TEVA PHARMACEUTICAL INDUSTRIES LTD

Comparison of Three Months Ended June 30, 2025 to Three Months Ended June 30, 2024

Segment Information

United States Segment

The following table presents revenues, expenses and profit for our United States segment for the three months ended June 30, 2025 and 2024:

United States Revenues

Revenues from our United States segment in the second quarter of 2025 were $2,151 million, an increase of $41 million, or 2%, compared to the second quarter of 2024. This increase was mainly due to higher revenues from our innovative products, mainly AUSTEDO, UZEDY and AJOVY, partially offset by lower revenues from generic products and COPAXONE.

The following table presents revenues for our United States segment by major products and activities for the three months ended June 30, 2025 and 2024:

Generic products (including biosimilars) revenues in our United States segment in the second quarter of 2025 were $961 million, a decrease of 6% compared to the second quarter of 2024. This decrease was mainly driven by lower revenues from lenalidomide capsules (the generic version of Revlimid®) and liraglutide injection 1.8mg (an authorized generic of Victoza®), driven primarily by increased competition, 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 second quarter of 2025 were lenalidomide capsules (the generic version of Revlimid®), epinephrine injectable solution (the generic equivalent of EpiPen® and EpiPen Jr®) and Truxima® (the biosimilar to Rituxan®). In the second quarter of 2025, our total prescriptions were approximately 266 million (based on trailing twelve months), representing 6.9% of total U.S. generic prescriptions, compared to approximately 303 million (based on trailing twelve months), representing 7.9% of total U.S. generic prescriptions in the second quarter of 2024, all according to IQVIA data.

On April 7, 2025, Teva and Samsung Bioepis Co., Ltd. announced the availability of, and subsequently launched, EPYSQLI® (eculizumab-aagh), a biosimilar to Soliris® (eculizumab), in the U.S., for the treatment of paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS) and generalized myasthenia gravis (gMG) in adult patients who are anti-acetylcholine receptor (AchR) antibody positive.

AJOVY revenues in our United States segment in the second quarter of 2025 were $63 million, an increase of 53% compared to the second quarter of 2024, mainly due to an increase in sales allowance due to anon-recurring item in the second quarter of 2024, and growth in volume in the second quarter of 2025. In the second quarter of 2025, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 31.0% out of subcutaneous injectable anti- CGRP class, compared to 28.6% in the second quarter of 2024.

AJOVY is indicated for the preventive treatment of migraine in adults and was launched in the U.S. in 2018. AJOVY is the only anti-CGRP subcutaneous product indicated for both quarterly and monthly dosing options. In April 2025, the FDA accepted Teva’s supplemental Biologics License Application (sBLA) for AJOVY to expand the indication to include children and adolescents.

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 Europe and will expire between 2035 and 2039. Such patents are also pending in other countries. AJOVY will also be protected by regulatory exclusivity for 12 years from marketing approval in the United States (obtained in September 2018) and 10 years from marketing approval in Europe (obtained in April 2019).

In October 2017, we filed a lawsuit in the U.S. District Court for the District of Massachusetts alleging that Eli Lilly & Co.’s (“Lilly”) marketing and sale of its galcanezumab product for the treatment of migraine infringes nine Teva patents, including three method of treatment patents and six composition of matter patents. Lilly then submitted IPR petitions to the PTAB, challenging the validity of the nine Teva patents. The PTAB issued decisions upholding the three method of treatment patents but finding the six composition of matter patents invalid, which decisions were affirmed by the Court of Appeals for the Federal Circuit on August 16, 2021. A jury trial regarding the three method of treatment patents resulted in a verdict in Teva’s favor on November 9, 2022, in which the three method of treatment patents were determined to be valid and infringed by Lilly, and Teva was awarded $176.5 million in damages. On September 26, 2023, the U.S. District Court for the District of Massachusetts issued a decision that reversed the jury’s verdict and damages award, finding Teva’s method of treatment patents to be invalid. Teva appealed this ruling on October 24, 2023, and the matter is fully briefed. The appeal hearing has been set for September 5, 2025.

In addition, in 2018, we entered into separate agreements with Alder Biopharmaceuticals, Inc. and Lilly resolving the European Patent Office oppositions that they filed against our AJOVY patents. The settlement agreement with Lilly also resolved Lilly’s action to revoke the patent protecting AJOVY in the United Kingdom.

AUSTEDO revenues in our United States segment in the second quarter of 2025 were $495 million, an increase of 22%, compared to $407 million in the second quarter of 2024. This increase was mainly due to growth in volumes, including the approval of AUSTEDO XR as a one pill, once-daily treatment in 2024.

AUSTEDO was launched in the U.S. in 2017. It is indicated for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia in adults.

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. On April 29, 2022 and June 8, 2022, we reached agreements with Lupin and Aurobindo, respectively, to sell their generic products beginning in April 2033, or earlier under certain circumstances. In addition, Apotex filed a petition for IPR by the Patent and Trial Appeal Board (“PTAB”) of the patent covering the deutetrabenazine compound that expires in 2031. On March 9, 2022, the U.S. Patent and Trademark Office denied Apotex’s petition and declined to institute a review of the deutetrabenazine patent. In China, invalidity proceedings were initiated against the deutetrabenazine compound patent by a local Chinese pharmaceutical company, and were discontinued following a settlement between the parties. There are no further patent litigations pending regarding AUSTEDO at this time.

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, 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 currently marketed twice-daily AUSTEDO. AUSTEDO XR is protected by 11 Orange Book patents expiring between 2031 and 2041.

On January 17, 2025, the Centers for Medicare and Medicaid Services (“CMS”) released a list of prescription medicines selected for price-setting discussions, which included AUSTEDO and AUSTEDO XR. The price-setting process has commenced, and the revised prices set by the U.S. Government, which will apply to eligible Medicare patients, are expected to become effective on January 1, 2027. As the price-setting process is still in its early stages, the extent to which prices for AUSTEDO and AUSTEDO XR will change as a result of such discussions remains uncertain.

UZEDY (risperidone) extended-release injectable suspension revenues in our United States segment in the second quarter of 2025 were $54 million, an increase of 120% compared to the second quarter of 2024, mainly due to growth in volume.

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 of risperidone that controls the steady release of risperidone. UZEDY is protected by four Orange Book patents expiring between 2027 and 2040. UZEDY is protected by regulatory exclusivity until April 28, 2026. We are moving forward with plans to launch UZEDY in other countries around the world. UZEDY faces competition from multiple products.

