Ladies and gentlemen, thank you for standing by, and welcome to today’s Teva Pharmaceutical First Quarter 2020 Financial Results. At this time all participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. [Operator Instructions] I must advise you that this conference is being recorded today and without any further delay I would now like to hand the conference over to presenter today Kevin Mannix, Senior Vice President and Head of Investor Relations. Please go ahead sir.

Thank you operator and thank you, everyone, for joining us today to discuss Teva’s first quarter 2020 financial results. On the call with me are Kare Schultz, Teva’s Chief Executive Officer, Eli Kalif; Chief Financial Officer and Brendan O’Grady; Teva's Head of North America Commercial.We hope you have had an opportunity to review our earnings press release, which was issued just an hour ago. A copy of the release as well as a copy of the slides being presented on this call can be found on our website at www.tevapharm.com as well as through our Teva Investor Relations app.Please note that the discussion on today’s call includes certain non-GAAP measures, as defined by the SEC. Management uses both GAAP financial measures and the disclosed non-GAAP financial measures internally to evaluate and manage the Company’s operations to better understand its business.Further, management believes the inclusion of non-GAAP financial measures provides meaningful supplementary information and facilitates analysis by investors in evaluating the Company’s financial performance, results of operations and trends. A reconciliation of GAAP to non-GAAP measures is available in our earnings release and in today’s presentation.To begin today’s call, Kare and Eli will provide an overview of the first quarter performance, recent events, and priorities going forward. This will be followed by question-and-answer session. Today’s call which will run approximately one hour is being webcast live and recorded. You will be able to replay the call and view the transcript on Teva Investor Relations website.And with that I will now turn the call over to Kare Schultz. Kare if you would please.

Thanks Kevin. Welcome to all of you and thank you for your interest in our company. I hope you are all safe no matter where you might be. Before I go into the financials for the first quarter I just like to address Teva's response to COVID-19. I have chosen to give you some insights into the four elements where we have been focusing business continuity, sourcing and production, our employees and our communities.It's been paramount force to secure business continuity not just because of the need of the business but also because of the need of around 200 million patients that we serve in essential medicines every day. We have also wanted to minimize the impact on our R&D programs and secure that we could progress towards new product launches.In the process of keeping our commercial upgradation going we have been seeing a lot of digital instruments being implemented. We have been instrumental in doing a lot of E-detailing different new ways of communication in order to keep the sales force effective. I’m also had to report that we have not been seeing any job losses related to COVID-19. We have kept everything operational.A big part of our operation is of course sourcing and production. I am happy to report that all facilities remain open to meet the demand for our essential medicines. I would like to thank all our employees for the fantastic job they have been doing securing that we could stay operational in all of our facilities in this very challenging times. We do have adequate inventories of raw materials and finished products across our global network to live up to the demand from our customers and we have been able despite many difficulties to secure safe supply chain for our medicines and we basically had…

Thank you Kare and good morning and afternoon to everyone. These are indeed very extreme times that we are living and operating in to say the least. I hope that you are safe and healthy. We do have a lot to cover and I want to leave as much time as possible to take your questions. So let's get started.On slide 14, we highlight Teva's GAAP results including GAAP net income of $69 million and earnings per share on a GAAP basis of $0.06 for the first quarter of 2020. Our year-over-year improvement in our GAAP result was the result of an increase in gross profit and higher sales, lower operating expenses, legal settlements, shareholder tax benefit and minority and share in the profit offset by increased in impairments and restructuring charges.Turning to slide 15. I will detail the impairment, restructuring and other charges which totaled almost $770 million for the quarter. Impairment of a long live intangible assets accounting for the majority of the non-GAAP adjustments with $649 million in the first three months of 2020. This include impairment of the process R&D assets totaling $331 million mainly related to AUSTEDO for the treatment of Tourette syndrome in pediatric patients.Also included was the impairment of identified product rights of $318 million mainly due to the Japan in connection with ongoing regulatory pricing reduction and generic competition and updated market assumption regarding price and volume of certain generic products for early market in the United States. Amortization was $258 million for the first quarter which is right within the range of $250 million to $260 million per quarter that I guided during February.Turning to Slide 16. We review our non-GAAP performance. Quarterly revenues were approximately $4.4 billion, up 5% compared to Q1, 2019. The year-over-year increase was driven mainly by…

Thank you. [Operator Instructions] Your first question comes from the line from Kevin Caliendo, your line is now open.

