Teva Reports Third Quarter 2021 Financial Results
`
`Exhibit 99.1
`
`Revenues of $3.9 billion
`GAAP diluted EPS of $0.26
`Non-GAAP diluted EPS of $0.59
`Cash flow generated from operating activities of $529 million
`Free cash flow of $795 million
`Full year 2021 business outlook reaffirmed
`Net revenues of $16.0 - $16.4 billion
`Adjusted EBITDA of $4.8 - $5.1 billion
`EPS of $2.50 - $2.70
`Free cash flow of $2.0 - $2.3 billion
`
`TEL AVIV, Israel--(BUSINESS WIRE)--October 27, 2021--Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) today reported results for the
`quarter ended September 30, 2021.
`
`Mr. Kåre Schultz, Teva's President and CEO, said, "I am very happy with our solid performance in the third quarter of 2021, especially our strong cash flow
`and continued momentum with key brands. Our results were driven by robust performance of AJOVY® in the U.S., Europe and Japan as well as U.S. sales of
`AUSTEDO®, our novel therapy for the treatment of patients with Huntington’s disease and tardive dyskinesia. We are also very enthusiastic about expanding
`our pipeline with additional movement disorder products in clinical development for multiple system atrophy (MSA) and Parkinson’s disease, through the
`strategic collaboration announced yesterday with MODAG GmbH."
`
`Mr. Schultz continued, "We are also proud to be launching a Sustainability-Linked Bond (SLB) today, which further demonstrates our commitment to the
`environment and to securing access to medicines in low and middle-income countries, two of the greatest challenges of our time. Teva is the first generics
`company to issue an SLB, furthering our leadership in accessible medicines for patients throughout the world."
`
`Third Quarter 2021 Consolidated Results
`
`Revenues in the third quarter of 2021 were $3,887 million, a decrease of 2%, or 3% in local currency terms, compared to the third quarter of 2020. This
`decrease was mainly due to lower revenues in our North America segment, mainly due to COPAXONE® and generic products, partially offset by higher
`revenues from generic and OTC products in our Europe segment, AJOVY® and AUSTEDO®. Revenues continued to be affected by the ongoing impact of
`the COVID-19 pandemic on markets and on customer stocking and purchasing patterns.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 1
`
`

`

`Exchange rate movements during the third quarter of 2021, including hedging effects, positively impacted our revenues by $42 million and our GAAP and
`non-GAAP operating income by $22 million and $23 million, respectively.
`
`GAAP gross profit was $1,794 million in the third quarter of 2021, a decrease of 3% compared to the third quarter of 2020. GAAP gross profit margin was
`46.2% in the third quarter of 2021, compared to 46.6% in the third quarter of 2020. The decrease in gross profit margin was mainly driven by a change in the
`mix of products sold, resulting from lower sales of specialty products that have higher profitability, mainly COPAXONE and lower profitability from Anda,
`partially offset by improved profitability from generic products, mainly in our North America segment. Non-GAAP gross profit was $2,083 million in the
`third quarter of 2021, flat compared to the third quarter of 2020. Non-GAAP gross profit margin was 53.6% in the third quarter of 2021, compared to 52.4%
`in the third quarter of 2020.
`
`GAAP Research and Development (R&D) expenses in the third quarter of 2021 were $222 million, a decrease of 14% compared to the third quarter of
`2020. Non-GAAP R&D expenses were $217 million, or 5.6% of quarterly revenues, in the third quarter of 2021, compared to $233 million, or 5.8%, in the
`third quarter of 2020. In the third quarter of 2021, our R&D expenses related primarily to specialty product candidates in the respiratory, pain, migraine and
`headache therapeutic areas, with additional activities in selected other areas and generic products including biosimilars. Our lower R&D expenses in the third
`quarter of 2021, compared to the third quarter of 2020, were mainly due to a decrease in the pain and neuropsychiatry therapeutic areas as well as various
`generics projects.
`
`GAAP Selling and Marketing (S&M) expenses in the third quarter of 2021 were $597 million, a decrease of 1% compared to the third quarter of 2020.
`Non-GAAP S&M expenses were $567 million, or 14.6% of quarterly revenues, in the third quarter of 2021, compared to $566 million, or 14.2%, in the third
`quarter of 2020.
`
`GAAP General and Administrative (G&A) expenses in the third quarter of 2021 were $291 million, an increase of 4% compared to the third quarter of
`2020. Non-GAAP G&A expenses were $275 million, or 7.1% of quarterly revenues, in the third quarter of 2021, compared to $269 million, or 6.8%, in the
`third quarter of 2020.
`
`GAAP operating income in the third quarter of 2021 was $623 million, compared to a loss of $4,342 million in the third quarter of 2020. The operating loss
`in the third quarter of 2020 was mainly due to a goodwill impairment charge and higher intangible asset impairment charges. Non-GAAP operating income
`in the third quarter of 2021 was $1,042 million, an increase of 2%, compared to $1,025 million in the third quarter of 2020. Non-GAAP operating margin was
`26.8% in the third quarter of 2021, compared to 25.8% in the third quarter of 2020. The increase was mainly due to higher profit in our Europe and
`International Markets segments, partially offset by lower profit in our North America segment.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 2
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`