BENDEKAand TREANDA combined revenues in our United States segment in the second quarter of 2025 were $40 million, a decrease of 3% compared to the second quarter of 2024, mainly due to competition from alternative therapies, as well as from generic bendamustine products.

In April 2019, we signed an amendment to the license agreement with Eagle extending the royalty term applicable to the United States to the full period for which we sell BENDEKA and increased the royalty rate. In consideration, Eagle agreed to assume a portion of BENDEKA-related patent litigation expenses.

There are 19 patents listed in the U.S. Orange Book for BENDEKA with expiration dates in 2026 and 2031. In August 2021, the Court of Appeals for the Federal Circuit affirmed the district court’s decision upholding the validity of all of the asserted patents and finding infringement by two remaining ANDA filers. Another ANDA filer did not join the appeal, and Teva also settled with two ANDA filers.

Teva also settled litigation against three 505(b)(2) applicants, Hospira, Inc. (“Hospira”), Dr. Reddy’s Laboratories (“DRL”) and Accord Healthcare (“Accord”). Based on these settlement agreements, Hospira, Accord and DRL 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.

In addition to the settlement with Eagle regarding its bendamustine 505(b)(2) NDA, between 2015 and 2020, we reached final settlements with 22 ANDA filers for generic versions of the lyophilized form of TREANDA and one 505(b)(2) NDA filer for a generic version of the liquid form of TREANDA, providing for the launch of generic versions of TREANDA prior to patent expiration. Currently, there are multiple generic TREANDA products on the market.

COPAXONE revenues in our United States segment in the second quarter of 2025 were $62 million, a decrease of 23% compared to the second quarter of 2024, mainly due to market share erosion and competition.

The market for MS treatments continues to develop, particularly with the approval of generic versions of COPAXONE. Oral branded and generic treatments for MS, such as Tecfidera® (dimethyl fumarate) and Gilenya® (fingolimod) continue to present significant and increasing competition. COPAXONE also continues to face competition from existing injectable products, as well as from monoclonal antibodies, such as Ocrevus®, Kesimpta® and Tysabri®.

Anda revenues from third-party products in our United States segment in the second quarter of 2025 were $365 million, a decrease of 2%, compared to $373 million in the second quarter of 2024. This decrease was mainly due to lower volumes. Anda, our distribution business in the United States, distributes generic and innovative medicines and OTC pharmaceutical products from Teva and various third-party manufacturers to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States.

Anda competes in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.

Product Launches and Pipeline

In the second quarter of 2025, we launched the generic and biosimilar version of the following branded products in the United States:

As of June 30, 2025, our generic products pipeline in the United States includes 128 product applications awaiting FDA approval, including 69 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 March 31, 2025 of approximately $128 billion, according to IQVIA. Approximately 74% of pending applications include a paragraph IV patent challenge, and we believe we arefirst-to-file with respect to 55 of these products, or 81 products including final approvals where launch is pending a settlement agreement or court decision. Collectively, these first-to-file opportunities represent over $80 billion in U.S. brand sales for the twelve months ended March 31, 2025, 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 subject to forfeiture, shared exclusivity or competition fromso-called “authorized generics,” which may ultimately affect the value derived.

In the second quarter of 2025, we received tentative approvals for generic 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.

For information regarding our innovative and biosimilar products pipeline, see “—Teva Consolidated Results—Research and Development (R&D) Expenses” below.

United States Gross Profit

Gross profit from our United States segment in the second quarter of 2025 was $1,250 million, an increase of 7%, compared to $1,167 million in the second quarter of 2024.

Gross profit margin for our United States segment in the second quarter of 2025 increased to 58.1%, compared to 55.3% in the second quarter of 2024. This increase was mainly due to a favorable mix of products primarily driven by higher revenues from AUSTEDO.

United States R&D Expenses

R&D expenses relating to our United States segment in the second quarter of 2025 were $152 million, a decrease of 11%, compared to $170 million in the second quarter of 2024.

United States S&M Expenses

S&M expenses relating to our United States segment in the second quarter of 2025 were $279 million, an increase of 3%, compared to $270 million in the second quarter of 2024. This increase was mainly due to promotional activities related to our key innovative products.

United States G&A Expenses

G&A expenses relating to our United States segment in the second quarter of 2025 were $113 million, an increase of 13% compared to $100 million in the second quarter of 2024.

For a description of our G&A expenses in the second quarter of 2025, see “—Teva Consolidated Results—General and Administrative (G&A) Expenses” below.

United States Profit

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

Profit from our United States segment in the second quarter of 2025 was $706 million, an increase of 12% compared to $629 million in the second quarter of 2024. This increase was mainly due to higher gross profit, as discussed above.

Europe Segment

The following table presents revenues, expenses and profit for our Europe segment for the three months ended June 30, 2025 and 2024:

Europe Revenues

Our Europe segment includes the European Union, the United Kingdom and certain other European countries.

Revenues from our Europe segment in the second quarter of 2025 were $1,298 million, an increase of 7%, or $85 million, compared to the second quarter of 2024. In local currency terms, revenues increased by 3% compared to the second quarter of 2024, mainly due to proceeds from the sale of certain product rights, higher revenues from AJOVY and higher revenues from generic products.

In the second quarter of 2025, revenues were positively impacted by exchange rate fluctuations of $46 million, net of hedging effects, compared to the second quarter of 2024. Revenues in the second quarter of 2025, included $25 million from a negative hedging impact, which is included in “Other” in the table below. Revenues in the second quarter of 2024 included $3 million from a positive hedging impact, which is included in “Other” in the table below. See note 8d to our consolidated financial statements.

The following table presents revenues for our Europe segment by major products and activities for the three months ended June 30, 2025 and 2024:

Generic products revenues (including OTC and biosimilar products) in our Europe segment in the second quarter of 2025, were $1,040 million, an increase of 7% compared to the second quarter of 2024. In local currency terms, revenues increased by 1%, mainly due to OTC price increases, as well as revenues from recently launched products, partially offset by lower volumes.

AJOVY revenues in our Europe segment in the second quarter of 2025 increased by 38% to $71 million, compared to $52 million in the second quarter of 2024. In local currency terms revenues increased by 30% due to growth in volume.

For information about AJOVY patent protection, see “—United States Revenues—Revenues by Major Products and Activities” above.

COPAXONE revenues in our Europe segment in the second quarter of 2025 were $50 million, a decrease of 6% compared to the second quarter of 2024. In local currency terms revenues decreased by 11%, due to price reductions and a decline in volume resulting from the availability of alternative therapies and competing glatiramer acetate products.

