ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Not Applicable | ||
(State or other jurisdiction of incorporation or organization) |
( loyerIdentification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
Page |
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1 |
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1 |
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PART I |
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Item 1. |
2 |
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Item 1A. |
26 |
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Item 1B. |
50 |
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Item 2. |
51 |
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Item 3. |
51 |
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Item 4. |
51 |
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PART II |
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Item 5. |
51 |
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Item 6. |
52 |
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Item 7. |
53 |
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Item 7A. |
82 |
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Item 8. |
85 |
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Item 9. |
168 |
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Item 9A. |
168 |
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Item 9B. |
169 |
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Item 9C. |
169 |
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PART III |
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Item 10. |
169 |
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Item 11. |
169 |
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Item 12. |
169 |
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Item 13. |
169 |
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Item 14. |
169 |
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PART IV |
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Item 15. |
170 |
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Item 16. |
175 |
• | our ability to successfully compete in the marketplace, including: that we are substantially dependent on our generic products; consolidation of our customer base and commercial alliances among our customers; delays in launches of new generic products; the increase in the number of competitors targeting generic opportunities and seeking U.S. market exclusivity for generic versions of significant products; our ability to develop and commercialize biopharmaceutical products; competition for our specialty products, including AUSTEDO ® , AJOVY® and COPAXONE® ; our ability to achieve expected results from investments in our product pipeline; our ability to develop and commercialize additional pharmaceutical products; and the effectiveness of our patents and other measures to protect our intellectual property rights; |
• | our substantial indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, may result in a further downgrade of our credit ratings; and our inability to raise debt or borrow funds in amounts or on terms that are favorable to us; |
• | our business and operations in general, including: uncertainty regarding the COVID-19 pandemic and the governmental and societal responses thereto; our ability to successfully execute and maintain the activities and efforts related to the measures we have taken or may take in response to the COVID-19 pandemic and associated costs therewith; effectiveness of our optimization efforts; our ability to attract, hire and retain highly skilled personnel; manufacturing or quality control problems; interruptions in our supply chain; disruptions of information technology systems; breaches of our data security; variations in intellectual property laws; challenges associated with conducting business globally, including political or economic instability, major hostilities or terrorism; costs and delays resulting from the extensive pharmaceutical regulation to which we are subject or delays in governmental processing time due to travel and work restrictions caused by the COVID-19 pandemic; the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; |
significant sales to a limited number of customers; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; and our prospects and opportunities for growth if we sell assets; |
• | compliance, regulatory and litigation matters, including: failure to comply with complex legal and regulatory environments; increased legal and regulatory action in connection with public concern over the abuse of opioid medications and our ability to reach a final resolution of the remaining opioid-related litigation; scrutiny from competition and pricing authorities around the world, including our ability to successfully defend against the U.S. Department of Justice (“DOJ”) criminal charges of Sherman Act violations; potential liability for patent infringement; product liability claims; failure to comply with complex Medicare and Medicaid reporting and payment obligations; compliance with anti-corruption sanctions and trade control laws; environmental risks; and the impact of Environmental, Social and Governance (“ESG”) issues; |
• | other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our intangible assets; potential significant increases in tax liabilities (including as a result of potential tax reform in the United States); and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business; |
ITEM 1. |
BUSINESS |
• | AJOVY (fremanezumab-vfrm) injection is a fully humanized monoclonal antibody that binds to calcitonin gene-related peptide (“CGRP”) and it is indicated for the preventive treatment of migraine in adults. AJOVY was launched in the U.S. in 2018. AJOVY was approved in Canada in April 2020. |
• | During 2019, AJOVY was granted a marketing authorization in the European Union by the European Medicines Agency (“EMA”) in a centralized process and began receiving marketing authorizations in |
various countries in our International Markets segment. AJOVY was launched in Japan in August 2021. By the end of 2021, we launched AJOVY in most European countries and in certain International Markets countries. We are moving forward with plans to launch in other countries around the world. |
• | Our auto-injector device for AJOVY became commercially available in the U.S. in April 2020 and in Canada in April 2021. We have also received approval from the EMA for AJOVY’s auto-injector submission in the European Union in October 2019, and we commenced launch in March 2020. |
• | AJOVY is the only anti-CGRP subcutaneous product indicated for quarterly treatment. |
• | AJOVY is protected by patents expiring in 2026 in Europe and in 2027 in the United States. Applications for patent term extensions have been submitted in various markets around the world, and certain extensions in Europe and other countries have already been granted until 2031. Additional patents relating to the use of AJOVY in the treatment of migraine have also been issued in the United States 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 and 10 years from marketing approval in Europe. |
• | We have 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. Lilly then submitted inter partes review (“IPR”) petitions to the Patent Trial and Appeal Board (“PTAB”), challenging the validity of the nine patents asserted against it in the litigation. The litigation in the district court was stayed pending resolution of the IPR petitions. On February 18, 2020, the PTAB issued decisions on the first six IPRs, finding the six composition of matter patents invalid as being obvious. On March 31, 2020, the PTAB issued a decision upholding the three method of treatment patents. On August 16, 2021, the Court of Appeals for the Federal Circuit affirmed all of the PTAB’s decisions. The litigation is proceeding as to the three method of treatment patents and a trial is expected in 2022. We also filed another suit against Lilly on June 8, 2021, asserting two patents recently granted to Teva, related to the treatment of refractory migraine. Lilly responded to the complaint with a motion to dismiss, which Teva is opposing. 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 (deutetrabenazine) is a deuterated form of a small molecule inhibitor of vesicular monoamine 2 transporter, or VMAT2, that is designed to regulate the levels of a specific neurotransmitter, dopamine, in the brain. The FDA granted deutetrabenazine New Chemical Entity exclusivity until April 2022 and Orphan Drug exclusivity for the treatment of chorea associated with Huntington’s disease until April 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, which is a debilitating, often irreversible movement disorder caused by certain medications used to treat mental health or gastrointestinal conditions. |
• | AUSTEDO was launched in China for the treatment of chorea associated with Huntington’s disease and for the treatment of tardive dyskinesia in early 2021. In October 2021, we received marketing approval for both indications in Brazil. We continue with additional submissions in various other countries around the world. |
• | AUSTEDO is protected in the United States by seven Orange Book patents expiring between 2031 and 2038 and in Europe by two patents expiring in 2029. 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 July 1, 2021, we filed a complaint against Aurobindo, asserting six of the Orange Book patents, and a separate complaint against Lupin, asserting four of the Orange Book patents. The suits were filed in the U.S. District Court for the District of New Jersey. The seventh patent was issued in November 2021, and listed in the Orange Book in December 2021. In addition, Apotex has filed a petition for IPR by the PTAB of the patent covering the deutetrabenazine compound that expires in 2031. We responded to that petition on December 15, 2021. |
• | COPAXONE (glatiramer acetate injection) continues to play a major role in the treatment of MS in the United States (according to IQVIA data as of late 2021). COPAXONE is indicated for the treatment of patients with relapsing forms of MS (“RMS”), including the reduction of the frequency of relapses in relapsing-remitting multiple sclerosis (“RRMS”), including in patients who have experienced a first clinical episode and have MRI features consistent with MS. |
• | COPAXONE is believed to have a unique mechanism of action that works with the immune system, unlike many therapies that are believed to rely on general immune suppression or cell sequestration to exert their effect. COPAXONE provides a proven mix of efficacy, safety and tolerability. |
• | One European patent protecting COPAXONE 40 mg/mL was found invalid by the Board of Appeal of the European Patent Office in September 2020. Two additional patents expiring in 2030 were found invalid at the European Patent Office in December 2021. In certain countries, Teva remains in litigation against generic companies on an additional COPAXONE 40 mg/mL patent that expires in 2030. |
• | In December 2018, Teva sued Pharmascience regarding its application to sell a generic version of COPAXONE in Canada. In December 2020, the Canadian Federal Court issued a decision finding the 2028 method of use patent invalid and the 2030 dosing regimen patent valid and infringed. In January 2022, the Canadian Federal Court of Appeals affirmed Teva’s victory against Pharmascience on the 2030 dosing regimen patent. A re-examination proceeding initiated by Pharmascience at the Canadian Patent office that had been stayed, may resume. We previously settled our Canadian litigation with Sandoz, regarding their application for a generic version of COPAXONE in Canada. Additionally, a case against Mylan with respect to its Canadian application for a generic version of COPAXONE was stayed pending the outcome of the Pharmascience appeal, and may resume. Mylan’s 24-month stay for its product will likely be extended at least until 2023. |
• | The market for MS treatments continues to develop, particularly with generic versions of COPAXONE. Oral treatments for MS, such as Tecfidera ® , Gilenya® and Aubagio® , 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® . |
• | BENDEKA (bendamustine hydrochloride) injection and TREANDA (bendamustine hydrochloride) for injection are approved in the United States for the treatment of patients with Chronic Lymphocytic Leukemia (“CLL”) and patients with indolent B-cell Non-Hodgkin’s Lymphoma (“NHL”) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. We launched BENDEKA in the United States in January 2016. It is a liquid, low-volume (50 mL) and short-time 10-minute infusion formulation of bendamustine hydrochloride that we licensed from Eagle. |
• | BENDEKA faces direct competition from Belrapzo ® (a ready-to-dilute bendamustine hydrochloride product from Eagle). Other competitors to BENDEKA include combination therapies such as R-CHOP (a combination of cyclophosphamide, vincristine, doxorubicin and prednisone in combination with rituximab) and CVP-R (a combination of cyclophosphamide, vincristine and prednisolone in combination with rituximab) for the treatment of NHL, as well as a combination of fludarabine, doxorubicin and rituximab for the treatment of CLL and newer targeted oral therapies, such as ibrutinib, idelilisib and venetoclax. |
• | In July 2018, Eagle prevailed in its suit against the FDA to obtain seven years of orphan drug exclusivity in the United States for BENDEKA. On March 13, 2020, this decision was upheld in the appellate court. As things currently stand, drug applications referencing BENDEKA, TREANDA or any other bendamustine product will not be approved by the FDA until the orphan drug exclusivity expires in December 2022. 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 16 patents listed in the U.S. Orange Book for BENDEKA with expiry dates between 2026 and 2031. In September 2019, a patent infringement action against four of six ANDA filers for generic versions of BENDEKA was tried in the U.S. District Court for the District of Delaware. On April 27, 2020, the district court upheld the validity of all of the asserted patents and found that all four ANDA filers infringe at least one of the patents. Three of the four ANDA filers appealed the district court decision. Teva settled with one of the three ANDA filers, and on August 13, 2021, the Federal Circuit issued a Rule 36 affirmance of the district court decision with respect to the other two filers. On December 14, 2021, Apotex filed a Petition for a Writ of Certiorari with the U.S. Supreme Court. Litigation against the fifth ANDA filer was dismissed after the withdrawal of its patent challenge, and the case against a sixth ANDA filer was also settled. Recent suits against two filers of 505(b)(2) NDAs referencing BENDEKA are also in initial stages of litigation. |
• | Additionally, in July 2018, Teva and Eagle filed suit against Hospira, Inc. (“Hospira”) related to its 505(b)(2) NDA referencing BENDEKA in the U.S. District Court for the District of Delaware. On December 16, 2019, the district court dismissed the case against Hospira on all but one of the asserted patents, which expires in 2031. The trial on the remaining asserted patent has been postponed and is scheduled to begin on April 25, 2022. |
• | 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. |
• | ProAir HFA ® HFA, another albuterol inhaler. Other generic versions of ProAir were launched in 2020. |
• | ProAir RespiClick |
• | QVAR |
• | QVAR RediHaler |
• | ProAir Digihaler |
• | ArmonAir Digihaler |
• | AirDuo Digihaler |
• | BRALTUS ® inhaler. It was launched in Europe in August 2016. |
• | CINQAIR/CINQAERO |
• | AirDuo RespiClick |
Phase 2 |
Phase 3 |
Pre-Submission |
Under Regulatory Review | |||||
Novel Biologics |
TEV-48574 Irritable Bowel Syndrome |
Fasinumab Osteoarthritic Pain (March 2016) (1) |
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TEV-53275 |
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Small Molecules |
Deutetrabenazine Dyskinesia in Cerebral Palsy (September 2019) |
Risperidone LAI Schizophrenia (2) | ||||||
Digital Respiratory |
Digihaler ® (budesonide and formoterol fumarate dihydrate) (EU) |
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QVAR ® Digihaler® (beclomethasone dipropionate HFA)(U.S.) |
(1) | Developed in collaboration with Regeneron Pharmaceuticals, Inc. (“Regeneron”). Results for two phase 3 clinical trials, FACT OA1 and FACT OA2, were released on August 5, 2020, indicating that the co-primary endpoints for fasinumab 1 mg monthly were achieved. Fasinumab 1 mg monthly demonstrated significant improvements in pain and physical function over placebo at week 16 and week 24, respectively. Fasinumab 1 mg monthly also showed nominally significant benefits in physical function in two trials and pain in one trial, when compared to the maximum FDA-approved prescription doses of non-steroidal anti-inflammatory drugs for osteoarthritis. The FACT OA1 trial included an additional treatment arm, fasinumab 1 mg every two months, which showed numerical benefit over placebo, but did not reach statistical significance. In initial safety analyses from the phase 3 trials, there was an increase in arthropathies reported with fasinumab. In a sub-group of patients from one phase 3 long-term safety trial, there was an increase in joint replacement with fasinumab 1 mg monthly treatment during the off-drug follow-up period, although this increase was not seen in the other trials to date. |
(2) | Developed under a license agreement with MedinCell. In August 2021, the FDA accepted the NDA for risperidone LAI, based on phase 3 data from two pivotal studies. |
• | fremanezumab for fibromyalgia and for an additional indication; and |
• | deutetrabenazine for an additional indication. |
• | global R&D facilities that enable us to have a broad global generic pipeline and product line, as well as a focused pipeline of specialty products; |
• | API manufacturing capabilities that offer a stable, high-quality supply of key APIs, vertically integrated with our pharmaceutical operations; |
• | pharmaceutical manufacturing facilities approved by the FDA, EMA and other regulatory authorities located around the world, which offer a broad range of production technologies and the ability to concentrate production in order to achieve high quality and economies of scale; and |
• | high-volume, technologically advanced distribution facilities for solid dosage forms, injectable and blow-fill-seal, which are available in North America, Europe, Latin America, India and Israel and that allow us to deliver new products to our customers quickly and efficiently, providing a cost-effective, safe and reliable supply. |
• | we continued the implementation of our global EHS management system in all countries where we operate, which promotes proactive compliance with applicable EHS requirements, establishes EHS standards throughout our global operations and helps drive continuous improvement in our EHS performance; |
• | proactively evaluated EHS compliance through self-evaluation and an internal and external audit program, addressing non-conformities through appropriate corrective and preventative action; and |
• | continued to promote climate change mitigation and adaptation strategy according to international standards. |
December 31, |
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2021 |
2020 |
2019 |
||||||||||
Full-time |
34,713 | 37,100 | 38,130 | |||||||||
Part-time |
1,266 | 1,272 | 1,158 | |||||||||
Contractor |
1,558 | 1,844 | 1,497 | |||||||||
Total |
37,537 | 40,216 | 40,785 | |||||||||
Total full time equivalent |
37,037 | 39,717 | 40,039 |
December 31, |
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2021 |
2020 |
2019 |
||||||||||
North America |
6,302 | 6,918 | 7,336 | |||||||||
Europe |
18,122 | 18,569 | 18,207 | |||||||||
International Markets (excluding Israel) |
7,955 | 9,210 | 9,408 | |||||||||
Israel |