`

`EBITDA (defined as operating income, excluding amortization and depreciation expenses) was $954 million in the third quarter of 2021, compared to
`negative EBITDA of $3,961 million in the third quarter of 2020. Adjusted EBITDA (defined as non-GAAP operating income excluding depreciation
`expenses) was $1,170 million in the third quarter of 2021, an increase of 1% compared to $1,153 million in the third quarter of 2020.
`
`GAAP financial expenses were $241 million in the third quarter of 2021, compared to $117 million in the third quarter of 2020. Non-GAAP financial
`expenses were $235 million in the third quarter of 2021, compared to $241 million in the third quarter of 2020. Financial expenses in the third quarter of
`2021, were mainly comprised of interest expenses of $232 million. Financial expenses in the third quarter of 2020 were mainly comprised of interest
`expenses of $241 million, partially offset by gains on revaluations of marketable securities of $124 million.
`
`In the third quarter of 2021, we recognized a GAAP tax expense of $76 million, on pre-tax income of $382 million. In the third quarter of 2020, we
`recognized a tax expense of $16 million, on pre-tax loss of $4,459 million. Our tax rate for the third quarter of 2021 was mainly affected by amortization and
`interest expense disallowance. Non-GAAP income taxes in the third quarter of 2021 were $137 million, or 17%, on pre-tax non-GAAP income of $807
`million. Non-GAAP income taxes in the third quarter of 2020 were $133 million, or 17%, on pre-tax non-GAAP income of $784 million. Our non-GAAP
`tax rate in the third quarter of 2021 was mainly affected by the mix of products we sold and interest expense disallowance.
`
`We expect our annual non-GAAP tax rate for 2021 to be 17%-18%, unchanged from our outlook provided in February 2021.
`
`GAAP net income attributable to Teva and GAAP EPS were $292 million and $0.26, respectively, in the third quarter of 2021, compared to net loss of
`$4,349 million and a loss per share of $3.97 in the third quarter of 2020. The loss in the third quarter of 2020 was mainly due to a goodwill impairment
`charge and intangible asset impairment charges. Non-GAAP net income attributable to Teva and non-GAAP diluted EPS in the third quarter of 2021 were
`$651 million and $0.59, respectively, compared to $637 million and $0.58 in the third quarter of 2020.
`
`The weighted average diluted shares outstanding used for the fully diluted share calculation for the three months ended September 30, 2021 and 2020 was
`1,109 million shares and 1,096 million shares, respectively. The weighted average diluted shares outstanding used for the fully diluted share calculation on
`a non-GAAP basis for the three months ended September 30, 2021 and 2020 was 1,109 million and 1,100 million shares, respectively.
`
`As of September 30, 2021 and 2020, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,128 million and
`1,118 million, respectively.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 3
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`

