QUARTERLY 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 |
t Applicable | ||
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification Number) | |
(Address of principal executive offices) |
(Zip code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
American Depositary Shares, each representing one |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||
Emerging growth company |
PART I. |
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Item 1. |
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5 |
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6 |
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7 |
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9 |
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10 |
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Item 2. |
39 |
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Item 3. |
61 |
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Item 4. |
61 |
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PART II. |
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Item 1. |
62 |
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Item 1A. |
62 |
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Item 2. |
62 |
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Item 3. |
62 |
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Item 4. |
62 |
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Item 5. |
62 |
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Item 6. |
63 |
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64 |
• | 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 its impact on our business, financial condition, operations, cash flows, and liquidity and on the economy in general; 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; and environmental risks; |
• | 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. |
FINANCIAL STATEMENTS |
March 31, |
December 31, |
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2021 |
2020 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Accounts receivables, net of allowance for credit losses of $ |
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Inventories |
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Prepaid expenses |
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Other current assets |
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Assets held for sale |
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Total current assets |
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Deferred income taxes |
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Other non-current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use |
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Identifiable intangible assets, net |
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Goodwill |
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Total assets |
$ | $ | ||||||
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|
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LIABILITIES AND EQUITY |
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Current liabilities: |
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Short-term debt |
$ | $ | ||||||
Sales reserves and allowances |
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Accounts payables |
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Employee-related obligations |
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Accrued expenses |
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Other current liabilities |
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Total current liabilities |
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Long-term liabilities: |
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Deferred income taxes |
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Other taxes and long-term liabilities |
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Senior notes and loans |
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Operating lease liabilities |
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Total long-term liabilities |
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Commitments and contingencies |
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Total liabilities |
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Equity: |
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Teva shareholders’ equity: |
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Ordinary shares of NIS |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Accumulated other comprehensive los s |
( |
) | ( |
) | ||||
Treasury shares as of March 31 , 2021 and December 31, 2020 — |
( |
) | ( |
) | ||||
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|
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|
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|
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Non-controlling interests |
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Total equity |
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Total liabilities and equity |
$ | $ | ||||||
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|
|
|
Three months ended |
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March 31, |
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2021 |
2020 |
|||||||
Net revenues |
$ | $ | ||||||
Cost of sales |
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|
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Gross profit |
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Research and development expenses |
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Selling and marketing expenses |
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General and administrative expenses |
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Intangible assets impairments |
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Other assets impairments, restructuring and other items |
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Legal settlements and loss contingencies |
( |
) | ||||||
Other income |
( |
) | ( |
) | ||||
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|
|
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Operating (loss) income |
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Financial expenses, net |
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|
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Income (loss) before income taxes |
( |
) | ||||||
Income taxes (benefit) |
( |
) | ||||||
Share in (profits) losses of associated companies, net |
( |
) | ||||||
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|
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Net income (loss) |
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Net income (loss) attributable to non-controlling interests |
( |
) | ||||||
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Net income (loss) attributable to Teva |
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|
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Earnings (loss) per share attributable to ordinary shareholders: |
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Basic |
$ | $ | ||||||
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|
|
|
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Diluted |
$ | $ | ||||||
|
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|
|
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Weighted average number of shares (in millions): |
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Basic |
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Diluted |
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|
Three months ended |
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March 31, |
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2021 |
2020 |
|||||||
Net income (loss) |
$ | $ | ||||||
Other comprehensive income (loss), net of tax: |
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Currency translation adjustment |
( |
) | ( |
) | ||||
Unrealized gain (loss) from derivative financial instruments, net |
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|
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Total other comprehensive income (loss) |
( |
) | ( |
) | ||||
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|
|
|
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Total comprehensive income (loss) |
( |
) | ( |
) | ||||
Comprehensive income (loss) attributable to non-controlling interests |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Comprehensive income (loss) attributable to Teva |
$ | ( |
) | $ | ( |
) | ||
|
|
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|
Teva shareholders’ equity |
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Ordinary shares |
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Number of shares (in millions) |
Stated value |
Additional paid-in capital |
Retained earnings (accumulated deficit) |
Accumulated other comprehensive (loss) |
Treasury shares |
Total Teva shareholders’ equity |
Non-controlling interests |
Total equity |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net Income (loss) |
||||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||
Issuance of Shares |
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Stock-based compensation expense |
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Balance at March 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||
|
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|
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* | Represents an amount less than $ |
Teva shareholders’ equity |
||||||||||||||||||||||||||||||||||||
Ordinary shares |
||||||||||||||||||||||||||||||||||||
Number of shares (in millions) |
Stated value |
Additional paid-in capital |
Retained earnings (accumulated deficit) |
Accumulated other comprehensive (loss) |
Treasury shares |
Total Teva shareholders’ equity |
Non-controlling interests |
Total equity |
||||||||||||||||||||||||||||
(U.S. dollars in millions) |
||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Net Income (loss) |
( |
) | ||||||||||||||||||||||||||||||||||
Other comprehensive income (loss) |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Issuance of shares |
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Stock-based compensation expense |
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Balance at March 31, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | ( |
) | $ | $ | $ | ||||||||||||||||||||||
|
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* | Represents an amount less than $ . |
Three months ended |
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March 31, |
||||||||
2021 |
2020 |
|||||||
Operating activities: |
||||||||
Net income (loss) |
$ | $ | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operations: |
||||||||
Depreciation and amortization |
||||||||
Impairment of long-lived assets and assets held for sale |
||||||||
Net change in operating assets and liabilities |
( |
) | ( |
) | ||||
Deferred income taxes – net and uncertain tax positions |
( |
) | ( |
) | ||||
Stock-based compensation |
||||||||
Net loss (gain) from investments and from sale of long lived assets |
||||||||
Other items |
( |
) | ||||||
|
|
|
|
|||||
Net cash provided by (used in) operating activities |
( |
) | ||||||
|
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|
|||||
Investing activities: |
||||||||
Beneficial interest collected in exchange for securitized accounts receivables |
||||||||
Purchases of property, plant and equipment |
( |
) | ( |
) | ||||
Proceeds from sale of business and long lived assets |
||||||||
Proceeds from sale of investments and other investing activities |
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|
|
|
|
|||||
Net cash provided by investing activities |
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|
|||||
Financing activities: |
||||||||
Repayment of senior notes and loans and other long-term liabilities |
( |
) | ||||||
Redemption of convertible senior notes |
( |
) | ||||||
Other financing activities |
( |
) | ||||||
|
|
|
|
|||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Translation adjustment on cash and cash equivalents |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Net change in cash and cash equivalents |
( |
) | ( |
) | ||||
Balance of cash and cash equivalents at beginning of period |
||||||||
|
|
|
|
|||||
Balance of cash and cash equivalents at end of period |
$ | $ | ||||||
|
|
|
|
|||||
Non-cash financing and investing activities: |
||||||||
Beneficial interest obtained in exchange for securitized accounts receivables |
$ | $ |
a. |
Basis of presentation |
b. |
Significant accounting policies |
March 31, |
December 31, |
|||||||
2021 |
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 |
$ | $ | ||||||
|
|
|
|
Three months ended March 31, 2021 |
||||||||||||||||||||
North America |
Europe |
International Markets |
Other activities |
Total |
||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||
Sale of goods |
||||||||||||||||||||
Licensing arrangements |
||||||||||||||||||||
Distribution |
||||||||||||||||||||
Other |
||||||||||||||||||||
|
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|
|
|
|
|
|
|||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2020 |
||||||||||||||||||||
North America |
Europe |
International Markets |
Other activities |
Total |
||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||
Sale of goods |
||||||||||||||||||||
Licensing arrangements |
||||||||||||||||||||
Distribution |
— | |||||||||||||||||||
Other |
||||||||||||||||||||
|
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|
|
|
|||||||||||
$ | $ | $ | $ | $ | ||||||||||||||||
|
|
|
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|
|
Sales Reserves and Allowances |
||||||||||||||||||||||||||||||||
Reserves included in Accounts Receivable, net |
Rebates |
Medicaid and other governmental allowances |
Chargebacks |
Returns |
Other |
Total reserves included in SR&A |
Total |
|||||||||||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Provisions related to sales made in current year |
||||||||||||||||||||||||||||||||
Provisions related to sales made in prior periods |
— |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||||||
Credits and payments |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Translation differences |
— |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at March 31, 2021 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reserves included in Accounts Receivable, net |
Rebates |
Medicaid and other governmental allowances |
Chargebacks |
Returns |
Other |
Total reserves included in SR&A |
Total |
|||||||||||||||||||||||||
(U.S.$ in millions) |
||||||||||||||||||||||||||||||||
Balance at December 31, 2019 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
||||||||||||||||||||||||
Provisions related to sales made in current year |
||||||||||||||||||||||||||||||||
Provisions related to sales made in prior periods |
— |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||||||
Credits and payments |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||||||||||
Translation differences |
— |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at March 31, 2020 |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
March 31, 2021 |
December 31, 2020 |
|||||||
(U.S. $ in millions) |
||||||||
Finished products |
$ | $ | ||||||
Raw and packaging materials |
||||||||
Products in process |
||||||||
Materials in transit and payments on account |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
Gross carrying amount net of impairment |
Accumulated amortization |
Net carrying amount |
||||||||||||||||||||||
March 31, |
December 31, |
March 31, |
December 31, |
March 31, |
December 31, |
|||||||||||||||||||
2021 |
2020 |
2021 |
2020 |
2021 |
2020 |
|||||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||||||
Product rights |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Trade names |
||||||||||||||||||||||||
In process research and development |
— | — | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(a) | IPR&D assets of $ |
(b) | Identifiable product rights of $ |
(a) | IPR&D assets of $ |
(b) | Identifiable product rights of $ |
North America |
Europe |
International Markets |
Other |
Total |
||||||||||||||||
(U.S. $ in millions) |
||||||||||||||||||||
Balance as of December 31, 2020 (1) |
$ | $ | $ | $ | $ | |||||||||||||||
Changes during the period: |
||||||||||||||||||||
Translation differences |
( |
) | ( |
) | ( |
) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of March 31, 2021 (1) |
$ | $ | $ | $ | $ | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Accumulated goodwill impairment as of March 31, 2021 and December 31, 2020 was approximately $ |
March 31, 2021 |
December 31, 2020 |
|||||||||||||||
Weighted average interest rate as of March 31, 2021 |
Maturity |
|||||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Convertible senior debentures |
% | |||||||||||||||
Current maturities of long-term liabilities |
|
|||||||||||||||
|
|
|
|
|||||||||||||
Total short-term debt |
|
$ | $ | |||||||||||||
|
|
|
|
Weighted average interest rate as of March 31, 2021 |
Maturity |
March 31, 2021 |
December 31, 2020 |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Senior notes EUR |
% | |||||||||||||||
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 |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
Senior notes USD |
% | |||||||||||||||
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 |
|
$ | $ | |||||||||||||
|
|
|
|
Fair value |
||||||||
Not designated as hedging instruments |
||||||||
March 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) |
|||||||||||||||
Three months ended, |
Three months ended, |
|||||||||||||||
March 31, 2021 |
March 31, 2020 |
March 31, 2021 |
March 31, 2020 |
|||||||||||||
Reported under |
(U.S. $ in millions) |
|||||||||||||||
Line items in which effects of hedges are recorded |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Cross-currency swaps—net investment hedge (1) |
( |
) | ( |
) |
Financial expenses, net |
Net revenues |
|||||||||||||||
Three months ended, |
Three months ended, |
|||||||||||||||
March 31, 2021 |
March 31, 2020 |
March 31, 2021 |
March 31, 2020 |
|||||||||||||
Reported under |
(U.S. $ in millions) |
|||||||||||||||
Line items in which effects of hedges are recorded |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||
Option and forward contracts (2) |
( |
) | — | |||||||||||||
Option and forward contracts economic hedge (3) |
— | ( |
) | ( |
) |
(1) | In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $500 million maturing in 2020. These cross currency swaps were designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets, in order to reduce the risk of adverse exchange rate fluctuations. With respect to these cross currency swap agreements, Teva recognized gains which mainly reflect the differences between the float-for-float |
(2) | 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. |
(3) | 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. 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 2020, Teva recognized a loss of $ |
Three months ended |
||||||||
March 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Impairments of long-lived tangible assets (1) |
$ | $ | ||||||
Contingent consideration |
||||||||
Restructuring |
||||||||
Other |
— | |||||||
Total |
$ | $ | ||||||
(1) | Including impairments related to exit and disposal activities |
Three months ended March 31, |
||||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Restructuring |
||||||||
Employee termination |
$ | $ | ||||||
Other |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
Employee termination costs |
Other |
Total |
||||||||||
(U.S. $ in millions ) |
||||||||||||
Balance as of January 1, 2021 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Provision |
( |
) | ( |
) | ( |
) | ||||||
Utilization and other* |
||||||||||||
|
|
|
|
|
|
|||||||
Balance as of March 31, 2021 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
Employee termination costs |
Other |
Total |
||||||||||
(U.S. $ in millions ) |
||||||||||||
Balance as of January 1, 2020 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Provision |
( |
) |
( |
) |
( |
) | ||||||
Utilization and other* |
||||||||||||
|
|
|
|
|
|
|||||||
Balance as of March 31, 2020 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
|
|
|
|
|
|
* |
Includes adjustments for foreign currency translation. |
Net Unrealized Gains (Losses) |
Benefit Plans |
|||||||||||||||
Foreign currency translation adjustments |
Derivative financial instruments |
Actuarial gains (losses) and prior service (costs) credits |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Balance as of December 31, 2020, net of taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
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 March 31, 2021, net of taxes |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||
|
|
|
|
|
|
|
|
* | Amounts do not include a $ loss from foreign currency translation adjustments attributable to non-controlling interests. |
Net Unrealized Gains (Losses) |
Benefit Plans |
|||||||||||||||
Foreign currency translation adjustments |
Derivative financial instruments |
Actuarial gains (losses) and prior service (costs) credits |
Total |
|||||||||||||
(U.S. $ in millions) |
||||||||||||||||
Balance as of December 31, 2019, net of taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
|||||||||
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 March 31, 2020, net of taxes |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
|
|
|
|
|
|
|
* | Amounts do not include a $ non-controlling interests. |
(a) | North America segment, which includes the United States and Canada. |
(b) | Europe segment, which includes the European Union and certain other European countries. |
(c) | International Markets segment, which includes all countries other than those in the North America and Europe segments. |
a. |
Segment information: |
Three months ended March 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 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Three months ended March 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 |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Three months ended |
||||||||
March 31, |
||||||||
2021 |
2020 |
|||||||
(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 |
||||||||
Intangible asset impairments |
||||||||
Legal settlements and loss contingencies |
( |
) | ||||||
Other unallocated amounts |
||||||||
|
|
|
|
|||||
Consolidated operating income (loss) |
||||||||
|
|
|
|
|||||
Financial expenses, net |
||||||||
|
|
|
|
|||||
Consolidated income (loss) before income taxes |
$ | $ | ( |
) | ||||
|
|
|
|
North America |
Three months ended March 31, |
|||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Generic products |
$ | $ | ||||||
AJOVY |
||||||||
AUSTEDO |
||||||||
BENDEKA/TREANDA |
||||||||
COPAXONE |
||||||||
ProAir* |
||||||||
Anda |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
* |
Does not include revenues from ProAir authorized generic, which are included under generic products. |
Europe |
Three months ended March 31, |
|||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Generic products |
$ | $ | ||||||
AJOVY |
||||||||
COPAXONE |
||||||||
Respiratory products |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
International markets |
Three months ended March 31, |
|||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
Generic products |
$ | $ | ||||||
COPAXONE |
||||||||
Other |
||||||||
|
|
|
|
|||||
Total |
$ | $ | ||||||
|
|
|
|
March 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, mainly debt securities |
— | |||||||||||||||
Derivatives: |
||||||||||||||||
Asset derivatives—options and forward contracts |
— | — | ||||||||||||||
Liability derivatives—options and forward contracts |
— | ( |
) | — | ( |
) | ||||||||||
Contingent consideration** |
— | — | ( |
) | ( |
) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
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 |
$ | $ | $ | ( |
) | $ | ||||||||||
|
|
|
|
|
|
|
|
* | As of March 31, 2021, Teva’s shares in American Well Corporation (“American Well”) moved from a Level 2 measurement to Level 1 measurement within the fair value hierarchy, since they are no longer subject to a sale restriction. |
** | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
Three months ended March 31, 2021 |
Three months ended March 31, 2020 |
|||||||
(U.S. $ in millions) |
||||||||
Fair value at the beginning of the period |
$ | ( |
) | ( |
) | |||
Redemption of debt securities |
( |
) | ||||||
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 |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
Estimated fair value* |
||||||||
March 31, |
December 31, |
|||||||
2021 |
2020 |
|||||||
(U.S. $ in millions) |
||||||||
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. |
ITEM 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• |
Revenues in the first quarter of 2021 were $3,982 million, a decrease of 9%, or 10% in local currency terms, compared to the first quarter of 2020, mainly due to lower revenues from generic, OTC and respiratory products and from COPAXONE in our Europe segment, lower revenues from Anda, COPAXONE and BENDEKA/TREANDA in our North America segment, lower revenues from Japan resulting from the divestment of a majority of the generic and operational assets of our Japanese business venture, as well as regulatory price reductions and generic competition to off-patented products in Japan, partially offset by higher revenues from generic products and AUSTEDO in our North America segment. Revenues were also affected by changes in demand for certain products resulting from the impact of the COVID-19 pandemic. |
• |
Our North America segment generated revenues of $1,989 million and profit of $577 million in the first quarter of 2021. Revenues decreased by 5% compared to the first quarter of 2020, mainly due to a decrease in revenues of Anda, COPAXONE and BENDEKA/TREANDA, partially offset by higher revenues from generic products and AUSTEDO. Our North America segment has experienced some reductions in volume due to less physician and hospital activity during the COVID-19 pandemic, but has also experienced increase in demand for certain products related to the treatment of COVID-19 and its symptoms. In addition, the ability to promote certain specialty products, primarily AJOVY and AUSTEDO, has been impacted by less physician visits by patients and less physician interactions by our sales personnel. Profit increased by 5% compared to the first quarter of 2020, mainly due to higher gross profit, as well as lower S&M expenses. |
• |
Our Europe segment generated revenues of $1,214 million and profit of $338 million in the first quarter of 2021. Revenues decreased by 13%, or 20% in local currency terms, compared to the first quarter of 2020. This decrease was mainly due to higher revenues in the first quarter of 2020, as a result of significant customer stocking due to the COVID-19 pandemic. In addition, revenues were impacted by lower demand of generic, OTC and respiratory products resulting from a decline in doctor and hospital visits by patients, which resulted in fewer prescriptions, as well as lower sales of cough and cold products, both due to the COVID-19 pandemic. The decrease in revenues is also attributed to a decline in COPAXONE revenues due to competing glatiramer acetate products and price declines in oncology products as a result of generic competition. Profit decreased by 33%, mainly due to lower revenues. |
• |
Our International Markets segment generated revenues of $490 million and profit of $122 million in the first quarter of 2021. Revenues decreased by 13%, or 7% in local currency terms, compared to the first quarter of 2020, mainly due to lower revenues in Japan resulting from the divestment of the majority of the generic and operational assets of our Japanese business venture, as well as regulatory price reductions and generic competition to off-patented products in Japan and lower positive impact from hedging activity. Profit decreased by 22%, mainly due to lower positive impact from hedging activity as well as lower sales in Japan resulting from regulatory price reductions and generic competition to off-patented products, partially offset by lower S&M expenses. |
• |
Impairments of identifiable intangible assets were $79 million in the first quarter of 2021, compared to $649 million in the first quarter of 2020. See note 5 to our consolidated financial statements. |
• |
No goodwill impairments were recorded in the first quarters of both 2021 and 2020. |
• |
We recorded other asset impairments, restructuring and other items expenses of $137 million in the first quarter of 2021, compared to expenses of $121 million in the first quarter of 2020. See note 12 to our consolidated financial statements. |
• |
Legal settlements and loss contingencies expenses were $104 million in the first quarter of 2021, compared to income of $25 million in the first quarter of 2020. See note 9 to our consolidated financial statements. |
• |
Operating income was $434 million in the first quarter of 2021, compared to operating income of $191 million in the first quarter of 2020. The increase was mainly due to lower intangible asset impairment charges, partially offset by lower profit in our Europe segment along with higher legal settlements and loss contingencies. |
• |
Financial expenses were $290 million in the first quarter of 2021, compared to $224 million in the first quarter of 2020. Financial expenses in the first quarter of 2021 were mainly comprised of interest expenses of $239 million and loss on revaluations of marketable securities of $64 million. Financial expenses in the first quarter of 2020 were mainly comprised of interest expenses of $241 million. |
|
• | In the first quarter of 2021, we recognized a tax expense of $62 million, on pre-tax income of $144 million. In the first quarter of 2020, we recognized a tax benefit of $59 million, on pre-tax loss of $33 million. Our tax rate for the first quarter of 2021 was mainly affected by legal settlements, impairments and amortization in jurisdictions in which tax rates are lower than Teva’s average tax rate on its ongoing business operations. |
• | Exchange rate movements during the first quarter of 2021, net of hedging effects, positively impacted revenues by $74 million and negatively impacted operating income by $14 million, compared to the first quarter of 2020. |
• | As of March 31, 2021, our debt was $24,986 million, compared to $25,919 million as of December 31, 2020. This decrease was mainly due to the redemption of $491 million of our convertible senior debentures and exchange rate fluctuations. |
• | Cash flow used in operating activities during the first quarter of 2021 was $405 million, compared to cash flow generated from operating activities of $305 million in the first quarter of 2020. The decrease in the first quarter of 2021 was mainly due to changes in working capital items resulting from a decrease in SR&A and an increase in inventory, as well as lower profit in our Europe segment. |
• | During the first quarter of 2021, we generated free cash flow of $59 million, which we define as comprising $405 million in cash flow used in operating activities, $476 million in beneficial interest collected in exchange for securitized accounts receivables and $138 million in proceeds from divestitures of businesses and other assets, partially offset by $150 million in cash used for capital investment. During the first quarter of 2020, we generated free cash flow of $551 million, comprising $305 million in cash flow generated from operating activities, $368 million in beneficial interest collected in exchange for securitized accounts receivables and $6 million in proceeds from sale of property, plant and equipment and intangible assets, partially offset by $128 million in cash used for capital investment. The decrease in the first quarter of 2021 resulted mainly from lower cash flow generated from operating activities, partially offset by higher sales of assets. |
Three months ended March 31, |
||||||||||||||||
2021 |
2020 |
|||||||||||||||
(U.S. $ in millions / % of Segment Revenues) |
||||||||||||||||
Revenues |
$ | 1,989 | 100 | % | $ | 2,082 | 100 | % | ||||||||
Gross profit |
1,074 | 54.0 | % | 1,062 | 51.0 | % | ||||||||||
R&D expenses |
160 | 8.0 | % | 146 | 7.0 | % | ||||||||||
S&M expenses |
229 | 11.5 | % | 251 | 12.1 | % | ||||||||||
G&A expenses |
111 | 5.6 | % | 118 | 5.6 | % | ||||||||||
Other (income) expense |
(3 | ) | § | (2 | ) | § | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment profit* |
$ | 577 | 29.0 | % | $ | 550 | 26.4 | % | ||||||||
|
|
|
|
|
|
|
|
* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
Three months ended March 31, |
Percentage Change |
|||||||||||
2021 |
2020 |
2020-2021 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Generic products |
$ | 1,053 | $ | 952 | 11 | % | ||||||
AJOVY |
31 | 29 | 8 | % | ||||||||
AUSTEDO |
146 | 122 | 20 | % | ||||||||
BENDEKA/TREANDA |
91 | 105 | (14 | %) | ||||||||
COPAXONE |
164 | 198 | (17 | %) | ||||||||
ProAir* |
54 | 59 | (9 | %) | ||||||||
Anda |
289 | 426 | (32 | %) | ||||||||
Other |
161 | 191 | (16 | %) | ||||||||
|
|
|
|
|||||||||
Total |
$ | 1,989 | $ | 2,082 | (5 | %) | ||||||
|
|
|
|
* | Does not include revenues from 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 |
* | 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 Annual U.S. Branded Market (U.S. $ in millions (IQVIA)) * |
||||
Ibrutinib Caps |
Imbruvica ® |
$ | 782 | |||
Lubiprostone Caps |
Amitza ® |
$ | 410 |
* | The figures presented are for the twelve months ended in the calendar quarter immediately prior to our launch or re-launch. |
Phase 2 |
Phase 3 |
Pre-Submission | ||||
Novel Biologics |
Fremanezumab Fibromyalgia |
Fremanezumab Additional indication |
||||
TEV-48574 Respiratory |
Fasinumab Osteoarthritic Pain (March 2016) (1) |
|||||
TEV-53275 Respiratory |
||||||
Small Molecules |
Deutetrabenazine Dyskinesia in Cerebral Palsy (September 2019) |
Risperidone LAI Schizophrenia (2) | ||||
Digital Respiratory |
Digihaler ® (budesonide and formoterol fumarate dihydrate) (EU) | |||||
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) | In January 2021, we announced positive results for a phase 3 clinical trial designed to evaluate the efficacy of risperidone LAI. No new safety signals were identified that are inconsistent with the known safety profile of other risperidone formulations. The second phase 3 study evaluating long-term safety and tolerability is ongoing. |
Three months ended March 31, |
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2021 |
2020 |
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(U.S. $ in millions / % of Segment Revenues) |
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Revenues |
$ | 1,214 | 100% | $1,402 | 100% | |||||||||||
Gross profit |
688 | 56.6% | 823 | 58.7% | ||||||||||||
R&D expenses |
66 | 5.4% | 55 | 3.9% | ||||||||||||
S&M expenses |
214 | 17.7% | 202 | 14.4% | ||||||||||||
G&A expenses |
70 | 5.8% | 66 | 4.7% | ||||||||||||
Other (income) expense |
§ | § | (1) | § | ||||||||||||
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Segment profit* |
$ | 338 | 27.8% | $502 | 35.8% | |||||||||||
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* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than $1 million or 0.5%, as applicable. |
Three months ended March 31, |
Percentage Change |
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2021 |
2020 |
2020-2021 |
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(U.S. $ in millions) |
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Generic products |
$ | 865 | $ | 1,032 | (16 | %) | ||||||
AJOVY |
16 | 4 | 251 | % | ||||||||
COPAXONE |
100 | 109 | (8 | %) | ||||||||
Respiratory products |
93 | 106 | (12 | %) | ||||||||
Other |
140 | 151 | (7 | %) | ||||||||
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Total |
$ | 1,214 | $ | 1,402 | (13 | %) | ||||||
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Three months ended March 31, |
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2021 |
2020 |
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(U.S. $ in millions / % of Segment Revenues) |
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Revenues |
$ | 490 | 100% | $ | 565 | 100% | ||||||||||
Gross profit |
260 | 53.0% | 305 | 54.0% | ||||||||||||
R&D expenses |
18 | 3.6% | 15 | 2.7% | ||||||||||||
S&M expenses |
96 | 19.6% | 106 | 18.8% | ||||||||||||
G&A expenses |
26 | 5.3% | 34 | 6.0% | ||||||||||||
Other (income) expense |
(2 | ) | § | (6 | ) | (1.1%) | ||||||||||
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Segment profit* |
$ | 122 | 24.9% | $ | 156 | 27.6% | ||||||||||
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* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
Three months ended March 31, |
Percentage Change |
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2021 |
2020 |
2020-2021 |
||||||||||
(U.S. $ in millions) |
||||||||||||
Generic products |
$ | 392 | $ | 449 | (13 | %) | ||||||
COPAXONE |
12 | 12 | (1 | %) | ||||||||
Other |
86 | 104 | (17 | %) | ||||||||
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Total |
$ | 490 | $ | 565 | (13 | %) | ||||||
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Three months ended |
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March 31, |
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2021 |
2020 |
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(U.S. $ in millions) |
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North America profit |
$ | 577 | $ | 550 | ||||
Europe profit |
338 | 502 | ||||||
International Markets profit |
122 | 156 | ||||||
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Total reportable segments profit |
1,036 | 1,208 | ||||||
Profit of other activities |
41 | 36 | ||||||
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Total segments profit |
1,077 | 1,244 | ||||||
Amounts not allocated to segments: |
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Amortization |
242 | 258 | ||||||
Other assets impairments, restructuring and other items |
137 | 121 | ||||||
Intangible asset impairments |
79 | 649 | ||||||
Legal settlements and loss contingencies |
104 | (25 | ) | |||||
Other unallocated amounts |
82 | 49 | ||||||
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Consolidated operating income (loss) |
434 | 191 | ||||||
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Financial expenses, net |
290 | 224 | ||||||
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Consolidated income (loss) before income taxes |
$ | 144 | $ | (33 | ) | |||
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• | our management and Board of Directors use the 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/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 and marketable securities investment valuation gains/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. |
Three Months Ended March 31, 2021 |
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U.S. $ and shares in millions (except per share amounts) |
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GAAP | Excluded for non-GAAP measurement |
Non-GAAP |
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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 |
Other non-GAAP items* |
Other items |
|||||||||||||||||||||||||||||||||||||||
Net revenues |
3,982 | 3,982 | ||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales |
2,104 | 215 | 5 | 6 | 41 | 1,838 | ||||||||||||||||||||||||||||||||||||||||||
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Gross profit |
1,878 | 215 | — | — | — | — | 5 | 6 | — | 41 | — | 2,144 | ||||||||||||||||||||||||||||||||||||
Gross profit margin |
47.2 | % | 53.8 | % | ||||||||||||||||||||||||||||||||||||||||||||
R&D expenses |
254 | 5 | 5 | — | 244 | |||||||||||||||||||||||||||||||||||||||||||
S&M expenses |
585 | 27 | 9 | — | 549 | |||||||||||||||||||||||||||||||||||||||||||
G&A expenses |
290 | 11 | — | 278 | ||||||||||||||||||||||||||||||||||||||||||||
Other income |
(5 | ) | (5 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies |
104 | 104 | — | |||||||||||||||||||||||||||||||||||||||||||||
Other assets impairments, restructuring and other items |
137 | 48 | 81 | 3 | 4 | — | ||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairments |
79 | 79 | — | |||||||||||||||||||||||||||||||||||||||||||||
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Operating income (loss) |
434 | 242 | 104 | 127 | 5 | 81 | 5 | 31 | 3 | 45 | — | 1,077 | ||||||||||||||||||||||||||||||||||||
Financial expenses, net |
290 | 64 | 227 | |||||||||||||||||||||||||||||||||||||||||||||
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Income (loss) before income taxes |
144 | 242 | 104 | 127 | 5 | 81 | 5 | 31 | 3 | 45 | 64 | 851 | ||||||||||||||||||||||||||||||||||||
Income taxes |
62 | (85 | ) | 146 | ||||||||||||||||||||||||||||||||||||||||||||
Share in profits (losses) of associated companies – net |
(3 | ) | 2 | (4 | ) | |||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) |
84 | 242 | 104 | 127 | 5 | 81 | 5 | 31 | 3 | 45 | (19 | ) | 709 | |||||||||||||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests |
7 | (3 | ) | 10 | ||||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) attributable to Teva |
77 | 242 | 104 | 127 | 5 | 81 | 5 | 31 | 3 | 45 | (22 | ) | 699 | |||||||||||||||||||||||||||||||||||
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Total reconciled items |
242 | 104 | 127 | 5 | 81 | 5 | 31 | 3 | 45 | (22 | ) | |||||||||||||||||||||||||||||||||||||
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EPS - Basic |
0.07 | 0.57 | 0.64 | |||||||||||||||||||||||||||||||||||||||||||||
EPS - Diluted |
0.07 | 0.56 | 0.63 |
* | 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. |
Three Months Ended March 31, 2020 |
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U.S. $ and shares in millions (except per share amounts) |
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GAAP | Excluded for non-GAAP measurement |
Non-GAAP |
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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 |
Other non-GAAP items* |
Other items |
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Net revenues |
4,357 | 4,357 | ||||||||||||||||||||||||||||||||||||||||||||||
Cost of sales |
2,294 | 223 | 4 | 6 | 15 | 2,046 | ||||||||||||||||||||||||||||||||||||||||||
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Gross profit |
2,063 | 223 | — | — | — | — | 4 | 6 | — | 15 | — | 2,312 | ||||||||||||||||||||||||||||||||||||
Gross profit margin |
47.3 | % | 53.1 | % | ||||||||||||||||||||||||||||||||||||||||||||
R&D expenses |
221 | (4 | ) | 5 | 221 | |||||||||||||||||||||||||||||||||||||||||||
S&M expenses |
613 | 35 | 9 | 570 | ||||||||||||||||||||||||||||||||||||||||||||
G&A expenses |
304 | 10 | 4 | 290 | ||||||||||||||||||||||||||||||||||||||||||||
Other income |
(13 | ) | (13 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies |
(25 | ) | (25 | ) | — | |||||||||||||||||||||||||||||||||||||||||||
Other assets impairments, restructuring and other items |
121 | 75 | 39 | 6 | 1 | — | ||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairments |
649 | 649 | — | |||||||||||||||||||||||||||||||||||||||||||||
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Operating income (loss) |
191 | 258 | (25 | ) | 724 | (4 | ) | 39 | 4 | 30 | 6 | 20 | — | 1,244 | ||||||||||||||||||||||||||||||||||
Financial expenses, net |
224 | 11 | 213 | |||||||||||||||||||||||||||||||||||||||||||||
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Income (loss) before income taxes |
(33 | ) | 258 | (25 | ) | 724 | (4 | ) | 39 | 4 | 30 | 6 | 20 | 11 | 1,030 | |||||||||||||||||||||||||||||||||
Income taxes |
(59 | ) | (234 | ) | 175 | |||||||||||||||||||||||||||||||||||||||||||
Share in profit (losses) of associated companies – net |
1 | 1 | ||||||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) |
25 | 258 | (25 | ) | 724 | (4 | ) | 39 | 4 | 30 | 6 | 20 | (223 | ) | 854 | |||||||||||||||||||||||||||||||||
Net income (loss) attributable to non-controlling interests |
(44 | ) | (63 | ) | 20 | |||||||||||||||||||||||||||||||||||||||||||
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Net income (loss) attributable to Teva |
69 | 258 | (25 | ) | 724 | (4 | ) | 39 | 4 | 30 | 6 | 20 | (286 | ) | 835 | |||||||||||||||||||||||||||||||||
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Total reconciled items |
258 | (25 | ) | 724 | (4 | ) | 39 | 4 | 30 | 6 | 20 | (286 | ) | |||||||||||||||||||||||||||||||||||
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EPS - Basic |
0.06 | 0.70 | 0.76 | |||||||||||||||||||||||||||||||||||||||||||||
EPS - Diluted |
0.06 | 0.70 | 0.76 |
* | 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. |
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. |
CONTROLS AND PROCEDURES |
ITEM 1. |
LEGAL PROCEEDINGS |
ITEM 1A. |
RISK FACTORS |
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
ITEM 3. |
DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
OTHER INFORMATION |
ITEM 6. |
EXHIBITS |
31.1 | Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
31.2 | Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 * | |
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 * | |
101.INS | XBRL Taxonomy Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema Document | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* | Filed herewith. |
TEVA PHARMACEUTICAL INDUSTRIES LIMITED | ||||||
Date: April 28, 2021 | By: | /s/ Eli Kalif | ||||
Name: | Eli Kalif | |||||
Title: | Executive Vice President, Chief Financial Officer (Duly Authorized Officer) |
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
I, Kåre Schultz, certify that:
1. | I have reviewed this quarterly report on Form 10-Q 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: April 28, 2021
/s/ Kåre Schultz |
Kåre Schultz |
President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT
I, Eli Kalif, certify that:
1. | I have reviewed this quarterly report on Form 10-Q 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: April 28, 2021
/s/ Eli Kalif |
Eli Kalif |
Executive Vice President, 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 Quarterly Report of Teva Pharmaceutical Industries Limited (the Company) on Form 10-Q for the period ended March 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: April 28, 2021
/s/ Kåre Schultz |
Kåre Schultz |
President and Chief Executive Officer |
/s/ Eli Kalif |
Eli Kalif |
Executive Vice President, Chief Financial Officer |
Consolidated Balance Sheets (Parenthetical) shares in Millions, $ in Millions |
Mar. 31, 2021
USD ($)
shares
|
Mar. 31, 2021
SFr / shares
|
Dec. 31, 2020
USD ($)
shares
|
Dec. 31, 2020
SFr / shares
|
---|---|---|---|---|
Allowance for credit losses | $ | $ 119 | $ 126 | ||
Common stock, par or stated value per share | SFr / shares | SFr 0.10 | SFr 0.10 | ||
Ordinary shares, authorized | 2,495 | 2,495 | ||
Ordinary shares, issued | 1,208 | 1,202 | ||
Treasury shares | 106 | 106 |
Consolidated Statements of Income (Loss) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Net revenues | $ 3,982 | $ 4,357 |
Cost of sales | 2,104 | 2,294 |
Gross profit | 1,878 | 2,063 |
Research and development expenses | 254 | 221 |
Selling and marketing expenses | 585 | 613 |
General and administrative expenses | 290 | 304 |
Intangible assets impairments | 79 | 649 |
Other assets impairments, restructuring and other items | 137 | 121 |
Legal settlements and loss contingencies | 104 | (25) |
Other income | (5) | (13) |
Operating (loss) income | 434 | 191 |
Financial expenses, net | 290 | 224 |
Income (loss) before income taxes | 144 | (33) |
Income taxes (benefit) | 62 | (59) |
Share in (profits) losses of associated companies, net | (3) | 1 |
Net income (loss) | 84 | 25 |
Net income (loss) attributable to non-controlling interests | 7 | (44) |
Net income (loss) attributable to Teva | $ 77 | $ 69 |
Earnings (loss) per share attributable to ordinary shareholders: | ||
Basic | $ 0.07 | $ 0.06 |
Diluted | $ 0.07 | $ 0.06 |
Weighted average number of shares (in millions): | ||
Basic | 1,099 | 1,093 |
Diluted | 1,107 | 1,096 |
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Net income (loss) | $ 84 | $ 25 |
Other comprehensive income (loss), net of tax: | ||
Currency translation adjustment | (208) | (560) |