3,600 | 3,675 | 4,337 | |||||||||
Total (excluding contractors) |
35,979 | 38,372 | 39,288 |
Female |
Male |
|||||||
Total employees |
46 | % | 54 | % | ||||
Managers |
48 | % | 52 | % | ||||
Senior management |
29 | % | 71 | % |
ITEM |
1A. RISK FACTORS |
• | Our future success depends on our ability to maximize the growth and commercial success of AUSTEDO. If our revenues derived from AUSTEDO do not increase as expected or if we lose market share to competing therapies, it may have an adverse effect on our results of operations. |
• | AJOVY faces strong competition from two products that were introduced into the market around the same time and are competing for market share in the same space, as well as from other emerging competing therapies, including oral calcitonin gene-related peptide (“CGRP”) products. |
• | COPAXONE faces increasing competition from generic versions in the U.S. and competing glatiramer acetate products in Europe, as well as from orally-administered therapies. Following the approval of generic competition, COPAXONE’s revenues and profitability have decreased. We expect this trend to continue in the future, which may have a significant effect on our financial results and cash flow. |
• | making it more difficult for us to satisfy our obligations; |
• | limiting our ability to borrow additional funds and increasing the cost of any such borrowing; |
• | increasing our vulnerability to, and reducing our flexibility to respond to, general adverse economic and industry conditions; |
• | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | placing us at a competitive disadvantage as compared to our competitors, to the extent that they are not as highly leveraged; and |
• | restricting us from pursuing certain business opportunities. |
• | some government programs may be discontinued, or the applicable tax rates may increase; |
• | we may be unable to meet the requirements for continuing to qualify for some programs and the restructuring plan may lead to the loss of certain tax benefits we currently receive; |
• | these programs and tax benefits may be unavailable at their current levels; |
• | upon expiration of a particular benefit, we may not be eligible to participate in a new program or qualify for a new tax benefit that would offset the loss of the expiring tax benefit; or |
• | we may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions. |
Business Segment |
Number of Facilities |
Square Feet (in thousands) |
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North America |
19 | 4,000 | ||||||
Europe |
30 | 11,200 | ||||||
International Markets |
30 | 7,000 | ||||||
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Worldwide Total Manufacturing and R&D Facilities |
79 | 22,200 |
* | $100 invested on December 31, 2016 in stock or index – including reinvestment of dividends. Indexes calculated on month-end basis. |
• | Our revenues in 2021 were $15,878 million, a decrease of 5% in U.S. dollars, or 6% in local currency terms, compared to 2020, mainly due to lower revenues from COPAXONE, generic products in the U.S., generic products in Japan resulting from the divestment of a majority of the generic and operational assets of our Japanese business venture, and Anda, partially offset by higher revenues from AUSTEDO and AJOVY. Revenues continued to be affected by the ongoing impact of the COVID-19 pandemic on markets and on customer stocking and purchasing patterns. |
• | Our North America segment generated revenues of $7,809 million and profit of $2,224 million in 2021. Revenues decreased by 7.5% compared to 2020. Profit decreased by 8% compared to 2020. |
• | Our Europe segment generated revenues of $4,886 million and profit of $1,494 million in 2021. Revenues increased by 3% in U.S. dollars. In local currency terms, revenues decreased by 2% compared to 2020. Profit increased by 12% compared to 2020. |
• | Our International Markets segment generated revenues of $2,032 million and profit of $529 million in 2021. Revenues decreased by 6% in U.S. dollars, or 4% in local currency terms compared to 2020. Profit increased by 12% compared to 2020. |
• | Our revenues from other activities in 2021 were $1,151 million, a decrease of 12% compared to 2020. In local currency terms, revenues decreased by 13%. |
• | Impairments of identifiable intangible assets were $424 million and $1,502 million in the years ended December 31, 2021 and 2020, respectively. See note 6 to our consolidated financial statements. |
• | We recorded expenses of $341 million for other asset impairments, restructuring and other items in 2021, compared to expenses of $479 million in 2020. See note 15 to our consolidated financial statements. |
• | In 2021, we recorded an expense of $717 million in legal settlements and loss contingencies, compared to an expense of $60 million in 2020. See note 11 to our consolidated financial statements. |
• | Operating income was $1,716 million in 2021, compared to an operating loss of $3,572 million in 2020. |
• | Financial expenses were $1,058 million in 2021, compared to $834 million in 2020. See note 17 to our consolidated financial statements. |
• | In 2021, we recognized a tax expense of $211 million, or 32%, on a pre-tax income of $658 million. In 2020, we recognized a tax benefit of $168 million, or 4%, on a pre-tax loss of $4,406 million. See note 13 to our consolidated financial statements. |
• | As of December 31, 2021, our debt was $23,043 million, compared to $25,919 million as of December 31, 2020. This decrease was mainly due to $4,008 million repurchased upon consummation of a cash tender offer, $3,167 million senior notes repaid at maturity and $710 million exchange rate fluctuations, partially offset by $4,973 million of issued sustainability-linked senior notes net of issuance costs. |
• | Cash flow generated from operating activities was $798 million in 2021, compared to $1,216 million in 2020. This decrease was mainly due to lower profit in our North America segment during 2021. |
• | During 2021, we generated free cash flow of $2,196 million, which we define as comprising: $798 million in cash flow generated from operating activities, $1,648 million in beneficial interest collected in exchange for securitized accounts receivables and $311 million in proceeds from divestitures of businesses and other assets, partially offset by $562 million in cash used for capital investments. During 2020, we generated free cash flow of $2,110 million. |
Year ended December 31, |
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2021 |
2020 |
|||||||||||||||
(U.S. $ in millions /% of Segment Revenues) |
||||||||||||||||
Revenues |
$ | 7,809 | 100 | % | $ | 8,447 | 100 | % | ||||||||
Gross profit |
4,226 | 54.1 | % | 4,489 | 53.1 | % | ||||||||||
R&D expenses |
618 | 7.9 | % | 622 | 7.4 | % | ||||||||||
S&M expenses |
988 | 12.7 | % | 1,013 | 12.0 | % | ||||||||||
G&A expenses |
427 | 5.5 | % | 443 | 5.2 | % | ||||||||||
Other income |
(31 | ) | § | (10 | ) | § | ||||||||||
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|
|
|
|
|
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Segment profit* |
$ | 2,224 | 28.5 | % | $ | 2,421 | 28.7 | % | ||||||||
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|
* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
Year ended December 31, |
Percentage Change 2020-2021 |
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2021 |
2020 |
|||||||||||
(U.S. $ in millions) |
||||||||||||
Generic products |
$ | 3,769 | $ | 4,010 | (6 | %) | ||||||
AJOVY |
176 | 134 | 31 | % | ||||||||
AUSTEDO |
802 | 637 | 26 | % | ||||||||
BENDEKA/TREANDA |
385 | 415 | (7 | %) | ||||||||
COPAXONE |
577 | 884 | (35 | %) | ||||||||
ProAir* |
180 | 241 | (25 | %) | ||||||||
Anda |
1,323 | 1,462 | (9 | %) | ||||||||
Other |
597 | 664 | (10 | %) | ||||||||
|
|
|
|
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Total |
$ | 7,809 | $ | 8,447 | (8 | %) | ||||||
|
|
|
|
* | Does not include revenues from the ProAir authorized generic, which are included under generic products. |
Product Name |
Brand Name |
Launch Date |
Total Annual U.S. Branded Sales at Time of Launch (U.S. $ in millions (IQVIA))* |
|||||
Mesalamine Extended-Release Capsules, 0.375g |
Apriso ® |
January | $ | 344 | ||||
Etonogestrel and Ethinyl Estradiol Vaginal Ring |
NuvaRing ® |
January | $ | 812 | ||||
Testosterone Gel, 1.62%, 20.25mg/1.25g & 40.5mg/2.5g |
AndroGel ® |
February | $ | 40 | ||||
Liothyronine Sodium Tablets USP, 5mcg, 25mcg, 50mcg |
Cytomel ® |
February | $ | 107 | ||||
Brinzolamide Ophthalmic Suspension, USP, 1% |
Azopt ® |
March | $ | 184 | ||||
Mesalamine Suppositories |
Canasa ® |
April | $ | 66 | ||||
Isotretinoin Capsules, USP |
Absorica ® |
April | $ | 156 | ||||
Erythromycin Tablets, USP |
N/A | May | $ | 45 | ||||
Tiopronin Tablets |
Thiola ® |
May | $ | 0.2 | ||||
Ivermectin Cream, 1% |
Soolantra ® |
June | $ | 111 | ||||
Formoterol Fumarate Inhalation Solution |
Perforomist ® |
June | $ | 300 | ||||
Bexarotene Capsules 75 mg |
Targretin ® |
November | $ | 48 | ||||
Adapalene and Benzoyl Peroxide Gel |
Epiduo ® |
December | $ | 281 | ||||
Arformoterol Tartrate Inhalation, Eq. 0.015 mg base/2 mL |
Brovana ® |
December | $ | 333 | ||||
Erlotinib Hydrochloride Tablets, 2 mg |
Tarceva ® |
December | $ | 3 | ||||
Pyrimethamine Tablets USP, 25 mg |
Daraprim ® |
December | $ | 42 | ||||
Ibuprofen & Famotidine Tablets, 800 mg/26.6 mg |
Duexis ® |
December | $ | 690 | ||||
Naloxone HCl Nasal Spray, 4 mg/spray |
Narcan ® |
December | $ | 281 | ||||
Sunitinib Malate Capsules, 12.5 mg, 25 mg, 37.5 mg and 50 mg |
Sutent ® |
December | $ | 193 | ||||
Buprenorphine Transdermal System, 7.5 mcg |
Butrans ® |
December | $ | 13 |
* | The figures presented are for the twelve months ended in the calendar quarter immediately prior to our launch or re-launch. |
Generic Name |
Brand Name |
Total U.S. Annual Branded Market (U.S. $ in millions (IQVIA))* |
||||
Ibrutinib Caps |
Imbruvica ® |
$ | 781 | |||
Lubiprostone Caps |
Amitiza ® |
$ | 306 | |||
Lenalidomide Capsules, 2.5 mg and 20 mg |
Revlimid ® |
$ | 162 | |||
Pimavanserin Capsules, 34 mg |
Nuplazid ® |
$ | 165 | |||
Methylnaltrexone Bromide Subcutaneous Injection |
Relistor ® |
$ | 19 | |||
Tasimelteon Caps |
Hetlioz ® |
$ | 2 |
* | The figures presented are for the twelve months ended in the calendar quarter immediately prior to our launch or re-launch. |
Year ended December 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
(U.S. $ in millions /% of Segment Revenues) |
||||||||||||||||
Revenues |
$ | 4,886 | 100 | % | $ | 4,757 | 100 | % | ||||||||
Gross profit |
2,823 | 57.8 | % | 2,666 | 56.0 | % | ||||||||||
R&D expenses |
244 | 5.0 | % | 247 | 5.2 | % | ||||||||||
S&M expenses |
846 | 17.3 | % | 830 | 17.4 | % | ||||||||||
G&A expenses |
244 | 5.0 | % | 261 | 5.5 | % | ||||||||||
Other (income) expense |
(5 | ) | § | (3 | ) | § | ||||||||||
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Segment profit* |
$ | 1,494 | 30.6 | % | $ | 1,331 | 28.0 | % | ||||||||
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* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
Year ended December 31, |
Percentage Change 2020-2021 |
|||||||||||
2021 |
2020 |
|||||||||||
(U.S. $ in millions) |
|
|||||||||||
Generic products |
$ | 3,569 | $ | 3,513 | 2 | % | ||||||
AJOVY |
87 | 31 | 184 | % | ||||||||
COPAXONE |
391 | 400 | (2 | %) | ||||||||
Respiratory products |
356 | 353 | 1 | % | ||||||||
Other |
483 | 459 | 5 | % | ||||||||
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Total |
$ | 4,886 | $ | 4,757 | 3 | % | ||||||
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§ | Represents an amount less than 0.5%. |
2021 |
2020 |
|||||||||||||||
(U.S. $ in millions / % of Segment Revenues) |
||||||||||||||||
Revenues |
$ | 2,032 | 100 | % | $ | 2,154 | 100 | % | ||||||||
Gross profit |
1,118 | 55.0 | % | 1,096 | 50.9 | % | ||||||||||
R&D expenses |
68 | 3.3 | % | 70 | 3.3 | % | ||||||||||
S&M expenses |
417 | 20.5 | % | 427 | 19.8 | % | ||||||||||
G&A expenses |
109 | 5.4 | % | 136 | 6.3 | % | ||||||||||
Other (income) expense |
(5 | ) | § | (11 | ) | (0.5 | %) | |||||||||
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Segment profit* |
$ | 529 | 26.0 | % | $ | 474 | 22.0 | % | ||||||||
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* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
Year ended December 31, |
Percentage Change 2020-2021 |
|||||||||||
2021 |
2020 |
|||||||||||
(U.S. $ in millions) |
||||||||||||
Generic products |
$ | 1,649 | $ | 1,792 | (8 | %) | ||||||
AJOVY |
50 | 18 | 179 | % | ||||||||
COPAXONE |
37 | 53 | (29 | %) | ||||||||
Other |
295 | 291 | 1 | % | ||||||||
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Total |
$ | 2,032 | $ | 2,154 | (6 | %) | ||||||
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Year ended December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
North America profit |
$ | 2,224 | $ | 2,421 | ||||
Europe profit |
1,494 | 1,331 | ||||||
International Markets profit |
529 | 474 | ||||||
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Total reportable segments profit |
4,246 | 4,225 | ||||||
Profit of other activities |
154 | 163 | ||||||
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Total segments profit |
4,401 | 4,388 | ||||||
Amounts not allocated to segments: |
||||||||
Amortization |
802 | 1,020 | ||||||
Other assets impairments, restructuring and other items |
341 | 479 | ||||||
Goodwill impairment |
— | 4,628 | ||||||
Intangible asset impairments |
424 | 1,502 | ||||||
Legal settlements and loss contingencies |
717 | 60 | ||||||
Other unallocated amounts |
402 | 271 | ||||||
Consolidated operating income (loss) |
1,716 | (3,572 | ) | |||||
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|
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Financial expenses, net |
1,058 | 834 | ||||||
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Consolidated income (loss) before income taxes |
$ | 658 | $ | (4,406 | ) | |||
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Payments Due by Period |
||||||||||||||||||||
Total |
Less than 1 year |
1-3 years |
3-5 years |
More than 5 years |
||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||
Long-term debt obligations, including estimated interest* |
$ | 29,778 | $ | 2,340 | $ | 5,805 | $ | 8,301 | $ | 13,332 | ||||||||||
Purchase obligations (including purchase orders) |
1,382 | 1,135 | 163 | 69 | 15 | |||||||||||||||
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Total |
$ | 31,160 | $ | 3,475 | $ | 5,968 | $ | 8,370 | $ | 13,347 | ||||||||||
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* | Long-term debt obligations mainly include senior notes, sustainability-linked senior notes and convertible senior debentures, as disclosed in note 9 to our consolidated financial statements. |
• | our management and Board of Directors use non-GAAP measures to evaluate our operational performance, to compare against work plans and budgets, and ultimately to evaluate the performance of management; |
• | our annual budgets are prepared on a non-GAAP basis; and |
• | senior management’s annual compensation is derived, in part, using these non-GAAP measures. While qualitative factors and judgment also affect annual bonuses, the principal quantitative element in the determination of such bonuses is performance targets tied to the work plan, which is based on the non-GAAP presentation set forth below. |
• | amortization of purchased intangible assets; |
• | legal settlements and material litigation fees, and/or loss contingencies, due to the difficulty in predicting their timing and scope; |
• | impairments of long-lived assets, including intangibles, property, plant and equipment and goodwill; |
• | restructuring expenses, including severance, retention costs, contract cancellation costs and certain accelerated depreciation expenses primarily related to the rationalization of our plants or to certain other strategic activities, such as the realignment of R&D focus or other similar activities; |
• | acquisition- or divestment- related items, including changes in contingent consideration, integration costs, banker and other professional fees, inventory step-up and in-process R&D acquired in development arrangements; |
• | expenses related to our equity compensation; |
• | significant one-time financing costs, amortization of issuance costs and terminated derivative instruments, and valuation gains or losses; |
• | unusual tax items; |
• | other awards or settlement amounts, either paid or received; |
• | other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as impacts due to changes in accounting, significant costs for remediation of plants, such as inventory write-offs or related consulting costs, or other unusual events; and |
• | corresponding tax effects of the foregoing items. |
Year Ended December 31, 2021 (U.S. $ and shares in millions, except per share amounts) |
||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Excluded for non-GAAP measurement | Non- GAAP |
||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Impairment of long- lived assets |
Other R&D expenses |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Gain on sale of business |
Other non- GAAP items |
Other items |
||||||||||||||||||||||||||||||||||||||||||
Net revenue |
15,878 | 15,878 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales |
8,284 | 702 | 23 | 23 | 270 | 7,266 | ||||||||||||||||||||||||||||||||||||||||||||||
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Gross profit |
7,594 | 702 | — | — | — | — | 23 | 23 | — | — | 270 | — | 8,612 | |||||||||||||||||||||||||||||||||||||||
Gross profit margin |
48 | % | 54 | % | ||||||||||||||||||||||||||||||||||||||||||||||||
R&D expenses |
967 | 15 | 19 | — | 933 | |||||||||||||||||||||||||||||||||||||||||||||||
S&M expenses |
2,429 | 99 | 33 | — | 2,297 | |||||||||||||||||||||||||||||||||||||||||||||||
G&A expenses |
1,099 | 43 | 27 | 1,029 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense |
(98 | ) | (51 | ) | (48 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies |
717 | 717 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other asset impairments, restructuring and other items |
341 | 160 | 133 | 7 | 40 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairment |
424 | 424 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
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Operating income (loss) |
1,716 | 802 | 717 | 584 | 15 | 133 | 23 | 118 | 7 | (51 | ) | 337 | — | 4,401 | ||||||||||||||||||||||||||||||||||||||
Financial expenses |
1,058 | 128 | 930 | |||||||||||||||||||||||||||||||||||||||||||||||||
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Income (loss) before income taxes |
658 | 802 | 717 | 584 | 15 | 133 | 23 | 118 | 7 | (51 | ) | 337 | 128 | 3,471 | ||||||||||||||||||||||||||||||||||||||
Income taxes |
211 | (360 | ) | 570 | ||||||||||||||||||||||||||||||||||||||||||||||||
Share in profits (losses) of associated companies – net |
(9 | ) | (1 | ) | (8 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) |
456 | 802 | 717 | 584 | 15 | 133 | 23 | 118 | 7 | (51 | ) | 337 | (232 | ) | 2,909 | |||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests |
39 | (15 | ) | 54 | ||||||||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) attributable to Teva |
417 | 802 | 717 | 584 | 15 | 133 | 23 | 118 | 7 | (51 | ) | 337 | (247 | ) | 2,855 | |||||||||||||||||||||||||||||||||||||
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EPS—Basic |
0.38 | 2.21 | 2.59 | |||||||||||||||||||||||||||||||||||||||||||||||||
EPS—Diluted |
0.38 | 2.20 | 2.58 |
* | Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events. |
Year ended December 31, 2020 (U.S. $ and shares in millions, except per share amounts) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP | Excluded for non-GAAP measurement | Non-GAAP | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of purchased intangible assets |
Legal settlements and loss contingencies |