`

`Non-GAAP information: Net non-GAAP adjustments in the third quarter of 2021 were $360 million. Non-GAAP net income and non-GAAP EPS for the
`third quarter of 2021 were adjusted to exclude the following items:
`
`Amortization of purchased intangible assets of $199 million, of which $175 million is included in cost of sales and the remaining $24 million in S&M
`expenses;
`Impairment of long-lived assets of $47 million, comprised of tangible assets in the North America segment and impairment of intangible assets of
`IPR&D and product rights assets mainly in connection with the Actavis Generics acquisition;
`Restructuring expenses of $28 million;
`Equity compensation expenses of $26 million;
`Contingent consideration expense of $9 million, mainly related to an increase in future royalties;
`Finance expenses of $6 million, related to revaluation of marketable securities;
`Other items of $107 million; and
`Income tax of $62 million.
`
`Teva believes that excluding such items facilitates investors’ understanding of its business. For further information, see the tables below for a reconciliation
`of the U.S. GAAP results to the adjusted non-GAAP figures and the information under “Non-GAAP Financial Measures.” Investors should consider non-
`GAAP financial measures in addition to, and not as replacement for, or superior to, measures of financial performance prepared in accordance with GAAP.
`
`Cash flow generated from operating activities during the third quarter of 2021 was $529 million, compared to $307 million in the third quarter of 2020.
`The increase in the third quarter of 2021 was mainly due to favorable collection of payments from customers in North America.
`
`Free cash flow (defined as cash flow from operating activities, cash used for capital investments, beneficial interest collected in exchange for securitized
`accounts receivables and proceeds from divestitures of businesses and other assets) was $795 million in the third quarter of 2021, compared to $506 million
`in the third quarter of 2020. The increase in the third quarter of 2021 resulted mainly from higher cash flow from operating activities.
`
`As of September 30, 2021, our debt was $23,746 million, compared to $25,132 million as of June 30, 2021. This decrease was mainly due to repayment of
`our $1,475 million 2.2% senior notes at maturity in July 2021 and exchange rate fluctuations, partially offset by $300 million borrowed under our unsecured
`syndicated revolving credit facility (“RCF”). During the third quarter of 2021, we borrowed $500 million under our RCF, of which $200 million was repaid
`during the quarter and the remaining $300 million was repaid subsequently. As of the date hereof, no amounts are outstanding under the RCF. Our debt as of
`September 30, 2021 was effectively denominated in the following currencies: 63% in U.S. dollars, 34% in euros and 3% in Swiss francs. The portion of total
`debt classified as short-term as of September 30, 2021 was 11%, compared to 14% as of June 30, 2021. Our financial leverage was 67% as of September 30,
`2021, compared to 69% as of June 30, 2021. Our average debt maturity was approximately 5.4 years as of September 30, 2021, compared to 5.3 years as of
`June 30, 2021.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 4
`
`