In certain countries, Teva remains in litigation against generic companies regarding COPAXONE.

Respiratory products revenues in our Europe segment in the second quarter of 2025 were $55 million, a decrease of 3% compared to the second quarter of 2024. In local currency terms, revenues decreased by 8%, mainly due to net price reductions and lower volumes.

Product Launches and Pipeline

As of June 30, 2025, our generic products pipeline in Europe included 273 generic approvals relating to 30 compounds in 67 formulations, with no European Medicines Agency (“EMA”) approvals received. In addition, approximately 1,490 marketing authorization applications are pending approval in 37 European countries, relating to 97 compounds in 215 formulations. No applications are pending with the EMA.

For information regarding our innovative medicines and biosimilar products pipeline, see “—Teva Consolidated Results—Research and Development (R&D) Expenses” below.

Europe Gross Profit

Gross profit from our Europe segment in the second quarter of 2025 was $717 million, an increase of 6% compared to $677 million in the second quarter of 2024.

Gross profit margin for our Europe segment in the second quarter of 2025 decreased to 55.2%, compared to 55.8% in the second quarter of 2024. This decrease was mainly due to a negative impact from hedging activities and an unfavorable mix of products, partially offset by proceeds from the sale of certain product rights.

Europe R&D Expenses

R&D expenses relating to our Europe segment in the second quarter of 2025 were $59 million, a decrease of 5% compared to $62 million in the second quarter of 2024.

Europe S&M Expenses

S&M expenses relating to our Europe segment in the second quarter of 2025 were $228 million, an increase of 9% compared to $209 million in the second quarter of 2024. This increase was mainly due to exchange rate fluctuations as well as to support revenue growth of our generic and key innovative products, including new launches.

Europe G&A Expenses

G&A expenses relating to our Europe segment in the second quarter of 2025 were $66 million, an increase of 3% compared to $64 million in the second quarter of 2024.

For a description of our G&A expenses in the second quarter of 2025, see “—Teva Consolidated Results—General and Administrative (G&A) Expenses” below.

Europe Profit

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

Profit from our Europe segment in the second quarter of 2025 was $364 million, an increase of 6%, compared to $342 million in the second quarter of 2024. This increase was mainly due to higher gross profit, partially offset by higher S&M expenses, as discussed above.

International Markets Segment

The following table presents revenues, expenses and profit for our International Markets segment for the three months ended June 30, 2025 and 2024:

International Markets Revenues

Our International Markets segment includes all countries in which we operate other than the United States and the countries included in our Europe segment. The International Markets segment covers a substantial portion of the global pharmaceutical industry, including more than 35 countries.

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.

On March 31, 2025, we closed the agreement with JKI Co. Ltd., established by the fund managed and operated by private equity firm J-Will Partners Co. Ltd., to sell our Teva-Takeda business venture in Japan, which includes generic products and legacy products. See note 2 and note 17 to our consolidated financial statements.

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. During the three months ended June 30, 2025, the impact of this conflict on our International Markets segment’s results of operations and financial condition was immaterial. Consistent with our foreign exchange risk management hedging programs, in the three months ended June 30, 2025 we partially hedged our exposure to currency exchange rate fluctuations with respect to our balance sheet assets, revenues and expenses. However, as of the end of the second quarter of 2025, we hedge a small part of our projected net revenues in Russian ruble for 2025. Prior to and since the escalation of the conflict, we have been taking measures to reduce our operational cash balances in Russia and Ukraine. We have been monitoring the solvency of our customers in Russia and Ukraine and have taken measures, where practicable, to mitigate our exposure to risks related to the conflict in the region. However, the duration, severity and global implications (including potential inflation and devaluation consequences) of the conflict cannot be predicted at this time and could have an effect on our business, including on our exchange rate exposure, supply chain, operational costs and commercial presence in these markets.

Revenues from our International Markets segment in the second quarter of 2025 were $495 million, a decrease of 17% compared to the second quarter of 2024. In local currency terms, revenues decreased by 16% compared to the second quarter of 2024. This decrease was mainly due to the divestment of our business venture in Japan.

In the second quarter of 2025, revenues were negatively impacted by exchange rate fluctuations of $2 million, including hedging effects, compared to the second quarter of 2024. Revenues in the second quarter of 2025 included $8 million from a negative hedging impact, compared to a negative hedging impact of $5 million in the second quarter of 2024, which are included in “Other” in the table below. See note 8d to our consolidated financial statements.

The following table presents revenues for our International Markets segment by major products and activities for the three months ended June 30, 2025 and 2024:

Generic products revenues (including OTC and biosimilar products) in our International Markets segment were $410 million in the second quarter of 2025, a decrease of 16% in both U.S. dollars and local currency terms, compared to the second quarter of 2024, mainly due to the divestment of our business venture in Japan.

AJOVY was launched in certain markets in our International Markets segment, including in Canada, Japan, Australia, Israel, South Korea, Brazil and others. AJOVY revenues in our International Markets segment in the second quarter of 2025 were $20 million, compared to $22 million in the second quarter of 2024, mainly due to timing of shipments.

AUSTEDO was launched in China and Israel in 2021 and in Brazil in 2022, for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia. In February 2024, we announced a strategic partnership for the marketing and distribution of AUSTEDO in China. In April 2025, AUSTEDO received marketing authorization in South Korea. We continue to pursue additional submissions in various other markets.

AUSTEDO revenues in our International Markets segment in the second quarter of 2025 were $3 million compared to $12 million in the second quarter of 2024. In local currency terms, revenues decreased by 75%, mainly due to timing of shipments.

COPAXONE revenues in our International Markets segment in the second quarter of 2025 were $7 million compared to $14 million in the second quarter of 2024.

International Markets Gross Profit

Gross profit from our International Markets segment in the second quarter of 2025 was $243 million, a decrease of 15% compared to $286 million in the second quarter of 2024.

Gross profit margin for our International Markets segment in the second quarter of 2025 increased to 49.2%, compared to 48.3% in the second quarter of 2024. This increase was mainly due to a favorable mix of products, mainly in connection with the divestment of our business venture in Japan.

International Markets R&D Expenses

R&D expenses relating to our International Markets segment in the second quarter of 2025 were $24 million, a decrease of 19% compared to the second quarter of 2024.

International Markets S&M Expenses

S&M expenses relating to our International Markets segment in the second quarter of 2025 were $114 million, a decrease of 22% compared to the second quarter of 2024, mainly due to the divestment of our business venture in Japan.

International Markets G&A Expenses

G&A expenses relating to our International Markets segment in the second quarter of 2025 were $32 million, a decrease of 15% compared to the second quarter of 2024.