Goodwill impairment |
Impairment of long- lived assets |
Other R&D expenses |
Restructuring costs |
Costs related to regulatory actions taken in facilities |
Equity compensation |
Contingent consideration |
Gain on sale of business |
Other non- GAAP items |
Other items |
|||||||||||||||||||||||||||||||||||||||||||||
Net revenue |
16,659 | 16,659 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales |
8,933 | 894 | 23 | 27 | 63 | 7,925 | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Gross profit |
7,726 | 894 | 23 | 27 | 63 | 8,734 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Gross profit margin |
46.4 | % | 52.4 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
R&D expenses |
997 | 37 | 20 | — | 941 | |||||||||||||||||||||||||||||||||||||||||||||||||||
S&M expenses |
2,498 | 126 | 36 | 14 | 2,322 | |||||||||||||||||||||||||||||||||||||||||||||||||||
G&A expenses |
1,173 | 46 | 12 | 1,115 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other (income) expense |
(40 | ) | (8 | ) | (31 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies |
60 | 60 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other asset impairments, restructuring and other items |
479 | 416 | 120 | (81 | ) | 24 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairment |
1,502 | 1,502 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill impairment |
4,628 | 4,628 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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Operating income (loss) |
(3,572 | ) | 1,020 | 60 | 4,628 | 1,918 | 37 | 120 | 23 | 129 | (81 | ) | (8 | ) | 114 | — | 4,388 | |||||||||||||||||||||||||||||||||||||||
Financial expenses, net |
834 | (85 | ) | 918 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
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Income (loss) before income taxes |
(4,406 | ) | 1,020 | 60 | 4,628 | 1,918 | 37 | 120 | 23 | 129 | (81 | ) | (8 | ) | 114 | (85 | ) | 3,470 | ||||||||||||||||||||||||||||||||||||||
Income taxes |
(168 | ) | (745 | ) | 577 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share in profits (losses) of associated companies – net |
(138 | ) | (134 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) |
(4,099 | ) | 1,020 | 60 | 4,628 | 1,918 | 37 | 120 | 23 | 129 | (81 | ) | (8 | ) | 114 | (964 | ) | 2,897 | ||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests |
(109 | ) | (177 | ) | 68 | |||||||||||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) attributable to Teva |
(3,990 | ) | 1,020 | 60 | 4,628 | 1,918 | 37 | 120 | 23 | 129 | (81 | ) | (8 | ) | 114 | (1,140 | ) | 2,830 | ||||||||||||||||||||||||||||||||||||||
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EPS—Basic |
(3.64 | ) | 6.23 | 2.58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
EPS—Diluted |
(3.64 | ) | 6.22 | 2.57 |
* | Other non-GAAP items include other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as certain accelerated depreciation expenses and inventory write offs, primarily related to the rationalization of our plants and other unusual events. |
• | ongoing impact of the COVID-19 pandemic on markets and on customer stocking and purchasing patterns. For further details, see “—The COVID-19 Pandemic” above; |
• | continued success of our specialty products AUSTEDO and AJOVY; |
• | success of clinical trials and approval of our specialty product risperidone LAI; |
• | ability to successfully execute key generic launches in a timely manner; |
• | ability to successfully develop and launch new biosimiliar products; |
• | a decrease in sales of COPAXONE and other specialty products due to potential loss of exclusivity, generic competition and/or availability of alternative therapies; |
• | we expect continued competition for our generic products where multiple similar generic products have been launched, resulting in pricing pressure in the generics markets. We do, however, also see certain generic segments in which opportunities exist to grow our business, our portfolio of new drug applications and our portfolio of approved complex products; |
• | we expect continued increases in prices of raw materials, energy, labor and transportation; |
• | our disciplined cash management and debt repayment schedule; |
• | our high debt levels and non-investment grade credit rating may increase the cost of any new borrowing; |
• | continued impact of currency fluctuations on revenues and operating income, as well as on various balance sheet and statements of income line items; |
• | ongoing evaluation to further network consolidation activities to achieve additional operational efficiencies, which may affect our business and operations; and |
• | continued efforts towards achieving our long-term financial goals. |
• | Revenue Recognition and SR&A in the United States |
• | Income Taxes |
• | Contingencies |
• | Goodwill |
• | Identifiable Intangible Assets |
• | A projection or forecast that indicates losses or reduced profits associated with an asset. This could result, for example, from a change in the competitive landscape modifying our assumptions about market share or pricing prospectively, a government reimbursement program that results in an inability to sustain projected product revenues and profitability, or lack of acceptance of a product by patients, physicians or payers limiting our projected growth. |
• | A significant adverse change in legal factors or in the business climate that could affect the value of the asset. For example, a successful challenge of our patent rights by a competitor would likely result in generic competition earlier than expected. And conversely, a lost challenge of patent rights in connection with our generic file would likely result in delayed entry. |
• | A significant adverse change in the extent or manner in which an asset is used. For example, restrictions imposed by the FDA or other regulatory authorities could affect our ability to manufacture or sell a product. |
• | For IPR&D projects, this could result from, among other things, a change in outlook affecting assumptions around competition or timing of entry such as approval success or the related timing of approval, clinical trial data results, other delays in the projected launch dates or additional expenditures required to commercialize the product. |
ITEM |
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Net exposure as of December 31, 2021 |
||||
Liability/Asset |
(U.S. $ in millions) |
|||
USD/CHF |
475 | |||
BGN/EUR |
291 | |||
USD/JPY |
285 | |||
GBP/USD |
180 | |||
INR/USD |
130 | |||
USD/MXN |
99 | |||
PLN/EUR |
75 | |||
USD/EUR |
71 | |||
HRK/USD |
50 |
Currency (sold) |
Cross Currency (bought) |
Net Notional Value |
Fair Value |
2021 Weighted Average Cross Currency Prices or Strike Prices |
||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||||||
Forward: |
||||||||||||||||||||||||
CHF |
USD | 509 | 464 | (4 | ) | (12 | ) | 0.92 | ||||||||||||||||
JPY |
USD | 313 | 326 | 4 | (5 | ) | 113.51 | |||||||||||||||||
USD |
GBP | 133 | * | (1 | ) | — | 1.36 | |||||||||||||||||
EUR |
USD | 98 | 400 | 4 | (16 | ) | 1.18 | |||||||||||||||||
MXN |
USD | 96 | 91 | (4 | ) | (2 | ) | 21.38 | ||||||||||||||||
USD |
INR | 95 | 145 | 1 | 2 | 75.35 | ||||||||||||||||||
RUB |
USD | 79 | * | (1 | ) | — | 76.92 | |||||||||||||||||
CAD |
USD | 76 | 70 | 1 | (2 | ) | 1.25 | |||||||||||||||||
EUR |
PLN | 68 | 103 | 1 | — | 4.66 | ||||||||||||||||||
CZK |
EUR | 50 | * | (1 | ) | — | 25.63 | |||||||||||||||||
GBP |
USD | * | 133 | — | (3 | ) | — | |||||||||||||||||
EUR |
CAD | * | 101 | — | (1 | ) | — | |||||||||||||||||
Options: |
||||||||||||||||||||||||
EUR |
USD | 73 | 167 | 1 | (3 | ) | 1.15 | |||||||||||||||||
CAD |
USD | 53 | * | — | (1 | ) | 1.30 | |||||||||||||||||
CHF |
USD | 51 | 84 | — | (2 | ) | 0.94 | |||||||||||||||||
JPY |
USD | * | 89 | — | — | — | ||||||||||||||||||
GBP |
USD | * | 53 | — | (1 | ) | — |
* | Represents net notional value of less than $50 million. |
Currency |
Total Amount |
Interest Rate Ranges |
2022 |
2023 |
2024 |
2025 |
2026 |
2027 & thereafter |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Fixed Rate: |
||||||||||||||||||||||||||||||||||||
USD |
13,934 | 2.80 | % | 7.13 | % | 1,453 | 1,250 | 1,000 | 3,496 | 1,000 | 5,019 | |||||||||||||||||||||||||
Euro |
8,417 | 1.13 | % | 6.00 | % | 670 | 708 | 2,152 | — | 2,037 | 2,543 | |||||||||||||||||||||||||
CHF |
767 | 0.50 | % | 1.00 | % | — | — | 383 | — | — | — | |||||||||||||||||||||||||
USD convertible debentures* |
23 | 0.25 | % | 0.25 | % | — | — | — | — | — | — | |||||||||||||||||||||||||
Variable Rate: |
||||||||||||||||||||||||||||||||||||
Others |
2 | 1.00 | % | 2.00 | % | — | — | — | — | — | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total: |
23,143 | $ | 2,122 | $ | 1,958 | $ | 3,535 | $ | 3,496 | $ | 3,037 | $ | 7,562 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Less debt issuance costs |
(100 | ) | ||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
Total: |
$ | 23,043 | ||||||||||||||||||||||||||||||||||
|
|
* | Classified under short-term debt. |
December 31, |
December 31, |
|||||||
2021 |
2020 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Accounts receivables, net of allowance for credit losses of $ |
||||||||
Inventories |
||||||||
Prepaid expenses |
||||||||
Other current assets |
||||||||
Assets held for sale |
||||||||
Total current assets |
||||||||
Deferred income taxes |
||||||||
Other non-current assets |
||||||||
Property, plant and equipment, net |
||||||||
Operating lease right-of-use assets |
||||||||
Identifiable intangible assets, net |
||||||||
Goodwill |
||||||||
Total assets |
$ | $ | ||||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Short-term debt |
$ | $ | ||||||
Sales reserves and allowances |
||||||||
Accounts payables |
||||||||
Employee-related obligations |
||||||||
Accrued expenses |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term liabilities: |
||||||||
Deferred income taxes |
||||||||
Other taxes and long-term liabilities |
||||||||
Senior notes and loans |
||||||||
Operating lease liabilities |
||||||||
Total long-term liabilities |
||||||||
Commitments and contingencies |
||||||||
Total liabilities |
||||||||
Equity: |
||||||||
Teva shareholders’ equity: |
||||||||
Ordinary shares of NIS |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Treasury shares as of December 31, 2021 and December 31, 2020: |
( |
) | ( |
) | ||||
Non-controlling interests |
||||||||
Total equity |
||||||||
Total liabilities and equity |
$ | $ | ||||||
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net revenues |
$ | $ | $ | |||||||||
Cost of sales |
||||||||||||
|
|
|
|
|
|
|||||||
Gross profit |
||||||||||||
Research and development expenses , net |
||||||||||||
Selling and marketing expenses |
||||||||||||
General and administrative expenses |
||||||||||||
Intangible assets impairments |
||||||||||||
Goodwill impairment |
||||||||||||
Other asset impairments, restructuring and other items |
||||||||||||
Legal settlements and loss contingencies |
||||||||||||
Other income |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Operating (loss) income |
( |
) | ( |
) | ||||||||
Financial expenses—net |
||||||||||||
|
|
|
|
|
|
|||||||
Income (loss) before income taxes |
( |
) | ( |
) | ||||||||
Income taxes (benefit) |
( |
) | ( |
) | ||||||||
Share in (profits) losses of associated companies—net |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss) |
( |
) | ( |
) | ||||||||
Net income (loss) attributable to non-controlling interests |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss) attributable to Teva |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Earnings (loss) per share attributable to ordinary shareholders: |
||||||||||||
Basic |
$ | $ | ( |
) | $ | ( |
) | |||||
|
|
|
|
|
|
|||||||
Diluted |
$ | $ | ( |
) | $ | ( |
) | |||||
|
|
|
|
|
|
|||||||
Weighted average number of shares (in millions): |
||||||||||||
Basic |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted |
||||||||||||
|
|
|
|
|
|
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Net income (loss) |
$ | $ | ( |
) | $ | ( |
) | |||||
Other comprehensive income (loss), net of tax: |
||||||||||||
Currency translation adjustment |
( |
) | ( |
) | ||||||||
Unrealized gain (loss) on derivative financial instruments, net |
||||||||||||
Unrealized gain (loss) on available-for-sale securities, net |
( |
) | ||||||||||
Unrealized gain (loss) on defined benefit plans, net |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total other comprehensive income (loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Total comprehensive income (loss) |
( |
) | ( |
) | ||||||||
Comprehensive income (loss) attributable to non-controlling interests |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Comprehensive income (loss) attributable to Teva |
$ | $ | ( |
) | $ | ( |
) | |||||
|
|
|
|
|
|
Teva shareholders’ equity |
||||||||||||||||||||||||||||||||||||
Ordinary shares |
||||||||||||||||||||||||||||||||||||
Number of shares (in millions) |
Stated value |
Additional paid-in capital |
Retained earnings (accumulated deficit) |
Accumulated other comprehensive income (loss) |
Treasury shares |
Total Teva share-holders’ equity |
Non- controlling interests |
Total equity |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Balance at January 1, 2019 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Changes during 2019: |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||||||||||
Issuance of Treasury Shares |
* | ( |
) | |||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Issuance of shares |
* | * | ||||||||||||||||||||||||||||||||||
Transactions with non-controlling interests |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Other |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2019 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Changes during 2020: |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Issuance of Shares |
* | * | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Transactions with non-controlling interests |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2020 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Changes during 2021: |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Issuance of Shares |
* | * | * | |||||||||||||||||||||||||||||||||
Stock-based compensation expense |
||||||||||||||||||||||||||||||||||||
Transactions with non-controlling interests |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance at December 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* | Represents an amount less than |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Operating activities: |
||||||||||||
Net income (loss) |
$ | $ | ( |
) | $ | ( |
) | |||||
Adjustments to reconcile net loss to net cash provided by operations: |
||||||||||||
Impairment of goodwill, long-lived assets and assets held for sale |
||||||||||||
Depreciation and amortization |
||||||||||||
Net change in operating assets and liabilities |
( |
) | ( |
) | ( |
) | ||||||
Deferred income taxes—net and uncertain tax positions |
( |
) | ( |
) | ( |
) | ||||||
Stock-based compensation |
||||||||||||
Other items |
||||||||||||
Research and development in process |
||||||||||||
Net loss (gain) from investments and from sale of business and long lived assets |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities |
||||||||||||
|
|
|
|
|
|
|||||||
Investing activities: |
||||||||||||
Beneficial interest collected in exchange for securitized trade receivables |
||||||||||||
Proceeds from sale of business and long lived assets |
||||||||||||
Purchases of property, plant and equipment |
( |
) | ( |
) | ( |
) | ||||||
Purchases of investments and other assets |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from sale of investments |
||||||||||||
Other investing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Net cash provided by investing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Financing activities: |
||||||||||||
Repayment of senior notes and loans and other long term liabilities |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from senior notes, net of issuance costs |
||||||||||||
Proceeds from short term debt |
||||||||||||
Repayment of short term debt |
( |
) | ( |
) | ( |
) | ||||||
Redemption of convertible debentures |
( |
) | ||||||||||
Other financing activities |
( |
) | ( |
) | ( |
) | ||||||
Tax withholding payments made on shares and dividends |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net cash used in financing activities |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Translation adjustment on cash and cash equivalents |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Net change in cash, cash equivalents and restricted cash |
||||||||||||
Balance of cash, cash equivalents and restricted cash at beginning of year |
||||||||||||
|
|
|
|
|
|
|||||||
Balance of cash, cash equivalents and restricted cash at end of year |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Reconciliation of cash, cash equivalents and restricted cash reported in the consolidated balance sheets: |
||||||||||||
Cash and cash equivalents |
||||||||||||
Restricted cash included in other current assets |
||||||||||||
|
|
|
|
|
|
|||||||
Total cash, cash equivalents and restricted cash shown in the statement of cash flows |
||||||||||||
|
|
|
|
|
|
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Supplemental cash flow information: |
||||||||||||
Non-cash financing and investing activities: |
||||||||||||
Beneficial interest obtained in exchange for securitized trade receivables |
$ | $ | $ | |||||||||
Cash paid during the year for: |
||||||||||||
Interest |
$ | $ | $ | |||||||||
Income taxes, net of refunds |
$ | $ | $ |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
Other current assets |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Trade payables, accrued expenses, employee-related obligations and other liabilities |
( |
) | ||||||||||
Trade receivables net of sales reserves and allowances |
( |
) | ( |
) | ( |
) | ||||||
Inventories |
||||||||||||
|
|
|
|
|
|
|||||||
$ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
b. |
New accounting pronouncements |
c. |
Acquisitions: |
d. |
Collaborative arrangements: |
e. |
Equity investments: |
f. |
Fair value measurement: |
g. |
Investment in debt securities: |
h. |
Cash and cash equivalents: |
i. |
Restricted cash: |
j. |
Accounts Receivable: |
k. |
Concentration of credit risks: |
l. |
Inventories: |
m. |
Long-lived assets: |
1. | An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. |
2. | If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying mount, a quantitative fair value test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized. |
n. |
Contingencies: |
o. |
Treasury shares: |
p. |
Stock-based compensation: |
q. |
Deferred income taxes: |
1. |
Taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them. The determination of the amount of related unrecognized deferred tax liability is not practicable. |
2. |
Amounts of tax-exempt income generated from the Company’s current Approved Enterprises and unremitted earnings from foreign subsidiaries retained for reinvestment in the Group. See note 13f. |
r. |
Uncertain tax positions: |
s. |
Derivatives and hedging: |
t. |
Revenue recognition: |
u. |
Research and development: |
v. |
Shipping and handling costs: |
w. |
Advertising costs: |
x. |
Restructuring: |
y. |
Segment reporting: |
(a) | North America segment, which includes the United States and Canada. |
(b) | Europe segment, which includes the European Union, the United Kingdom and certain other European countries. |
(c) | International Markets segment, which includes all countries in which Teva operates other than those in the North America and Europe segments. |
z. |
Earnings per share: |
aa. |
Securitization |
bb. |
Divestitures |
cc. |
Debt instruments |
dd. |
Leases |
December 31, 2021 |
December 31, 2020 |
|||||||
(U.S. $ in millions) |
||||||||
Inventories |
||||||||
Property, plant and equipment, net and others |