Hi, thanks for taking my call. I had a couple of questions. Was there any stocking of the auto-injector in 1Q that may have impacted sales for the product?

So thank you Kevin for that question. I think the answer is quite very brief. No, there was not, so there's no financial impact in the first quarter results of stocking of the auto-injector into the market and the simple explanation is that it was not available because it wasn't approved yet. So we were not sort of really shipping it in the first quarter. So we hope of course to see a nice uptake of the product here in the second quarter and but there was no effect in the first quarter.

That's great.

Thank you. We need to stay with one question. Thank you very much. Please reenter the queue. Thank you. Your next question comes from the line from Akash Tewari. Your line is now open. Please ask your question.

Hi, this is [Andrew] on for Akash. So first I noticed TRx for the Gx business initially went up during COVID and then took a significant turn down over the last few weeks. That said on a relative basis it seems like Teva’s volumes haven't fallen to the same degree as Sandoz or Milan. Do you have any color on what's occurring here and what types of Gx portfolios and drug categories are being less impacted by COVID. And then secondly can you give any color on how COVID is impacting your Gx supply chain? Are you seeing any increased inventory [holding] or any cases of drug shortages yet? I know that you saw some significant inventory consumption which affected cash flow in the quarter. Thanks.

So I can't really comment on the other companies and their situation. I haven't really looked into that. I must admit. But I can tell you that, we did see in March a couple of weeks where there was very strong generics demand and OTC demand in Europe especially in Europe. And we then saw it revert back to levels that are slightly below the norm. You could say it's nothing a dramatic and it's very different from individual product to individual product. Just to give you a feel for it, we have some products. Now I'm just mentioning something, of course we have many thousand products, 20,000 different parts but the category of respiratory products for instance we see a steady increase demand of respiratory products in the U.S. and in some of the European markets but in some European markets we don't see it.In some European markets, governments made limitations to how many scripts you could go and fill at the pharmacy. In some markets they didn't. So it's really a very, very mixed bag situation. I would say overall for us we did probably see some extra patient level demand in Q1 especially in March, I do expect that we will see a somewhat reversal of some of that demand here in the Q2. It's not really dramatic but it's the way the swing factor will be to the extent there is one but probably maybe other companies have seen it more significant.

Thank you.

Thank you. Your next question comes from the line from Randall Stanicky. Your line is now open.

Great. Thanks, Kare, sounds like that the [$5.3 billion] to $5.8 billion range, EBITDA range for 2023 is on track. You've got past the COGS restructuring the two primary things going for the COGS improvement and the revenue opportunity. COGS is pretty clear. Revenue is less clear. You've pointed to biosimilars as a big part of this. Can you walk through how we should think about quantifying that opportunity over the next three years? Is there a $500 million opportunity from the pipeline here, $2 billion, $1 billion, how do you, how should we think about the support from biosimilars to your revenue? Why? Thank you.

Yes. So the elements, you could say unchanged but the dynamics are different. So if we talk about -- I totally agree with you that our gross margin optimization project or the COGS that's really very much in our own control. We are working diligently on it. I think there's a very high likelihood that just like we succeeded with the restructuring, we will succeed with this margin improvement program. So that then leaves the revenue to be the key question and what I've said is I'm confident that we've seen a trough also for the revenue that's not the same to say that we will see dramatic increases in revenue. I never said that but we will see single-digit increase in revenue and then you might ask what's the dynamics behind it and sorry for repeating but they're really a couple of elements here.On the specialty side you have COPAXONE that will keep on declining but at a much slower pace than what you saw before. So we are now down, we saw the guidance $1.5 billion on COPAXONE that number in the coming years will slowly come down. For now we have a good strong patent position in Europe which is maintaining a nice level there. We have generic competition in the U.S. but we have stabilization there. So we all know we see a modest decline in COPAXONE going forward. Now that decline has to be balanced by the growth in AUSTEDO and AJOVY combined.And we believe we've come to the point now where the growth in AUSTEDO and AJOVY this year will be higher than the decline in COPAXONE and that dynamic will continue in the coming years. So if you believe in that then you could say then the rest of the business which is…

Thank you. The next question comes from the line from David Amsellem. Please ask your question.