Unrealized gain (loss) from derivative financial instruments, net | 7 | 30 |
Total other comprehensive income (loss) | (201) | (530) |
Total comprehensive income (loss) | (117) | (505) |
Comprehensive income (loss) attributable to non-controlling interests | (60) | (34) |
Comprehensive income (loss) attributable to Teva | $ (57) | $ (471) |
Consolidated Statements of Changes in Equity - USD ($) shares in Millions, $ in Millions |
Total |
Ordinary Shares [Member] |
Additional Paid-in Capital [Member] |
Retained Earnings [Member] |
AOCI Attributable to Parent [Member] |
Treasury Shares [Member] |
Total Teva Shareholders' Equity [Member] |
Non-controlling Interests [Member] |
||
---|---|---|---|---|---|---|---|---|---|---|
Beginning balance at Dec. 31, 2019 | $ 15,063 | $ 56 | $ 27,312 | $ (6,956) | $ (2,312) | $ (4,128) | $ 13,972 | $ 1,091 | ||
Beginning balance, shares at Dec. 31, 2019 | 1,198 | |||||||||
Net Income (loss) | 25 | 69 | 69 | (44) | ||||||
Other Comprehensive income (loss) | (530) | (540) | (540) | 10 | ||||||
Issuance of Shares, value | [1] | |||||||||
Issuance of Shares, shares | 3 | |||||||||
Stock-based compensation expense | 30 | 30 | 30 | |||||||
Ending balance at Mar. 31, 2020 | 14,588 | $ 56 | 27,342 | (6,887) | (2,852) | (4,128) | 13,531 | 1,057 | ||
Ending balance, shares at Mar. 31, 2020 | 1,201 | |||||||||
Beginning balance at Dec. 31, 2020 | 11,061 | $ 57 | 27,443 | (10,946) | (2,399) | (4,128) | 10,026 | 1,035 | ||
Beginning balance, shares at Dec. 31, 2020 | 1,202 | |||||||||
Net Income (loss) | 84 | 77 | 77 | 7 | ||||||
Other Comprehensive income (loss) | (201) | (134) | (134) | (67) | ||||||
Issuance of Shares, value | [1] | |||||||||
Issuance of Shares, shares | 6 | |||||||||
Stock-based compensation expense | 31 | 31 | 31 | |||||||
Ending balance at Mar. 31, 2021 | $ 10,975 | $ 57 | $ 27,474 | $ (10,869) | $ (2,534) | $ (4,128) | $ 10,000 | $ 975 | ||
Ending balance, shares at Mar. 31, 2021 | 1,208 | |||||||||
|
Consolidated Statements of Changes in Equity (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Maximum [Member] | Ordinary Shares [Member] | ||
Exercise of options by employees and vested RSUs | $ 0.5 | $ 0.5 |
Consolidated Statements of Cash Flows - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Operating activities: | ||
Net income (loss) | $ 84 | $ 25 |
Adjustments to reconcile net income (loss) to net cash provided by operations: | ||
Depreciation and amortization | 376 | 399 |
Impairment of long-lived assets and assets held for sale | 127 | 724 |
Net change in operating assets and liabilities | (1,076) | (666) |
Deferred income taxes – net and uncertain tax positions | (11) | (233) |
Stock-based compensation | 31 | 30 |
Net loss (gain) from investments and from sale of long lived assets | 74 | 24 |
Other items | (10) | 2 |
Net cash provided by (used in) operating activities | (405) | 305 |
Investing activities: | ||
Beneficial interest collected in exchange for securitized accounts receivables | 476 | 368 |
Purchases of property, plant and equipment | (150) | (128) |
Proceeds from sale of business and long lived assets | 138 | 6 |
Proceeds from sale of investments and other investing activities | 44 | 6 |
Net cash provided by investing activities | 508 | 252 |
Financing activities: | ||
Repayment of senior notes and loans and other long-term liabilities | 0 | (700) |
Redemption of convertible senior notes | (491) | 0 |
Other financing activities | (2) | 0 |
Net cash used in financing activities | (493) | (700) |
Translation adjustment on cash and cash equivalents | (44) | (28) |
Net change in cash and cash equivalents | (434) | (171) |
Balance of cash and cash equivalents at beginning of period | 2,177 | 1,975 |
Balance of cash and cash equivalents at end of period | 1,743 | 1,804 |
Non-cash financing and investing activities: | ||
Beneficial interest obtained in exchange for securitized accounts receivables | $ 488 | $ 375 |
Basis of presentation |
3 Months Ended | ||||||
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Mar. 31, 2021 | |||||||
Basis of presentation | Note 1 – Basis of presentation:
The accompanying unaudited consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. In the opinion of management, the financial statements reflect all normal and recurring adjustments necessary to fairly state the financial position and results of operations of Teva. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, as filed with the Securities and Exchange Commission (“SEC”). The year-end balance sheet data was derived from the audited consolidated financial statements as of December 31, 2020, but not all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”) are included. In the process of preparing the consolidated financial statements, management makes estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, equity, revenues and expenses and related disclosure of contingent assets and liabilities. The inputs into Teva’s judgments and estimates also consider the economic implications of the COVID-19 pandemic on its critical and significant accounting estimates, most significantly in relation to sales, reserves and allowances, IPR&D assets, marketed product rights and goodwill, all of which will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning the COVID-19 pandemic and the actions taken to contain or treat it, as well as the economic impact on Teva’s employees, third-party manufacturers and suppliers, customers and markets. All estimates made by Teva related to the impact of the COVID-19 pandemic within its financial statements may change in future periods. Actual results could differ from those estimates. The results of operations for the three months ended March 31, 2021 are not necessarily indicative of results that could be expected for the entire fiscal year. Certain amounts in the consolidated financial statements and associated notes may not add up due to rounding. All percentages have been calculated using unrounded amounts.
Recently adopted accounting pronouncements In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective for all entities as of March 12, 2020 through December 31, 2022. There was no impact to the Company’s consolidated financial statements for the period ended March 31, 2021 as a result of adopting this standard update. The Company is continuing to evaluate the potential impact of the replacement of the LIBOR benchmark on its interest rate risk management activities and has started initial negotiations to transform the facility base rate of its securitization program. However, it is not expected to have a material impact on the consolidated financial results. In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes” (the “update”). The amendments in this update simplify the accounting for income taxes by removing the following exceptions in ASC 740: (1) exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items; (2) exception to accounting for basis differences for equity method investments when a foreign subsidiary becomes an equity method investment; and (3) exception to accounting for basis differences for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date In addition, the update also simplifies the accounting for income taxes in certain topics as follows: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a non-income-based tax; (2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; (3) specifying that an entity can elect (rather than be required to) allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; and (4) requiring that an entity reflect the effect of an enacted change in tax laws or rates in the annual effective tax rate computation in the interim period that includes the enactment date. Teva adopted the provisions of this update as of January 1, 2021. Based on the Company’s evaluation of the above provisions, the Company notes that items (1) and (4) of this paragraph are not material. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. Recently issued accounting pronouncements, not yet adopted In August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts financial statements. |
Certain transactions |
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Certain transactions | NOTE 2 – Certain transactions: The Company has entered into alliances and other arrangements with third parties to acquire rights to products it does not have, to access markets it does not operate in and to otherwise share development costs or business risks. The Company’s most significant agreements of this nature are summarized below. Alvotech Partnership In August 2020, Teva entered into a partnership agreement with biopharmaceutical company Alvotech for the exclusive commercialization in the U.S. of five biosimilar product candidates. The initial pipeline for this partnership contains biosimilar candidates addressing multiple therapeutic areas, including a proposed biosimilar to Humira ® . Under this agreement, Alvotech is responsible for the development, registration and supply of the biosimilar product candidates and Teva will exclusively commercialize the products in the United States. Teva paid an upfront payment in the third quarter of 2020 that was recorded as R&D expense. Additional development and commercial milestone payments of up to$ 450 million, as well as royalty payments, may be payable by Teva over the next few years. Teva and Alvotech will share profit from the commercialization of these biosimilars. Abbvie recently sued Alvotech for allegedly misappropriating confidential information relating to Humira ® . Alvotech has disputed these claims. Eli Lilly and Alder BioPharmaceuticals In December 2018, Teva entered into an agreement with Eli Lilly resolving the European Patent Office opposition they had filed against Teva’s AJOVY ® patents. The settlement agreement with Lilly also resolved Lilly’s action to revoke the patent protecting AJOVY in the United Kingdom. On January 8, 2018, Teva signed a global license agreement with Alder BioPharmaceuticals (“Alder”). The agreement validates Teva’s intellectual property and resolves Alder’s opposition to Teva’s European patent with respect to anti-calcitonin gene-related peptide (CGRP) antibodies, including the withdrawal of Alder’s appeal before the European Patent Office. Under the terms of the agreement, Alder received a non-exclusive license to Teva’s anti-CGRP antibodies patent portfolio to develop, manufacture and commercialize eptinezumab in the United States and worldwide, excluding Japan and Korea. Teva received a $ 25 million upfront payment that was recognized as revenue during the first quarter of 2018, and a $ 25 million milestone payment in March 2020 that was recognized as revenue in the first quarter of 2020. The agreement stipulates additional development and commercial milestone payments to Teva of up to $ 150 million, as well as future royalties. AUSTEDO ® On September 19, 2017, Teva entered into a partnership agreement with Nuvelution Pharma, Inc. (“Nuvelution”) for development of AUSTEDO for the treatment of Tourette syndrome in pediatric patients in the United States. There are no further plans in this indication following clinical trial results received in February 2020, which failed to meet their primary endpoints. The partnership agreement was terminated on February 5, 2021. Otsuka On May 12, 2017, Teva entered into a license and collaboration agreement with Otsuka Pharmaceutical Co. Ltd. (“Otsuka”), providing Otsuka with an exclusive license to conduct phase 2 and 3 clinical trials for AJOVY in Japan and, if approved, to commercialize the product in Japan. Otsuka paid Teva an upfront payment of $50 million in consideration for the transaction. Results for these trials were received in January 2020 indicating that primary and secondary endpoints were achieved and that no clinically significant adverse events were observed in subjects. In the third quarter of 2020, Otsuka submitted an application to obtain manufacturing and marketing approval for AJOVY in Japan and, as a result, paid Teva a milestone payment of $15 million, which was recognized as revenue in the third quarter of 2020. Teva may receive additional milestone payments upon achievement of certain development and revenue targets. Otsuka will also pay Teva royalties on AJOVY sales in Japan. Celltrion In October 2016, Teva and Celltrion, Inc. (“Celltrion”) entered into a collaborative agreement to commercialize Truxima ® and Herzuma® , two biosimilar products for the U.S. and Canadian markets. Teva paid Celltrion $160 million, of which Teva received an aggregate credit of $60 million asof March 31, 2021. Teva and Celltrion share the profit from the commercialization of these products. These two products, Truxima and Herzuma, were approved by the FDA in November and December 2018, respectively and were launched in the United States in November 2019 and March 2020, respectively. Regeneron In September 2016, Teva and Regeneron Pharmaceuticals, Inc. (“Regeneron”) entered into a collaborative agreement to develop and commercialize Regeneron’s pain medication product, fasinumab. Teva and Regeneron share in the global commercial rights to this product (excluding Japan, Korea and nine other Asian countries), as well as ongoing associated R&D costs of approximately $1 billion. Teva made an upfront payment of $250 million to Regeneron in the third quarter of 2016 and additional payments for achievement of development milestones in an aggregate amount of $120 million were paid during 2017 and 2018. The agreement stipulates additional development and commercial milestone payments of up to $2,230 million, as well as future royalties. Currently, all non-essential activities and related expenditures for fasinumab have been put on hold. Next steps will be assessed together with Regeneron, with the intention of discussing data with the FDA. Assets and Liabilities Held For Sale: Certain assets of Teva’s business venture in Japan Teva operated its business in Japan, which was part of Teva’s International Market segment, through a business venture with The Takeda Pharmaceutical Company Limited (“Takeda”), in which Teva owned a 51% stake and Takeda owned the remaining 49%. In July 2020 , Teva and Takeda entered into a purchase agreement to sell the majority of the business venture’s generic and operational assets. This transaction was completed on February 1 , 2021 . Until the closing date Teva accounted for the business venture assets and liabilities that were sold, as held for sale and determined that the fair value less cost of sale did not exceed the carrying value, resulting in an impairment charge of $ 247 million in other assets impairments, restructuring and other items recognized in 2020 and in the first quarter of 2021. Assets held for sale as of March 31, 2021, include the sale of certain OTC assets and manufacturing assets that are expected to be sold within the next year. The OTC assets were sold in April 2021. Assets held for sale as of December 31, 2020, included the Teva-Takeda business venture assets sold during the first quarter of 2021 and the sale of certain OTC assets and other manufacturing assets. The table below summarizes all Teva assets included as held for sale as of March 31, 2021 and December 31, 2020:
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Revenue from contracts with customers |
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Revenue from contracts with customers | NOTE 3 – Revenue from contracts with customers: Disaggregation of revenue The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15.
§ Represents an amount less than $1 million.
Variable consideration Variable consideration mainly includes sales reserves and allowances (“SR&A”), comprised of rebates (including Medicaid and other governmental program discounts), chargebacks, returns and other promotional (including shelf stock adjustments) items. Provisions for prompt payment discounts are netted against accounts receivables. The Company recognizes these provisions at the time of sale and adjusts them if the actual amounts differ from the estimated provisions. SR&A to U.S. customers comprised approximately 79% of the Company’s total SR&A as of March 31, 2021, with the remaining balance primarily in Canada and Germany. The changes in SR&A for third-party sales for the three months ended March 31, 2021 and 2020 were as follows:
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Inventories |
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Inventories | NOTE 4 – Inventories: Inventories, net of reserves, consisted of the following:
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Identifiable Intangible Assets |
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Identifiable Intangible Assets | NOTE 5 – Identifiable intangible assets: Identifiable intangible assets consisted of the following:
Product rights and trade names Product rights and trade names are assets presented at amortized cost. Product rights and trade names represent a portfolio of pharmaceutical products from various therapeutic categories from various acquisitions with a weighted average life of approximately 10 years. Amortization of intangible assets was $242 million and $258 million in the three months ended March 31, 2021 and 2020, respectively. IPR&D Teva’s IPR&D are assets that have not yet been approved in major markets. Teva’s IPR&D is comprised mainly of various generic products from the Actavis Generics acquisition of $780 million. IPR&D carries intrinsic risks that the asset might not succeed in advanced phases and may be impaired in future periods. Intangible assets impairments Impairments of long-lived intangible assets for the three months ended March 31, 2021 and 2020, were $79 million and $649 million, respectively. Impairments in the first quarter of 2021 consisted of:
Impairments in the first quarter of 2020 consisted of:
The fair value measurement of the impaired intangible assets in the first three months of 2021 is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The discount rate applied ranged from 7.5% to 9%. A probability of success factor ranging from 40% to 90% was used in the fair value calculation to reflect inherent regulatory and commercial risk of IPR&D. |
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Goodwill | NOTE 6 – Goodwill: The changes in the carrying amount of goodwill for the period ended March 31, 2021 were as follows:
Teva operates its business through three reporting segments: North America, Europe and International Markets. Each of these business segments is a reporting unit. Additional reporting units include Teva’s production and sale of APIs to third parties (“Teva API”) and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through its affiliate Medis. The Teva API and Medis reporting units are included under “Other” in the above table. See note 15 for additional segment information. Teva determines the fair value of its reporting units using the income approach. The income approach is a forward-looking approach for estimating fair value. Within the income approach, the method used is the discounted cash flow method. Teva starts with a forecast of all the expected net cash flows associated with the reporting unit, which includes the application of a terminal value, and then applies a discount rate to arrive at a net present value amount. Cash flow projections are based on Teva’s estimates of revenue growth rates and operating margins, taking into consideration industry and market conditions. The discount rate used is based on the weighted average cost of capital (“WACC”), adjusted for the relevant risk associated with country-specific and business-specific characteristics. If any of these expectations were to vary materially from Teva’s assumptions, Teva may recognize an impairment of goodwill allocated to these reporting units in the future. During the first quarter of 2021, management assessed developments that occurred during the quarter to determine if it was more likely than not that the fair value of any of its reporting units was below its carrying amount. Based on this assessment, management concluded that it was not more likely than not that the fair value of any of the reporting units was below its carrying value as of March 31, 2021 and, therefore, no quantitative assessment was performed. Following the goodwill impairment charge recorded in the third quarter of 2020 in the North America reporting unit, the carrying value of the North America reporting unit equaled its fair value as of September 30, 2020. Therefore, if business conditions or expectations were to change materially, it may be necessary to record further impairment charges to the North America reporting unit in the future. The other reporting units all have fair value in excess of % over their book values as of March 31, 2021. |
Debt obligations |
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Debt obligations | NOTE 7 – Debt obligations: a. Short-term debt:
Convertible senior debentures The principal amount of Teva’s 0.25% convertible senior debentures due 2026, was $23 million as of March 31, 2021 and $514 million as of December 31, 2020. These convertible senior debentures include a “net share settlement” feature according to which the principal amount will be paid in cash and in case of conversion, only the residual conversion value above the principal amount will be paid in Teva shares. Due to the “net share settlement” feature, exercisable at any time, these convertible senior debentures are classified in the Balance Sheet under short-term debt. Holders of the convertible senior debentures exercised their optional repurchase right and redeemed $491 million of the convertible senior debentures on February 1, 2021, which was the date to exercise this right. b. Long-term debt:
Long-term debt was issued by several indirect wholly-owned subsidiaries of the Company and is fully and unconditionally guaranteed by the Company as to payment of all principal, interest, discount and additional amounts, if any. Long-term debt as of March 31, 2021 is effectively denominated in the following currencies: 61% in U.S. dollar, 36% in euro and 3% in Swiss franc. Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily its $2.3 billion unsecured syndicated revolving credit facility entered into in April 2019 (“RCF”). The RCF agreement provides for two separate tranches, a $1.15 billion tranche A and a $1.15 billion tranche B. Tranche A had a maturity date of April 8, 2022, of which an amount of $1.065 billion was extended twice, initially to April 8, 2023 and then to April 8, 2024. Tranche B has a maturity date of April 8, 2024. Loans and letters of credit will be available from time to time under each tranche for Teva’s general corporate purposes. The RCF contains certain covenants, including certain limitations on incurring liens and indebtedness and maintenance of certain financial ratios, including the requirement to maintain compliance with a net debt to EBITDA ratio, which becomes more restrictive over time. The net debt to EBITDA ratio limit was 5.50x through March 31, 2021, gradually declines to 5.00x in the third and fourth quarters of 2021, 4.50x in the first quarter of 2022, and continues to gradually decline over the remaining term of the RCF to 3.50x in the first quarter of 2023. The RCF can be used for general corporate purposes, including repaying existing debt. As of March 31, 2021, and as of the date of this Quarterly Report on Form 10-Q, no amounts were outstanding under the RCF. Based on current and forecasted results, the Company expects that it will not exceed the financial covenant thresholds set forth in the RCF within one year from the date these financial statements are issued. Under specified circumstances, including non-compliance with any of the covenants described above and the unavailability of any waiver, amendment or other modification thereto, the Company will not be able to borrow under the RCF. Additionally, violations of the covenants, under the above-mentioned circumstances, would result in an event of default in all borrowings under the RCF and, when greater than a specified threshold amount as set forth in each series of senior notes is outstanding, could lead to an event of default under the Company’s senior notes due to cross acceleration provisions. Teva expects that it will continue to have sufficient cash resources to support its debt service payments and all other financial obligations within one year from the date that these financial statements are issued. |