||||||||
Goodwill |
||||||||
Adjustments of assets held for sale to fair value |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total assets of the disposal group classified as held for sale in the consolidated balance sheets |
$ | $ | ||||||
|
|
|
|
|||||
Total liabilities of the disposal group classified as held for sale in the consolidated balance sheets under accrued expenses ($ |
$ | ( |
) | $ | ||||
|
|
|
|
Year ended December 31, 2021 |
||||||||||||||||||||
North America |
Europe |
International Markets |
Other activities |
Total |
||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||
Sale of goods |
||||||||||||||||||||
Licensing arrangements |
||||||||||||||||||||
Distribution |
||||||||||||||||||||
Other |
( |
) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2020 |
||||||||||||||||||||
North America |
Europe |
International Markets |
Other activities |
Total |
||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||
Sale of goods |
||||||||||||||||||||
Licensing arrangements |
||||||||||||||||||||
Distribution |
||||||||||||||||||||
Other |
§ | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019 |
||||||||||||||||||||
North America |
Europe |
International Markets |
Other activities |
Total |
||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||
Sale of goods |
||||||||||||||||||||
Licensing arrangements |
||||||||||||||||||||
Distribution |
||||||||||||||||||||
Other |
§ | ( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
§ | Represents an amount less than $1 million. |
Sales Reserves and Allowances |
||||||||||||||||||||||||||||||||
Reserves included in Accounts Receivable, net |
Rebates |
Medicaid and other governmental allowances |
Chargebacks |
Returns |
Other |
Total reserves included in Sales Reserves and Allowances |
Total |
|||||||||||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||||||||||||||
Balance at January 1, 2020 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Provisions related to sales made in current year period |
$ | |||||||||||||||||||||||||||||||
Provisions related to sales made in prior periods |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||||||||||||
Credits and payments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||||||||||
Translation differences |
$ | |||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||
Provisions related to sales made in current year period |
$ | |||||||||||||||||||||||||||||||
Provisions related to sales made in prior periods |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||||||||||
Credits and payments |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||||||||||
Translation differences |
( |
) | ( |
) | ( |
) | ( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||||||||||||
Balance at December 31, 2021 |
$ | $ | ||||||||||||||||||||||||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Finished products |
$ | $ | ||||||
Raw and packaging materials |
||||||||
Products in process |
||||||||
Materials in transit and payments on account |
||||||||
$ | $ | |||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Machinery and equipment |
$ | $ | ||||||
Buildings |
||||||||
Computer equipment and other assets |
||||||||
Assets under construction and payments on account |
||||||||
Land |
||||||||
Less—accumulated depreciation |
( |
) | ( |
) | ||||
$ |
$ |
|||||||
Gross carrying amount net of impairment |
Accumulated amortization |
Net carrying amount |
||||||||||||||||||||||
December 31, |
||||||||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||||||
Product rights |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Trade names |
||||||||||||||||||||||||
In-process research and development (IPR&D) |
— | — | ||||||||||||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
(a) | Identifiable product rights and trade names of $ ® ), resulting from modified competition assumptions as a result of settlements between the innovator and other generic filers; and |
(b) | IPR&D assets of $ |
(a) | IPR&D assets of $ ® ), due to modified competition assumptions as a result of settlements between the innovator and other generic filers; (iii) $ |
(b) | Identifiable product rights of $ |
(a) | Identifiable product rights of $ |
(b) | IPR&D assets of $ ® ), due to modified competition assumptions as a result of settlements between the innovator and other generic filers, and (iii) $ |
North America |
Europe |
International Markets |
Other |
Total |
||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||
Balance as of December 31, 2019 (1) |
$ | $ | $ | $ | $ | |||||||||||||||
Changes during the period: |
||||||||||||||||||||
Goodwill reclassified as assets held for sale |
— | ( |
) | ( |
) | — | ( |
) | ||||||||||||
Goodwill impairment |
( |
) | — | — | — | ( |
) | |||||||||||||
Translation differences |
( |
) | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2020 (1) |
$ | $ | $ | $ | $ | |||||||||||||||
Changes during the period: |
||||||||||||||||||||
Goodwill reclassified as assets held for sale |
— | ( |
) | — | ( |
) | ( |
) | ||||||||||||
Translation differences |
( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2021 (1) |
$ | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Accumulated goodwill impairment as of December 31, 2021, December 31, 2020 and December 31, 2019 was approximately $ |
Year ended December 31, |
Year ended December 31, |
Year ended December 31, |
||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
(U.S. $ in millions) |
(U.S. $ in millions) |
||||||||||
Operating lease cost: |
||||||||||||
Fixed payments and variable payments that depend on an index or rate |
$ | $ | $ | |||||||||
Variable lease payments not included in the lease liability |
||||||||||||
Short-term lease cost |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
Year ended December 31, |
Year ended December 31, |
Year ended December 31, |
||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
(U.S. $ in millions) |
(U.S. $ in millions) |
||||||||||
Cash paid for amounts included in the measurement of lease liabilities: |
||||||||||||
Operating cash flows from operating leases |
$ | $ | $ | |||||||||
Right-of-use assets obtained in exchange for lease obligations (non-cash): |
||||||||||||
Operating leases |
$ | $ | $ |
December 31, |
December 31, |
|||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
(U.S. $ in millions) |
|||||||
Operating leases: |
||||||||
Operating lease ROU assets |
$ | $ | ||||||
Other current liabilities |
||||||||
s |
||||||||
|
|
|
|
|||||
Total operating lease liabilities |
$ | $ | ||||||
|
|
|
|
December 31, |
December 31, |
|||||||
2021 |
2020 |
|||||||
Weighted average remaining lease term |
||||||||
Operating leases |
||||||||
Weighted average discount rate |
||||||||
Operating leases |
% | % |
December 31, |
||||
2021 |
||||
(U.S. $ in millions) |
||||
2022 |
$ | |||
2023 |
||||
2024 |
||||
2025 |
||||
2026 and thereafter |
||||
|
|
|||
Total operating lease payments |
$ | |||
|
|
|||
Less: imputed interest |
||||
|
|
|||
Present value of lease liabilities |
$ | |||
|
|
a. |
Short-term debt: |
December 31, |
||||||||||||||||
Weighted average interest rate as of December 31, 2021 |
Maturity |
2021 |
2020 |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Convertible debentures |
% | |||||||||||||||
Current maturities of long-term liabilities |
|
|||||||||||||||
|
|
|
|
|||||||||||||
Total short term debt |
|
$ | $ | |||||||||||||
|
|
|
|
b. |
Long-term debt: |
Weighted average interest rate as of December 31, 2021 |
Maturity |
December 31, 2021 |
December 31, 2020 |
|||||||||||||
% |
(U.S. $ in millions) |
|||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Sustainability-linked senior notes EUR |
% | — | ||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Sustainability-linked senior notes EUR |
% | — | ||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Senior notes EUR |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | — | ||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Sustainability-linked senior notes USD |
% | — | ||||||||||||||
Sustainability-linked senior notes USD |
% | — | ||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% |
Weighted average interest rate as of December 31, 2021 |
Maturity |
December 31, 2021 |
December 31, 2020 |
|||||||||||||
% |
(U.S. $ in millions) |
|||||||||||||||
Senior notes USD |
% | — | ||||||||||||||
Senior notes USD |
% | — | ||||||||||||||
Senior notes CHF |
% | |||||||||||||||
Senior notes CHF |
% | |||||||||||||||
|
|
|
|
|||||||||||||
Total senior notes |
||||||||||||||||
Other long-term debt |
||||||||||||||||
Less current maturities |
( |
) | ( |
) | ||||||||||||
Less debt issuance costs |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|||||||||||||
Total senior notes and loans |
$ | $ | ||||||||||||||
|
|
|
|
(1) | In July 2021, Teva repaid $ |
(2) | In November 2021, Teva issued sustainability-linked senior notes in an aggregate principal amount of |
(3) | In November 2021, Teva issued sustainability-linked senior notes in an aggregate principal amount of |
(4) | In November 2021, Teva issued sustainability-linked senior notes in an aggregate principal amount of $ |
(5) | In November 2021, Teva issued sustainability-linked senior notes in an aggregate principal amount of $ |
(6) | In November 2021, Teva consummated a cash tender offer and extinguished |
(7) | In November 2021, Teva repaid $ |
(8) | Debt issuance costs as of December 31, 2021 include $ million in connection with the issuance of the sustainability-linked senior notes in November 2021. |
* | Interest rate adjustments and a potential one-time premium payment related to the sustainability-linked bonds are treated as bifurcated embedded derivatives. See note 10c. |
December 31, 2021 |
||||
(U.S. $ in millions) |
||||
2023 |
$ | |||
2024 |
||||
2025 |
||||
2026 * |
||||
2027 and thereafter |
||||
|
|
|||
$ | ||||
|
|
* | including $ |
a. |
Foreign exchange risk management: |
b. |
Interest risk management: |
c. |
Bifurcated embedded derivatives: |
d. |
Derivative instrument outstanding: |
Fair value |
||||||||
Not designated as hedging instruments |
||||||||
December 31, 2021 |
December 31, 2020 |
|||||||
Reported under |
(U.S. $ in millions) |
|||||||
Asset derivatives: |
||||||||
Other current assets: |
||||||||
Option and forward contracts |
$ | $ | ||||||
Liability derivatives: |
||||||||
Other current liabilities: |
||||||||
Option and forward contracts |
( |
) | ( |
) |
Financial expenses, net |
Other comprehensive income (loss) |
|||||||||||||||||||||||
Year ended December 31, |
Year ended December 31, |
|||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 |
2020 |
2019 |
|||||||||||||||||||
Reported under |
(U.S. $ in millions) |
|||||||||||||||||||||||
Line items in which effects of hedges are recorded |
$ | $ | $ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||||
Cross-currency swaps—cash flow hedge (1) |
( |
) | ( |
) | ||||||||||||||||||||
Cross-currency swaps—net investment hedge (2) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||
Interest rate swaps—fair value hedge (3) . |
Financial expenses, net |
Net revenues |
|||||||||||||||||||||||
Year ended December 31, |
Year ended December 31, |
|||||||||||||||||||||||
2021 |
2020 |
2019 |
2021 |
2020 |
2019 |
|||||||||||||||||||
Reported under |
(U.S. $ in millions) |
|||||||||||||||||||||||
Line items in which effects of hedges are recorded |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Option and forward contracts (4) |
( |
) | ( |
) | — | — | — | |||||||||||||||||
Option and forward contracts (5) |
— | — | * |
* | Represents an amount less than $ |
(1) | With respect to cross-currency swap agreements, Teva recognized gains which mainly reflect the differences between the fixed interest rate and the floating interest rate. In the fourth quarter of 2019, Teva terminated $ |
(2) | In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $ |
(3) | In the fourth quarter of 2016, Teva entered into an interest rate swap agreement designated as fair value hedge relating to its |
(4) | Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses, net. |
(5) | Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on projected revenues and expenses recorded in euro, the Swiss franc, the Japanese yen, the British pound, the Russian ruble, the Canadian dollar and some other currencies to protect its projected operating results for 2021 and 2022. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as an economic hedge. These derivative instruments, which may include 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. In 2021, the positive impact from these derivatives recognized under revenues was $ |
e. |
Amortizations due to terminated derivative instruments: |
f. |
Securitization: |
As of and for the year ended December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Sold receivables at the beginning of the year |
$ | $ | ||||||
Proceeds from sale of receivables |
||||||||
Cash collections (remitted to the owner of the receivables) |
( |
) | ( |
) | ||||
Effect of currency exchange rate changes |
( |
) | ||||||
|
|
|
|
|||||
Sold receivables at the end of the year |
$ | $ | ||||||
|
|
|
|
a. |
Commitments: |
b. |
Contingencies: |
a. |
Income (loss) before income taxes: |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Parent Company and its Israeli subsidiaries |
$ | $ | $ | |||||||||
Non-Israeli subsidiaries |
( |
) | ( |
) | ||||||||
$ | $ | ( |
) | $ | ( |
) | ||||||
b. |
Income taxes: |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
In Israel |
$ | $ | $ | |||||||||
Outside Israel |
( |
) | ( |
) | ||||||||
$ | $ | ( |
) | $ | ( |
) | ||||||
Current |
$ | $ | $ | |||||||||
Deferred |
( |
) | ( |
) | ( |
) | ||||||
$ | $ | ( |
) | $ | ( |
) | ||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Income (loss) before income taxes |
$ | $ | ( |
) | $ | ( |
) | |||||
Statutory tax rate in Israel |
% | % | % | |||||||||
Theoretical provision for income taxes |
$ | $ | ( |
) | $ | ( |
) | |||||
Increase (decrease) in the provision for income taxes due to: |
||||||||||||
The Parent Company and its Israeli subsidiaries - Tax benefits arising from reduced tax rates under benefit programs |
( |
) | ( |
) | ( |
) | ||||||
Mainly nondeductible items and prior year tax |
( |
) |
||||||||||
Non-Israeli subsidiaries, including impairments (*) |
( |
) | ||||||||||
Increase (decrease) in other uncertain tax positions—net |
( |
) | ( |
) | ||||||||
Effective consolidated income taxes |
$ | $ | ( |
) | $ | ( |
) | |||||
(*) |
In 2020, income before income taxes includes goodwill impairment in non-Israeli subsidiaries that did not have a corresponding tax effect. |
c. |
Deferred income taxes: |
December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Deferred tax assets (liabilities), net: |
||||||||
Inventory related |
$ | $ | ||||||
Sales reserves and allowances |
||||||||
Provision for legal settlements |
||||||||
Intangible assets (*) |
( |
) | ( |
) | ||||
Carryforward losses and deductions and credits (**) |
||||||||
Property, plant and equipment |
( |
) | ( |
) | ||||
Deferred interest |
||||||||
Provisions for employee related obligations |
||||||||
Other |
||||||||
Valuation allowance—in respect of carryforward losses and deductions that may not be utilized |
( |
) | ( |
) | ||||
$ | ( |
) | $ | ( |
) | |||
(*) | The decrease in deferred tax liability is mainly due to impairment and amortization. |
(**) | The amounts are shown following a reduction for unrecognized tax benefits of $ |
The amount as of December 31, 2021 represents the tax effect of gross carryforward losses and deductions with the following expirations: - — $ |
December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Long-term assets—deferred income taxes |
||||||||
Long-term liabilities—deferred income taxes |
( |
) | ( |
) | ||||
$ | ( |
) | $ | ( |
) | |||
d. |
Uncertain tax positions: |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Balance at the beginning of the year |
$ | $ | $ | |||||||||
Increase (decrease) related to prior year tax positions, net |
( |
) | ( |
) | ||||||||
Increase related to current year tax positions |
||||||||||||
Decrease related to settlements with tax authorities and lapse of applicable statutes of limitations |
( |
) | ( |
) | ( |
) | ||||||
Other |
( |
) | ( |
) | — | |||||||
Balance at the end of the year |
$ | $ | $ | |||||||||
e. |
Tax assessments: |
f. |
Basis of taxation: |
• | Investment of at least |
• | One of the following: |
a. | At least |
b. | A venture capital investment approximately equivalent to at least $ |
c. | Growth in sales or workforce by an average of |
a. |
Ordinary shares and ADSs |
b. |
Stock-based compensation plans |
Year ended December 31, |
||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||
Number (in thousands) |
Weighted average exercise price |
Number (in thousands) |
Weighted average exercise price |
Number (in thousands) |
Weighted average exercise price |
|||||||||||||||||||
Balance outstanding at beginning of year |
$ | $ | $ | |||||||||||||||||||||
Changes during the year: |
||||||||||||||||||||||||
Exercised |
— | — | — | — | ( |
) | ||||||||||||||||||
Forfeited |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Expired |
( |
) | ( |
) | — | — | ||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Balance outstanding at end of year |
||||||||||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Balance exercisable at end of year |
||||||||||||||||||||||||
|
|
|
|
|
|
(1) Number of ordinary shares issuable upon exercise of outstanding options |
||||||||||||
Range of exercise prices |
Balance at end of period (in thousands) |
Weighted average exercise price |
Weighted average remaining life |
|||||||||
Number of shares |
$ |
Years |
||||||||||
Lower than $ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
|
|
|||||||||||
Total |
||||||||||||
|
|
(2) Number of ordinary shares issuable upon exercise of vested options |
||||||||||||
Range of exercise prices |
Balance at end of period (in thousands) |
Weighted average exercise price |
Weighted average remaining life |
|||||||||
Number of shares |
$ |
Years |
||||||||||
Lower than $ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
$ |
||||||||||||
Total |
||||||||||||
Year ended December 31, |
||||||||||||||||||||||||
2021 |
2020 |
2019 |
||||||||||||||||||||||
Number (in thousands) |
Weighted average grant date fair value |
Number (in thousands) |
Weighted average grant date fair value |
Number (in thousands) |
Weighted average grant date fair value |
|||||||||||||||||||
Balance outstanding at beginning of year |
$ | $ | $ | |||||||||||||||||||||
Granted |
||||||||||||||||||||||||
Vested |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Forfeited |
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Balance outstanding at end of year |
||||||||||||||||||||||||
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Employee stock options |
$ | $ | $ | |||||||||
RSUs and PSUs |
||||||||||||
Total stock-based compensation expense |
||||||||||||
Tax effect on stock-based compensation expense |
||||||||||||
Net effect |
$ | $ | $ | |||||||||
d. |
Dividends |
e. |
Accumulated other comprehensive loss |
Net Unrealized Gains/(Losses) |
Benefit Plans |
|||||||||||||||||||
Foreign currency translation adjustments |
Available- for-sale securities |
Derivative financial instruments |
Actuarial gains/(losses) and prior service (costs)/credits |
Total |
||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||
Balance as of January 1, 2019 |
$ | ( |
) | $ |
$ |
( |
) | $ |
( |
) | $ |
( |
) | |||||||
Other comprehensive income/(loss) before reclassifications |
( |
) | ( |
) | ||||||||||||||||
Amounts reclassified to the statements of income |
( |
) |
||||||||||||||||||
Net other comprehensive income/(loss) before tax |
( |
) | ( |
) | ||||||||||||||||
Corresponding income tax |
( |
) | — | — | ( |
) | ||||||||||||||
Net other comprehensive income/(loss) after tax* |
( |
) | ( |
) | ||||||||||||||||
Balance as of December 31, 2019 |
( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||
Other comprehensive income/(loss) before reclassifications |
( |
) | — | ( |
) | ( |
) | |||||||||||||
Amounts reclassified to the statements of income |
— |
— |
( |
) | ||||||||||||||||
Net other comprehensive income/(loss) before tax |
( |
) | — | ( |
) | ( |
) | |||||||||||||
Corresponding income tax |
— | — | ||||||||||||||||||
Net other comprehensive income/(loss) after tax* |
( |
) | — | ( |
) | ( |
) | |||||||||||||
Balance as of December 31, 2020 |
( |
) | — | ( |
) | ( |
) | ( |
) | |||||||||||
Other comprehensive income/(loss) before reclassifications |
( |
) | — |
( |
) | |||||||||||||||
Amounts reclassified to the statements of income |
— | — | ||||||||||||||||||
Net other comprehensive income/(loss) before tax |
( |
) | — | ( |
) | |||||||||||||||
Corresponding income tax |
— | — | ( |
) | ||||||||||||||||
Net other comprehensive income/(loss) after tax* |
( |
) | — | ( |
) | |||||||||||||||
Balance as of December 31, 202 1 |
$ | ( |
) | — | $ | ( |
) | $ | ( |
) | $ | ( |
) | |||||||
* | Amounts do not include foreign currency translation adjustments attributable to non-controlling interests of $ |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Impairment of long-lived tangible assets (1) |
$ | $ | $ | |||||||||
Contingent consideration (see note 20) |
( |
) | ||||||||||
Restructuring |
||||||||||||
Other |
||||||||||||
Total |
$ | $ | $ | |||||||||
(1) | Including impairments related to exit and disposal activities. |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Restructuring |
||||||||||||
Employee termination |
$ | $ | $ | |||||||||
Other |
||||||||||||
Total |
$ | $ | $ | |||||||||
Employee termination costs |
Other |
Total |
||||||||||
(U.S. $ in millions ) |
||||||||||||
Balance as of January 1, 2019 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Provision |
( |
) | ( |
) | ( |
) | ||||||
Utilization and other* |
||||||||||||
Balance as of January 1, 2020 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Provision |
( |
) | ( |
) | ( |
) | ||||||
Utilization and other* |
||||||||||||
Balance as of December 31, 2020 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Provision |
( |
) | ( |
) | ( |
) | ||||||
Utilization and other* |
||||||||||||
Balance as of December 31, 2021 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
* | Includes adjustments for foreign currency translation. |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Gain on divestitures, net of divestitures related costs (1) |
||||||||||||
Section 8 and similar payments (2) |
— | |||||||||||
Gain (loss) on sale of assets |
( |
) | ||||||||||
Other, net |
||||||||||||
|
|
|
|
|
|
|||||||
Total other income |
$ | $ | $ | |||||||||
|
|
|
|
|
|
(1) | In 2021, mainly due to capital gains related to the sale of certain OTC assets. In 2020 and 2019, mainly related to the divestment of several activities in the International Markets segment. |
(2) | Section 8 of the Patented Medicines (Notice of Compliance) Regulation relates to recoveries of lost revenue related to patent infringement proceedings in Canada. |
Year ended December, 31 |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Interest expenses and other bank charges |
||||||||||||
(Income) loss from investments (1) |
( |
) | ( |
) | ||||||||
Foreign exchange (gains) losses, net |
( |
) | ( |
) | ||||||||
Other, net (2) |
||||||||||||
|
|
|
|
|
|
|||||||
Total finance expense, net |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|
(1) |
(Income) loss from investments in 2021 and 2020 comprised mainly of revaluation gains and loss of Teva’s investment in American Well Corporation (“American Well”). See note 20. |
(2) |
Amortization of issuance costs and terminated derivative instruments. |
Year ended December, 31 |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions, except share data) |
||||||||||||
Net income (loss) used for the computation of basic and diluted earnings (loss) per share |
$ | ( |
) | $ | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Weighted average number of shares used in the computation of basic earnings (loss) per share |
||||||||||||
|
|
|
|
|
|
|||||||
Weighted average number of shares used in the computation of diluted earnings (loss) per share |
||||||||||||
|
|
|
|
|
|
(a) | North America segment, which includes the United States and Canada. |
(b) | Europe segment, which includes the European Union, the United Kingdom and certain other European countries. |
(c) | International Markets segment, which includes all countries other than those in the North America and Europe segments. |
Year ended December 31, |
||||||||||||
2021 |
||||||||||||
North America |
Europe |
International Markets |
||||||||||
(U.S. $ in millions) |
||||||||||||
Revenues |
$ | $ | $ | |||||||||
Gross profit |
||||||||||||
R&D expenses |
||||||||||||
S&M expenses |
||||||||||||
G&A expenses |
||||||||||||
Other income |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Segment profit |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year ended December 31, |
||||||||||||
2020 |
||||||||||||
North America |
Europe |
International Markets |
||||||||||
(U.S. $ in millions) |
||||||||||||
Revenues |
$ | $ | $ | |||||||||
Gross profit |
||||||||||||
R&D expenses |
||||||||||||
S&M expenses |
||||||||||||
G&A expenses |
||||||||||||
Other income |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Segment profit |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year ended December 31, |
||||||||||||
2019 |
||||||||||||
North America |
Europe |
International Markets |
||||||||||
(U.S. $ in millions) |
||||||||||||
Revenues |
$ | $ | $ | |||||||||
Gross profit |
||||||||||||
R&D expenses |
||||||||||||
S&M expenses |
||||||||||||
G&A expenses |
||||||||||||
Other income |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Segment profit |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year ended |
||||||||||||
December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
North America profit |
$ | $ | $ | |||||||||
Europe profit |
||||||||||||
International Markets profit |
||||||||||||
|
|
|
|
|
|
|||||||
Total reportable segments profit |
||||||||||||
Profit of other activities |
||||||||||||
|
|
|
|
|
|
|||||||
Total segments profit |
||||||||||||
Amounts not allocated to segments: |
||||||||||||
Amortization |
||||||||||||
Other assets impairments, restructuring and other items |
||||||||||||
Goodwill impairment |
||||||||||||
Intangible asset impairments |
||||||||||||
Legal settlements and loss contingencies |
||||||||||||
Other unallocated amounts |
||||||||||||
Consolidated operating income (loss) |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Financial expenses, net |
||||||||||||
|
|
|
|
|
|
|||||||
Consolidated income (loss) before income taxes |
$ | $ | ( |
) | $ | ( |
) | |||||
|
|
|
|
|
|
b. |
Segment revenues by major products and activities: |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Generic products |
$ | $ | $ | |||||||||
AJOVY |
||||||||||||
AUSTEDO |
||||||||||||
BENDEKA/TREANDA |
||||||||||||
COPAXONE |
||||||||||||
ProAir* |
||||||||||||
Anda |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | $ | $ | |||||||||
|
|
|
|
|
|
* | Does not include revenues from the ProAir authorized generic, which are included under generic products. |
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Generic products |
$ | $ | $ | |||||||||
AJOVY |
||||||||||||
COPAXONE |
||||||||||||
Respiratory products |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Year ended December 31, |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Generic products |
$ | $ | $ | |||||||||
AJOVY |
§ | |||||||||||
COPAXONE |
||||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
Total |
$ | $ | $ | |||||||||
|
|
|
|
|
|
§ | Represents an amount less than $ million . |
c. |
Supplemental data—major customers: |
Percentage of Third Party Net Sales |
||||||||||||
2021 |
2020 |
2019 |
||||||||||
McKesson Corporation |
% | % | % | |||||||||
AmerisourceBergen Corporation |
% | % | % |
d. |
Property, plant and equipment—by geographical location were as follows: |
December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Israel |
$ | $ | ||||||
United States |
||||||||
Croatia |
||||||||
Germany |
||||||||
Czech republic |
||||||||
Hungary |
||||||||
Ireland |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total property, plant and equipment |
$ | $ | ||||||
|
|
|
|
December 31, 2021 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Money markets |
$ | $ | — | $ | — | $ | ||||||||||
Cash, deposits and other |
— | — | ||||||||||||||
Investment in securities: |
||||||||||||||||
Equity securities* |
— | — | ||||||||||||||
Other |
— | |||||||||||||||
Restricted cash |
— | — | ||||||||||||||
Derivatives: |
||||||||||||||||
Asset derivatives—options and forward contracts |
— | — | ||||||||||||||
Liabilities derivatives: |
||||||||||||||||
Options and forward contracts |
— | ( |
) | — | ( |
) | ||||||||||
Bifurcated embedded derivatives |
— | — | § | |||||||||||||
Contingent consideration** |
— | — | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
§ | Represents an amount less than 0.5 million. |
December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Cash and cash equivalents: |
||||||||||||||||
Money markets |
$ | $ | $ | $ | ||||||||||||
Cash, deposits and other |
||||||||||||||||
Investment in securities: |
||||||||||||||||
Equity securities |
||||||||||||||||
Other, mainly debt securities |
||||||||||||||||
Derivatives: |
||||||||||||||||
Asset derivatives—options and forward contracts |
— | — | ||||||||||||||
Liability derivatives—options and forward contracts |
— | ( |
) | — | ( |
) | ||||||||||
Contingent consideration** |
( |
) | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
* | During the first quarter of 2021, Teva’s shares in American Well Corporation (“American Well”) moved from a Level 2 measurement to a Level 1 measurement within the fair value hierarchy, since they were no longer subject to a sale restriction. By the end of September, 2021, Teva sold all of its holdings in American Well. |
** | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
December 31, 2021 |
December 31, 2020 |
|||||||
(U.S. $ in millions) |
||||||||
Fair value at the beginning of the period |
$ | ( |
) | $ | ( |
) | ||
Transfer into Level 3- equity securities |
||||||||
Revaluation of equity securities |
||||||||
Redemption of debt securities |
( |
) | ||||||
Revaluation of debt securities |
( |
) | ||||||
Reclassification to Level 2- equity securities |
( |
) | ||||||
Bifurcated embedded derivatives |
§ | |||||||
Adjustments to provisions for contingent consideration: |
||||||||
Actavis Generics transaction |
||||||||
Eagle transaction |
( |
) | ( |
) | ||||
Settlement of contingent consideration: |
||||||||
Eagle transaction |
||||||||
|
|
|
|
|||||
Fair value at the end of the period |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
§ | Represents an amount less than $0.5 million. |
Estimated fair value* |
||||||||
December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Senior notes and sustainability-linked senior notes included under senior notes and loans |
$ | $ | ||||||
Senior notes and convertible senior debentures included under short-term debt |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
* | The fair value was estimated based on quoted market prices. |
a. |
Long-term employee-related obligations consisted of the following: |
December 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Accrued severance obligations |
$ | $ | ||||||
Defined benefit plans |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
b. |
Terms of arrangements: |
Column A |
Column B |
Column C |
Column D |
Column E |
||||||||||||||||
Balance at beginning of period |
Charged to costs and expenses |
Charged to other accounts |
Deductions |
Balance at end of period |
||||||||||||||||
Allowance for doubtful accounts: |
||||||||||||||||||||
Year ended December 31, 2021 |
$ | $ | ( |
) | $ | $ | ( |
) |
$ | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2020 |
$ | $ | ( |
) | $ | $ | $ | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2019 |
$ | $ | ( |
) | $ | $ | ( |
) | $ | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance in respect of carryforward tax losses and deductions that may not be utilized: |
||||||||||||||||||||
Year ended December 31, 2021 |
$ | $ | $ | — | $ | ( |
) | $ | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2020 |
$ | $ | $ | — | $ | ( |
) | $ | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2019 |
$ | $ | $ | — | $ | ( |
) | $ | ||||||||||||
|
|
|
|
|
|
|
|
|
|
ITEM 9A. |
CONTROLS AND PROCEDURES |
(a) | The following financial statements are filed as part of this Annual Report on Form 10-K: |
page |
||||
86 | ||||
Consolidated Financial Statements: |
||||
90 | ||||
91 | ||||
92 | ||||
93 | ||||
94 | ||||
96 | ||||
Financial Statement Schedule: |
||||
167 |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith |
1. | English translation or summary from Hebrew original, which is the official version. |
2. | Incorporated by reference to Exhibit 3.1 to Registration Statement on Form F-1(Reg. No. 33-15736). |
3. | Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 14, 2018. |
4. | Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on June 9, 2020. |
5. | Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on December 4, 2018. |
6. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on January 31, 2006. |
7. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on January 31, 2006. |
8. | Incorporated by reference to Exhibit 4.3 to Form 6-K filed on January 31, 2006. |
9. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on May 4, 2010. |
10. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on November 10, 2011. |
11. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on December 18, 2012. |
12. | Incorporated by reference to Exhibit 4.3 to Form 6-K filed on November 10, 2011. |
13. | Incorporated by reference to Exhibit 4.4 to Form 6-K filed on November 10, 2011. |
14. | Incorporated by reference to Exhibit 4.5 to Form 6-K filed on November 10, 2011. |
15. | Incorporated by reference to Exhibit 4.6 to Form 6-K filed on November 10, 2011. |
16. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on March 31, 2015. |
17. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on March 31, 2015. |
18. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on July 25, 2016. |
19. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on July 21, 2016. |
20. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on July 21, 2016. |
21. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on July 28, 2016. |
22. | Incorporated by reference to Exhibit 4.3 to Form 6-K filed on July 28, 2016. |
23. | Incorporated by reference to Exhibit 4.5 to Form 6-K filed on July 28, 2016. |
24. | Incorporated by reference to Exhibit 4.6 to Form 6-K filed on July 28, 2016. |
25. | Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on March 14, 2018. |
26. | Incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on March 14, 2018. |
27. | Incorporated by reference to Exhibit 4.5 to Current Report on Form 8-K filed on March 14, 2018. |
28. | Incorporated by reference to Exhibit 4.6 to Current Report on Form 8-K filed on March 14, 2018. |
29. | Incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on November 25, 2019. |
30. | Incorporated by reference to Exhibit 4.6 to Current Report on Form 8-K filed on November 25, 2019. |
31. | Incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on November 10, 2021. |
32. | Incorporated by reference to Exhibit 4.6 to Current Report on Form 8-K filed on November 10, 2021. |
33. | Incorporated by reference to Exhibit 4.33 to Annual Report on Form 10-K filed on February 21, 2020. |
34. | Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 10, 2019. |
35. | Incorporated by reference to Exhibit 10.20 to Annual Report on Form 10-K filed on February 12, 2018. |
36. | Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on June 9, 2020. |
37. | Incorporated by reference to Exhibit 10.7 to Annual Report on Form 10-K filed on February 10, 2021. |
38. | Incorporated by reference to Exhibit 10.13 to Annual Report on Form 10-K filed on February 21, 2020. |
39. | Incorporated by reference to Exhibit 10.32 to Annual Report on Form 10-K filed on February 21, 2020. |
40. | Incorporated by reference to Exhibit A to Proxy Statement filed on June 8, 2017. |
41. | Incorporated by reference to Exhibit 10.49 to Annual Report on Form 10-K filed on February 12, 2018. |
42. | Incorporated by reference to Exhibit 10.50 to Annual Report on Form 10-K filed on February 12, 2018. |
43. | Incorporated by reference to Exhibit 10.51 to Annual Report on Form 10-K filed on February 12, 2018. |
44. | Incorporated by reference to Exhibit 10.52 to Annual Report on Form 10-K filed on February 12, 2018. |
45. | Incorporated by reference to Exhibit 10.54 to Annual Report on Form 10-K filed on February 12, 2018. |
46. | Incorporated by reference to Exhibit 10.60 to Annual Report on Form 10-K filed on February 12, 2018. |
47. | Incorporated by reference to Exhibit Appendix A to our Definitive Proxy Statement filed on April 22, 2020. |
48. | Incorporated by reference to Exhibit 10.63 to Annual Report on Form 10-K filed on February 12, 2018. |
49. | Incorporated by reference to Exhibit 10.64 to Annual Report on Form 10-K filed on February 12, 2018. |
50. | Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form 10-Q filed on November 5, 2020. |
51. | Incorporated by reference to Exhibit 10.30 to Annual Report on Form 10-K filed on February 21, 2020. |
52. | Incorporated by reference to Exhibit 10.31 to Annual Report on Form 10-K filed on February 21, 2020. |
53. | Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form 10-Q filed on November 5, 2020. |
54. | Incorporated by reference to Exhibit 10.37 to Annual Report on Form 10-K filed on February 12, 2018. |
55. | Incorporated by reference to Exhibit 10.38 to Annual Report on Form 10-K filed on February 12, 2018. |
56. | Incorporated by reference to Exhibit 18 to Quarterly Report on Form 10-Q filed on August 5, 2020. |
TEVA PHARMACEUTICAL INDUSTRIES LIMITED | ||
By: | /s/ Kåre Schultz | |
Name: | Kåre Schultz | |
Title: | President and Chief Executive Officer | |
Dated: | February 9, 2022 |
Name |
Title |
Date | ||||
By: |
/s/ Dr. Sol J. Barer Dr. Sol J. Barer |
Chairman of the Board of Directors |
February 9, 2022 | |||
By: |
/s/ Kåre Schultz Kåre Schultz |
President and Chief Executive Officer and Director | February 9, 2022 | |||
By: |
/s/ Eli Kalif Eli Kalif |
Executive Vice President, Chief Financial Officer (Principal Financial Officer) |
February 9, 2022 | |||
By: |
/s/ Amir Weiss Amir Weiss |
Senior Vice President, Chief Accounting Officer (Principal Accounting Officer) |
February 9, 2022 | |||
By: |
/s/ Rosemary A. Crane Rosemary A. Crane |
Director |
February 9, 2022 | |||
By: |
/s/ Amir Elstein Amir Elstein |
Director |
February 9, 2022 |
Name |
Title |
Date | ||||
By: |
/s/ Jean-Michel Halfon Jean-Michel Halfon |
Director |
February 9, 2022 | |||
By: | /s/ Gerald M. Lieberman |
Director | February 9, 2022 | |||
Gerald M. Lieberman | ||||||
By: |
/s/ Roberto A. Mignone Roberto A. Mignone |
Director |
February 9, 2022 | |||
By: |
/s/ Dr. Perry D. Nisen Dr. Perry D. Nisen |
Director |
February 9, 2022 | |||
By: |
/s/ Nechemia (Chemi) J. Peres Nechemia (Chemi) J. Peres |
Director |
February 9, 2022 | |||
By: |
/s/ Prof. Ronit Satchi-Fainaro Prof. Ronit Satchi-Fainaro |
Director |
February 9, 2022 | |||
By: |
/s/ Janet S. Vergis Janet S. Vergis |
Director |
February 9, 2022 | |||
By: |
/s/ Dr. Tal Zaks Dr. Tal Zaks |
Director |
February 9, 2022 |
Exhibit 10.23
Execution Version
EMPLOYMENT AGREEMENT
This Employment Agreement (this Agreement), dated as of June 5, 2018 (the Execution Date), is entered into by and between TEVA PHARMACEUTICALS USA, INC., a Delaware corporation (Teva USA), and SVEN DETHLEFS (the Executive).