Hi everyone this is [Zach] on for David. Thank you for taking my question. Just a quick one for me. Would you mind providing an update on the generic Forteo and NuvaRing filings and your latest thoughts on potential launch timing and specifically on the Forteo generic, do you think that the Phoenix product will ultimately be substitutable? Thank you.

Thanks for that question. I will hand that over to Brendan since it's a U.S. specific question. Brendan O’Grady: Yes. Thank you, Kare. And so I'll take Forteo first. So as you all know, Forteo is a complex generic product. We continue to work with the FDA on the product it continues to progress. We expect Forteo could be possible later this year or early next year. We'll see where that heads regards to the other product they've applied for an AB rating on the product. We'll see how long that takes and where that progresses. I can't really comment on that because I don't know where that company is with that. It's possible they could get it. It's also quite possible we could launch prior to that. So we'll see where that goes. In regards to NuvaRing we're progressing and working through the final stages with FDA. So as soon as that product is approved we will be operationally ready to launch.

Great. Thank you.

Thanks for the question.

Thank you. The next question comes from the line from Umer Raffat. Your line is now open.

Hi, thanks so much for taking my question. I just wanted to ask about the gross to net and what's being baked into guidance especially considering, I would have thought AUSTEDO probably gets a lot of growth and an expansion into the balance of the year Kare and also I saw Amgen report Aimovig down quarter-over-quarter in 1Q but it doesn't seem like that happened for AJOVY. So I'm just trying to understand the growth and dynamic what you're seeing and also what you're assuming given the higher unemployment and more Medicaid. Thank you very much.

Thanks for that question. So we're basically not seeing any dramatic changes on the gross to net. We do sometimes in a quarter have small adjustments on specific products based on prior period adjustments and things like that. We have not seen anything dramatic here in the first quarter. We're not expecting to see any major changes going forward. As you know we have quite a number of products that are in the Medicaid space and we see a pretty stable situation there and also for Medicare. So I would say that our gross to net expectations apart from the changes in contracting which of course we bake into the outlook all the time so whenever we enter new contracts we calculate that into our gross to net predictions but apart from that we're not seeing any dramatic changes.

Thank you. Your next question comes from the line from Louise Chen. Your line is now open.

Hi, thanks for taking the questions. This is [Jen] came on for Louise. I'm wondering what's the latest update on the opioid litigation? Do you still expect track 2 this year or do you expect any impacts or delays from COVID-19?

So on the opioid litigation we're still working actively with the AGs on the framework that we agreed with them last year. We are seeing a delay due to the COVID-19 both in the sense that the work go slower because everybody's at home but also because you could say in these kind of matters often when there's a trial approaching that's a trigger for people to get the work done so to speak and as I'm sure you're aware the New York trial that was the first upcoming trial, state trial that has been delayed. So I think it's fair to assume that we'll see a delay. I do hope that we will reach a final firm settlement based on the framework agreement. This will be to the benefit of the U.S. public and to people who suffer from substance abuse. So I'm still optimistic that will be the case but it will definitely be delayed.

Thank you.

Thank you for the question.

Thank you. Your next question comes from the line from Gary Nachman. Your line is now open.

Hey, this is Alice on for Gary. Thanks for taking the question. Just a quick one on AUSTEDO. How much of the priority is it to add additional indications to the pipeline for that? And are you considering an eventual international expansion for the product at all?

Sorry, I couldn't completely hear you. Could you try to repeat the question. Your line is not so clear. Just repeat the question please.

Yes. For AUSTEDO how much of a priority that add additional indications to that and are you considering eventual international expansion for that product?

Okay. Thank you. Now I hear. So indication expansion and international sales. So yes, we are considering both. Of course we had a disappointment as you know in the first quarter that we were looking for an indication into it and that did not work out. So we are still considering whether we can expand the indications. We're also looking as to whether we would be able to launch the product in other markets. Right now we are working actively on Japan and China looking to see if there's a chance of launching there and we have filed in China. So we are optimistic that that might be possible. So we are still pursuing international expansion of AUSTEDO. I don't know Brendan, if you want to comment on how you see the U.S. in terms of the new indications. Brendan O’Grady: Yes, of course anytime you get a new indication to a medicine it can drive revenue and ultimately drive profits but just to think about AUSTEDO today, there's still a significant opportunity in both Huntington's disease as well as tardive dyskinesia. The population of tardive dyskinesia is only maybe 10% to 15% treated. So there's significant upside there. So that's certainly our focus today but other indications associated with movement disorder would provide further growth for us.