International Markets Profit

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

Profit from our International Markets segment in the second quarter of 2025 was $74 million, an increase of 1%, compared to $73 million in the second quarter of 2024. This increase was mainly due to lower operating expenses, partially offset by a decrease in gross profit, mainly as a result of the divestment of our business venture in Japan.

Other Activities

We have other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and anout-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our United States, Europe or International Markets segments described above.

On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale. The intention to divest is in alignment with our Pivot to Growth strategy. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all. For further information, see note 2 to our consolidated financial statements.

Our revenues from other activities in the second quarter of 2025 were $232 million, a decrease of 7% in U.S. dollars, or 9% in local currency terms, compared to the second quarter of 2024.

API sales to third parties in the second quarter of 2025 were $135 million, a decrease of 11% in both U.S. dollars and local currency terms, compared to the second quarter of 2024, mainly due to lower demand and timing of shipments.

Teva Consolidated Results

Revenues

Revenues in the second quarter of 2025 were $4,176 million, flat in U.S. dollars, or a decrease of 1% in local currency terms compared to the second quarter of 2024. This decrease was mainly due to lower revenues from generic products in our International Markets segment associated with the divestment of our business venture in Japan, as well as in our U.S. segment, and a decrease in revenues from COPAXONE, partially offset by an increase in revenues from our key innovative products AUSTEDO, AJOVY and UZEDY.

See “—United States Revenues,” “—Europe Revenues,” “—International Markets Revenues” and “—Other Activities” above.

Exchange rate movements during the second quarter of 2025, net of hedging effects, positively impacted revenues by $49 million, compared to the second quarter of 2024. See note 8d to our consolidated financial statements.

Gross Profit

Gross profit in the second quarter of 2025, was $2,102 million, an increase of 4% compared to $2,024 million in the second quarter of 2024.

Gross profit margin was 50.3% in the second quarter of 2025, compared to 48.6% in the second quarter of 2024. This increase was mainly due to a favorable mix of products, primarily driven by higher revenues from AUSTEDO, the sale of certain product rights in our Europe Segment and the divestment of our business venture in Japan, partially offset by lower revenues from COPAXONE.

Research and Development (R&D) Expenses, net

Our R&D activities for innovative medicines and biosimilar products in each of our segments include costs of discovery research, preclinical work, drug formulation, early- and late-stage clinical development and product registration costs. These expenditures are reported net of contributions received from collaboration partners. Our spending takes place throughout the development process, including (i) early-stage projects in both discovery and preclinical phases; (ii) middle-stage projects in clinical programs up to Phase 3; (iii) late-stage projects in Phase 3 programs, including where a new drug application is currently pending approval; (iv) post-approval studies for marketed products; and (v) indirect expenses, such as costs of internal administration, infrastructure and personnel.

Our R&D activities for generic products in each of our segments include both (i) direct expenses relating to product formulation, analytical method development, stability testing, management of bioequivalence and other clinical studies and regulatory filings; and (ii) indirect expenses, such as costs of internal administration, infrastructure and personnel.

In the second quarter of 2025, our R&D expenses, net related primarily to innovative product candidates and marketed products in neuroscience, immunology and immuno-oncology, and selected other areas, as well as generic products and biosimilars.

R&D expenses, net in the second quarter of 2025, were $244 million, a decrease of 9% compared to $269 million in the second quarter of 2024.

Our lower R&D expenses, net in the second quarter of 2025 compared to the second quarter of 2024, were mainly due to a decrease innon-recurring milestone payments related to certain biosimilar projects, and a decrease in our generics projects.

Our R&D expenses, net in the second quarter of 2025, were also impacted by reimbursements from the strategic partnerships we entered into in 2023 and 2024. See note 2 to our consolidated financial statements.

R&D expenses, net as a percentage of revenues were 5.8% in the second quarter of 2025, compared to 6.5% in the second quarter of 2024.

Innovative Medicines Pipeline

Below is a description of key products in our innovative medicines pipeline as of July 30, 2025:

Biosimilar Products Pipeline

We have additional biosimilar products in development internally and with our partners that are in various stages of clinical trials and regulatory review worldwide, including confirmatory clinical trials for biosimilars to Xolair® (omalizumab), to Xgeva® (denosumab), which was submitted for regulatory review in Europe, to Entyvio® (vedolizymab), which is in collaboration with Alvotech for the U.S. market, and TEV-‘333 a biosimilar in collaboration with mAbxience. Our proposed biosimilar to Prolia® (denosumab) was submitted for regulatory review in the U.S. and Europe. Our proposed biosimilars to Simponi®, Simponi Aria® (golimumab), and Eyla (aflibercept), which are in collaboration with Alvotech, were submitted for regulatory review in the U.S.

Selling and Marketing (S&M) Expenses

S&M expenses in the second quarter of 2025, were $654 million, flat compared to the second quarter of 2024. This was mainly the result of the factors discussed above under “—United States segment—S&M Expenses,” “—Europe segment— S&M Expenses” and “—International Markets segment— S&M Expenses”.

S&M expenses as a percentage of revenues were 15.7% in the second quarter of 2025, compared to 15.8% in the second quarter of 2024.

General and Administrative (G&A) Expenses

G&A expenses in the second quarter of 2025, were $305 million, an increase of 8% compared to the second quarter of 2024. This increase was mainly due to costs related to optimization activities of Teva’s global organization and operations in connection with Teva’s Transformation programs.

G&A expenses as a percentage of revenues were 7.3% in the second quarter of 2025 compared to 6.8% in the second quarter of 2024.

Intangible Asset Impairments

We recorded expenses of $42 million for identifiable intangible asset impairments in the second quarter of 2025, compared to expenses of $61 million in the second quarter of 2024. See note 5 to our consolidated financial statements.

Goodwill Impairment

No goodwill impairments were recorded in the second quarter of 2025, compared to a goodwill impairment charge of $400 million in the second quarter of 2024 related to Teva’s API reporting unit. See note 6 to our consolidated financial statements.

Other Asset Impairments, Restructuring and Other Items

We recorded expenses of $232 million for other asset impairments, restructuring and other items in the second quarter of 2025, compared to expenses of $280 million in the second quarter of 2024. See note 12 to our consolidated financial statements.

Legal Settlements and Loss Contingencies

We recorded expenses of $166 million in legal settlements and loss contingencies in the second quarter of 2025, compared to expenses of $83 million in the second quarter of 2024. See note 9 to our consolidated financial statements.