`

`Segment Results for the Third Quarter of 2021
`
`North America Segment
`
`Our North America segment includes the United States and Canada.
`
`The following table presents revenues, expenses and profit for our North America segment for the three months ended September 30, 2021 and 2020:
`
`
`
`
`
`
`
`
`
`
`
`
`
`Three months ended September 30,
`
`2021
`2020
`
`
`(U.S. $ in millions / % of Segment Revenues)
`
`1,875
`100% $
`2,017
`100%
`Revenues
`967
`51.6%
`1,056
`52.4%
`Gross profit
`146
`7.8%
`155
`7.7%
`R&D expenses
`250
`13.3%
`250
`12.4%
`S&M expenses
`121
`6.4%
`97
`4.8%
`G&A expenses
`(7)
`§
`
`(5)
`§
`Other income
`458
`24.4% $
`560
`27.7%
`Segment profit*
`
`
`
`
`
`
`
`
`
`* Segment profit does not include amortization and certain other items.
`§ Represents an amount less than 0.5%.
`
`
`
`
`
`
`
`$
`
`$
`
`Revenues from our North America segment in the third quarter of 2021 were $1,875 million, a decrease of $142 million, or 7%, compared to the third
`quarter of 2020, mainly due to a decrease in revenues from COPAXONE and generic products. 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 has been impacted by less physician
`visits by patients and less physician interactions by our sales personnel.
`
`Revenues in the United States, our largest market, were $1,754 million in the third quarter of 2021, a decrease of $134 million, or 7%, compared to the third
`quarter of 2020.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 5
`
`

`

`Revenues by Major Products and Activities
`
`The following table presents revenues for our North America segment by major products and activities for the three months ended September 30, 2021 and
`2020:
`
`Three months ended
`
`September 30,
`
`
`
`2020
`2021
`
`
`
`
`(U.S. $ in millions)
`
`
`
`
`
`
`
`
`928
`859 $
`
`Generic products
`35
`46
`
`
`AJOVY
`168
`201
`
`
`AUSTEDO
`105
`95
`
`
`BENDEKA®/TREANDA®
`236
`133
`
`
`COPAXONE
`50
`31
`
`
`ProAir®*
`341
`363
`
`
`Anda
`155
`146
`
`
`Other
`2,017
`1,875 $
`
`Total
`
`
`
`
`
`
`* Does not include revenues from our ProAir authorized generic, which are included under generic products.
`
`
`
`
`$
`
`
`
`
`
`
`
`$
`
`Percentage
`
`Change
`2020-2021
`
`(7%)
`31%
`19%
`(9%)
`(44%)
`(37%)
`7%
`(5%)
`(7%)
`
`Generic products revenues in our North America segment (including biosimilars) in the third quarter of 2021 were $859 million, a decrease of 7% compared
`to the third quarter of 2020, mainly due to increased competition and lower volumes.
`
`In the third quarter of 2021, our total prescriptions were approximately 305 million (based on trailing twelve months), representing 8.2% of total U.S. generic
`prescriptions according to IQVIA data.
`
`AJOVY revenues in our North America segment in the third quarter of 2021 increased by 31% to $46 million, compared to the third quarter of 2020, mainly
`due to growth in volume.
`
`AUSTEDO revenues in our North America segment in the third quarter of 2021 increased by 19%, to $201 million, compared to $168 million in the third
`quarter of 2020, mainly due to growth in volume.
`
`BENDEKA and TREANDA combined revenues in our North America segment in the third quarter of 2021 decreased by 9% to $95 million, compared to the
`third quarter of 2020, mainly due to the availability of alternative therapies and continued competition from Belrapzo® (a ready-to-dilute bendamustine
`hydrochloride product from Eagle).
`
`COPAXONE revenues in our North America segment in the third quarter of 2021 decreased by 44% to $133 million, compared to the third quarter of 2020,
`mainly due to generic competition in the United States.
`
`ProAir (HFA and RespiClick) revenues in our North America segment in the third quarter of 2021 were $31 million, a decrease of 37% compared to the
`third quarter of 2020, mainly due to generic competition. In January 2019, we launched our own ProAir authorized generic in the United States, following the
`launch of a generic version of Ventolin® HFA, another albuterol inhaler. Revenues from our ProAir authorized generic are included in “generic products”
`above. During the third quarter of 2021, the exit market share of our overall albuterol product, including our ProAir authorized generic was 38%, making it
`the second largest in the market, compared to 44% in the third quarter of 2020. Other generic versions of ProAir were launched in 2020.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 6
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`