Thanks for the question.

Yes. Thank you.

Thank you. The next question comes from the line from Ami Fadia. Your line is now open.

Hi, good morning. Thanks for taking my question. Can you provide some thoughts on the feasibility of pre-gained manufacturing back to the U.S. for certain essential products and how are you thinking about this in the context of Teva?And then, just a follow-up from an earlier question with regards to AJOVY with the availability of the auto-injector. Do you anticipate an expansion in gross to net with maybe some revised contracting? Thank you.

So, that was an elegant way of getting two questions into, that’s fine. So, the manufacturing discussion. It is of course at the end of the day a political decision. It's a fact that API manufacturing has moved out of the U.S. over the last 10 to 15 years and has basically no real API manufacturing left in the U.S.The same thing goes for the early stage raw materials, starting materials that also produced not in the U.S. a big majority of this products have their raw materials or API produced in China. In our case, we have an API network where we have some manufacturing and raw materials coming from China.We have a quite a large part coming from Europe where we have a network of some 15 manufacturing sites. This API manufacturing should be brought back to the U.S., then it would of course take some kind of preferential treatment from a political point-of-view simply due to the fact that manufacturing cost in the U.S. are higher than they are in China and in India.And that means that nobody can be competitive if you move the production back to the U.S. unless you get preferential treatment by the buyers, be it the government or be it the customers. What we're doing at Teva is we are trying to secure a very sustainable safe supply chain.So, we have a lot of our finished product being manufactured in the U.S. we have a lot of our API being manufactured in Europe in our factories there. So, we believe we have a very safe and supply chain. Of course, we try to persuade our customers that there's a value to that.But it's up to the customers whether they want to pay for the extra supply chain security or not. You could…

Thank you for the question.

Thank you.

Thank you. The next question comes from the line from Elliot Wilbur. Your line is now open.

Thanks, good morning, good afternoon. Just sticking with CGRP same question for Kare, for Brendan as well. Maybe just some initial color commentary on how the introduction on the orals has impacted this space. Seems to be largely a market expansive dynamic at this point.But just want to see if you would agree with that observation. And then more specifically, I know it's still relatively early here but there was a recent labeling change to one of the products in the category Aimovig with the addition of hypertension morning, it does not seem to be insignificant.Just wondering if you guys have had a chance to assess that and how you think that may impact market dynamics. Thanks.

Thanks for the question. I will comment briefly and then Brendan can also chip in. so, in terms of the orals, we don’t really see any impact in the overall market. We have to remember that it's really two different say treatment modalities.1) Is preventive therapy, in our case within an injection every third month or every month which you really take to reduce the number of migraine attacks. And on average, you get a reduction of 50%, in some cases up to 90% or a 100%. So, it's a really beneficial therapy for anybody who suffers from migraine to the extent of chronic migraine four days or more a month.The oral products are acute in connection with the attack. So, you could say it's really two different situations and I think that everybody who suffers from migraine to the level of four days or more, they definitely want to avoid the attacks if they can no matter how they can treat them.So, it's probably more of a comparative situation for the different acute therapies that these products might gain some share there. But it doesn't seem to impact the overall preventive market. And on the labeling, I have not heard anything about this issue with regards to AJOVY. But I'll just hand it over to Brendan to hear what comments you have. Brendan? Brendan O’Grady: Yes, thank you Kare. So, I'll talk about the orals fist so. I agree Kare with obviously with what you said. I think that it is somewhat two different markets.If you think about migraine or if you know migraine patients, depending upon severity of the migraine, I think that these could be potentially additive products in your assumption that this is probably going to create market expansion, I think is correct.We'll see it's still early days but of course one's more acute and the other is more prevention. So, like I said we'll see how that goes. In regards to Aimovig's labeling change, of course, if you think about AJOVY, almost prevalent side effect is a report in our label as injection side reaction which tends to be pretty mild and transient.So, I think that that's good and I think that overall now with AJOVY in the marketplace. And of course we have the prefilled syringe which many physicians and patients wanted to make sure that we would keep in the market with the launch of auto-injector which we are going to continue to do.So, we have both of those offerings, we have a very good safety profile, a very good efficacy profile. And of course, the ability to offer quarterly dosing. So, we do think that we have a very competitive offering in the marketplace. And we'll see what impact the label change with Aimovig has.

