profit, as discussed above.

The following table presents revenues, expenses and profit for our International Markets segment for the three months ended MarchJune 31,30, 2026 and 2025:

As of the date of this Quarterly Report on Form 10-Q, sustained conflict between Russia and Ukraine and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results and we have no manufacturing or R&D facilities in these markets. In the firstsecond quarter of 2026, the impact of this conflict on our International Markets segment was immaterial.

Revenues from our International Markets segment in the firstsecond quarter of 2026 were $524$550 million, aan decreaseincrease of 10%11% compared to the firstsecond quarter of 2025. In local currency terms, revenues decreasedincreased by 19%7% compared to the firstsecond quarter of 2025, mainly due to thehigher divestmentrevenues offrom our businesskey ventureinnovative products AJOVY and AUSTEDO, primarily in Japan.China.

In the firstsecond quarter of 2026, revenues were positively impacted by exchange rate fluctuations of $50$19 million, includingnet of hedging effects, compared to the firstsecond quarter of 2025. Revenues in the firstsecond quarter of 2026 included $1$11 million from a positivenegative hedging impact, compared to a negative hedging impact of $15$8 million in the firstsecond quarter of 2025, which are included in “Other” in the table below. See note 8c to our consolidated financial statements.