Operating Income (Loss)

Operating Income was $455 million in the second quarter of 2025, compared to an operating loss of $5 million in the second quarter of 2024. This increase was mainly due to the goodwill impairment charge recorded in the second quarter of 2024, as well as higher gross profit in the second quarter of 2025, partially offset by higher legal settlements and loss contingencies in the second quarter of 2025.

Operating income as a percentage of revenues was 10.9% in the second quarter of 2025, compared to an operating loss as a percentage of revenues of 0.1% in the second quarter of 2024.

Financial Expenses, Net

In the second quarter of 2025, financial expenses, net were $252 million, mainly comprised ofnet-interest expenses of $203 million. In the second quarter of 2024, financial expenses, net were $241 million, mainly comprised ofnet-interest expenses of $233 million.

Reconciliation Table to Consolidated Income (Loss) Before Income Taxes

The following table presents a reconciliation of our segment profits to our consolidated operating income (loss) and to consolidated income (loss) before income taxes for the three months ended June 30, 2025 and 2024:

Income Taxes

In the second quarter of 2025, we recognized a tax benefit of $78 million, on apre-tax income of $203 million. In the second quarter of 2024, we recognized a tax expense of $630 million, on apre-tax loss of $246 million. See note 11 to our consolidated financial statements.

Net Income (Loss) Attributable to Teva

Net income attributable to Teva was $282 million in the second quarter of 2025, compared to a net loss of $846 million in the second quarter of 2024. This change was mainly due to higher income taxes in the second quarter of 2024, as well as higher operating income in the second quarter of 2025, as discussed above.

Diluted Shares Outstanding and Earnings (Loss) per Share

The weighted average diluted shares outstanding used for the fully diluted share calculations for the three months ended June 30, 2025 and 2024 was 1,161 million shares and 1,133 million shares, respectively.

Diluted earnings per share was $0.24 in the second quarter of 2025, compared to diluted loss per share of $0.75 in the second quarter of 2024. See note 13 to our consolidated financial statements.

Share Count for Market Capitalization

We calculate share amounts using the outstanding number of shares (i.e., excluding treasury shares) plus shares that would be outstanding upon the exercise of options and vesting of RSUs and PSUs, and the conversion of our convertible senior debentures, in each case, at period end.

As of June 30, 2025 and 2024, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,179 million shares and 1,167 million shares, respectively.

Impact of Currency Fluctuations on Results of Operations

In the second quarter of 2025, approximately 45% of our revenues were denominated in currencies other than the U.S. dollar. Since our results are reported in U.S. dollars, we are subject to significant foreign currency risks. Accordingly, changes in the rate of exchange between the U.S. dollar and local currencies in the markets in which we operate (primarily the euro, British pound, Russian ruble, Swiss franc, Canadian dollar, new Israeli shekel, Polish złoty and Swedish krona) impacted our results.

During the second quarter of 2025, the following main currencies relevant to our operations increased in value against the U.S. dollar (each compared on a quarterly average basis): Russian ruble by 12%, Swedish krona by 11%, Swiss franc by 9%, Polish złoty by 6%, British pound by 6%, euro by 5% and new Israeli shekel by 4%. The following currencies relevant to our operations decreased in value against the U.S. dollar: Argentine peso by 23%, Mexican peso by 12% and Brazilian real by 8%.

As a result, exchange rate movements during the second quarter of 2025, net of hedging effects, positively impacted revenues by $49 million and had a negligible impact on operating income, compared to the second quarter of 2024.

In the second quarter of 2025, a negative hedging impact of $32 million was recognized under revenues, and a positive hedging impact of $4 million was recognized under cost of sales. In the second quarter of 2024, a negative hedging impact of $2 million was recognized under revenues and a negative hedging impact of $3 million was recognized under cost of sales.

Hedging transactions against future projected revenues and expenses are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. See note 8d to our consolidated financial statements.

Commencing in the third quarter of 2018, the cumulative inflation in Argentina exceeded 100% or more over a three-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

Commencing in the second quarter of 2022, the cumulative inflation in Turkey exceeded 100% or more over a three-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

Comparison of six Months Ended June 30, 2025 to six Months Ended June 30, 2024

Unless specified otherwise, the factors used to explain quarterly changes on a year-over-year basis are also relevant for the comparison of the results for the six months ended June 30, 2025 and 2024. Where there are different factors affecting the six months comparison, we have described them below.

Segment Information

United States Segment

The following table presents revenues, expenses and profit for our United States segment for the six months ended June 30, 2025 and 2024:

United States Revenues

Revenues from our United States segment in the first six months of 2025 were $4,060 million, an increase of 6% compared to $3,835 million in the first six months of 2024.

The following table presents revenues for our United States segment by major products and activities for the six months ended June 30, 2025 and 2024:

COPAXONE revenues in our United States segment in the first six months of 2025 were $116 million, an increase of 5% compared to $111 million in the first six months of 2024, mainly due to an increase in sales allowance due to anon-recurring item in the first six months of 2024, partially offset by market share erosion and competition.

United States Gross Profit

Gross profit from our United States segment in the first six months of 2025 was $2,308 million, an increase of 14%, compared to $2,025 million in the first six months of 2024.

Gross profit margin for our United States segment in the first six months of 2025 increased to 56.9% compared to 52.8% in the first six months of 2024.

United States R&D Expenses

R&D expenses relating to our United States segment in the first six months of 2025 were $306 million, a decrease of 5%, compared to $324 million in the first six months of 2024.

For a description of our R&D expenses in the first six months of 2025, see “—Teva Consolidated Results—Research and Development (R&D) Expenses” below.

United States S&M Expenses

S&M expenses relating to our United States segment in the first six months of 2025 were $552 million, an increase of 4%, compared to $530 million in the first six months of 2024.

United States G&A Expenses

G&A expenses relating to our United States segment in the first six months of 2025 were $208 million, an increase of 8%, compared to $193 million in the first six months of 2024.

United States Profit

Profit from our United States segment in the first six months of 2025 was $1,239 million, an increase of 27%, compared to $979 million in the first six months of 2024.

Europe Segment

The following table presents revenues, expenses and profit for our Europe segment for the six months ended June 30, 2025 and 2024:

Europe Revenues

Our Europe segment includes the European Union, the United Kingdom, and certain other European countries.

Revenues from our Europe segment in the first six months of 2025 were $2,492 million, an increase of $7 million, compared to the first six months of 2024. In local currency terms, revenues increased by 1% compared to the first six months of 2024.