R E C I T A L S:
WHEREAS, Teva USA desires to employ the Executive and the Executive has indicated his willingness to provide his services to Teva USA on the terms and conditions set forth herein; and
WHEREAS, Teva USA and the Executive deem it to be in their mutual best interests to memorialize the terms of such employment in a formal agreement.
NOW, THEREFORE, on the basis of the foregoing premises and in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
1. Effective Date. This Agreement shall be effective as of June 18, 2018 (the Effective Date).
2. Term of Employment. Teva USA hereby agrees to employ the Executive and the Executive hereby accepts such employment with Teva USA, on the terms and conditions hereinafter set forth. The term of employment (the Term of Employment) hereunder shall commence on the Effective Date and shall continue until the Termination Date, as defined in Section 7 below.
3. Position; Duties and Responsibilities; Place of Performance.
(a) The Executive was appointed as Executive Vice President, Global Marketing & Portfolio, effective November 27, 2017, pursuant to that certain Promotion Letter, dated December 14, 2017, by and between Executive and Teva. In such capacity, the Executive reports directly to the President and Chief Executive Officer of Teva Pharmaceutical Industries Ltd. (TPI, and collectively with Teva USA, the Company). In addition, the Executive has such additional executive duties and responsibilities as may be assigned to him by the President and Chief Executive Officer of TPI. If the Executive is elected as a director or officer of any subsidiary or affiliate of the Company, the Executive shall serve in such capacity or capacities without additional compensation.
(b) During the Term of Employment the Executives principal place of employment will be in the United States, provided that no later than December 31, 2019, the Executives principal place of employment will be at Teva USAs headquarters in Parsippany, NJ in the United States. The Executive understands and agrees that it is expected that the Executive will be required to travel extensively (including internationally) in connection with the performance of his duties hereunder.
(c) Authority. Notwithstanding anything in this Agreement to the contrary, the Executive, while in the United States, (a) shall not have authority to bind TPI or any of its non-U.S. subsidiaries and (b) shall be subject to such further restrictions as to his activities on behalf of TPI or its non-U.S. subsidiaries as may be determined by TPI from time to time.
4. Exclusivity. Subject to the terms and conditions set forth in this Agreement, the Executive shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during the Term of Employment, including, without limitation, any activity that (a) conflicts with the interests of the Company or its affiliates, (b) interferes with the proper and efficient performance of his duties for the Company or (c) interferes with the exercise of his judgment in the Companys or its affiliates best interests. Notwithstanding the foregoing, nothing herein shall preclude the Executive from: (i) serving, with the prior written consent of the President and Chief Executive Officer of TPI (which shall not be unreasonably withheld or delayed), as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations; (ii) engaging in charitable activities and community affairs; (iii) speaking at meetings of business, charitable and civic organizations; or (iv) subject to the terms and conditions set forth in Section 9 hereof, managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by the Executive so as not to be in contradiction to any Company policy and/or materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder or create a potential business or fiduciary conflict.
5. Compensation and Benefits.
(a) Base Salary. For services rendered under this Agreement, Teva USA shall pay the Executive a salary at the rate of U.S. $582,000 per annum (such salary, or any increased salary granted to the Executive pursuant to this Section 5(a), the Base Salary). TPI shall recommend to the Human Resources and Compensation Committee (the Compensation Committee) of the Board of Directors of TPI (the TPI Board) to increase Executives Base Salary to $602,000 per annum retroactively effective as of the Effective Date at the first meeting of the Compensation Committee following the Effective Date. In the event that the Executives Base Salary is so increased, the Company shall, no later than the second payroll cycle following the date of such increase, pay to the Executive an additional amount, less applicable withholdings, equal to the excess of the Base Salary that the Executive would have earned from the Effective Date through the date of such increase over the Base Salary that the Executive actually earned during such period. In addition, the Compensation Committee, with input from the President and Chief Executive Officer of TPI, shall periodically consider and resolve whether to approve adjustments to the Executives Base Salary, according to the considerations specified in the shareholder-approved compensation policy of TPI in effect from time to time (the Compensation Policy) and subject to approval of the Compensation Committee and the TPI Board. The Executives Base Salary shall be payable in accordance with the payroll practices of Teva USA as the same shall exist from time to time.
(b) Annual Bonus. For each fiscal year that ends during the Term of Employment, the Executive shall be eligible to be considered for an annual bonus under the
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Companys annual cash bonus plan in accordance with the Compensation Policy (the Annual Bonus) and subject to the sole discretion of the Compensation Committee and the TPI Board, with a target amount equal to 100% of Executives Base Salary. If payable, the Annual Bonus shall be paid to the Executive at the same time as annual bonuses are generally payable to other similarly situated senior executives of the Company, subject to the Executives continuous employment through the payment date, except as otherwise set forth in this Agreement. For the sake of clarity, in the event of an increase in the Base Salary during a fiscal year, the Annual Bonus calculation (if any) shall be made on a prorated basis.
(c) Equity Awards. During the Term of Employment, the Executive shall be considered for equity-based compensation awards under TPIs 2015 Long-Term Equity-Based Incentive Plan or any successor equity compensation plan(s) (the Equity Plan), at the sole discretion of the President and Chief Executive Officer of TPI, the Compensation Committee and the TPI Board. Any such awards shall be granted on such terms and conditions as may be determined by the Compensation Committee and the TPI Board.
(d) Benefits. During the Term of Employment, the Executive shall be eligible to participate in such benefit plans and programs as shall be provided to similarly situated executives of Teva USA, including medical insurance, long-term and short-term disability insurance, dental insurance, life insurance, 401(k) plan, Supplemental Deferred Compensation Plan and other benefit programs that may be adopted by Teva USA from time to time (but, excluding, for the avoidance of doubt, Teva USAs Supplemental Executive Retirement Plan and Defined Contribution Supplemental Executive Retirement Plan). Nothing contained herein shall be construed to limit the Companys ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing the Executive notice, and the right to do so is expressly reserved. For the avoidance of doubt, as of the Effective Date, Executive will cease participation in any benefit program (including compensation in lieu of such programs) of any company in the Teva Group (to the extent there are any such benefit programs) other than Teva USA.
(e) Car Allowance. During the Term of Employment, the Executive will be provided with a car cash allowance of U.S. $2,000 per month.
(f) Vacation. During the Term of Employment, the Executive shall be entitled to the same number of vacation days, holidays, sick days and other paid time off benefits as are generally allowed to other similarly situated executives of Teva USA in accordance with Teva USAs policy as in effect from time to time. Teva USAs expectation is that the Executive will take a reasonable amount of vacation (not to exceed five (5) weeks per year). Because there are no set vacation allocations, the Executive acknowledges that, in accordance with Teva USAs policy, the Company will not make any payment for unused vacation time in connection with a termination of the Executives employment for any reason.
(g) Localization Benefits.
(i) General. During a period of one year from the Effective Date, the Executive will be entitled to (A) home leave, and (B) shipment of personal effects to the area where the Executive will reside, which is expected to be within reasonable
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commuting distance of Teva USAs corporate headquarters in Parsippany, NJ. In addition, the Executive will be entitled to tax preparation and filing support related to his international assignment with the Teva Group. In each case, the terms will be in accordance with the Companys Long Term International Assignment Policy (the Relocation Policy), as shall be amended from time to time.
(ii) Changes to Relocation Policy. The Executive acknowledges, agrees and understands that the Relocation Policy does not form part of this Agreement and the Company reserves the right to amend, suspend, or terminate the Relocation Policy at any time without providing the Executive notice, and the right to do so is expressly reserved. Notwithstanding the foregoing, in the event of any conflict between the Relocation Policy and this Agreement, the terms of this Agreement shall prevail.
(iii) Additional Relocation Payments. In lieu of, and not in addition to, any relocation benefits other than those relocation benefits specifically set forth in Section 5(g)(i), Teva USA will, subject to the Executives continued employment through the applicable anniversary of the Effective Date, pay or provide Executive the following relocation benefits: (A) within fifteen (15) days following the Execution Date, a lump-sum cash amount equal to $86,718 which represents certain relocation support for the following 12 months; (B) within thirty (30) days following the second anniversary of the Effective Date a lump-sum cash amount equal to $117,348 which represents certain relocation support for the following 12 months; and (C) within thirty (30) days following the third anniversary of the Effective Date a lump-sum cash amount equal to $58,674 which represents certain relocation support for the following 12 months (such amounts, collectively, the Additional Relocation Payments). The Additional Relocation Payments shall be grossed-up by the Company for all applicable taxes. For the avoidance of doubt, Executive shall be entitled to relocation benefits only to the extent they are expressly referred to in Sections 5(g)(i) and 5(g)(iii). In addition, the Executive shall cease to be entitled to any relocation benefits and/or any other compensation from any other company of the Teva Group.
(iv) Repayment of Additional Relocation Payments. The Executive Acknowledges and agrees that in the event of termination pursuant to Section 7(c) or Section 7(f) within three years following the Effective Date, Executive shall repay to the Company the prorated amount of the Additional Relocation Payments that were paid to him for such period pursuant to Section 5(g)(iii) for the period in which he will not be employed by the Company.
6. Ordinary Business Expenses. During the Term of Employment, Teva USA shall reimburse the Executive for all reasonable out-of-pocket expenses incurred by the Executive in connection with the business of the Company and in the performance of his duties under this Agreement, including expenses for travel, lodging and similar items, all in accordance with Teva USAs expense reimbursement policy, as the same may be modified from time to time. Teva USA shall reimburse all such proper expenses upon the Executives presentation to Teva USA of an itemized accounting of such expenses with reasonable supporting data.
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7. Termination of Employment.
(a) General. The Term of Employment shall terminate upon the earliest to occur of (i) the Executives death, (ii) a termination by reason of a Disability (as defined below), (iii) a termination by Teva USA with or without Cause (as defined below) and (iv) a termination by the Executive with or without Good Reason (as defined below). The date on which employee-employer relations cease to exist between the parties (including as a result of acceleration of such cessation due to a waiver by the Company of Executives services during the relevant Notice Period (as defined below) and payment to the Executive of the entire amount the Executive is entitled to in respect of such Notice Period) shall be referred to in this Agreement as the Termination Date. For the avoidance of doubt, in the event Executive shall be employed by any other member of the Teva Group following a termination of employment by Teva USA, such termination by Teva USA shall not be deemed termination of employment of Executive. Upon the termination of the Executives employment with the Teva Group for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by the Executive, the Executive shall resign from any and all directorships, committee memberships or any other positions the Executive holds with any member of the Teva Group.
(b) Death or Disability. The Executives employment shall terminate automatically upon his death. Teva USA may terminate the Executives employment immediately after the occurrence of a Disability, such termination to be effective upon the Executives receipt of written notice of such termination. In the event the Executives employment is terminated due to his death or Disability, the Executive or his estate or his beneficiaries, as the case may be, shall be entitled to (i) all accrued but unpaid Base Salary through the Termination Date; (ii) any unpaid or unreimbursed expenses incurred in accordance with Teva USA policy, including amounts due under Section 6 hereof to the extent incurred prior to the Termination Date; (iii) any other amounts required to be paid pursuant to applicable law, if any; and (iv) accrued and/or vested benefits under any plan or agreement covering the Executive which shall be governed by the terms of such plan or agreement (items (i) through (iv) collectively, the Accrued Obligations).
For purposes of this Agreement, Disability shall mean any physical or mental disability or infirmity that renders the Executive incapable of performing his usual and customary duties as set forth herein for a period of one hundred twenty (120) days during any twelve (12) month period. Any question as to the existence or extent of the Executives Disability upon which the Executive and Teva USA cannot agree shall be determined by a qualified, independent physician selected by Teva USA and approved by the Executive or the Executives representatives (which approval shall not be unreasonably withheld or delayed). The determination of any such physician shall be final and conclusive for all purposes of this Agreement.
Except as set forth in this Section 7(b), following the Executives termination by reason of his death or Disability, the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
(c) Termination by Teva USA for Cause. In the event of Cause, Teva USA may terminate the Executives employment for Cause as described in this Section 7(c): In the event Teva USA terminates the Executives employment for Cause, he shall be entitled only to (A) all accrued but unpaid Base Salary through the Termination Date; and (B) any unpaid or
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unreimbursed expenses incurred in accordance with Teva USA policy, including amounts due under Section 6 hereof to the extent incurred prior to the Termination Date. Following a termination of the Executives employment for Cause, except as set forth in this Section 7(c), the Executive shall have no further rights to any compensation or any other benefits.
For purposes of this Agreement, Cause shall mean: (A) the Executives indictment for, conviction of or pleading of guilty or nolo contendere to, (i) a felony or (ii) any crime involving moral turpitude; (B) the Executives embezzlement, dishonesty, misappropriation of Company property, breach of fiduciary duty or fraud with regard to the Company or any of its assets or businesses; (C) the Executives willful misconduct or gross negligence in the performance of the Executives duties or continual failure to perform the material duties of his position; (D) the Executives material violation of a Company rule or regulation; or (E) the Executives breach of a material provision of this Agreement.