Thanks for the question.

Thank you. The next question comes from the line from Ronny Gal. Your line is now open.

Hi, good morning. Hope you're all keeping safe. Congratulations on the very nice quarter results. I wanted to ask you Kare about the proposal to move some of the market and sure I know you have broadly commented about where your network is.There's now an offer or a proposal being formed that will push a lot of the manufacturing including API I'm sure, on the United States. And some of your peers came out basically arguing medicine not be done that way, be done through a network of international markets. That would be very costly.But it seems that there is an at least in currency swap effort to try to move that. Where does Teva stand on this, are you in favor of shifting manufacturing of API and is there some from the United States, at least then move it require medicine or should we rely on network-friendly countries to do so?

So thanks for that question, Ronny. What you're asking is really a political question. And of course I'm not a politician, I'm just a pharmaceutical executive who manufacture products. So, it's quite clear that the international globalization and competition has led to different parts of value chain being in different countries.So, you could say the raw materials very much in India, in China, API very much in China, India, some of it in Eastern Europe in Europe. And research very much in the U.S. for instance innovated new medicines very much being developed in United States and Europe and in different countries.So, the pharmaceutical business is a globalized value chain. Now, to the extent that politicians wants to secure certain elements of certain manufacturing in their country, that's really a political choice where you weigh economic benefits up against benefits of security of supply and so on.And I don’t have a firm position on what the politician should do but I can tell you that it's impossible to move manufacturing back to the U.S. unless the politician takes some firm political action. Because the comparative drivers of cost and the price competition in generics has led to the current situation.The approval by FDA of 1000s of ANDA's for Chinese and Indian companies, the approval of 100s of factories by FDA has led to the manufacturing moving out of United States. If you want to change that, you I ever have to toughen up on GMPs our environmental standards or simply decide that this is a security issue in-line with procurement of weapons and telecommunications and so on.So, it's really not for me to decide, it is a political decision. Thanks for the question.

Thank you.

Thank you. Ladies and gentlemen, we will now take our last question. And this comes from the line from David Risinger. Your line is now open.

Yes, thanks very much. So, I just wanted to start by saying, Kevin, if it's okay with you, I'd like to consider hiring the call operator given her effective call management to come and work in my household to manage our kids screen time.

Understood.

Anyway. So, my question actually is just on the IQVIA trend. So, what we've seen in the IQVIA gross dollar figures recently is pretty high rate of decline year-over-year in terms of year-over-year trends.Could you just comment on whether we should be looking at those at all, whether those trends are consistent with how you see the business trending in the U.S. year-over-year in sort of the current quarter and any implications for how we should think about forecasting the businesses where we're updating our models. Thank you.

So, thanks for that question, David. And you're right. The efficient operator, make sure you got your question and otherwise I guess you would have been skipped. But just please clarify what IQVIA trend, are you thinking about the volume or specific products or what is you're thinking about?

Sorry, yes. So, with the IQVIA trend that I'm talking about is the gross sales dollars trend which was declining about 40% year-over-year recently according to IQVIA for U.S. generics for Teva.

So, I would say that it's very difficult for us on a quarterly basis to reconcile the IQVIA gross numbers with our actual numbers. And so, I think the best way you can look at it is to look at our reported generic sales in North America and I think I've stated now for two years in a row, eight quarters in a row that we have a run rate of roughly a $1 billion a quarter on North American generics.I don’t see any change to that. So, how this fluctuations end up in the IQVIA and now but I don’t really know but it could be there's something about the gross numbers and the gross to net and so on. As you know there is a very high rebating rates in generics. So, there might be some kind of disconnect there and there might also be a disconnect on what gets reported, what volumes gets actually picked by IQVIA.So, I can just confirm that we are still seeing the North American generics business the same way with a run rate of around a $1 billion a quarter plus or minus, and then there's really no change in that. But I agree with you, it's difficult to reconcile the IQVIA numbers with our actual numbers.So, with that I'd like to thank everybody who listened in and wish you a nice and safety. Thank you.

Thank you ladies and gentlemen. That does conclude our conference for today. To listen to the replay of this conference, please dial 0044 3333 009785 and enter the conference ID 973 5219. Thank you for participating. You may now all disconnect.