Derivative instruments and hedging activities |
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Derivative Instruments and Hedging Activities | NOTE 8 – Derivative instruments and hedging activities: a. Foreign exchange risk management: In the first three months of 2021, approximately 48% of Teva’s revenues were denominated in currencies other than the U.S. dollar. As a result, Teva is subject to significant foreign currency risks. The Company enters into forward exchange contracts, purchases and writes options in order to hedge the currency exposure on balance sheet items, revenues and expenses. In addition, the Company takes measures to reduce exposure by using natural hedging. The Company also acts to offset risks in opposite directions among the subsidiaries within Teva. The currency hedged items are usually denominated in the following main currencies: the euro, the Swiss franc, the Japanese yen, the British pound, the Russian ruble, the Canadian dollar, the Polish zloty, the Indian rupee and other European and Latin American currencies. Depending on market conditions, foreign currency risk is also managed through the use of foreign currency debt. The Company may choose to hedge against possible fluctuations in foreign subsidiaries net assets (“net investment hedge”) and entered into cross currency swaps and forward contracts in the past in order to hedge such an exposure. Most of the counterparties to the derivatives are major banks and the Company is monitoring the associated inherent credit risks. The Company does not enter into derivative transactions for trading purposes. b. Interest risk management: The Company raises capital through various debt instruments, including straight notes that bear a fixed or variable interest rate, bank loans and convertible debentures. In some cases, the Company has swapped from a fixed to a floating interest rate (“fair value hedge”) and from a fixed to a fixed interest rate with an exchange from a currency other than the functional currency (“cash flow hedge”), thereby reducing overall interest expenses or hedging risks associated with interest rate fluctuations. c. Derivative instruments outstanding: The following table summarizes the classification and fair values of derivative instruments:
The table below provides information regarding the location and amount of pre-tax (gains) losses from derivatives designated in fair value or cash flow hedging relationships:
The table below provides information regarding the location and amount of pre-tax (gains) losses from derivatives not designated as hedging instruments:
d. Amortizations due to terminated derivative instruments: Forward starting interest rate swaps and treasury lock agreements In 2015, Teva entered into forward starting interest rate swaps and treasury lock agreements to protect the Company from interest rate fluctuations in connection with a future debt issuance the Company was planning. These forward starting interest rate swaps and treasury lock agreements were terminated in July 2016 upon the debt issuance. The termination of these transactions resulted in a loss position of $493 million, which was recorded in other comprehensive income (loss) and is amortized under financial expenses, net over the life of the debt . With respect to these forward starting interest rate swaps and treasury lock agreements, losses of $8 million were recognized under financial expenses, net for each of the three months ended March 31, 2021 and 2020. Fair value hedge In the third quarter of 2016, Teva terminated interest rate swap agreements designated as a fair value hedge relating to its 2.95% senior notes due 2022 with respect to $844 million notional amount and its 3.65% senior notes due 2021 with respect to $450 million notional amount. Settlement of these transactions resulted in a gain position of $41 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses, net over the life of the debt as additional interest expense. In the third quarter of 2019, Teva terminated $500 million interest rate swap agreements designated as a fair value hedge relating to its 2.8% senior notes due 2023 with respect to $3,000 million notional amount. Settlement of these transactions resulted in cash proceeds of $10 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses, net over the life of the debt. Cash flow hedge In the fourth quarter of 2019, Teva terminated $588 million cross-currency swap agreements against its outstanding 3.65% senior notes maturing in November 2021. Settlement of these transactions resulted in cash proceeds of $95 million. The cash flow hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses, net over the life of the debt. With respect to the interest rate swap and cross-currency swap agreements, no gains were recognized for the three months ended March 31, 2021, compared to gains of $1 million recognized under financial expenses, net for the three months ended March 31, 2020. |
Legal Settlements and Loss Contingencies |
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Legal Settlements and Loss Contingencies | NOTE 9 – Legal settlements and loss contingencies: Legal settlements and loss contingencies for the first quarter of 2021 were $104 million, compared to an income of $25 million in the first quarter of 2020. The expense in the first quarter of 2021 was mainly due to the provision for the carvedilol patent litigation (see note 10). The income in the first quarter of 2020 was mainly due to proceeds received following a settlement of an action brought against the sellers of Auden McKenzie (an acquisition made by Actavis Generics). As of March 31, 2021 and December 31, 2020, Teva’s provision for legal settlements and loss contingencies recorded under accrued expenses and other taxes and long-term liabilities was $1,730 million and 1,625 million, respectively. |
Commitments and contingencies |
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Commitments and contingencies | NOTE 10 – Commitments and contingencies: General From time to time, Teva and/or its subsidiaries are subject to claims for damages and/or equitable relief arising in the ordinary course of business. In addition, as described below, in large part as a result of the nature of its business, Teva is frequently subject to litigation. Teva generally believes that it has meritorious defenses to the actions brought against it and vigorously pursues the defense or settlement of each such action. Teva records a provision in its financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is estimable. Based upon the status of the cases described below, management’s assessments of the likelihood of damages, and the advice of counsel, no provisions have been made regarding the matters disclosed in this note, except as noted below. Litigation outcomes and contingencies are unpredictable, and excessive verdicts can occur. Accordingly, management’s assessments involve complex judgments about future events and often rely heavily on estimates and assumptions. Teva continuously reviews the matters described below and may, from time to time, remove previously disclosed matters where the exposures were fully resolved in the prior year, or determined to no longer meet the materiality threshold for disclosure, or were substantially resolved. In the first quarter of 2021, Teva has removed the bortezomib intellectual property litigation as it was fully resolved during 2020. In addition, Teva has removed PROVIGIL ® , lidocaine patch and the memantine hydrochloride antitrust matters exposures, which are no longer considered material risks to the results of operations and cash flows of the Company as they were substantially resolved in prior periods. If one or more of such proceedings described below were to result in final judgments against Teva, such judgments could be material to its results of operations and cash flows in a given period. In addition, Teva incurs significant legal fees and related expenses in the course of defending its positions even if the facts and circumstances of a particular litigation do not give rise to a provision in the financial statements. In connection with third-party agreements, Teva may under certain circumstances be required to indemnify, and may be indemnified by, in unspecified amounts, the parties to such agreements against third-party claims. Among other things, Teva’s agreements with third parties may require Teva to indemnify them, or require them to indemnify Teva, for the costs and damages incurred in connection with product liability claims, in specified or unspecified amounts. Except as otherwise noted, all of the litigation matters disclosed below involve claims arising in the United States. Except as otherwise noted, all third party sales figures given below are based on IQVIA (formerly IMS Health Inc.) data. Intellectual Property Litigation From time to time, Teva seeks to develop generic versions of patent-protected pharmaceuticals for sale prior to patent expiration in various markets. In the United States, to obtain approval for most generics prior to the expiration of the originator’s patents, Teva must challenge the patents under the procedures set forth in the Hatch-Waxman Act of 1984, as amended. To the extent that Teva seeks to utilize such patent challenge procedures, Teva is and expects to be involved in patent litigation regarding the validity, enforceability or infringement of the originator’s patents. Teva may also be involved in patent litigation involving the extent to which its product or manufacturing process techniques may infringe other originator or third-party patents. Additionally, depending upon a complex analysis of a variety of legal and commercial factors, Teva may, in certain circumstances, elect to market a generic version even though litigation is still pending. To the extent Teva elects to proceed in this manner, it could face substantial liability for patent infringement if the final court decision is adverse to Teva, which could be material to its results of operations and cash flows in a given period. Teva could also be sued for patent infringement outside of the context of the Hatch-Waxman Act. For example, Teva could be sued for patent infringement after commencing sales of a product. In addition, for biosimilar products, Teva could be sued according to the “patent dance” procedures of the Biologics Price Competition and Innovation Act (BPCIA). The general rule for damages in patent infringement cases in the United States is that the patentee should be compensated by no less than a reasonable royalty and it may also be able, in certain circumstances, to be compensated for its lost profits. The amount of a reasonable royalty award would generally be calculated based on the sales of Teva’s product. The amount of lost profits would generally be based on the lost sales of the patentee’s product. In addition, the patentee may seek consequential damages as well as enhanced damages of up to three times the profits lost by the patent holder for willful infringement, although courts have typically awarded much lower multiples. Teva is also involved in litigation regarding patents in other countries where it does business, particularly in Europe. The laws concerning generic pharmaceuticals and patents differ from country to country. Damages for patent infringement in Europe may include lost profits or a reasonable royalty, but enhanced damages for willful infringement are generally not available. In July 2014, GlaxoSmithKline (“GSK”) sued Teva in Delaware federal court for infringement of a patent directed to using carvedilol in a specified manner to decrease the risk of mortality in patients with congestive heart failure. Teva and eight other generic producers began selling their carvedilol tablets (the generic version of GSK’s Coreg®) i n September 2007. A jury trial was held and the jury returned a verdict in GSK’s favor finding Teva liable for induced infringement, including willful infringement, and assessing damages of $ 235.5 million, not including pre- or post-judgment interest or a multiplier for willfulness. Thereafter, the judge overturned the jury verdict, finding no induced infringement by Teva and that Teva did not owe any damages. On October 2, 2020, in a two-to-one decision, the Court of Appeals for the Federal Circuit, overturned the judge’s ruling and reinstated the jury verdict. Teva’s request for rehearing was granted, and the October 2020 decision was vacated. On February 23, 2021, the same three-judge panel of the Federal Circuit heard additional oral argument on the issue of whether there is enough evidence to support the jury’s verdict of induced infringement during the period from January 8, 2008 through April 30, 2011 (the “skinny label” period). If further appeals are decided against Teva, the case would be remanded to the district court for it to consider Teva’s other legal and equitable defenses that have not yet been considered by the district court. In the first quarter of 2021, Teva recognized a provision based on its offer to settle such matter. Product Liability Litigation Teva’s business inherently exposes it to potential product liability claims. Teva maintains a program of insurance, which may include commercial insurance, self-insurance (including direct risk retention), or a combination of both approaches, in amounts and on terms that it believes are reasonable and prudent in light of its business and related risks. However, Teva sells, and will continue to sell, pharmaceuticals that are not covered by its product liability insurance; in addition, it may be subject to claims for which insurance coverage is denied as well as claims that exceed its policy limits. Product liability coverage for pharmaceutical companies is becoming more expensive and increasingly difficult to obtain. As a result, Teva may not be able to obtain the type and amount of insurance it desires, or any insurance on reasonable terms, in all of its markets. Teva and its subsidiaries are parties to litigation relating to previously unknown nitrosamine impurities discovered in certain products. The discovery led to a global recall of single and combination valsartan medicines around the world starting in July 2018 and to subsequent recalls on other products. The nitrosamine impurities in valsartan are allegedly found in the active pharmaceutical ingredient (API) supplied by multiple API manufacturers. Teva’s products allegedly at issue in the various nitrosamine-related litigations pending in the United States include valsartan, losartan, metformin and ranitidine. There are currently two Multi-District Litigations (“MDL”) pending in the United States District Courts against Teva and numerous other manufacturers. One MDL is pending in the United States District Court for the District of New Jersey for valsartan, losartan and irbesartan. Teva is not named in complaints with respect to irbesartan. The second MDL is pending in the United States District Court for the Southern District of Florida for ranitidine. The lawsuits against Teva in the MDLs consist of individual personal injury and/or product liability claims and economic damages claims brought by consumers and end payors on behalf of purported classes of other consumers and end payors as well as medical monitoring class claims. Defendants’ motions to dismiss in the valsartan, losartan and irbesartan MDL were denied in part and granted in part, allowing plaintiffs to file amended complaints. On December 31, 2020, the court in the ranitidine MDL granted the generic defendants’ motion to dismiss on the grounds of preemption and deficient pleading, allowing plaintiffs to re-plead certain claims. Certain plaintiffs appealed the decision. Plaintiffs in the ranitidine MDL filed amended complaints, and on March 24, 2021, defendants moved to dismiss those amended complaints on largely the same grounds as the first round of motions to dismiss. In addition to these MDLs, Teva has also been named in a consolidated proceeding pending in the United States District Court for the District of New Jersey brought by individuals and end payors seeking economic damages on behalf of purported classes of consumers and end payors who purchased Teva’s, as well as other generic manufacturers’ metformin products. A motion to dismiss in that consolidated action is pending. Similar lawsuits are pending in Canada and Germany. Competition Matters As part of its generic pharmaceuticals business, Teva has challenged a number of patents covering branded pharmaceuticals, some of which are among the most widely-prescribed and well-known drugs on the market. Many of Teva’s patent challenges have resulted in litigation relating to Teva’s attempts to market generic versions of such pharmaceuticals under the federal Hatch-Waxman Act. Some of this litigation has been resolved through settlement agreements in which Teva obtained a license to market a generic version of the drug, often years before the patents expire. Teva and its subsidiaries have increasingly been named as defendants in cases that allege antitrust violations arising from such settlement agreements. The plaintiffs in these cases, which are usually direct and indirect purchasers of pharmaceutical products, and often assert claims on behalf of classes of all direct and indirect purchasers, typically allege that (1) Teva received something of value from the innovator in exchange for an agreement to delay generic entry, and (2) significant savings could have been realized if there had been no settlement agreement and generic competition had commenced earlier. These class action cases seek various forms of injunctive and monetary relief, including damages based on the difference between the brand price and what the generic price allegedly would have been and disgorgement of profits, which are automatically tripled under the relevant statutes, plus attorneys’ fees and costs. The alleged damages generally depend on the size of the branded market and the length of the alleged delay, and can be substantial—potentially measured in multiples of the annual brand sales—particularly where the alleged delays are lengthy or branded drugs with annual sales in the billions of dollars are involved. Teva believes that its settlement agreements are lawful and serve to increase competition, and has defended them vigorously. In Teva’s experience to date, these cases have typically settled for a fraction of the high end of the damages sought, although there can be no assurance that such outcomes will continue. In June 2013, the U.S. Supreme Court held, in Federal Trade Commission (“FTC”) v. Actavis, Inc. (the “AndroGel case”), that a rule of reason test should be applied in analyzing whether such settlements potentially violate the federal antitrust laws. The Supreme Court held that a trial court must analyze each agreement in its entirety in order to determine whether it violates the antitrust laws. This new test has resulted in increased scrutiny of Teva’s patent settlements, additional action by the FTC and state and local authorities, and an increased risk of liability in Teva’s currently pending antitrust litigations. In May 2015, Cephalon Inc., a Teva subsidiary (“Cephalon”), entered into a consent decree with the FTC (the “Modafinil Consent Decree”) under which the FTC dismissed antitrust claims against Cephalon related to certain finished modafinil products (marketed as PROVIGIL ® ) in exchange for Cephalon and Teva agreeing to, among other things, abide by certain restrictions and limitations, for a period of ten years, when entering into settlement agreements to resolve patent litigation in the United States. Those restrictions and limitations were further refined in connection with the settlement of other unrelated FTC antitrust lawsuits, as described below, and the term of the Modafinil Consent Decree was extended until 2029. In November 2020, the European Commission issued a final decision in its proceedings against both Cephalon and Teva, finding that the 2005 settlement agreement between the parties had the object and effect of hindering the entry of generic modafinil, and imposed fines totaling € 60.5million on Teva and Cephalon. Teva and Cephalon filed an appeal against the decision in February 2021. A provision for this matter was included in the financial statements. Teva and its affiliates have been named as defendants in lawsuits alleging that multiple patent litigation settlement agreements relating to AndroGel ® 1% (testosterone gel)violate the antitrust laws. The first of these lawsuits (the “Georgia AndroGel Litigation”) was filed in January 2009 in California federal court, and later transferred to Georgia federal court, with the FTC and the State of California, and later private plaintiffs challenging a September 2006 patent litigation settlement between Watson Pharmaceuticals, Inc. (“Watson”), from which Teva later acquired certain assets and liabilities, and Solvay Pharmaceuticals, Inc. (“Solvay”). The second lawsuit (the “Philadelphia AndroGel Litigation”) was filed by the FTC in September 2014 in federal court in Philadelphia, challenging Teva’s December 2011 patent litigation settlement with AbbVie. The FTC stipulated to dismiss Teva from both litigations, in exchange for Teva’s agreement to amend the Modafinil Consent Decree, as described above. On July 16, 2018, the direct purchaser plaintiffs’ motion for class certification in the Georgia AndroGel Litigation was denied and Teva later settled with most of the retailer plaintiffs in the Georgia AndroGel Litigation as well as the three direct purchasers that had sought class certification and on January 7, 2021, Teva settled all claims with the remaining retailer plaintiff in the Georgia AndroGel Litigation, thus leaving no remaining claims in the Georgia AndroGel Litigation. In August 2019, certain other direct-purchaser plaintiffs (who would have been members of the direct purchaser class in the Georgia AndroGel Litigation, had it been certified) filed their own claims in the federal court in Philadelphia (where the Philadelphia AndroGel Litigation has been pending), challenging (in one complaint) both the September 2006 settlement between Watson and Solvay, and the December 2011 settlement between Teva and AbbVie. Those claims remain pending. Annual sales of AndroGel ® 1% were approximately $ 350 million at the time of the earlier Watson/Solvay settlement and approximately $ 140 million at the time Actavis launched its generic version of AndroGel ® 1% in November 2015. A provision for these matters was included in the financial statements. In December 2011, three groups of plaintiffs sued Wyeth and Teva for alleged violations of the antitrust laws in connection with their settlement of patent litigation involving extended release venlafaxine (generic Effexor XR ® ) entered into in November 2005. The cases were filed by a purported class of direct purchasers, by a purported class of indirect purchasers and by certain chain pharmacies in the U.S. District Court for the District of New Jersey. The plaintiffs claim that the settlement agreement between Wyeth and Teva unlawfully delayed generic entry. In October 2014, the court granted Teva’s motion to dismiss in the direct purchaser cases, after which the parties agreed that the court’s reasoning applied equally to the indirect purchaser cases. Plaintiffs appealed and, in August 2017, the Third Circuit reversed the district court’s decision and remanded for further proceedings. In March 2020, the district court temporarily stayed discovery and referred the case to mediation, and discovery remains stayed. Annual sales of Effexor XR® were approximately $2.6 billion at the time of settlement and at the time Teva launched its generic version of Effexor XR® in July 2010. In February 2012, two purported classes of direct-purchaser plaintiffs sued GSK and Teva in New Jersey federal court for alleged violations of the antitrust laws in connection with their settlement of patent litigation involving lamotrigine (generic Lamicta