(d) Termination by Teva USA without Cause. Teva USA may terminate the Executives employment at any time without Cause, effective six (6) months following the Executives receipt of written notice of such termination (in this Section 7(d), the Notice Period). Teva USA may, in its sole and absolute discretion, by written notice, waive the services of the Executive during the Notice Period or in respect of any part of such period, and at Teva USAs sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date), all on the condition that Teva USA pay the Executive the monthly Base Salary and all additional compensation and benefits to which the Executive is entitled in respect of the Notice Period without regard to any such Teva USA waiver.
In the event the Executives employment is terminated by Teva USA without Cause (other than by reason of his death or Disability), the Executive shall be entitled to:
(i) the Accrued Obligations;
(ii) a lump sum cash payment in an amount equal to six (6) months of the Executives then-current Base Salary, payable on the sixtieth (60th) day following the Termination Date;
(iii) an amount equal to twelve (12) months of the Executives then-current Base Salary in consideration for the Executives undertaking set forth in Section 9(e) below and subject to the Executives compliance therewith, such amount to be paid in substantially equal installments in accordance with the payroll practices of Teva USA during the twelve (12) month period commencing on the Termination Date; and
(iv) a lump sum cash payment payable on the sixtieth (60th) day following the Termination Date in an amount equal to (A) the monthly COBRA premium cost for the Executive and the Executives covered dependents under Teva USAs group health plan as of the date of such termination, multiplied by (B) eighteen (18).
Notwithstanding the foregoing, and without derogating from any other remedy available to the Company, (A) the payments and benefits described in subsections (ii) through (iv) above shall immediately cease, (B) the Company shall have no further obligations to the Executive with
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respect thereto and (C) the Executive shall promptly repay to Teva USA any payments or benefits paid or provided to the Executive pursuant to subsections (ii) through (iv) above, in the event that the Executive breaches any provision of Section 9 hereof.
Following a termination of the Executives employment by Teva USA without Cause, except as set forth in this Section 7(d), the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
(e) Termination by the Executive for Good Reason. The Executive may terminate his employment for Good Reason and receive severance compensation upon such termination as described in this Section 7(e).
(i) The Executive may terminate his employment for Good Reason by providing Teva USA six (6) months written notice setting forth with reasonable specificity the event that constitutes Good Reason, which written notice, to be effective, must be provided to Teva USA within ninety (90) days following the occurrence of such event. During such six (6) month notice period, Teva USA shall have a cure right (if curable), and if not cured within such period, the Executives termination will be effective upon the date immediately following the expiration of the six (6) month notice period.
(ii) In the event of the Executives termination for Good Reason, the Executive shall be entitled to the same payments and other benefits as provided in Section 7(d)(i) through (iv) above for a termination without Cause, it being agreed that the Executives right to any such payments shall be subject to the same terms and conditions as described in Section 7(d) above, including, without limitation, the forfeiture of the Executives right to the payments and benefits described in subsections (d)(ii) through (iv) thereof, and the Executives obligation to promptly repay such amounts, in the event that the Executive breaches any provision of Section 9 hereof. Following a termination of the Executives employment by the Executive for Good Reason, except as set forth in this Section 7(e), the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
For purposes of this Agreement, Good Reason shall mean, without the Executives express written consent, the occurrence of any of the following events: (A) the Companys breach of a material provision of this Agreement, (B) a material diminution in the Executives duties or responsibilities that is inconsistent with the Executives position as described herein, or (C) a material reduction by Teva USA in the Executives rate of annual Base Salary.
(f) Termination by the Executive without Good Reason. The Executive may terminate his employment without Good Reason by providing Teva USA six (6) months written notice of such termination (in this Section 7(f), the Notice Period). In the event that the Executives employment is terminated by the Executive without Good Reason, the Executive shall be entitled to the Accrued Obligations.
In the event of the termination of the Executives employment under this Section 7(f), Teva USA may, in its sole and absolute discretion, by written notice, waive the services of the Executive during the Notice Period or in respect of any part of such period, and at Teva USAs sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date) and still have it treated as a termination without Good Reason.
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Following a termination of the Executives employment by the Executive without Good Reason, except as set forth in this Section 7(f), the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
(g) Change of Control. In the event that the Executives employment is terminated pursuant to subsection (d)of this Section , during the one year period following a merger of TPI with another entity, pursuant to which merger TPI is not the surviving entity, and such termination is a result of such merger, then, in addition to any payments or other benefits to which the Executive is entitled pursuant to Section 7(d), the Executive shall also be entitled to receive a lump sum cash payment in an amount equal to $1,500,000, payable on the next regular payroll date immediately following the sixtieth (60th) day after the Termination Date.
(h) Release. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to subsection (b), (d), (e) or (g) of this Section 7 (other than the Accrued Obligations) (collectively, the Severance Benefits) shall be conditioned upon the Executives execution, delivery to Teva USA, and non-revocation of a release of claims in the form attached as Exhibit A hereto, as the same may be revised from time to time by Teva USA upon the advice of counsel (the Release of Claims) (and the expiration of any revocation period contained in the Release of Claims) within sixty (60) days following the Termination Date. If the Executive fails to execute the Release of Claims in such a timely manner so as to permit any revocation period to expire prior to the end of such sixty (60) day period, or timely revokes his acceptance of such release following its execution, the Executive shall not be entitled to any of the Severance Benefits. Further, to the extent that any portion of the Severance Benefits constitutes nonqualified deferred compensation within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the Code) and all applicable regulations and guidance thereunder (Section 409A), any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day following the date of the Executives termination of employment hereunder, but for the condition that the Executive execute the Release of Claims as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th) day (subject to any additional delay as may be required under Section 11(a) of this Agreement), after which any remaining Severance Benefits shall thereafter be provided to the Executive according to the applicable schedule set forth herein. For the avoidance of doubt, in the event of a termination by reason of the Executives death or Disability, the Executives obligations herein to execute and not revoke the Release of Claims may be satisfied on his behalf by his estate or a person having legal power of attorney over his affairs.
(i) Compliance with Covenants. Notwithstanding any provision herein to the contrary, and without derogating from any other remedy available to the Company, in the event that the Executive breaches any provision of Section 9 hereof, (A) payment or provision of the Severance Benefits shall immediately cease (without prejudice to any other remedies available to the Company hereunder and/or pursuant to applicable law), (B) the Company shall have no further obligations to the Executive with respect to payment or provision of the Severance Benefits and (C) the Executive shall promptly repay to the Company any Severance Benefits paid or provided to the Executive pursuant to this Section 7 prior to the date of such breach.
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(j) Return of Property. Upon termination of the Executives employment, or earlier than that if required by the Company, the Executive shall promptly return to Teva USA any cell phone, laptop or other hand-held device provided to the Executive, and any confidential or proprietary information of the Company or any of their subsidiaries or affiliates that remains in the Executives possession; provided, however, that nothing in this Agreement or elsewhere shall prevent the Executive from retaining and utilizing documents relating to his personal benefits, entitlements and obligations; documents relating to his personal tax obligations; his desk calendar, personal contact list, and the like; and such other records and documents as may reasonably be approved by the TPI CEO (such approval not to be unreasonably withheld or delayed).
8. Representations. The Executive hereby represents to the Company that (a) he is legally entitled to enter into this Agreement and to perform the services contemplated herein and is not bound under any employment, consulting or other agreement to render services to any third party, (b) he has the full right, power and authority, subject to no rights of third parties, to grant to the Company the rights contemplated by Section 9(b) hereof, and (c) he does not now have, nor within the last three (3) years has he had, any ownership interest in any business enterprise (other than interests in publicly traded corporations where his ownership does not exceed one percent (1%) or more of the equity capital) which is a customer of the Teva Group (as defined below), or from which the Teva Group purchases any goods or services or to whom such corporations owe any financial obligations or are required or directed to make any payments.
9. Executives Covenants.
(a) Disclosure of Information. The Executive recognizes and acknowledges that the trade secrets, know-how and proprietary information and processes of TPI, Teva USA and their subsidiaries and affiliates (the Teva Group), as they may exist from time to time, are valuable, special and unique assets of the business of the Teva Group, access to and knowledge of which are essential to the performance of the Executives duties hereunder. The Executive will not, during or at any time following the Term of Employment, in whole or in part, disclose such secrets, know-how or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall the Executive make use of any such secrets, know-how or processes for his own purposes or for the benefit of any person, firm, corporation or other entity (except for a member of the Teva Group) under any circumstances during or after the Term of Employment; provided, that, after the termination of his employment, these restrictions shall not apply to such secrets, know-how and processes which are then in the public domain (provided that the Executive was not responsible, directly or indirectly, for such secrets, know-how or processes entering the public domain without the Companys consent). In addition, nothing contained in this Agreement shall be construed to prohibit the Executive from reporting possible violations of federal or state law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any whistleblower provisions of federal or state law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.
(b) DTSA Disclosure. Pursuant to 18 U.S.C. § 1833(b), an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made (A) in confidence to a federal, state or local government official,
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either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose a trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (A) files any document containing the trade secret under seal and (B) does not disclose the trade secret except pursuant to court order.
(c) Inventions. Without additional compensation, the Executive hereby sells, transfers and assigns to the Company, or to any person or entity designated by the Company, all of the entire right, title and interest of the Executive in, and to, all inventions, ideas, disclosures and improvements, whether patented or unpatented, and copyrightable material, made or conceived by the Executive, solely or jointly, during the Term of Employment, which relate to methods, apparatus, designs, products, processes or devices, sold, leased, used or under consideration or development by the Company or any of its subsidiaries or affiliates, or which otherwise relate to or pertain to the business, functions or operations of the Company or any of its subsidiaries or affiliates or which arise from the efforts of the Executive during the course of his employment for the Company or any of its subsidiaries or affiliates. The Executive shall communicate promptly and disclose to the Company, in such form as the Company requests, all information, details and data pertaining to the aforementioned inventions, ideas, disclosures and improvements. The Executive shall execute and deliver to the Company such formal transfers and assignments and such other papers and documents as may be necessary or required of the Executive to permit the Company or any person or entity designated by the Company to file and prosecute the patent applications and, as to copyrightable material, to obtain copyright thereof. Any invention relating to the business of the Company and its subsidiaries or affiliates made by the Executive within one year following the termination of the Term of Employment shall be deemed to fall within the provisions of this paragraph unless proved to have been first conceived and made following such termination.
(d) Covenant Not to Interfere. During the Term of Employment and for a period of twelve (12) months following the Termination Date, the Executive shall not, directly or indirectly, (i) solicit or induce, or in any manner attempt to solicit or induce, any person employed by, or as agent of, the Company, its subsidiaries or affiliates to terminate such persons contract of employment or agency, as the case may be, with the Company, its subsidiaries or affiliates or (ii) divert, or attempt to divert, any person, concern or entity from doing business with the Company, its subsidiaries or affiliates, or attempt to induce any such person, concern or entity to cease being a customer or supplier of the Company, its subsidiaries or affiliates.
(e) Covenant Not to Compete. By signing this Agreement, the Executive hereby acknowledges and agrees that, in his capacity as Executive Vice President, North America Commercial, the Executive will have a great deal of exposure and access to a broad variety of commercially valuable proprietary information of the Teva Group, including, by way of illustration, confidential information regarding the Teva Groups current and future products and strategies, costs and other financial information, R&D and marketing plans and strategies, etc. As a result of the Executives knowledge of the above information and in consideration for the benefits offered by the Company under this Agreement, the Executive affirms and recognizes his continuing obligations with respect to the use and disclosure of confidential and proprietary
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information of the Teva Group pursuant to the Teva Groups policies and the terms and conditions of this Agreement, and hereby agrees that, during the Term of Employment and for a period of twelve (12) months following the Termination Date (to the extent such restriction does not violate any statute or public policy), the Executive shall not, directly or indirectly (whether as an officer, director, owner, employee, partner, consultant or other direct or indirect service provider) perform any services for any division, subsidiary or product group of a company, which division, subsidiary or product group is involved in the development, manufacture of, sale of or trading in (i) generic products or (ii) specialty pharmaceutical products that are competitive with a fundamental product developed, manufactured, sold or otherwise traded in by the Company as of the date of such termination of employment, where the determination of whether a certain product constitutes a fundamental product manufactured, sold or otherwise traded in by the Teva Group shall be reasonably determined on an ad-hoc basis at the relevant time by the TPI CEO. If a company described in the preceding sentence is not organized into divisions, subsidiaries or product groups, the term division, subsidiary or product group in the preceding sentence shall refer to the entire company.
(f) Non-Disparagement. During the Term of Employment and at all times thereafter, the Executive agrees not to (i) make any disparaging or defamatory comments regarding any member of the Teva Group or any of its current or former directors, officers, employees or products or (ii) make any negative or disparaging comments concerning any aspect of the Executives relationship with any member of the Teva Group or any conduct or events relating to any termination of the Executives employment with the Company.
(g) Cooperation. During the Term of Employment and at all times thereafter, the Executive agrees to cooperate with the Company and its attorneys in connection with any matter related to the period he was employed by Teva USA and/or his services to other members of the Teva Group, including but not limited to any threatened, pending, and/or subsequent litigation, government investigation, or other formal inquiry against ant member of the Teva Group, and shall make himself available upon notice to prepare for and appear at deposition, hearing, arbitration, mediation, or trial in connection with any such matters. Such cooperation will include willingness to be interviewed by representatives of the Company and to participate in legal proceedings by deposition or testimony.
(h) Blue Pencil. It is the desire and intent of the parties that the provisions of this Section 9 be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision or clause of this Section 9 shall be adjudicated to be invalid or unenforceable or overly broad in scope, time or geographic region, then such provision or clause shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable or to reduce or narrow down the portion thus adjudicated to be too broad in scope, time or geographic region, such deletion, reduction or narrowing down to apply only with respect to the operation of this Section 9 in the particular jurisdiction in which such adjudication is made.
(i) Injunctive Relief. Executive acknowledges and agrees that Teva USA entered into this Agreement in reliance on the provisions of this Section 9 and the enforcement of this Section 9 is necessary to ensure the preservation, protection and continuity of the goodwill of the Teva Groups business and confidential information. Executive agrees that, due to the nature
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of the business of the Teva Group, the restrictions set forth in this Section 9 are reasonable as to time, geography and scope. Executive agrees that the Teva Group would suffer irreparable harm and continuing damage for which money damages would be insufficient if Executive were to breach, or threaten to breach, this Section 9. Executive furthermore agrees that the Teva Group would by reason of such breach, or threatened breach, be entitled to injunctive, a decree for specific performance, other equitable relief in aid of arbitration in a court of appropriate jurisdiction, and all other relief as may be proper (including money damages if appropriate), to the extent permitted by law, without the need to post any bond. Executive further consents and stipulates to the entry of such injunctive relief in such a court prohibiting Executive from breaching the terms of this Section 9. This section shall not, however, diminish the right of the Teva Group to claim and recover damages and other appropriate relief in addition to injunctive relief. Notwithstanding anything to the contrary contained herein, in the event of a breach of any covenant by Executive, the duration of any restriction breached shall be extended for a period equal to any time period that Executive was in violation of such covenant.
(j) Further Representations and Covenants. In signing this Agreement, Executive gives the Teva Group assurance that Executive has carefully read and considered all of the terms and conditions of this Section 9. Executive agrees that these restraints are necessary for the reasonable and proper protection of the Teva Group and its confidential information and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent Executive from obtaining other suitable employment during the period in which Executive is bound by the restraints. Executive agrees that, before providing services to any entity during the period of time that Executive is subject to the constraints in this Section 9, Executive will provide a copy of this Section 9 to such entity, and Executive shall ensure that such entity acknowledge to the Company in writing that it has read this Section 9. Executive acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Teva Group, and that Executive has sufficient assets and skills to provide a livelihood while such covenants remain in force. Executive further covenants that Executive will not challenge the reasonableness or enforceability of any of the covenants set forth in this Section 9, and that Executive will reimburse the Teva Group for all costs (including, without limitation, reasonable attorneys fees) incurred in connection with any action to enforce any of the provisions of this Section 9 if either the Teva Group prevails on any material issue involved in such dispute or if Executive challenges the reasonableness or enforceability of any of the provisions of this Section 9. It is also agreed that each member of the Teva Group will have the right to enforce all of Executives obligations under this Agreement.
10. Insurance. The Company may, at its election and for its benefit, insure the Executive against death, and the Executive shall submit to such physical examination and supply such information as may be reasonably required in connection therewith.
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11. Additional Section 409A Provisions. All payments and benefits under this Agreement shall be made and provided in a manner that is intended to comply with Section 409A, to the extent applicable. Notwithstanding any provision in this Agreement to the contrary:
(a) The payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A) upon a termination of employment shall be delayed until such time as the Executive has also undergone a separation from service as defined in U.S. Treasury Regulation Section 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the Termination Date) shall be paid (or commence to be paid) to the Executive on the schedule set forth in this Agreement as if the Executive had undergone such termination of employment (under the same circumstances) on the date of his ultimate separation from service. Any payment otherwise required to be made hereunder to the Executive at any date as a result of the termination of the Executives employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the Delay Period) in the event that the Executive is deemed at the time of his separation from service to be a specified employee (in each case, within the meaning of Section 409A) and if such delay is otherwise required to avoid additional tax under Section 409A(a)(2) of the Code. In such event, on the first business day following the expiration of the Delay Period, the Executive shall be paid, in a single lump sum cash payment, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.