The following table presents revenues for our Europe segment by major products and activities for the six months ended June 30, 2025 and 2024:

Europe Gross Profit

Gross profit from our Europe segment in the first six months of 2025 was $1,374 million, a decrease of 3% compared to $1,415 million in the first six months of 2024.

Gross profit margin for our Europe segment in the first six months of 2025 decreased to 55.2% compared to 56.9% in the first six months of 2024.

Europe R&D Expenses

R&D expenses relating to our Europe segment in the first six months of 2025 were $120 million, an increase of 2% compared to $118 million in the first six months of 2024.

Europe S&M Expenses

S&M expenses relating to our Europe segment in the first six months of 2025 were $427 million, an increase of 6% compared to $403 million in the first six months of 2024.

Europe G&A Expenses

G&A expenses relating to our Europe segment in the first six months of 2025 were $135 million, an increase of 4% compared to the first six months of 2024.

Europe Profit

Profit from our Europe segment in the first six months of 2025 was $693 million, a decrease of 9% compared to $764 million in the first six months of 2024.

International Markets Segment

The following table presents revenues, expenses and profit for our International Markets segment for the six months ended June 30, 2025 and 2024:

International Markets Revenues

Our International Markets segment includes all countries in which we operate other than the United States and the countries included in our Europe segment.

Revenues from our International Markets segment in the first six months of 2025 were $1,077 million, a decrease of $113 million, or 9%, compared to the first six months of 2024. In local currency terms, revenues decreased by 6% compared to the first six months of 2024.

In the first six months of 2025, revenues were negatively impacted by exchange rate fluctuations of $47 million including hedging effects, compared to the first six months of 2024. Revenues in the first six months of 2025 included a negative hedging impact of $23 million compared to a negative hedging impact of $1 million in the first six months of 2024, which are included in “Other” in the table below. See note 8d to our consolidated financial statements.

The following table presents revenues for our International Markets segment by major products and activities for the six months ended June 30, 2025 and 2024:

AJOVY revenues in our International Markets segment in the first six months of 2025 were $48 million, compared to $39 million in the first six months of 2024. This increase was mainly due to growth in existing markets in which AJOVY was launched.

International Markets Gross Profit

Gross profit from our International Markets segment in the first six months of 2025 was $521 million, compared to $583 million in the first six months of 2024. This decrease was mainly due to a negative hedging impact, as well as regulatory price reductions and generic competition tooff-patented products in Japan.

Gross profit margin for our International Markets segment in the first six months of 2025 was 48.4%, compared to 49.0% in the first six months of 2024.

International Markets R&D Expenses

R&D expenses relating to our International Markets segment in the first six months of 2025 were $49 million, a decrease of 15% compared to $58 million in the first six months of 2024.

International Markets S&M Expenses

S&M expenses relating to our International Markets segment in the first six months of 2025 were $232 million, a decrease of 12% compared to $263 million in the first six months of 2024.

International Markets G&A Expenses

G&A expenses relating to our International Markets segment in the first six months of 2025 were $72 million, a decrease of 1% compared to $73 million in the first six months of 2024.

International Markets Profit

Profit from our International Markets segment in the first six months of 2025 was $171 million, a decrease of 10%, compared to $190 million in the first six months of 2024.

Other Activities

We have other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and anout-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not included in our United States, Europe or International Markets segments described above.

On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale. The intention to divest is in alignment with our Pivot to Growth strategy. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all. For further information, see note 2 to our consolidated financial statements.

Our revenues from other activities in the first six months of 2025 were $438 million, a decrease of 8% in both U.S. dollars and local currency terms, compared to the first six months of 2024.

API sales to third parties in the first six months of 2025 were $265 million, a decrease of 5% in both U.S. dollars and local currency terms compared to the first six months of 2024.

Teva Consolidated Results

Revenues

Revenues in the first six months of 2025 were $8,067 million, an increase of 1% compared to the first six months of 2024. In local currency terms, revenues increased by 2%, compared to the first six months of 2024. This increase was mainly due to an increase in revenues from our key innovative products AUSTEDO, AJOVY and UZEDY, partially offset by a decrease in revenues from certain other innovative products and lower revenues from generic products in our International Markets segment associated with the divestment of our business venture in Japan, as well as in our U.S. segment.

See “—United States Revenues,” “—Europe Revenues,” “—International Markets Revenues” and “—Other Activities” above.

Exchange rate movements during the first six months of 2025, net of hedging effects, negatively impacted revenues by $53 million, compared to the first six months of 2024. See note 8d to our consolidated financial statements.

Gross Profit

Gross profit in the first six months of 2025 was $3,979 million, an increase of 5% compared to the first six months of 2024.

Gross profit margin was 49.3% in the first six months of 2025, compared to 47.5% in the first six months of 2024.

Research and Development (R&D) Expenses, net

R&D expenses, net in the first six months of 2025 were $490 million, a decrease of 4% compared to the first six months of 2024.

R&D expenses, net as a percentage of revenues were 6.1% in the first six months of 2025, compared to 6.4% in the first six months of 2024.

Selling and Marketing (S&M) Expenses

S&M expenses in the first six months of 2025 were $1,276 million, an increase of 1% compared to the first six months of 2024.

S&M expenses as a percentage of revenues were 15.8% in the first six months of 2025 and 2024.

General and Administrative (G&A) Expenses

G&A expenses in the first six months of 2025 were $603 million, an increase of 7% compared to the first six months of 2024.

G&A expenses as a percentage of revenues were 7.5% in the first six months of 2025, compared to 7.0% in the first six months of 2024.

Intangible Asset Impairments

We recorded expenses of $163 million for identifiable intangible asset impairments in the first six months of 2025, compared to expenses of $141 million in the first six months of 2024. See note 5 to our consolidated financial statements.

Goodwill Impairment

No goodwill impairment charges were recorded in the first six months of 2025, compared to a goodwill impairment charge of $400 million related to Teva’s API reporting unit recorded in the first six months of 2024. See note 6 to our consolidated financial statements.

Other Asset Impairments, Restructuring and Other Items

We recorded expenses of $210 million for other asset impairments, restructuring and other items in the first six months of 2025, compared to expenses of $954 million in the first six months of 2024. See note 12 to our consolidated financial statements.

Legal Settlements and Loss Contingencies

We recorded expenses of $252 million in legal settlements and loss contingencies in the first six months of 2025, compared to expenses of $188 million in the first six months of 2024. See note 9 to our consolidated financial statements.

Other Income (Loss)

Other loss in the first six months of 2025 was $9 million, compared to other income of $1 million in the first six months of 2024.