l ® ) e ntered into in February 2005. The plaintiffs claim that the settlement agreement unlawfully delayed generic entry and seek unspecified damages. In December 2012, the court dismissed the case, but in June 2015, the U.S. Court of Appeals for the Third Circuit reversed and remanded for further proceedings. In December 2018, the district court granted the direct-purchaser plaintiffs’ motion for class certification, but on April 22, 2020, the Third Circuit reversed that ruling and remanded for further class certification proceedings. On April 9, 2021, the district court denied the direct purchaser plaintiffs’ renewed motion for class certification. Annual sales of Lamictal ® were approximately $ 950 million at the time of the settlement and approximately $ 2.3 billion at the time Teva launched its generic version of Lamictal ® in July 2008. In April 2013, purported classes of direct purchasers of, and end payers for, Niaspan ® (extended release niacin) sued Teva and Abbott for violating the antitrust laws by entering into a settlement agreement in April 2005, to resolve patentlitigation over the product. A multidistrict litigation has been established in the U.S. District Court for the Eastern District of Pennsylvania. Throughout 2015 and in January 2016, several individual direct-purchaser opt-out plaintiffs filed complaints with allegations nearly identical to those of the direct purchasers’ class. In August 2019, the district court certified the direct-purchaser class, but in June 2020, the court denied the indirect purchasers’ motion for class certification without prejudice. On September 4, 2020, the indirect purchasers filed a renewed motion for class certification, which remains pending. In October 2016, the District Attorney for Orange County, California, filed a similar complaint in California state court, which has since been amended, alleging violations of state law. Defendants moved to strike the District Attorney’s claims for restitution and civil penalties to the extent not limited to alleged activity occurring in Orange County. The Superior Court denied that motion. The Court of Appeals subsequently reversed the decision and in June 2020, the California Supreme Court reversed the Court of Appeals’ decision, allowing the District Attorney’s claims to proceed. Annual sales of Niaspan® were approximately$ 416 million at the time of the settlement and approximately $ 1.1 billion at the time Teva launched its generic version of Niaspan ® in September 2013 . Since January 2014, numerous lawsuits have been filed in the U.S. District Court for the Southern District of New York by purported classes of end-payers for, and direct-purchasers of, Actos® and Actoplus Met (pioglitazone and pioglitazone plus metformin) against Takeda, the innovator, and several generic manufacturers, including Teva, Actavis and Watson. The lawsuits allege, among other things, that the settlement agreements between Takeda and the generic manufacturers violated the antitrust laws. The court dismissed the end-payers’ lawsuits against all defendants in September 2015. On February 8, 2017, the Court of Appeals for the Second Circuit affirmed the dismissal in part and vacated and remanded the dismissal in part with respect to the claims against Takeda. The direct purchasers’ case had been stayed pending resolution of the appeal in the end payer matter and the direct purchasers amended their complaint for a second time following the Second Circuit’s decision, but on October 8, 2019, the district court dismissed, with prejudice, the direct purchasers’ claims against the generic manufacturers (including Teva, Actavis, and Watson). At the time of Teva’s settlement, annual sales of Actos® and Actoplus Met were approximately $3.7 billion and approximately $500 million, respectively. At the time Teva launched its authorized generic version of Actos® and Actoplus Met in August 2012, annual sales of Actos® and Actoplus Met were approximately $2.8 billion and approximately $430 million, respectively. In January 2019, generic manufacturer Cipla Limited filed a lawsuit against Amgen, which was later amended to include Teva as a defendant, in Delaware federal court, alleging, among other things, that a January 2, 2019 settlement agreement between Amgen and Teva, resolving patent litigation over cinacalcet (generic Sensipar ® ), violated the antitrust laws. On August 14, 2020, Cipla Limited agreed to dismiss its claims against Teva, with prejudice, and those claims have since been dismissed. Putative classes of direct-purchaser and end-payer plaintiffs have also filed antitrust lawsuits (which have since been coordinated in federal court in Delaware) against Amgen and Teva related to the January 2, 2019 settlement. On July 22, 2020, a magistrate judge recommended that plaintiffs’ claims be dismissed and on November 30, 2020, the district court overruled the magistrate judge’s recommendation, denied Teva’s motion to dismiss in part, and instructed plaintiffs to file amended complaints, which plaintiffs filed on February 16, 2021. Teva again moved to dismiss those complaints on March 30, 2021, based on plaintiffs’ failure to allege both (a) that the settlement violated the antitrust laws and (b) that the settlement caused any actual injury to plaintiffs, and Teva’s motions remain pending. Annual sales of Sensipar® in the United States were approximately$1.4 billion at the time Teva launched its generic version of Sensipar ® in December 2018, and at the time of the January 2, 2019 settlement.On December 16, 2016, the U.K. Competition and Markets Authority (“CMA”) issued a statement of objections (a provisional finding of breach of the Competition Act) in respect of certain allegations against Allergan, Actavis UK and certain Auden Mckenzie entities alleging competition law breaches in connection with the supply of 10mg and 20mg hydrocortisone tablets in the U.K. On March 3, 2017 and February 28, 2019, the CMA issued second and third statements of objections in respect of certain additional allegations relating to the same products and covering part of the same time periods as in the first statement of objections. On February 12, 2020, the CMA issued a Supplementary Statement of Objections effectively combining the three previously issued statements referenced above and a Statement of Draft Penalty Calculation was issued on October 28, 2020. On January 9, 2017, Teva completed the sale of Actavis UK to Accord Healthcare Limited, in connection with which Teva will indemnify Accord Healthcare for potential fines imposed by the CMA and/or damages awarded by a court against Actavis UK in relation to the December 16, 2016 and March 3, 2017 statements of objections, and resulting from conduct prior to the closing date of the sale. In addition, Teva agreed to indemnify Allergan against losses arising from this matter in the event of any such fines or damages. A liability for this matter has been recorded in the financial statements. In March 2021, following the 2019 European Commission’s inspection of Teva and subsequent request for information, the European Commission opened a formal antitrust investigation to assess whether Teva may have abused a dominant position by delaying the market entry and uptake of medicines that compete with COPAXONE ® . Annual sales of COPAXONE in the European Economic Area for the past year were approximately $380 million. Between September 1, 2020 and December 20, 2020, separate plaintiffs purporting to represent putative classes of direct and indirect purchasers and opt-out retailer purchasers of Bystolic® (nebivolol hydrochloride) filed separate complaints in the U.S. District Court for the Southern District of New York against several generic manufacturers, including Teva, Actavis, and Watson, alleging, among other things, that the settlement agreements these generic manufacturers entered into with Forest Laboratories, Inc., the innovator, to resolve patent litigation over Bystolic® violated the antitrust laws. The cases were coordinated and on March 15, 2021, plaintiffs filed amended complaints. Annual sales of Bystolic® in the United States were approximately $700 million at the time of Watson’s 2013 settlement with Forest. Government Investigations and Litigation Relating to Pricing and Marketing Teva is involved in government investigations and litigation arising from the marketing and promotion of its pharmaceutical products in the United States. In 2015 and 2016, Actavis and Teva USA each respectively received subpoenas from the U.S. Department of Justice (“DOJ”) Antitrust Division seeking documents and other information relating to the marketing and pricing of certain Teva USA generic products and communications with competitors about such products. On August 25, 2020, a federal grand jury in the Eastern District of Pennsylvania returned a three count indictment charging Teva USA with criminal felony Sherman Act violations. See No. 20-cr-200 E-Cream, Gel, and Ointment), Warfarin, Etodolac (IR), Nadolol, Temozolomide, and Tobramycin. On September 8, 2020, Teva USA pled not guilty to all counts. A tentative trial date is yet to be scheduled. While the Company is unable to estimate a range of loss at this time, a conviction on these criminal charges could have a material adverse impact on the Company’s business, including monetary penalties and debarment from federally funded health care programs. In May 2018, Teva received a civil investigative demand from the DOJ Civil Division, pursuant to the federal False Claims Act, seeking documents and information produced since January 1, 2009 relevant to the Civil Division’s investigation concerning allegations that generic pharmaceutical manufacturers, including Teva, engaged in market allocation and price-fixing agreements, paid illegal remuneration, and caused false claims to be submitted in violation of the False Claims Act. An adverse resolution of this matter may include fines, penalties, financial forfeiture and compliance conditions. In 2015 and 2016, Actavis and Teva USA each respectively received a subpoena from the Connecticut Attorney General seeking documents and other information relating to potential state antitrust law violations. Subsequently, on December 15, 2016, a civil action was brought by the attorneys general of twenty states against Teva USA and several other companies asserting claims under federal antitrust law alleging price fixing of generic products in the United States. That complaint was later amended to add new states as named plaintiffs, as well as new allegations and new state law claims, and on June 18, 2018, the attorneys general of 49 states plus Puerto Rico and the District of Columbia filed a consolidated amended complaint against Actavis and Teva, as well as other companies and individuals. On May 10, 2019, most (though not all) of these attorneys general filed yet another antitrust complaint against Actavis, Teva and other companies and individuals, alleging price-fixing and market allocation with respect to additional generic products. On November 1, 2019, the state attorneys general filed an amended complaint, bringing the total number of plaintiff states and territories to 54. The amended complaint alleges that Teva was at the center of a conspiracy in the generic pharmaceutical industry, and asserts that Teva and others fixed prices, rigged bids, and allocated customers and market share with respect to certain additional products. On June 10, 2020, most, but not all, of the same states, with the addition of the U.S. Virgin Islands, filed a third complaint in the District of Connecticut naming, among other defendants, Actavis, but not Teva USA in a similar complaint relating to dermatological generics products. In the various complaints described above, the states seek a finding that the defendants’ actions violated federal antitrust law and state antitrust and consumer protection laws, as well as injunctive relief, disgorgement, damages on behalf of various state and governmental entities and consumers, civil penalties and costs. All such complaints have been transferred to the generic drug multidistrict litigation in the Eastern District of Pennsylvania (“Pennsylvania MDL”). On July 13, 2020, the court overseeing the Pennsylvania MDL chose the attorneys’ general November 1, 2019 amended complaint, referenced above, along with three complaints filed by private plaintiffs, to proceed first in the litigation as bellwether complaints. Teva moved the court to reconsider that ruling, and the motion was granted on February 9, 2021. As a result, the attorneys’ general November 1, 2019 amended complaint is not expected to be among the bellwether complaints in the Pennsylvania MDL. Beginning on March 2, 2016, and continuing through December 2020, numerous complaints have been filed in the United States on behalf of putative classes of direct and indirect purchasers of several generic drug products, as well as several individual direct and indirect purchaser opt-out plaintiffs. These complaints, which allege that the defendants engaged in conspiracies to fix prices and/or allocate market share of generic products have been brought against various manufacturer defendants, including Teva and Actavis. The plaintiffs generally seek injunctive relief and damages under federal antitrust law, and damages under various state laws. On October 16, 2018, the court denied certain of the defendants’ motions to dismiss as to certain federal claims, pending as of that date, and on February 15, 2019, the court granted in part and denied in part defendants’ motions to dismiss as to certain state law claims. On July 18, 2019, and again on May 6, 2020, certain individual plaintiffs commenced a civil action in the Pennsylvania Court of Common Pleas of Philadelphia County against many of the defendants in the Pennsylvania MDL, including Teva and Actavis, but no complaint has been filed in either action and, both cases have been placed in deferred status. On November 13, 2019, and again on August 24, 2020, certain counties in New York commenced civil actions against many of the defendants in the Pennsylvania MDL, including Teva and Actavis, and the complaints have been transferred to the Pennsylvania MDL. On December 15, 2020, several additional New York counties filed suit in New York state court raising similar allegations, and the case was removed to federal court on March 26, 2021. On March 1, 2020, Harris County in Texas filed a complaint against several generic manufacturers including Teva and Actavis in the District Court for the Southern District of Texas, which has been transferred to the Pennsylvania MDL. There is also one similar complaint brought in Canada, which alleges that the defendants engaged in conspiracies to fix prices and/or allocate market share of generic drug products to the detriment of a class of private payors. The action is in its early stages. In March 2017, Teva received a subpoena from the U.S. Attorney’s office in Boston, Massachusetts requesting documents related to Teva’s donations to patient assistance programs. Subsequently, in August 2020, the U.S. Attorney’s office in Boston, Massachusetts brought a civil action in the U.S. District Court for the District of Massachusetts alleging violations of the federal Anti-Kickback Statute, and asserting causes of action under the federal False Claims Act and state law. It is alleged that Teva caused the submission of false claims to Medicare through Teva’s donations to bona fide independent charities that provide financial assistance to patients. An adverse judgment may involve damages, civil penalties and injunctive remedies. On October 19, 2020, Teva filed a motion to dismiss the complaint on the grounds that it fails to state a claim, and that motion remains pending. Additionally, on January 8, 2021, Humana, Inc. filed an action against Teva in the United States District Court for the Middle District of Florida based on the allegations raised in the August 2020 complaint filed by the U.S. Attorney’s Office in Boston. On April 2, 2021 Teva filed a motion to dismiss the claims on the grounds that the claims are time-barred and/or insufficiently pled, and that action remains pending. Opioids Litigation Since May 2014, more than 3,000 complaints have been filed with respect to opioid sales and distribution against various Teva affiliates, along with several other pharmaceutical companies, by a number of cities, counties, states, other governmental agencies, tribes and private plaintiffs (including various putative class actions of individuals) in both state and federal courts. Most of the federal cases have been consolidated into a multidistrict litigation in the Northern District of Ohio (“MDL Opioid Proceeding”) and many of the cases filed in state court have been removed to federal court and consolidated into the MDL Opioid Proceeding. Two cases that were included in the MDL Opioid Proceeding were recently transferred back to federal district court for additional discovery, pre-trial proceedings and trial. Those cases are: City of Chicago v. Purdue Pharma L.P. et al., No. 14-cv-04361 18-cv-07591-CRB ® and FENTORA® . The complaints also assert claims related to Teva’s generic opioid products. In addition, over 950 personal injury plaintiffs, including various putative class actions of individuals, have asserted personal injury and wrongful death claims in over 600 complaints, nearly all of which are consolidated in the MDL Opioid Proceeding. Furthermore, approximately 700 complaints have named Anda, Inc. (and other distributors and manufacturers) alleging that Anda failed to develop and implement systems sufficient to identify suspicious orders of opioid products and prevent the abuse and diversion of such products to individuals who used them for other than legitimate medical purposes. Plaintiffs seek a variety of remedies, including restitution, civil penalties, disgorgement of profits, treble damages, attorneys’ fees and injunctive relief. Certain plaintiffs assert that the measure of damages is the entirety of the costs associated with addressing the abuse of opioids and opioid addiction and certain plaintiffs specify multiple billions of dollars in the aggregate as alleged damages. The individual personal injury plaintiffs further seek non-economic damages. In many of these cases, plaintiffs are seeking joint and several damages among all defendants. On April 19, 2021, a bench trial in California (The People of the State of California, acting by and through Santa Clara County Counsel James R. Williams, et. al. v. Purdue Pharma L.P., et. al.) commenced with Teva and other defendants focused on the marketing of branded opioids. Absent resolutions, additional trials are expected to proceed in several states in 2021. In May 2019, Teva settled the Oklahoma litigation brought by the Oklahoma Attorney General (State of Oklahoma, ex. rel. Mike Hunter, Attorney General of Oklahoma vs. Purdue Pharma L.P., et. al.) for $85 million. The settlement did not include any admission of violation of law for any of the claims or allegations made. As the Company demonstrated a willingness to settle part of the litigation, for accounting purposes, management considered a portion of opioid-related cases as probable and, as such, recorded an estimated provision in the second quarter of 2019. Given the relatively early stage of the cases, management viewed no amount within the range to be the most likely outcome. Therefore, management recorded a provision for the reasonably estimable minimum amount in the assessed range for such opioid-related cases in accordance with Accounting Standards Codification 450 “Accounting for Contingencies.” On October 21, 2019, Teva reached a settlement with the two plaintiffs in the MDL Opioid Proceeding that was scheduled for trial for the Track One case, Cuyahoga and Summit Counties of Ohio. Under the terms of the settlement, Teva will provide the two counties with opioid treatment medication, buprenorphine naloxone (sublingual tablets), known by the brand name Suboxone ® , with a value of $25 million at wholesale acquisition cost and distributed over three years to help in the care and treatment of people suffering from addiction, and a cash payment in the amount of $20 million, to be paid in fourAlso on October 21, 2019, Teva and certain other defendants reached an agreement in principle with a group of Attorneys General from North Carolina, Pennsylvania, Tennessee and Texas for a nationwide settlement. This nationwide settlement was designed to provide a mechanism by which the Company attempts to seek resolution of remaining potential and pending opioid claims by both the U.S. states and political subdivisions (i.e., counties, tribes and other plaintiffs) thereof. Under this nationwide settlement, Teva would provide buprenorphine naloxone (sublingual tablets) with an estimated value of up to approximately period. During the passage of time since then, the Company has continued to negotiate the terms and conditions of a nationwide settlement. There are many complex financial and legal issues still outstanding, including indemnification claims by Allergan against the Company, arising from the acquisition of the Actavis Generics business. Since negotiations are ongoing, the Company cannot predict if a settlement will be finalized. The Company considered a range of potential settlement outcomes. The current provision remains a reasonable estimate of the ultimate costs if a settlement is finalized based on the Company’s most recent offer to settle. However, if not finalized for the entirety of the cases, a reasonable upper end of a range of loss cannot be determined. An adverse resolution of any of these lawsuits or investigations may involve large monetary penalties, damages, and/or other forms of monetary and non-monetary relief and could have a material and adverse effect on Teva’s reputation, business, results of operations and cash flows. Separately, on April 27, 2018, Teva received subpoena requests from the United States Attorney’s office in the Western District of Virginia and the Civil Division seeking documents relating to the manufacture, marketing and sale of branded opioids. In August 2019, Teva received a grand jury subpoena from the United States Attorney’s Office for the Eastern District of New York for documents related to the Company’s anti-diversion policies and procedures and distribution of its opioid medications, in what the Company understands to be part of a broader investigation into manufacturers’ and distributors’ monitoring programs and reporting under the Controlled Substances Act. In September 2019, Teva received subpoenas from the New York State Department of Financial Services (NYDFS) as part of an industry-wide inquiry into the effect of opioid prescriptions on New York health insurance premiums. Following a Statement of Charges and Notice of Hearing filed by the NYDFS, a hearing is currently scheduled to take place in June 2021. Currently, Teva cannot predict how a nationwide settlement (if finalized) will affect these investigations and administrative actions. In addition, a number of state attorneys general, including a coordinated multistate effort, have initiated investigations into sales and marketing practices of Teva and its affiliates with respect to opioids. Other states are conducting their own investigations outside of the multistate group. Teva is cooperating with these ongoing investigations and cannot predict their outcome at this time. In addition, several jurisdictions and consumers in Canada have initiated litigation regarding opioids alleging similar claims as those in the United States. The cases in Canada may be consolidated and are in their early stages. Shareholder Litigation On November 6, 2016 and December 27, 2016, two putative securities class actions were filed in the U.S. District Court for the Central District of California against Teva and certain of its current and former officers and directors. Those lawsuits were consolidated and transferred to the U.S. District Court for the District of Connecticut (the “Ontario Teachers Securities Litigation”). On December 13, 2019, the lead plaintiff in that action filed an amended complaint, purportedly on behalf of purchasers of Teva’s securities