(b) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A.
(c) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) any such expense reimbursement shall be made by Teva USA no later than the last day of the taxable year following the taxable year in which such expense was incurred by the Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period during which the arrangement is in effect.
(d) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A, in no event whatsoever shall the Company or any of its affiliates be liable for (i) any additional tax, interest or penalties that may be imposed on the Executive as a result of Section 409A or (ii) any damages for failing to comply with Section 409A (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A).
12. Clawback. All payments made pursuant to this Agreement are subject to the clawback provisions in the Compensation Policy.
13. Required Stock Ownership. The Executive acknowledges and agrees to adhere to the Companys stock ownership guidelines applicable to senior executives of the Company, as may be amended from time to time in the Companys sole discretion.
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14. No-Hedging Policy. The Executive acknowledges and agrees to adhere to the Companys No-Hedging Policy applicable to senior executives of the Company, as may be amended from time to time in the Companys sole discretion.
15. No-Pledging Policy. The Executive acknowledges and agrees to adhere to the Companys No-Pledging Policy applicable to senior executives of the Company, as may be amended from time to time in the Companys sole discretion.
16. Notices. Any notice required or permitted to be given under this Agreement shall be deemed sufficient if in writing and if sent by registered mail to the Executive at his home address as reflected on the records of the Company, in the case of the Executive, or, in the case of the Company, to TPI at TPIs headquarters, Attention: Group Executive VP, Human Resources, or to such other officer or address as the Company shall notify the Executive.
17. Waiver of Breach. A waiver by the Company or the Executive of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by the other party.
18. Governing Law; Severability. This Agreement shall be governed by and construed and enforced in accordance with the laws of the state of New Jersey without giving effect to the choice of law or conflict of laws provisions thereof. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but the invalidity or unenforceability of any provision or portion of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision or portion of any provision, in any other jurisdiction. In addition, should a court determine that any provision or portion of any provision of this Agreement, is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties agree that such provision should be interpreted and enforced to the maximum extent which such court deems reasonable or valid.
19. Taxes. The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment and social insurance taxes, as shall be required by applicable law.
20. Assignment. This Agreement may be assigned, without the consent of the Executive, by Teva USA to any member of the Teva Group or to any person, partnership, corporation or other entity that has purchased all or substantially all the assets of Teva USA and/or TPI; provided, that such assignee assumes any and all of the obligations of the Company hereunder. The Company shall cause any person, firm or corporation acquiring all or substantially all of the assets of Teva USA to execute a written instrument agreeing to assume any and all of the obligations of the Company hereunder as a condition to acquiring such assets.
21. Compensation Policy. This Agreement shall be subject to the Compensation Policy and nothing herein shall derogate in any way from the Companys rights thereunder.
22. Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties and supersedes any and all agreements, letters of intent or understandings between the
14
Executive and (a) the Company, (b) any member of the Teva Group or (c) any of the Companys principal shareholders, affiliates or subsidiaries, except as to the Companys equity compensation plans and other separate agreements, plans and programs referred to herein; provided, that this Agreement shall not alter (i) the Executives obligations to any member of the Teva Group under any confidentiality, invention assignment, or similar agreement or arrangement to which the Executive is a party with any member of the Teva Group, which obligations shall remain in force and effect and (ii) the Executives rights to any equity and/or retention award previously granted, which rights shall remain in full force and effect and shall not be overridden by this Agreement. Notwithstanding the foregoing, in the event of any inconsistency between this Agreement and the Compensation Policy, the terms of the Compensation Policy shall control. This Agreement may be changed only by an agreement in writing signed by a party against whom enforcement of any waiver, change, modification, extension or discharge is sought.
23. Headings. The headings of the sections and subsections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.
24. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Signatures delivered by facsimile or by e-mail as a portable document format (.pdf) file or image file attachment shall be effective for all purposes.
25. Survival. The provisions of this Agreement that are intended to survive the termination of this Agreement shall survive such termination in accordance with their terms.
26. Indemnification. The Indemnification and Release Agreement between TPI and the Executive, dated November 27, 2017, shall continue to apply in full force and effect in accordance with its terms, and is incorporated by reference to this Agreement.
* * *
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date specified in the first paragraph of this Agreement.
TEVA PHARMACEUTICALS USA, INC. | ||
By: | /s/ Deborah A. Griffin / SVP & Chief Accounting Officer | |
Name: Deborah A. Griffin | ||
Title: SVP & Chief Accounting Officer | ||
By: | /s/ Brian E. Shanahan / Secretary | |
Name: Brian E. Shanahan | ||
Title: Secretary | ||
EXECUTIVE | ||
/s/ Sven Dethlefs | ||
June 5, 2018 |
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EXHIBIT A
FORM OF RELEASE AGREEMENT
As a material inducement to Teva Pharmaceuticals USA, Inc. (Teva USA) to providing the severance benefits and other benefits and payments in excess of the amounts required to be paid to Sven Dethlefs (the Executive) by applicable law (if any) under the employment agreement (the Employment Agreement) dated as of June 5, 2018 by and between Teva USA and the Executive, and in consideration of its agreements and obligations under the Employment Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged by the Executive, the Executive on behalf of himself and his family, agents, representatives, heirs, executors, trustees, administrators, attorneys, successors and assigns (the Releasors) hereby irrevocably, unconditionally and generally releases Teva USA, Teva Pharmaceutical Industries Ltd., and their and the Teva Groups direct and indirect parents, subsidiaries, affiliates, shareholders, officers, directors, employees and attorneys, and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (collectively, the Corporate Releasees), from, and hereby waives and/or settles any and all, actions, causes of action, suits, debts, sums of money, agreements, promises, damages, or any liability, claims or demands, known or unknown and of any nature whatsoever and which the Executive ever had, now has or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the date of this release (collectively, the Executive Claims) arising directly or indirectly pursuant to or out of his employment with Teva USA, the performance of services for Teva USA or any Corporate Releasee or the termination of such employment or services and, specifically, without limitation, any rights and/or the Executive Claims (a) arising under or pursuant to any contract, express or implied, written or oral, relating to the Executives employment or termination thereof or the employment relationship, including, without limitation, the Employment Agreement; (b) for wrongful dismissal or termination of employment; (c) arising under any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the employment relationship and/or that specifically prohibit discrimination based upon age, race, religion, sex, national origin, disability, sexual orientation or any other unlawful bases, including, but not limited to, any and all claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act of 1990, the Equal Pay Act of 1963, the Americans with Disabilities Act of 1990, as amended, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, as amended, and applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes; (d) for damages, including, without limitation, punitive or compensatory damages or for attorneys expenses, costs, wages, injunctive or equitable relief resulting or pertaining to those matters released hereunder; and (e) relating to salaries, benefits, bonuses, compensation, fringe benefits, social benefits according to any law or agreement, amounts of managers insurance, pension fund, provident fund and education fund, overtime, severance pay, sick pay, recreation payments, vacation payments, prior notice payments, options or other securities, reimbursement of expenses and/or any other payments or benefits due to the Executive. This paragraph shall not apply to any rights or claims that the Executive may have: (i) for a breach of Teva USAs obligation to provide, or cause to be provided, the severance and other payments and benefits due under the
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Employment Agreement; (ii) for disability, life insurance, health, welfare, qualified and nonqualified pension and other employee benefit plans in accordance with the terms of the applicable plans; and (iii) any right(s) of indemnification that the Executive may have, whether under or pursuant to the Employment Agreement, this release or the charter, bylaws or other governing plans, policies or arrangements of, or any insurance policy maintained by Teva USA, for any and all actions undertaken by the Executive in his capacity as an employee, contractor, consultant, agent, officer, director, shareholder, trustee, fiduciary or other representative of Teva USA.
The Releasors agree not to bring any action, suit or proceeding whatsoever (including the initiation of governmental proceedings or investigations of any type) against any of the Corporate Releasees for any matter or circumstance concerning which the Releasors have released the Corporate Releasees under this Release. Further, the Executive agrees not to encourage any other person or suggest to any other person that he, he or it institute any legal action against the Corporate Releasees, and the Executive hereby declares, confirms and undertakes that, if the Releasors or anyone else in their name should deliver a claim as mentioned above, the Executive shall reimburse the Corporate Releasees and anyone else on their behalf to the full extent of the sum of the legal expenses and legal fees incurred by them as a result of any such claim; and in the event that Releasors prevail in such legal action, then the Corporate Releasees shall reimburse such sum to the Executive. Notwithstanding the foregoing, this Release is not intended to interfere with the Executives right to file a charge with the U.S. Equal Employment Opportunity Commission (the EEOC) in connection with any claim the Executive believes the Executive may have against Teva USA. The Releasors hereby agree to waive the right to any relief (monetary or otherwise) in any action, suit or proceeding the Executive may bring in violation of this Release, including any proceeding before the EEOC or any other similar body or in any proceeding brought by the EEOC or any other similar body on the Executives behalf. In addition, nothing contained in this release shall be construed to prohibit the Releasors from reporting possible violations of federal or state law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any whistleblower provisions of federal or state law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.
To the extent applicable, this release shall constitute a dismissal and compromise notice for the purposes of Section 29 of the Israeli Severance Pay Law 5713-1963.
Representation by Counsel/Revocation.
(a) By executing this release, the Executive acknowledges that: (i) he has been advised by Teva USA to consult with an attorney before executing this release and has consulted and been represented by counsel in connection therewith; (ii) he has been provided with at least a twenty-one (21) day period to review and consider whether to sign this release and, by executing and delivering this release to Teva USA, he is waiving any remaining portion of such twenty-one (21) day period; and (iii) he has been advised that he has seven (7) days following execution of the Release to revoke this release (the Revocation Period).
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(b) This release will not be effective or enforceable until the Revocation Period has expired. Any revocation of this release shall only be effective if an originally executed written notice of revocation is delivered to Teva USA on or before 5:00 p.m. EST on the last day of the Revocation Period. If so revoked, this release shall be deemed to be void ab initio and of no further force and effect.
(c) Defined terms not otherwise defined herein shall have the same meanings ascribed to them in the Employment Agreement.
Dated: [To be Executed Following a Termination of Employment]
B-4
Exhibit 10.24
Amendment
to the Employment Agreement dated June 5, 2018
by and between
Teva Pharmaceuticals USA, Inc. and Sven Dethlefs
This Amendment (this Amendment) is made this day of July, 2018, by and among Teva Pharmaceuticals USA, Inc. and Sven Dethlefs (the Executive) to the Employment Agreement entered into between the Company and Executive dated June 5, 2018 (the Agreement).
Whereas, the Company and Executive have entered into the Agreement; and
Whereas, the Parties wish to amend certain terms of the Agreement as set forth below.
Now therefore, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:
1. | Except as expressly set-forth in this Amendment, all terms and conditions of the Agreement shall continue in full force and effect. |
2. | Section 5(g)(iii) of the Agreement shall be replaced in its entirety with the following: |
(iii) | Additional Relocation Payments. In lieu of, and not in addition to, any relocation benefits other than those relocation benefits specifically set forth in Section 5(g)(i), Teva USA will pay or provide Executive the following relocation benefits: (A) within fifteen (15) days following the Execution Date, a lump-sum cash amount equal to $86,718 which represents certain relocation support for the following 12 months (Initial Period); (B) within fifteen (15) days following the signature of this Amendment a lump-sum cash amount equal to $176,022 which represents certain relocation support for the 24 months following the Initial Period (such amounts, collectively, the Additional Relocation Payments). The Additional Relocation Payments shall be grossed-up by the Company for all applicable taxes. For the avoidance of doubt, Executive shall be entitled to relocation benefits only to the extent they are expressly referred to in Sections 5(g)(i) and 5(g)(iii). In addition, the Executive shall cease to be entitled to any relocation benefits and/or any other compensation from any other company of the Teva Group. |
3. | This Amendment may be executed in multiple counterparts, each of which will be deemed to be an original and all of which will be deemed to be a single agreement. |
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
/s/ Brian E. Shanahan / Secretary |
/s/ Sven Dethlefs |
|||||||
Teva Pharmaceuticals USA, Inc. | Sven Dethlefs |
Exhibit 10.25
Private and Confidential
July 27, 2021
To: Mark Sabag
Teva Global ID: 31507
Dear Mark,
Congratulations on your appointment as Executive Vice President, International Markets Commercial.
Effective Date: August 15, 2021
Your compensation will remain the same as prior to your appointment and the terms shall be as determined in your current employment agreement.
We strongly believe in the company and in your contribution to its success. We look forward to your continued commitment towards Tevas short and long-term strategic goals.
Sincerely,
Kåre Schultz
President and Chief Executive Officer
Teva Pharmaceutical Industries Ltd.
124 Dvora HaNevia St., Tel Aviv 6944020 Israel | www.tevapharm.com
Exhibit 10.26
Private and Confidential
July 27, 2021
To: Sven Dethlefs
Teva Global ID: 75279
Dear Sven,
Congratulations on your appointment as Executive Vice President, North America Commercial.
The following are the terms of your employment which shall be amended in light of your new position. The terms of your employment are subject to Teva Pharmaceutical Industries Compensation Policy applicable to executive officers.
Effective Date: August 15, 2021
Annual Base Salary: $816,000
Annual Bonus: Executive officer bonus plan with target of 100% Annual Base Salary. For the year 2021 your annual bonus calculation shall be made on the basis of an annual base salary of $816,000
Annual Equity Award: You will be considered for equity-based compensation awards as part of annual compensation cycle at the sole discretion of the CEO, the Compensation Committee and the Board of Directors
All other terms are subject to your current employment agreement.
We strongly believe in the company and in your contribution to its success. We look forward to your continued commitment towards Tevas short and long-term strategic goals.
Sincerely,
Kåre Schultz
President and Chief Executive Officer
Teva Pharmaceutical Industries Ltd.
124 Dvora HaNevia St., Tel Aviv 6944020 Israel | www.tevapharm.com
Exhibit 21
The following is a list of subsidiaries of the Company as of December 31, 2021, omitting some subsidiaries which, considered in the aggregate, would not constitute a significant subsidiary.
Name of Subsidiary |
Jurisdiction of Organization | |
Actavis Group PTC ehf | Iceland | |
Actavis International Limited | Malta | |
Actavis Italy S.p.A | Italy | |
Actavis Pharma Holding ehf | Iceland | |
Laboratorio Chile, S.A | Chile | |
Mepha Schweiz AG | Switzerland | |
Merckle GmbH | Germany | |
Ratiopharm GmbH | Germany | |
Teva API B.V. | Netherlands | |
Teva Canada Limited | Canada | |
Teva Capital Services Switzerland GmbH | Switzerland | |
Teva Czech Industries s.r.o | Czech Republic | |
Teva Health GmbH | Germany | |
Teva Finance Services II B.V. | Curacao | |
Teva Italia S.r.l | Italy | |
Teva Limited Liability Company | Russia | |
Teva Pharma S.L.U | Spain | |
Teva Pharmaceuticals Europe B.V. | Netherlands | |
Teva Pharmaceuticals International GmbH | Switzerland | |
Teva Pharmaceuticals USA, Inc. | United States | |
Teva Pharm. Works Private Ltd. Company | Hungary | |
Teva Santé SAS | France | |
Teva Takeda Pharma Ltd. | Japan | |
Teva UK Limited | United Kingdom | |
Teva Pharmaceutical Finance Netherlands III B.V. | Netherlands |
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-168331, 333-206753, 333-212851, 333-214077, 333-220382 and 333-241003) and Form S-3 (No. 333-260519) of Teva Pharmaceutical Industries Limited of our report dated February 9, 2022 relating to the financial statements and financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ Kesselman & Kesselman
Kesselman & Kesselman
Certified Public Accountants (Isr.)
A member of PricewaterhouseCoopers International Limited
Tel-Aviv, Israel
February 9, 2022
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
I, Kåre Schultz, certify that:
1. | I have reviewed this annual report on Form 10-K of Teva Pharmaceutical Industries Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the companys internal control over financial reporting that occurred during the companys most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: February 9, 2022
/s/ Kåre Schultz |
Kåre Schultz |
President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
I, Eli Kalif, certify that:
1. | I have reviewed this annual report on Form 10-K of Teva Pharmaceutical Industries Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. | The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | disclosed in this report any change in the companys internal control over financial reporting that occurred during the companys most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. | The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. | any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: February 9, 2022
/s/ Eli Kalif |
Eli Kalif |
Chief Financial Officer |
Exhibit 32
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Teva Pharmaceutical Industries Limited (the Company) on Form 10-K for the period ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), we, Kåre Schultz, President and Chief Executive Officer of the Company, and Eli Kalif, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: February 9, 2022
/s/ Kåre Schultz |
Kåre Schultz |
President and Chief Executive Officer |
/s/ Eli Kalif |
Eli Kalif |
Chief Financial Officer |
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