Operating Income (Loss)

Operating income was $975 million in the first six months of 2025, compared to an operating loss of $223 million in the first six months of 2024.

Operating income as a percentage of revenues was 12.1% in the first six months of 2025, compared to an operating loss as a percentage of revenues of 2.8% in the first six months of 2024.

Financial Expenses, Net

In the first six months of 2025, financial expenses, net were $477 million, mainly comprised ofnet-interest expenses of $415 million. In the first six months of 2024, financial expenses, net were $491 million, mainly comprised ofnet-interest expenses of $466 million.

Reconciliation Table to Consolidated Income (Loss) Before Income Taxes

The following table presents a reconciliation of our segment profits to our consolidated operating income (loss) and to consolidated income (loss) before income taxes for the six months ended June 30, 2025 and 2024:

Income Taxes

In the first six months of 2025, we recognized a tax benefit of $4 million, onpre-tax income of $497 million. In the first six months of 2024, we recognized a tax expense of $578 million, onpre-tax loss of $713 million. See note 11 to our consolidated financial statements.

Net Income (Loss) Attributable tonon-controlling interests

Net income attributable to redeemable andnon-redeemable non-controlling interests was $6 million in the first six months of 2025, compared to a net loss attributable to redeemable andnon-redeemable non-controlling interests of $309 million in the first six months of 2024. The net loss in the first six months of 2024 was mainly due to higher impairments of tangible assets, largely related to the classification of our business venture in Japan as held for sale. See note 12 to our consolidated financial statements.

Net Income (Loss) Attributable to Teva

Net income attributable to Teva was $497 million in the first six months of 2025, compared to a net loss of $985 million in the first six months of 2024.

Diluted Shares Outstanding and Earnings (Loss) per Share

The weighted average diluted shares outstanding used for the fully diluted share calculations for the six months ended June 30, 2025 and 2024 was 1,159 million shares and 1,128 million shares, respectively.

Diluted earnings per share was $0.43 for the six months ended June 30, 2025, compared to diluted loss per share of $0.87 for the six months ended June 30, 2024. See note 13 to our consolidated financial statements.

Impact of Currency Fluctuations on Results of Operations

In the first six months of 2025, approximately 46% of our revenues were denominated in currencies other than the U.S. dollar. Because our results are reported in U.S. dollars, we are subject to significant foreign currency risks and, accordingly, changes in the exchange rate between the U.S. dollar and local currencies in markets in which we operate (primarily the euro, British pound, Swiss franc, Russian ruble, Canadian dollar, new Israeli shekel, Polish złoty, Japanese yen and Swedish krona) impacted our results.

During the first six months of 2025, the following main currencies relevant to our operations increased in value against the U.S. dollar: Russian ruble by 4%, Swedish krona by 3%, Swiss franc by 3%, Polish złoty by 3%, new Israeli shekel by 3%, British pound by 2% and Japanese Yen by 2% (all compared on asix-month average basis). The following main currencies relevant to our operations decreased in value against the U.S. dollar: Argentine peso by 22%, Turkish lira by 16%, Mexican peso by 14%, Brazilian real by 12%, Ukraine hryvna by 6%, Canadian dollar by 4% and Indian rupee by 3%.

As a result, exchange rate movements during the first six months of 2025, net of hedging effects, negatively impacted overall revenues by $53 million and our operating income by $51 million, compared to the first six months of 2024.

In the first six months of 2025, a negative hedging impact of $60 million was recognized under revenues, and a positive hedging impact of $3 million was recognized under cost of sales. In the first six months of 2024, a positive hedging impact of $10 million was recognized under revenues and a negative hedging impact of $6 was recognized under cost of sales.

Hedging transactions against future projected revenues and expenses are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. See note 8d to our consolidated financial statements.

2025 Aggregated Contractual Obligations

There have not been any material changes in our assessment of material contractual obligations and commitments as set forth in Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024.

Liquidity and Capital Resources

Total balance sheet assets were $40,131 million as of June 30, 2025, compared to $39,326 million as of December 31, 2024.

Our working capital balance, which includes accounts receivables net of SR&A, inventories, prepaid expenses and other current assets, accounts payables, employee-related obligations, accrued expenses and other current liabilities, was negative $2,446 million as of June 30, 2025, compared to negative $2,837 million as of December 31, 2024. This increase was mainly due to higher inventory levels primarily due to exchange rate fluctuations, and an increase in accounts receivables, net of SR&A, as well as a decrease in employee related obligations mainly due to performance incentive payments to employees for 2024, partially offset by an increase in accounts payables and accrued expenses primarily due to exchange rate fluctuations.

Employee-related obligations, as of June 30, 2025 were $481 million, compared to $624 million as of December 31, 2024. The decrease in the first six months of 2025 was mainly due to performance incentive payments to employees for 2024, partially offset by an accrual for performance incentive payments to employees for 2025.

Cash investment in property, plant and equipment and intangible assets in the second quarter of 2025 was $96 million, compared to $97 million in the second quarter of 2024. Depreciation in the second quarter of 2025 was $103 million, compared to $113 million in the second quarter of 2024.

Cash and cash equivalents as of June 30, 2025, were $2,161 million, compared to $3,300 million as of December 31, 2024. See also the statement of cash flow to our consolidated financial statements.

In the first quarter of 2025, we paid a dividend of $340 million to redeemablenon-controlling interests in our business venture in Japan.

Our cash on hand that is not used for ongoing operations is generally invested in bank deposits as well as liquid securities that bear fixed and floating rates.

Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily our $1.8 billion unsecured syndicated sustainability-linked revolving credit facility, entered into in April 2022, as amended in February 2023 and in May 2024 (“RCF”). See note 7 to our consolidated financial statements.

Debt Balance and Movements

As of June 30, 2025, our debt was $17,227 million, compared to $17,783 million as of December 31, 2024. This decrease was mainly due to repayment at maturity of $1,368 million of our senior notes (as detailed below), partially offset by $780 million of exchange rate fluctuations. Additionally, during the second quarter of 2025, we repurchased $2,290 million aggregate principal amount of notes upon consummation of a cash tender offer, and issued $2,305 million of senior notes, net of discount and issuance costs. For further information, see note 7 to our consolidated financial statements.

In January 2025, we repaid $426 million of our 6% senior notes at maturity.

In January 2025, we repaid $427 million of our 7.13% senior notes at maturity.

In March 2025, we repaid $515 million of our 4.50% senior notes at maturity.

In July 2025, we repaid $444 million of our 1% senior notes at maturity.