between February 6, 2014 and May 10, 2019. The amended complaint asserts that Teva and certain of its current and former officers and directors violated federal securities and common laws in connection with Teva’s alleged failure to disclose pricing strategies for various drugs in its generic drug portfolio and by making allegedly false or misleading statements in certain offering materials. The amended complaint seeks unspecified damages, legal fees, interest, and costs. In July 2017, August 2017, and June 2019, other putative securities class actions were filed in other federal courts based on similar allegations, and those cases have been transferred to the U.S. District Court for the District of Connecticut. Between August 2017 and October 2020, twenty complaints were filed against Teva and certain of its current and former officers and directors seeking unspecified compensatory damages, legal fees, costs and expenses. The similar claims in these complaints have been brought on behalf of plaintiffs, in various forums across the country, who have indicated that they intend to “opt-out” of the Ontario Teachers Securities Litigation. On March 10, 2020, the Court consolidated the Ontario Teachers Securities Litigation with all of the above-referenced putative class actions for all purposes and the “opt-out” cases for pretrial purposes. The case is now in discovery. Pursuant to that consolidation order, plaintiffs in several of the “opt-out” cases filed amended complaints on May 28, 2020. On January 22, 2021, the Court dismissed the “opt-out” plaintiffs’ claims arising from statements made prior to the five year statute of repose, but denied Teva’s motion to dismiss their claims under Israeli laws. Those “opt-out” plaintiffs moved for reconsideration, which was denied on March 30, 2021. The Ontario Teachers Securities Litigation plaintiffs’ Motion for Class Certification and Appointment of Class Representatives and Class Counsel was granted on March 9, 2021, to which Teva has sought an appeal. That motion is pending. Motions to approve securities class actions were also filed in the Tel Aviv District Court in Israel with similar allegations to those made in the Ontario Teachers Securities Litigation. On September 23, 2020, a putative securities class action was filed in the U.S. District Court for the Eastern District of Pennsylvania against Teva and certain of its former officers alleging, among other things, violations of Section 10(b) of the Securities and Exchange Act of 1934 and SEC Rule 10b-5. The complaint, purportedly filed on behalf of persons who purchased or otherwise acquired Teva securities between October 29, 2015 and August 18, 2020, alleges that Teva and certain of its former officers violated federal securities laws by allegedly making false and misleading statements regarding the commercial performance of COPAXONE, namely, by failing to disclose that Teva had caused the submission of false claims to Medicare through Teva’s donations to bona fide independent charities that provide financial assistance to patients, which allegedly impacted COPAXONE’s commercial success and the sustainability of its revenues and resulted in the above referenced August 2020 False Claims Act complaint filed by the DOJ. The securities class action complaint seeks unspecified damages, legal fees, interest, and costs. The case is in its preliminary stages, and on March 15, 2021, plaintiffs filed amended complaints. On March 26, 2021, the Court appointed lead plaintiff and lead counsel, and instructed that the lead plaintiff can file an amended complaint by May 25, 2021. A motion to approve a securities class action was also filed in the Central District Court in Israel, which has been stayed pending the U.S. litigation, with similar allegations to those made in the above complaint filed in the U.S. District Court for the Eastern District of Pennsylvania. Motions to approve derivative actions against certain past and present directors and officers have been filed in Israeli Courts alleging negligence and recklessness with respect to the acquisition of the Rimsa business, the acquisition of Actavis Generics and the patent settlement relating to Lidoderm ® . Motions for document disclosure prior to initiating derivative actions were filed with respect to several U.S. and EU settlement agreements, opioids, the U.S. price-fixing investigations and allegations related to the DOJ’s complaint regarding Copaxone patient assistance program in the U.S. In October 2020, Teva filed a notice with the Tel Aviv District Court to settle the derivative proceeding with regard to the acquisition of Actavis Generics and two related actions, including the derivative proceedings related to allegations in connection with the Lidoderm® patent settlement agreement. Environmental Matters Teva or its subsidiaries are party to a number of environmental proceedings, or have received claims, including under the federal Superfund law or other federal, provincial or state and local laws, imposing liability for alleged noncompliance, or for the investigation and remediation of releases of hazardous substances and for natural resource damages. Many of these proceedings and claims seek to require the generators of hazardous wastes disposed of at a third party-owned site, or the party responsible for a release of hazardous substances that impacted a site, to investigate and clean the site or to pay or reimburse others for such activities, including for oversight by governmental authorities and any related damages to natural resources. Teva or its subsidiaries have received claims, or been made a party to these proceedings, along with others, as an alleged generator of wastes that were disposed of or treated at third-party waste disposal sites, or as a result of an alleged release from one of Teva’s facilities or former facilities. Although liability among the responsible parties, under certain circumstances, may be joint and several, these proceedings are frequently resolved so that the allocation of clean-up and other costs among the parties reflects the relative contributions of the parties to the site conditions and takes into account other pertinent factors. Teva’s potential liability varies greatly at each of the sites; for some sites the costs of the investigation, clean-up and natural resource damages have not yet been determined, and for others Teva’s allocable share of liability has not been determined. At other sites, Teva has taken an active role in identifying those costs, to the extent they are identifiable and estimable, which do not include reductions for potential recoveries of clean-up costs from insurers, indemnitors, former site owners or operators or other potentially responsible parties. In addition, enforcement proceedings relating to alleged violations of federal, state, commonwealth or local requirements at some of Teva’s facilities may result in the imposition of significant penalties (in amounts not expected to materially adversely affect Teva’s results of operations) and the recovery of certain costs and natural resource damages, and may require that corrective actions and enhanced compliance measures be implemented. Other Matters On February 1, 2018, former shareholders of Ception Therapeutics, Inc., a company that was acquired by and merged into Cephalon in 2010, prior to Cephalon’s acquisition by Teva, filed breach of contract and other related claims against the Company, Teva USA and Cephalon in the Delaware Court of Chancery. Among other things, the plaintiffs allege that Cephalon breached the terms of the 2010 Ception-Cephalon merger agreement by failing to exercise commercially reasonable efforts to develop and commercialize CINQAIR ® (reslizumab) for the treatment of eosinophilic esophagitis (“EE”). The plaintiffs claim damages of at least $200 million, an amount they allege is equivalent to theJune 2022. |
Income taxes |
3 Months Ended |
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Mar. 31, 2021 | |
Income taxes | NOTE 11 – Income taxes: In the first quarter of 2021, Teva recognized a tax expense of $62 million, on pre-tax income of $144 million. In the first quarter of 2020, Teva recognized a tax benefit of $59 million, on $33 million. pre-tax loss ofTeva’s tax rate for the first quarter of 2021 was mainly affected by legal settlements, impairments and amortization in jurisdictions in which tax rates are lower than Teva’s average tax rate on its ongoing business operations. The statutory Israeli corporate tax rate is 23% in 2021. Teva’s tax rate differs from the Israeli statutory tax rate, mainly due to generation of profits in various jurisdictions in which tax rates are different than the Israeli tax rate, tax benefits in Israel and other countries, as well as infrequent or non-recurring items. Teva filed a claim seeking the refund of withholding taxes paid to the Indian tax authorities in 2012. Trial in this case is scheduled to begin in May 2021. A final and binding decision against Teva in this case may lead to an asset write off of $140 million. The Israeli tax authorities issued tax assessment decrees for 2008-2012 and 2013-2016, challenging the Company’s positions on several issues. Teva has protested the 2008-2012 and 2013-2016 decrees before the Central District Court in Israel. The Company believes it has adequately provided for these items, however, adverse results could be material. |
Other assets impairments, restructuring and other items |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Other assets impairments, restructuring and other items | NOTE 12 – Other assets impairments, restructuring and other items:
Impairments Impairments of tangible assets for the three months ended March 31, 2021 and 2020 were $48 million and $75 million, respectively. The impairment for the three months ended March 31, 2021 was mainly related to certain assets in Europe. Teva may record additional impairments in the future, to the extent it changes its plans on any given asset and/or the assumptions underlying such plans, as a result of its network consolidation activities. Contingent consideration In the three months ended March 31, 2021, Teva recorded an expense of $3 million for contingent consideration, compared to an expense of $6 million in the three months ended March 31, 2020. Restructuring In the three months ended March 31, 2021, Teva recorded $81 million of restructuring expenses, compared to $39 million in the three months ended March 31, 2020. The expenses for the three months ended March 31, 2021 were primarily related to network consolidation activities and residual expenses of the restructuring plan announced in 2017. The following tables provide the components of costs associated with Teva’s restructuring plan, including other costs associated with Teva’s restructuring plan and recorded under different items:
The following table provides the components of and changes in the Company’s restructuring accruals:
Significant regulatory and other events In July 2018, the FDA completed an inspection of Teva’s manufacturing plant in Davie, Florida in the United States, and issued a Form FDA- to the site. In October 2018, the FDA notified Teva that the inspection of the site is classified as “official action indicated” (OAI). On February 5, 2019, Teva received a warning letter from the FDA that contained four additional enumerated concerns related to production, quality control and investigations at this site. Teva has been working diligently to address the FDA’s concerns in a manner consistent with current good manufacturing practice (cGMP) requirements as quickly and as thoroughly as possible. An FDA follow up inspection occurred in January 2020, resulting in some follow up findings and Teva received a letter from the FDA dated April 24, 2020 notifying it that the site continues to be classified as OAI. If Teva is unable to remediate the findings to the FDA’s satisfaction, Teva may face additional consequences. These would potentially include continued delays in FDA approval for future products from the site, financial implications due to loss of revenues, impairments, inventory write-offs, customer penalties, idle capacity charges, costs of additional remediation and possible FDA enforcement action. Teva expects to generate approximately $125 483 million in revenues from this site during the remainder of 2021, assuming remediation or enforcement does not cause any unscheduled slowdown or stoppage at the facility, however, delays in FDA approvals of future products from the site may occur . In July 2018, Teva announced the voluntary recall of valsartan and certain combination valsartan medicines in various countries due to the detection of trace amounts of a previously unknown nitrosamine impurity called NDMA found in valsartan API supplied by Zhejiang Huahai Pharmaceuticals Co. Ltd. (“Huahai”). Since July 2018, Teva has been actively engaged with global regulatory authorities in reviewing its sartan and other products to determine whether NDMA and/or other related nitrosamine impurities are present in specific products. Where necessary, Teva has initiated additional voluntary recalls. In December 2019, Teva reached a settlement with Huahai resolving Teva’s claims related to certain sartan API supplied by Huahai. Under the settlement agreement, Huahai agreed to compensate Teva for some of its direct losses and provide it with prospective cost reductions for API. The settlement does not release Huahai from liability for any losses Teva may incur as a result of third party personal injury or product liability claims relating to the sartan API at issue. In addition, multiple lawsuits have been filed in connection with this matter, which may lead to additional customer penalties, impairments and litigation costs. In the second quarter of 2020, Teva’s operations in its manufacturing facilities in Goa, India were temporarily suspended due to a water supply issue. During the second half of 2020, Teva has completed partial remediation of this issue and has restarted limited supply from its Goa facilities. The site experienced some additional delays in first quarter of 2021 due to labor related issues. The impact to Teva’s financial results for the three months ended March 31, 2021 was immaterial, however, if the full remediation takes longer than expected there may be further loss of sales, customer penalties or impairments to related assets. |
Earnings (Loss) per Share |
3 Months Ended |
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Mar. 31, 2021 | |
Earnings (Loss) per Share | NOTE 13 – Earnings (Loss) per share: Basic earnings and loss per share are computed by dividing net results attributable to Teva’s ordinary shareholders by the weighted average number of ordinary shares outstanding (including fully vested restricted share units (“RSUs”)) during the period, net of treasury shares. In computing diluted earnings per share for the three months ended March 31, 2021 and March 31, 2020, basic earnings per share were adjusted to take into account the potential dilution that could occur upon the exercise of options and non-vested RSUs granted under employee stock compensation plans. No account was taken of the potential dilution by the convertible senior debentures, since they had an anti-dilutive effect on earnings per share. Basic and diluted earnings per share were $0.07 for the three months ended March 31, 2021, compared to basic and diluted earnings per share of $0.06 for the three months ended March 31, 2020. |
Accumulated other comprehensive income (loss) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accumulated other comprehensive income (loss) | NOTE 14 – Accumulated other comprehensive income (loss): The components of, and changes within, accumulated other comprehensive income (loss) attributable to Teva are presented in the table below:
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Segments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | NOTE 15 – Segments: Teva operates its business and reports its financial results in three segments:
In addition to these three segments, Teva has other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through its affiliate Medis. Teva’s Chief Executive Officer (“CEO”), who is the chief operating decision maker (“CODM”), reviews financial information prepared on a consolidated basis, accompanied by disaggregated information about revenues and contributed profit by the three identified reportable segments, namely North America, Europe and International Markets, to make decisions about resources to be allocated to the segments and assess their performance. Segment profit is comprised of gross profit for the segment less R&D expenses, S&M expenses, G&A expenses and other income related to the segment. Segment profit does not include amortization and certain other items. Teva manages its assets on a company basis, not by segments, as many of its assets are shared or commingled. Teva’s CODM does not regularly review asset information by reportable segment and, therefore, Teva does not report asset information by reportable segment. Teva’s CEO may review its strategy and organizational structure from time to time. Any changes in strategy may lead to a reevaluation of the Company’s segments and goodwill allocation to reporting units, as well as fair value attributable to its reporting units. See note 3 and note 6.
§ Represents an amount less than $1 million.
The following table presents a reconciliation of Teva’s segment profits to its consolidated operating income (loss) and to consolidated income (loss) before income taxes for the three months ended March 31, 2021 and 2020:
b. Segment revenues by major products and activities: The following tables present revenues by major products and activities for the three months ended March 31, 2021 and 2020:
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Fair value measurement |
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Mar. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurement | NOTE 16 – Fair value measurement: Financial items carried at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 are classified in the tables below in one of the three categories of fair value level s :
Teva determined the fair value of the liabilities for the contingent consideration based on a probability-weighted discounted cash flow analysis. This fair value measurement is based on significant unobservable inputs in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the contingent consideration is based on several factors, such as: the cash flows projected from the success of unapproved product candidates; the probability of success of product candidates, including risks associated with uncertainty regarding achievement and payment of milestone events; the time and resources needed to complete the development and approval of product candidates; the life of the potential commercialized products and associated risks of obtaining regulatory approvals in the United States and Europe, and the risk adjusted discount rate for fair value measurement. A probability of success factor ranging from 80% to 100% was used in the fair value calculation to reflect inherent regulatory and commercial risk of the contingent payments and IPR&D. The discount rate applied ranged from 7.5% to 8.0%. The weighted average discount rate, calculated based on the relative fair value of Teva’s contingent consideration liabilities, was 7.8%. The contingent consideration is evaluated quarterly, or more frequently, if circumstances dictate. Changes in the fair value of contingent consideration are recorded in consolidated statements of income. Significant changes in unobservable inputs, mainly the probability of success and cash flows projected, could result in material changes to the contingent consideration liabilities. The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs:
Financial instruments not measured at fair value Financial instruments measured on a basis other than fair value mostly consist of senior notes and convertible senior debentures (see note 7) and are presented in the table below in terms of fair value (level 1 inputs):
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Basis of presentation (Policies) |
3 Months Ended |
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Mar. 31, 2021 | |
Recently adopted and issued accounting pronouncements | Recently adopted accounting pronouncements In March 2020, the FASB issued ASU 2020-04 “Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” This guidance provides optional expedients and exceptions for applying generally accepted accounting principles to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The guidance applies only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. This guidance is effective for all entities as of March 12, 2020 through December 31, 2022. There was no impact to the Company’s consolidated financial statements for the period ended March 31, 2021 as a result of adopting this standard update. The Company is continuing to evaluate the potential impact of the replacement of the LIBOR benchmark on its interest rate risk management activities and has started initial negotiations to transform the facility base rate of its securitization program. However, it is not expected to have a material impact on the consolidated financial results. In December 2019, the FASB issued ASU 2019-12 “Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes” (the “update”). The amendments in this update simplify the accounting for income taxes by removing the following exceptions in ASC 740: (1) exception to the incremental approach for intra-period tax allocation when there is a loss from continuing operations and income or a gain from other items; (2) exception to accounting for basis differences for equity method investments when a foreign subsidiary becomes an equity method investment; and (3) exception to accounting for basis differences for a foreign subsidiary when a foreign equity method investment becomes a subsidiary; and (4) exception to the general methodology for calculating income taxes in an interim period when a year-to-date In addition, the update also simplifies the accounting for income taxes in certain topics as follows: (1) requiring that an entity recognize a franchise tax (or similar tax) that is partially based on income as an income-based tax and account for any incremental amount incurred as a rates in the annual effective tax rate computation in the interim period that includes the enactment date. Teva adopted the provisions of this update as of January 1, 2021. Based on the Company’s evaluation of the above provisions, the Company notes that items (1) and (4) of this paragraph are not material. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.
non-income-based tax; (2) requiring that an entity evaluate when a step up in the tax basis of goodwill should be considered part of the business combination in which the book goodwill was originally recognized and when it should be considered a separate transaction; (3) specifying that an entity can elect (rather than be required to) allocate the consolidated amount of current and deferred tax expense to a legal entity that is not subject to tax in its separate financial statements; and (4) requiring that an entity reflect the effect of an enacted change in tax laws or |
Recently issued accounting pronouncements, not yet adopted | Recently issued accounting pronouncements, not yet adopted In August 2020, the FASB issued ASU 2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts financial statements. |
Certain transactions (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Summary of Major Classes of Assets and Liabilities Included as Held for Sale | The table below summarizes all Teva assets included as held for sale as of March 31, 2021 and December 31, 2020:
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Revenue from contracts with customers (Tables) |
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Summary of disaggregates revenues by major revenue streams | The following table disaggregates Teva’s revenues by major revenue streams. For additional information on disaggregation of revenues, see note 15.
§ Represents an amount less than $1 million.