As of June 30, 2025, our debt was effectively denominated in the following currencies: 55% in U.S. dollars, 42% in euros and 3% in Swiss francs.

The portion of total debt classified as short-term as of June 30, 2025 was 3% compared to 10% as of December 31, 2024.

Our financial leverage, which is the ratio between our debt and the sum of our debt and equity, was 72% as of June 30, 2025, compared to 77% as of December 31, 2024. Our average debt maturity was approximately 5.95 years as of June 30, 2025, compared to 5.5 years as of December 31, 2024.

Total Equity

Total equity was $6,834 million as of June 30, 2025, compared to $5,380 as of December 31, 2024. This increase was mainly due to a positive impact from exchange rate fluctuations of $694 million and a net income attributable to Teva of $497 million.

Exchange rate fluctuations affected our balance sheet, as approximately 80% of our net assets as of June 30, 2025 (including both monetary andnon-monetary assets) were in currencies other than the U.S. dollar. When compared to December 31, 2024, changes in currency rates as of June 30, 2025 had a positive impact of $694 million on our equity. The following main currencies increased in value against the U.S. dollar: Russian ruble by 29%, Polish złoty by 12%, Swiss franc by 12%, Bulgarian lev by 11%, euro by 11%, Mexican peso by 9%, British pound by 9% and Japanese yen by 8%. All comparisons are on ayear-to-date basis.

Cash Flow

We continually seek to improve the efficiency of our working capital management. Periodically, as part of our cash and commercial relationship management activities, we make decisions in our commercial and supply chain activities which drive an acceleration of receivable payments from customers, or deceleration of payments to vendors. This has the effect of increasing or decreasing cash from operations during any given period. Increased cash from operations has the effect of reducing our leverage ratio, which is measured net of cash and cash equivalents, as of the end of such period. In connection with strategic continual improvement, we obtained more favorable payment terms from many of our vendors which are expected to continue in future periods. In addition, in periods in which receivable payments from customers are delayed, we have and expect we may in the future extend the time to pay certain vendors, so as to balance our liquidity position. Such decisions have had and may in the future have a material impact on our annual operating cash flow measurement, as well as on our quarterly results.

Cash flow generated from operating activities during the second quarter of 2025 was $227 million, compared to $103 million of cash flow generated from operating activities in the second quarter of 2024. The higher cash flow generated from operating activities in the second quarter of 2025 resulted mainly from higher profit in our U.S. segment, and a positive impact from accounts receivables, net of SR&A mainly due to collection timing, partially offset by higher sequential inventory levels, as well as higher tax payments.

During the second quarter of 2025, we generated free cash flow of $476 million, which we define as comprising $227 million in cash flow generated from operating activities, $336 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $9 million of proceeds from divestitures of businesses and other assets, partially offset by $96 million in cash used for capital investment. During the second quarter of 2024, we generated free cash flow of $324 million, which we define as comprising $103 million in cash flow generated from operating activities, $317 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $1 million in divestitures of businesses and other assets, partially offset by $97 million in cash used for capital investment. The increase in the second quarter of 2025 resulted mainly from higher cash flow generated from operating activities.

Dividends

We have not paid dividends on our ordinary shares or American Depositary Shares (ADSs) since December 2017.

Commitments

In addition to financing obligations under short-term debt and long-term senior notes and loans, debentures and convertible debentures, our major contractual obligations and commercial commitments include leases, royalty payments, contingent payments pursuant to acquisition agreements, collaboration agreements, development funding agreements and participation in joint ventures associated with R&D activities. For further information on our agreements with mAbxience, Launch Therapeutics and Abingworth, Biolojic Design, Royalty Pharma, Sanofi, Modag, Alvotech, Takeda and MedinCell, see note 2 to our consolidated financial statements.

We are committed to paying royalties to owners ofknow-how, partners in alliances and certain other arrangements, and to parties that financed R&D at a wide range of rates as a percentage of sales of certain products, as defined in the agreements. In some cases, the royalty period is not defined; in other cases, royalties will be paid over various periods not exceeding 20 years.

In connection with certain development, supply and marketing, and research and collaboration or services agreements, we are required to indemnify, in unspecified amounts, the parties to such agreements against third-party claims relating to (i) infringement or violation of intellectual property or other rights of such third party; or (ii) damages to users of the related products. Except as described in our financial statements, we are not aware of any material pending action that may result in the counterparties to these agreements claiming such indemnification.

Non-GAAP Net Income and Non-GAAP EPS Data

We presentnon-GAAP net income andnon-GAAP earnings per share (“EPS”) as management believes that such data provide useful information to investors because they are used by management and our Board of Directors, in conjunction with other performance metrics, to evaluate our operational performance, to prepare and evaluate our work plans and annual budgets and ultimately to evaluate the performance of management, including annual compensation. While other qualitative factors and judgment also affect annual compensation, the principal quantitative element in the determination of such compensation are performance targets tied to the work plan, which are based on thesenon-GAAP measures.

Non-GAAP financial measures have no standardized meaning and accordingly have limitations in their usefulness to investors. Investors are cautioned that, unlike financial measures prepared in accordance with U.S. GAAP, non-GAAP measures may not be comparable with the calculation of similar measures for other companies. Thesenon-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses our performance. The limitations of usingnon-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all events during a period and may not provide a comparable view of our performance to other companies in the pharmaceutical industry. Investors should considernon-GAAP net income andnon-GAAP EPS in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.

In preparing ournon-GAAP net income andnon-GAAP EPS data, we exclude items that either have anon-recurring impact on our financial performance or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not excluded, potentially cause investors to extrapolate future performance from an improper base that is not reflective of our underlying business performance. Certain of these items are also excluded because of the difficulty in predicting their timing and scope. The items excluded from ournon-GAAP net income andnon-GAAP EPS include:

The following tables present ournon-GAAP net income andnon-GAAP EPS for the three and six months ended June 30, 2025 and 2024, as well as reconciliations of each measure to their nearest GAAP equivalents:

Off-Balance Sheet Arrangements

We do not have any materialoff-balance sheet arrangements, except for: (i) surety underwritten guarantees Teva has provided the European Commission in an amount of euro 462.2 million, together with specified post-decision interest, which remain in force for three years, and which includes substantially similar covenants as our RCF, as disclosed in note 10 to our consolidated financial statements, and (ii) securitization transactions, which are disclosed in note 10f to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Critical Accounting Policies

For a summary of our significant accounting policies, see note 1 to our consolidated financial statements and “Critical Accounting Policies” included in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recently Issued Accounting Pronouncements

See note 1 to our consolidated financial statements.