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Summary of Sales Reserves and Allowances | The changes in SR&A for third-party sales for the three months ended March 31, 2021 and 2020 were as follows:
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Inventories (Tables) |
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Inventories | Inventories, net of reserves, consisted of the following:
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Identifiable Intangible Assets (Tables) |
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Summary of Identifiable Intangible Assets | Identifiable intangible assets consisted of the following:
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Goodwill (Tables) |
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Summary of Changes in the Carrying Amount of Goodwill by Segment | The changes in the carrying amount of goodwill for the period ended March 31, 2021 were as follows:
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Debt obligations (Tables) |
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Schedule of Short-term Debt | a. Short-term debt:
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Schedule of Senior Notes and Loans | b. Long-term debt:
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Derivative instruments and hedging activities (Tables) |
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Summary of Classification and Fair Values of Derivative Instruments | The following table summarizes the classification and fair values of derivative instruments:
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Derivatives Not Designated as Hedging Instruments | The table below provides information regarding the location and amount of pre-tax (gains) losses from derivatives designated in fair value or cash flow hedging relationships:
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Information Regarding The Location And Amount Of Pretax (Gains) Losses Of Derivatives Designated In Fair Value Or Cash Flow Hedging Relationships | The table below provides information regarding the location and amount of pre-tax (gains) losses from derivatives not designated as hedging instruments:
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Other assets impairments, restructuring and other items (Tables) |
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Schedule of Other Assets Impairments, Restructuring and Other Items |
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Summary of Restructuring Plan Including Costs Related to Exit and Disposal | The following tables provide the components of costs associated with Teva’s restructuring plan, including other costs associated with Teva’s restructuring plan and recorded under different items:
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Summary of Restructuring Accruals | The following table provides the components of and changes in the Company’s restructuring accruals:
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Accumulated other comprehensive income (loss) (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income/(Loss) (Net of Tax) | The components of, and changes within, accumulated other comprehensive income (loss) attributable to Teva are presented in the table below:
|
Segments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Profit |
§ Represents an amount less than $1 million.
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Schedule Of Consolidated Income Before Income Tax | The following table presents a reconciliation of Teva’s segment profits to its consolidated operating income (loss) and to consolidated income (loss) before income taxes for the three months ended March 31, 2021 and 2020:
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Schedule of Net Sales by Product Line | The following tables present revenues by major products and activities for the three months ended March 31, 2021 and 2020:
|
Fair Value Measurement (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Financial Items Carried at Fair Value | Financial items carried at fair value on a recurring basis as of March 31, 2021 and December 31, 2020 are classified in the tables below in one of the three categories of fair value level s :
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Summary of Fair Value of Financial Liabilities Measured Using Level 3 Inputs | The following table summarizes the activity for those financial assets and liabilities where fair value measurements are estimated utilizing Level 3 inputs:
|
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Summary of Financial Instrument Measured on a Basis Other Than Fair Value | Financial instruments not measured at fair value Financial instruments measured on a basis other than fair value mostly consist of senior notes and convertible senior debentures (see note 7) and are presented in the table below in terms of fair value (level 1 inputs):
|
Certain Transactions - Other Transactions - Additional Information (Detail) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Jan. 08, 2018 |
May 12, 2017 |
Sep. 30, 2016 |
Mar. 31, 2021 |
Sep. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2016 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Alder [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Upfront payment | $ 25 | ||||||||
Milestone payment | $ 25 | ||||||||
Collaborative agreement milestone payments | $ 150 | ||||||||
Otsuka [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Upfront payment | $ 50 | ||||||||
Milestone payment | $ 15 | ||||||||
Celltrion [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Refundable payment | $ 60 | ||||||||
Total associated cost | 160 | ||||||||
Regeneron [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Upfront payment | $ 250 | ||||||||
Collaborative agreement milestone payments | $ 2,230 | $ 120 | $ 120 | ||||||
Research and development costs | $ 1,000 | ||||||||
Alvotech [Member] | |||||||||
Noncash or Part Noncash Acquisitions [Line Items] | |||||||||
Collaborative agreement milestone payments | $ 450 |
Certain Transactions - Assets and Liabilities Held For Sale - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
Nov. 30, 2015 |
|
Impairment charge | $ 247 | $ 247 | |
Teva [Member] | |||
Equity Method Investment Ownership Percentage | 51.00% | ||
Minority Interest Ownership Percentage | 49.00% |
Certain Transactions - Business Acquisitions - Summary of Major Classes of Assets and Liabilities Included as Held for Sale (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Business Combinations [Abstract] | ||
Inventories | $ 0 | $ 146 |
Property, plant and equipment, net and others | 99 | 312 |
Goodwill | 2 | 27 |
Adjustments of assets held for sale to fair value | (14) | (296) |
Total assets of the disposal group classified as held for sale in the consolidated balance sheets | $ 87 | $ 189 |
Revenue from Contracts with Customers - Additional Information (Detail) |
3 Months Ended |
---|---|
Mar. 31, 2021 | |
United States [Member] | |
Revenue Recognition [Line Items] | |
Percentage sales reserves and allowances to U.S. customers | 79.00% |
Revenue from Contracts with Customers - Summary of Disaggregation of Revenues by Major Revenue Streams (Detail) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 3,982 | $ 4,357 | |||
Sale of Goods [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 3,463 | 3,655 | |||
Licensing Arrangements [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 49 | 41 | |||
Distribution [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 308 | 434 | |||
Other [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 162 | 227 | |||
International Markets [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 490 | 565 | |||
International Markets [Member] | Sale of Goods [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 440 | 482 | |||
International Markets [Member] | Licensing Arrangements [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 3 | 3 | |||
International Markets [Member] | Distribution [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 19 | 6 | |||
International Markets [Member] | Other [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 28 | 74 | |||
Other activities [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 289 | 307 | |||
Other activities [Member] | Sale of Goods [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 177 | 177 | |||
Other activities [Member] | Licensing Arrangements [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 1 | 1 | |||
Other activities [Member] | Distribution [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 0 | ||||
Other activities [Member] | Other [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 111 | 129 | |||
North America [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 1,989 | 2,082 | |||
North America [Member] | Sale of Goods [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 1,668 | 1,625 | |||
North America [Member] | Licensing Arrangements [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 32 | 25 | |||
North America [Member] | Distribution [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 289 | 426 | |||
North America [Member] | Other [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | [1] | 6 | |||
Europe [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 1,214 | 1,402 | |||
Europe [Member] | Sale of Goods [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 1,178 | 1,370 | |||
Europe [Member] | Licensing Arrangements [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | 14 | 12 | |||
Europe [Member] | Distribution [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | [1] | 2 | |||
Europe [Member] | Other [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenue | $ 22 | $ 19 | |||
|
Revenue from Contracts with Customers - Schedule of Sales Reserves and Allowances (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Revenue Recognition [Line Items] | ||
Balance at beginning of period | $ 4,904 | $ 6,246 |
Provisions related to sales made in current year | 3,532 | 4,100 |
Provisions related to sales made in prior periods | (117) | (148) |
Credits and payments | (3,628) | (4,410) |
Translation differences | (29) | (43) |
Balance at end of period | 4,662 | 5,745 |
Reserves Included in Accounts Receivable, Net [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 80 | 87 |
Provisions related to sales made in current year | 100 | 102 |
Credits and payments | (102) | (106) |
Balance at end of period | 78 | 83 |
Rebates [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 2,054 | 2,895 |
Provisions related to sales made in current year | 1,126 | 1,370 |
Provisions related to sales made in prior periods | (55) | (106) |
Credits and payments | (1,210) | (1,513) |
Translation differences | (17) | (21) |
Balance at end of period | 1,898 | 2,625 |
Medicaid and Other Governmental Allowances [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 828 | 1,109 |
Provisions related to sales made in current year | 164 | 233 |
Provisions related to sales made in prior periods | (11) | (29) |
Credits and payments | (188) | (248) |
Translation differences | (4) | (2) |
Balance at end of period | 789 | 1,063 |
Chargebacks [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 1,108 | 1,342 |
Provisions related to sales made in current year | 2,043 | 2,223 |
Provisions related to sales made in prior periods | 6 | (16) |
Credits and payments | (1,987) | (2,396) |
Translation differences | (3) | (6) |
Balance at end of period | 1,167 | 1,147 |
Returns [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 686 | 637 |
Provisions related to sales made in current year | 76 | 139 |
Provisions related to sales made in prior periods | (40) | (1) |
Credits and payments | (101) | (112) |
Translation differences | (3) | (4) |
Balance at end of period | 618 | 659 |
Other [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 148 | 176 |
Provisions related to sales made in current year | 23 | 33 |
Provisions related to sales made in prior periods | (17) | 4 |
Credits and payments | (40) | (35) |
Translation differences | (2) | (10) |
Balance at end of period | 112 | 168 |
Total Reserves Included in Sales Reserves and Allowances [Member] | ||
Revenue Recognition [Line Items] | ||
Balance at beginning of period | 4,824 | 6,159 |
Provisions related to sales made in current year | 3,432 | 3,998 |
Provisions related to sales made in prior periods | (117) | (148) |
Credits and payments | (3,526) | (4,304) |
Translation differences | (29) | (43) |
Balance at end of period | $ 4,584 | $ 5,662 |
Inventories - Summary of Inventories (Detail) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Inventories [Line Items] | ||
Finished products | $ 2,253 | $ 2,378 |
Raw and packaging materials | 1,297 | 1,231 |
Products in process | 663 | 605 |
Materials in transit and payments on account | 193 | 189 |
Total | $ 4,406 | $ 4,403 |
Identifiable Intangible Assets - Summary of Identifiable Intangible Assets (Detail) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | $ 20,637 | $ 21,182 |
Accumulated amortization | 12,192 | 12,259 |
Net carrying amount | 8,445 | 8,923 |
Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 19,213 | 19,650 |
Accumulated amortization | 12,019 | 12,094 |
Net carrying amount | 7,194 | 7,556 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 610 | 621 |
Accumulated amortization | 173 | 165 |
Net carrying amount | 437 | 456 |
In Process Research and Development (IPR&D) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount net of impairment | 814 | 911 |
Net carrying amount | $ 814 | $ 911 |
Identifiable Intangible Assets - Additional Information (Detail) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021
USD ($)
|
Mar. 31, 2020
USD ($)
|
|
Finite-Lived Intangible Assets [Line Items] | ||
Amortization of intangible assets useful life | 10 years | |
Amortization of intangible assets | $ 242 | $ 258 |
Impairment of intangible assets excluding goodwill | $ 79 | 649 |
Minimum [Member] | Measurement input, discount rate [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.075 | |
Maximum [Member] | Measurement input, discount rate [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.080 | |
In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | $ 51 | 331 |
In Process Research and Development [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.075 | |
In Process Research and Development [Member] | Minimum [Member] | Measurement input, discount rate [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 40 | |
In Process Research and Development [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.09 | |
In Process Research and Development [Member] | Maximum [Member] | Measurement input, discount rate [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 90 | |
Actavis [Member] | In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Business combination recognized identifiable assets | $ 780 | |
Actavis [Member] | In Process Research and Development [Member] | Generic Pipeline Products [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 106 | |
Actavis [Member] | Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 318 | |
AUSTEDO [Member] | In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 211 | |
Japan [Member] | Actavis [Member] | In Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | 165 | |
United States [Member] | Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | $ 138 | |
United States [Member] | Actavis [Member] | Identifiable product rights [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Impairment of intangible assets excluding goodwill | $ 28 |
Goodwill - Summary of Changes in the Carrying Amount of Goodwill by Segment (Detail) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021
USD ($)
| ||||
Goodwill [Line Items] | ||||
Beginning balance | $ 20,624 | [1] | ||
Translation differences | (322) | |||
Ending balance | 20,302 | [1] | ||
North America [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 6,473 | [1] | ||
Translation differences | 4 | |||
Ending balance | 6,477 | [1] | ||
Europe [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 9,102 | [1] | ||
Translation differences | (312) | |||
Ending balance | 8,790 | [1] | ||
International Markets [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 2,362 | [1] | ||
Translation differences | (14) | |||
Ending balance | 2,348 | [1] | ||
Other [Member] | ||||
Goodwill [Line Items] | ||||
Beginning balance | 2,687 | [1] | ||
Ending balance | $ 2,687 | [1] | ||
|
Goodwill - Summary of Changes in the Carrying Amount of Goodwill by Segment (Parenthetical) (Detail) - USD ($) $ in Billions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Goodwill [Line Items] | ||
Accumulated goodwill impairment | $ 25.6 | $ 25.6 |
Goodwill - Additional Information (Detail) |
Mar. 31, 2021 |
---|---|
Other [Member] | |
Goodwill [Line Items] | |
Percentage difference between fair value and carrying value in respect of goodwill | 10.00% |
Debt Obligations - Schedule of Short-term Debt (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | ||
Current maturities of long-term liabilities | $ 2,674 | $ 2,674 |
Total short term debt | $ 2,697 | 3,188 |
Convertible senior debentures [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 0.25% | |
Maturity | 2026 | |
Short-term borrowings | $ 23 | $ 514 |
Debt Obligations - Schedule of Senior Notes and Loans (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Dec. 31, 2020 |
|
Debt Instrument [Line Items] | ||
Total senior notes | $ 25,041 | $ 25,490 |
Less current maturities | (2,674) | (2,674) |
Less debt issuance costs | (80) | (86) |
Total senior notes and loans | $ 22,288 | 22,731 |
Other Debentures [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 0.90% | |
Maturity | 2026 | |
Total senior notes and loans | $ 1 | 1 |
Senior notes EUR 1,500 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.13% | |
Maturity | 2024 | |
Total senior notes | $ 1,752 | 1,839 |
Senior notes EUR 1,300 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.25% | |
Maturity | 2023 | |
Total senior notes | $ 1,520 | 1,595 |
Senior notes EUR 900 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 4.50% | |
Maturity | 2025 | |
Total senior notes | $ 1,054 | 1,107 |
Senior notes EUR 750 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.63% | |
Maturity | 2028 | |
Total senior notes | $ 873 | 916 |
Senior notes EUR 700 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.25% | |
Maturity | 2022 | |
Total senior notes | $ 820 | 861 |
Senior notes EUR 700 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.88% | |
Maturity | 2027 | |
Total senior notes | $ 818 | 860 |
Senior notes USD 3,500 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.15% | |
Maturity | 2026 | |
Total senior notes | $ 3,495 | 3,495 |
Senior notes USD 3,000 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.80% | |
Maturity | 2023 | |
Total senior notes | $ 2,997 | 2,996 |
Senior notes USD 2,000 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 4.10% | |
Maturity | 2046 | |
Total senior notes | $ 1,986 | 1,986 |
Senior notes USD 1,250 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.00% | |
Maturity | 2024 | |
Total senior notes | $ 1,250 | 1,250 |
Senior notes USD 1,250 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.75% | |
Maturity | 2028 | |
Total senior notes | $ 1,250 | 1,250 |
Senior notes EUR 1,000 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.00% | |
Maturity | 2025 | |
Total senior notes | $ 1,172 | 1,230 |
Senior notes USD 1,000 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 7.13% | |
Maturity | 2025 | |
Total senior notes | $ 1,000 | 1,000 |
Senior notes USD 1,475 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.20% | |
Maturity | 2021 | |
Total senior notes | $ 1,474 | 1,472 |
Senior notes USD 844 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 2.95% | |
Maturity | 2022 | |
Total senior notes | $ 851 | 853 |
Senior notes USD 789 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 6.15% | |
Maturity | 2036 | |
Total senior notes | $ 783 | 783 |
Senior notes USD 613 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.65% | |
Maturity | 2021 | |
Total senior notes | $ 615 | 616 |
Senior notes USD 588 million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 3.65% | |
Maturity | 2021 | |
Total senior notes | $ 587 | 586 |
Senior notes CHF 350 Million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 0.50% | |
Maturity | 2022 | |
Total senior notes | $ 372 | 397 |
Senior notes CHF 350 Million [Member] | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate | 1.00% | |
Maturity | 2025 | |
Total senior notes | $ 372 | $ 398 |
Debt Obligations - Schedule of Senior Notes and Loans (Parenthetical) (Detail) - Mar. 31, 2021 € in Millions, SFr in Millions, $ in Millions |
EUR (€) |
USD ($) |
CHF (SFr) |
---|---|---|---|
Senior notes EUR 1,500 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | € 1,500 | ||
Senior notes EUR 1,300 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 1,300 | ||
Senior notes EUR 900 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 900 | ||
Senior notes EUR 750 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 750 | ||
Senior notes EUR 700 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 700 | ||
Senior notes EUR 700 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | 700 | ||
Senior notes EUR 1,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | € | € 1,000 | ||
Senior notes USD 1,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 1,000 | ||
Senior notes USD 3,500 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 3,500 | ||
Senior notes USD 1,475 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 1,475 | ||
Senior notes USD 3,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 3,000 | ||
Senior notes USD 2,000 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 2,000 | ||
Senior notes USD 1,250 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 1,250 | ||
Senior notes USD 1,250 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 1,250 | ||
Senior notes USD 844 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 844 | ||
Senior notes USD 789 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 789 | ||
Senior notes USD 613 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | 613 | ||
Senior notes USD 588 million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | $ 588 | ||
Senior notes CHF 350 Million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | SFr | SFr 350 | ||
Senior notes CHF 350 Million [Member] | |||
Debt Instrument [Line Items] | |||
Debt instrument face amount | SFr | SFr 350 |
Debt Obligations - Additional Information (Detail) € in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | |||
---|---|---|---|---|---|
Apr. 30, 2019
USD ($)
|
Mar. 31, 2021
USD ($)
|
Mar. 31, 2021
EUR (€)
|
Feb. 01, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
Debt Instrument [Line Items] | |||||
Long term debt currency portion USD | 61.00% | 61.00% | |||
Long term debt currency portion EUR | 36.00% | 36.00% | |||
Long term debt currency portion CHF | 3.00% | 3.00% | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 2,300 | ||||
Convertible Debt [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount currently outstanding on the debt instruments | $ 23 | $ 491 | $ 514 | ||
Weighted average interest rate | 0.25% | 0.25% | |||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt Instrument, Covenant Description | The net debt to EBITDA ratio limit was 5.50x through March 31, 2021, gradually declines to 5.00x in the third and fourth quarters of 2021, 4.50x in the first quarter of 2022, and continues to gradually decline over the remaining term of the RCF to 3.50x in the first quarter of 2023. | ||||
Revolving Credit Facility [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Long Term Debt Payable Under Revolving Credit Facility | € | € 0 | ||||
Revolving Credit Facility [Member] | Trache A [Member] | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility | $ 1,150 | ||||
Revolving Credit Facility [Member] | Trache A [Member] | Trache A Extension [Member] | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility | $ 1,065 | ||||
Line of credit facility, expiration date | Apr. 08, 2023 | ||||
Revolving Credit Facility [Member] | Trache B [Member] | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility | $ 1,150 | ||||
Line of credit facility, expiration date | Apr. 08, 2024 |
Derivative Instruments and Hedging Activities - Summary of Classification and Fair Values of Derivative Instruments (Detail) - Not Designated as Hedging Instrument [Member] - Foreign Exchange Contract [Member] - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Accounts Payable [Member] | ||
Derivative [Line Items] | ||
Liability derivatives | $ (23) | $ (79) |
Other Current Assets [Member] | ||
Derivative [Line Items] | ||
Asset derivatives | $ 63 | $ 24 |
Derivative Instruments and Hedging Activities - Information Regarding The Location And Amount Of Pretax (Gains) Losses Of Derivatives Designated In Fair Value Or Cash Flow Hedging Relationships (Details) - Designated as Hedging Instrument [Member] - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|||
Other Comprehensive Income | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivative Instruments, Net, Pretax | $ (201) | $ (530) | ||
Other Comprehensive Income | Net Investment Hedging [Member] | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivative Instruments, Net, Pretax | [1] | 0 | (21) | |
Financial expenses [Member] | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivative Instruments, Net, Pretax | 290 | 224 | ||
Financial expenses [Member] | Net Investment Hedging [Member] | ||||
Derivative [Line Items] | ||||
Gain (Loss) on Derivative Instruments, Net, Pretax | [1] | $ 0 | $ (2) | |
|
Derivative Instruments and Hedging Activities - Schedule Of Other Derivatives Not Designated As Hedging Instruments Statements OfFinancial Performance And Financial Position Location (Details) - USD ($) $ in Millions |
3 Months Ended | |||||
---|---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|||||
Net Revenues [Member] | Not Designated as Hedging Instrument [Member] | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | $ 290 | $ 224 | ||||
Net Revenues [Member] | Not Designated as Hedging Instrument, Trading [Member] | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | [1] | (70) | 24 | |||
Net Revenues [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | [2] | |||||
Financial expenses [Member] | Not Designated as Hedging Instrument [Member] | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | (3,982) | (4,357) | ||||
Financial expenses [Member] | Not Designated as Hedging Instrument, Trading [Member] | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | [1] | |||||
Financial expenses [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member] | ||||||
Derivative [Line Items] | ||||||
Gain (Loss) on Derivative Instruments, Net, Pretax | [2] | $ (28) | $ (60) | |||
|
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Sep. 30, 2016 |
Dec. 31, 2019 |
Sep. 30, 2019 |
|
Derivative [Line Items] | |||||
Revenues other than USD | 48.00% | ||||
Teva other comprehensive loss | $ 493 | ||||
Forward starting interest rate swaps and treasury lock agreements losses | 8 | $ 8 | |||
Interest Rate Swap Gain | 0 | 1 | |||
Gain from currency swap | 0 | 1 | |||
Cash received on settlement of position | 3 | ||||
Cost of sales [Member] | |||||
Derivative [Line Items] | |||||
Derivative, Gain on Derivative | $ 28 | $ 27 | |||
Senior Notes Due 2023 Two [Member] | |||||
Derivative [Line Items] | |||||
Notional amount hedge debt | $ 3,000 | $ 500 | |||
Previously hedge debt rate | 2.80% | ||||
Cash received on settlement of position | $ 10 | ||||
Derivative, Fair Value Hedge, Included in Effectiveness, Gain (Loss) | 41 | ||||
Senior Notes Due 2022 [Member] | |||||
Derivative [Line Items] | |||||
Notional amount hedge debt | $ 844 | ||||
Previously hedge debt rate | 2.95% | ||||
Senior Notes Due 2021 [Member] | |||||
Derivative [Line Items] | |||||
Notional amount hedge debt | $ 450 | $ 588 | |||
Previously hedge debt rate | 3.65% | 3.65% | |||
Cash received on settlement of position | $ 95 |
Legal Settlements and Loss Contingencies - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Dec. 31, 2020 |
|
Loss Contingencies [Line Items] | |||
Legal settlements and loss contingencies, expense | $ 104 | ||
Legal settlements, income | $ 25 | ||
Accrued amount for legal settlements and loss contingencies | $ 1,730 | $ 1,625 | |
Restructuring expense and income | The expense in the first quarter of 2021 was mainly due to the provision for the carvedilol patent litigation (see note 10). The income in the first quarter of 2020 was mainly due to proceeds received following a settlement of an action brought against the sellers of Auden McKenzie (an acquisition made by Actavis Generics). |
Commitments and Contingencies - Contingencies - Additional Information (Detail) € in Millions, $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 20, 2020
EUR (€)
|
Oct. 21, 2019
USD ($)
Number
|
Aug. 21, 2017
USD ($)
|
Jul. 15, 2015
USD ($)
|
May 31, 2019
USD ($)
|
Aug. 31, 2012
USD ($)
|
Dec. 31, 2010
USD ($)
|
Aug. 31, 2008
USD ($)
|
Mar. 31, 2021
USD ($)
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2014
USD ($)
|
Sep. 01, 2020
USD ($)
|
Jan. 31, 2009
USD ($)
|
Jul. 31, 2008
USD ($)
|
Feb. 28, 2005
USD ($)
|
|
Commitment And Contingencies [Line Items] | |||||||||||||||
Damages assessment | $ 235.5 | ||||||||||||||
Annual sales at the time of settlement | $ 700.0 | $ 350.0 | |||||||||||||
Annual sales of Effexor | $ 2,600.0 | ||||||||||||||
Annual sales of Lamictal | $ 2,300.0 | $ 950.0 | |||||||||||||
Annual sales of Aggrenox | $ 1.1 | $ 416.0 | |||||||||||||
Annual sales of Actos | $ 2,800.0 | $ 3,700.0 | |||||||||||||
Annual sales of Acto plus | $ 430.0 | $ 500.0 | |||||||||||||
Annual Sales Of Sensipar | $ 1,400.0 | ||||||||||||||
Litigation settlement amount awarded cash amount | $ 20.0 | ||||||||||||||
Annual Sales Of Copaxone | $ 380.0 | ||||||||||||||
Fines Imposed In Period | € | € 60.5 | ||||||||||||||
Opioid Litigation [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Litigation settlement amount | $ 25.0 | $ 85.0 | |||||||||||||
Litigation settlement amount awarded distribution period | 3 years | ||||||||||||||
Litigation settlement amount awarded number of installments | Number | 4 | ||||||||||||||
Litigation settlement amount awarded cash amount distribution period | 3 years | ||||||||||||||
Nationwide Settlement [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Litigation settlement amount | $ 23,000.0 | ||||||||||||||
Litigation settlement amount awarded distribution period | 10 years | ||||||||||||||
Litigation settlement amount awarded cash amount | $ 250.0 | ||||||||||||||
Litigation settlement amount awarded cash amount distribution period | 10 years | ||||||||||||||
Eosinophilic Esophagitis [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Damage claimed | 200.0 | ||||||||||||||
Eosinophilic Esophagitis [Member] | United States [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Damage claimed | 150.0 | ||||||||||||||
Eosinophilic Esophagitis [Member] | Europe [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Damage claimed | $ 50.0 | ||||||||||||||
AndroGel Rate at 1% [Member] | |||||||||||||||
Commitment And Contingencies [Line Items] | |||||||||||||||
Annual sales at the time of settlement | $ 140.0 |
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Nov. 30, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Tax [Line Items] | |||
Expected impairment of income tax benefit | $ 140 | ||
Income tax expense (benefit) | $ 62 | $ (59) | |
Pre-tax income (loss) | $ 144 | $ (33) | |
Israel Tax Authority [Member] | |||
Income Tax [Line Items] | |||
Statutory tax rate in Israel | 23.00% |
Other assets impairments, restructuring and other items - Schedule of Other Assets Impairments, Restructuring and Other Items (Detail) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|||
Restructuring and Impairment Costs [Line Items] | ||||
Impairments of long-lived tangible assets | [1] | $ 48 | $ 75 | |
Contingent consideration | 3 | 6 | ||
Restructuring | 81 | 39 | ||
Other | 4 | |||
Total | $ 137 | $ 121 | ||
|
Other assets impairments, restructuring and other items - Additional Information (Detail) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Dec. 31, 2021 |
|||
Restructuring and Impairment Costs [Line Items] | ||||||
Impairments of long-lived tangible assets | [1] | $ 48 | $ 75 | |||
Impairments of property, plant and equipment | 48 | |||||
Restructuring costs | 81 | 39 | ||||
Business combination contingent consideration arrangements change in amount of contingent consideration liability | $ 3 | 6 | ||||
Scenario, Forecast [Member] | ||||||
Restructuring and Impairment Costs [Line Items] | ||||||
Expected revenue from Florida manufacturing plant in 2020 | $ 125 | |||||
Restructuring Cost [Member] | ||||||
Restructuring and Impairment Costs [Line Items] | ||||||
Business combination contingent consideration arrangements change in amount of contingent consideration liability | $ (3) | $ 6 | ||||
|
Other assets impairments, restructuring and other items - Components of costs associated with restructuring plan including costs related to exit and disposal activities (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 81 | $ 39 |
Employee termination [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | 79 | 33 |
Other [Member] | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring charges | $ 2 | $ 6 |
Other assets impairments, restructuring and other items - Summary of Restructuring Accruals (Detail) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning balance | $ (122) | $ (215) | ||
Provision | (81) | (39) | ||
Utilization and other | [1] | 35 | 75 | |
Ending balance | (168) | (179) | ||
Employee termination costs [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning balance | (115) | (208) | ||
Provision | (79) | (33) | ||
Utilization and other | [1] | 33 | 69 | |
Ending balance | (161) | (172) | ||
Other [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Beginning balance | (7) | (7) | ||
Provision | (2) | (6) | ||
Utilization and other | [1] | 2 | 6 | |
Ending balance | $ (7) | $ (7) | ||
|
Earnings (Loss) per Share - Additional Information (Detail) - $ / shares |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 30, 2020 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Basic and diluted loss per share | $ 0.07 | $ 0.06 | |
Convertible Preferred Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Weighted average shares with anti-dilutive effect on earnings per share | 0 | 0 |
Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Millions |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 30, 2020 |
|||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Beginning Balance | $ (2,399) | ||||||||
Net other comprehensive income loss after tax in respect of acturial benefits | [1] | $ (570) | |||||||
Ending Balance | (2,534) | ||||||||
Foreign Currency Translation Adjustments [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Beginning Balance | (1,919) | (1,794) | $ (1,794) | ||||||
Other comprehensive income (loss) before reclassifications | (174) | (573) | |||||||
Net other comprehensive income (loss) before tax | (174) | (573) | |||||||
Corresponding income tax | 33 | 3 | |||||||
Net other comprehensive income loss after tax in respect of acturial benefits | [2] | (141) | |||||||
Ending Balance | (2,060) | (2,364) | |||||||
Derivative Financial Instruments [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Beginning Balance | (363) | (420) | (420) | ||||||
Other comprehensive income (loss) before reclassifications | 22 | ||||||||
Amounts reclassified to the statements of income | 9 | 8 | |||||||
Net other comprehensive income (loss) before tax | 9 | 30 | |||||||
Corresponding income tax | (2) | ||||||||
Net other comprehensive income loss after tax in respect of acturial benefits | 7 | [2] | 30 | [1] | |||||
Ending Balance | (356) | (390) | |||||||
Benefit Plans [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Beginning Balance | (117) | (98) | (98) | ||||||
Ending Balance | (117) | (98) | |||||||
AOCI Attributable to Parent [Member] | |||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||||||
Beginning Balance | (2,399) | (2,312) | (2,312) | ||||||
Other comprehensive income (loss) before reclassifications | (174) | (551) | |||||||
Amounts reclassified to the statements of income | 9 | 8 | |||||||
Net other comprehensive income (loss) before tax | (165) | (543) | |||||||
Corresponding income tax | 31 | $ 3 | |||||||
Net other comprehensive income loss after tax in respect of acturial benefits | (134) | [2] | (540) | [1] | |||||
Ending Balance | $ (2,534) | $ (2,852) | |||||||
|
Accumulated Other Comprehensive Income (Loss) (Parenthetical) (Detail) $ in Millions |
3 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Accounting Standards Update 2016-01 [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Foreign currency translation attributable to non-controlling interests | $ 10 |
Foreign Currency Translation Adjustments Attributable to Non-controlling Interests [Member] | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |
Foreign currency translation attributable to non-controlling interests | $ 67 |
Segments - Summary of Segment Profit (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | $ 3,982 | $ 4,357 |
Gross profit | 1,878 | 2,063 |
R&D expenses | 254 | 221 |
S&M expenses | 585 | 613 |
G&A expenses | 290 | 304 |
Segment profit | 434 | 191 |
North America [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 1,989 | 2,082 |
Gross profit | 1,074 | 1,062 |
R&D expenses | 160 | 146 |
S&M expenses | 229 | 251 |
G&A expenses | 111 | 118 |
Other (income) expense | (3) | (2) |
Segment profit | 577 | 550 |
Europe [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 1,214 | 1,402 |
Gross profit | 688 | 823 |
R&D expenses | 66 | 55 |
S&M expenses | 214 | 202 |
G&A expenses | 70 | 66 |
Other (income) expense | (1) | |
Segment profit | 338 | 502 |
International Markets [Member] | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||
Revenues | 490 | 565 |
Gross profit | 260 | 305 |
R&D expenses | 18 | 15 |
S&M expenses | 96 | 106 |
G&A expenses | 26 | 34 |
Other (income) expense | (2) | (6) |
Segment profit | $ 122 | $ 156 |
Segments - Summary of Profit by Segments and Reconciliation of Segments Profit to Consolidated Income Before Income Taxes (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Amounts allocated to segments: | ||
Segments profit | $ 434 | $ 191 |
Amounts not allocated to segments: | ||
Amortization | 242 | 258 |
Other assets impairments, restructuring and other items | 137 | 121 |
Intangible asset impairments | 79 | 649 |
Legal settlements and loss contingencies | 104 | (25) |
Other unallocated amounts | 82 | 49 |
Consolidated operating income (loss) | 434 | 191 |
Financial expenses, net | 290 | 224 |
Income (loss) before income taxes | 144 | (33) |
North America [Member] | ||
Amounts allocated to segments: | ||
Segments profit | 577 | 550 |
Amounts not allocated to segments: | ||
Consolidated operating income (loss) | 577 | 550 |
Europe [Member] | ||
Amounts allocated to segments: | ||
Segments profit | 338 | 502 |
Amounts not allocated to segments: | ||
Consolidated operating income (loss) | 338 | 502 |
International Markets [Member] | ||
Amounts allocated to segments: | ||
Segments profit | 122 | 156 |
Amounts not allocated to segments: | ||
Consolidated operating income (loss) | 122 | 156 |
Corporate Segment [Member] | ||
Amounts allocated to segments: | ||
Segments profit | 1,036 | 1,208 |
Amounts not allocated to segments: | ||
Consolidated operating income (loss) | 1,036 | 1,208 |
Other Segments [Member] | ||
Amounts allocated to segments: | ||
Segments profit | 41 | 36 |
Amounts not allocated to segments: | ||
Consolidated operating income (loss) | 41 | 36 |
Segments and Other Activities [Member] | ||
Amounts allocated to segments: | ||
Segments profit | 1,077 | 1,244 |
Amounts not allocated to segments: | ||
Consolidated operating income (loss) | $ 1,077 | $ 1,244 |
Segments - Schedule of Revenues by Major Products and Activities (Detail) - USD ($) $ in Millions |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|||
Product Information [Line Items] | ||||
Revenues | $ 3,982 | $ 4,357 | ||
North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 1,989 | 2,082 | ||
Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 1,214 | 1,402 | ||
International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 490 | 565 | ||
Generic products [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 1,053 | 952 | ||
Generic products [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 865 | 1,032 | ||
Generic products [Member] | International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 392 | 449 | ||
COPAXONE [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 164 | 198 | ||
COPAXONE [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 100 | 109 | ||
COPAXONE [Member] | International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 12 | 12 | ||
BENDEKA and TREANDA [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 91 | 105 | ||
ProAir [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | [1] | 54 | 59 | |
AJOVY [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 31 | 29 | ||
AJOVY [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 16 | 4 | ||
AUSTEDO [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 146 | 122 | ||
Respiratory Product [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 93 | 106 | ||
Anda [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 289 | 426 | ||
Other [Member] | North America [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 161 | 191 | ||
Other [Member] | Europe [Member] | ||||
Product Information [Line Items] | ||||
Revenues | 140 | 151 | ||
Other [Member] | International Markets [Member] | ||||
Product Information [Line Items] | ||||
Revenues | $ 86 | $ 104 | ||
|
Segments - Additional Information (Detail) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021
USD ($)
Segment
|
Mar. 31, 2020
USD ($)
|
|
Segment Reporting Information [Line Items] | ||
Number of reportable segments | Segment | 3 | |
Operating Income (Loss) | $ 434 | $ 191 |
Europe [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating Income (Loss) | 338 | $ 502 |
Europe [Member] | Sales Revenue, Net [Member] | ||
Segment Reporting Information [Line Items] | ||
Operating Income (Loss) | $ 1 |
Fair Value Measurement - Summary of Financial Items Carried at Fair Value (Detail) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
|||||
---|---|---|---|---|---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Contingent consideration | [1] | $ (246) | $ (268) | ||||
Total | 1,725 | 2,153 | |||||
Asset Derivatives - Options and Forward Contracts [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivatives | 63 | 24 | |||||
Liabilities Derivatives Options and Forward Contracts [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivatives | (23) | (79) | |||||
Money Markets [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Cash and cash equivalents | 120 | 367 | |||||
Cash, Deposits and Other [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Cash and cash equivalents | 1,623 | 1,810 | |||||
Equity Securities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investment in securities | 182 | [2] | 284 | ||||
Other, Mainly Debt Securities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investment in securities | 6 | 15 | |||||
Level 1 [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total | 1,930 | 2,207 | |||||
Level 1 [Member] | Money Markets [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Cash and cash equivalents | 120 | 367 | |||||
Level 1 [Member] | Cash, Deposits and Other [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Cash and cash equivalents | 1,623 | 1,810 | |||||
Level 1 [Member] | Equity Securities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investment in securities | 182 | [2] | 25 | ||||
Level 1 [Member] | Other, Mainly Debt Securities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investment in securities | 5 | 5 | |||||
Level 2 [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Total | 40 | 204 | |||||
Level 2 [Member] | Asset Derivatives - Options and Forward Contracts [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivatives | 63 | 24 | |||||
Level 2 [Member] | Liabilities Derivatives Options and Forward Contracts [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Derivatives | (23) | (79) | |||||
Level 2 [Member] | Equity Securities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investment in securities | 259 | ||||||
Level 3 [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Contingent consideration | [1] | (246) | (268) | ||||
Total | (245) | (258) | |||||
Level 3 [Member] | Other, Mainly Debt Securities [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Investment in securities | $ 1 | $ 10 | |||||
|
Fair value measurement - Additional Information (Detail) |
Mar. 31, 2021 |
---|---|
Maximum [Member] | Measurement input probability of success [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 1 |
Maximum [Member] | Measurement input, discount rate [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.080 |
Minimum [Member] | Measurement input probability of success [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.80 |
Minimum [Member] | Measurement input, discount rate [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.075 |
Weighted Average [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Business combination, contingent consideration, liability, measurement input | 0.078 |
Fair Value Measurement - Summary of Fair Value of Financial Liabilities Measured Using Level 3 Inputs (Detail) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value at the beginning of the period | $ (258) | $ (448) |
Revaluation of debt securities | (9) | |
Fair value at the end of the period | (245) | (423) |
Actavis Generics [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Adjustments to provisions for contingent consideration | (5) | |
Actavis Generics transaction | (3) | |
Eagle Transaction [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Adjustments to provisions for contingent consideration | (1) | |
Settlement of contingent consideration | $ 25 | $ 31 |
Fair Value Measurement - Summary of Financial Instrument Measured on a Basis Other Than Fair Value (Detail) - USD ($) $ in Millions |
Mar. 31, 2021 |
Dec. 31, 2020 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 25,027 | $ 25,891 |
Senior Notes [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | 22,316 | 22,684 |
Senior Notes and Convertible Senior Debentures Included Under Short-Term Liabilities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total | $ 2,711 | $ 3,207 |
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