`

`Anda revenues in our North America segment in the third quarter of 2021 increased by 7% to $363 million, compared to $341 million in the third quarter of
`2020, mainly due to higher demand.
`
`North America Gross Profit
`
`Gross profit from our North America segment in the third quarter of 2021 was $967 million, a decrease of 8%, compared to $1,056 million in the third
`quarter of 2020. This decrease was mainly due to lower gross profit from COPAXONE.
`
`Gross profit margin for our North America segment in the third quarter of 2021 decreased to 51.6%, compared to 52.4% in the third quarter of 2020. This
`decrease was mainly due to a change in the mix of products.
`
`North America Profit
`
`Profit from our North America segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this
`segment. Segment profit does not include amortization and certain other items.
`
`Profit from our North America segment in the third quarter of 2021 was $458 million, a decrease of 18% compared to $560 million in the third quarter of
`2020, mainly due to lower gross profit.
`
`Europe Segment
`
`Our Europe segment includes the European Union and certain other European countries.
`
`The following table presents revenues, expenses and profit for our Europe segment for the three months ended September 30, 2021 and 2020:
`
`Three months ended September 30,
`
`2021
`2020
`
`
`(U.S. $ in millions / % of Segment Revenues)
`
`1,220
`100% $
`1,116
`100%
`Revenues
`714
`58.6%
`637
`57.1%
`Gross profit
`55
`4.5%
`60
`5.4%
`R&D expenses
`204
`16.7%
`200
`17.9%
`S&M expenses
`64
`5.2%
`66
`5.9%
`G&A expenses
`(2)
`§
`
`(1)
`§
`Other income
`394
`32.3% $
`312
`28.0%
`Segment profit*
`
`
`
`
`
`
`
`
`
`* Segment profit does not include amortization and certain other items.
`§ Represents an amount less than $1 million or 0.5%, as applicable.
`
`$
`
`
`
`
`
`$
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 7
`
`

`

`Revenues from our Europe segment in the third quarter of 2021 were $1,220 million, an increase of 9% or $104 million, compared to the third quarter of
`2020. In local currency terms, revenues increased by 6%, mainly due to the impact the COVID-19 pandemic had on markets and on customer stocking and
`purchasing patterns.
`
`Revenues by Major Products and Activities
`
`The following table presents revenues for our Europe segment by major products and activities for the three months ended September 30, 2021 and 2020:
`
`Three months ended
`Percentage
`
`
`September 30,
`Change
`
`
`
` 2020-2021
`2021
`2020
`
`
`
`(U.S. $ in millions)
`
`
`
`
` $
`895 $
`824
`9%
`Generic products
`
`
`23
`
`8
`180%
`AJOVY
`
`
`95
`
`101
`(6%)
`COPAXONE
`Respiratory products
`
`85
`
`77
`10%
`
`122
`
`106
`Other
`
`15%
` $
`1,220 $
`1,116
`Total
`9%
`
`Generic products revenues in our Europe segment in the third quarter of 2021, including OTC products, increased by 9% to $895 million, compared to the
`third quarter of 2020. In local currency terms, revenues increased by 7%, mainly due to the impact the COVID-19 pandemic had on markets and on customer
`stocking and purchasing patterns.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 8
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`

`

`AJOVY revenues in our Europe segment in the third quarter of 2021 increased to $23 million, compared to $8 million in the third quarter of 2020, mainly
`due to launches and reimbursements in additional European countries as well as growth in existing countries.
`
`COPAXONE revenues in our Europe segment in the third quarter of 2021 decreased by 6% to $95 million, compared to the third quarter of 2020. In local
`currency terms, revenues decreased by 7%, due to price reductions and a decline in volume resulting from competing glatiramer acetate products.
`
`Respiratory products revenues in our Europe segment in the third quarter of 2021 increased by 10% to $85 million compared to the third quarter of 2020. In
`local currency terms, revenues increased by 7%, mainly due to the impact the COVID-19 pandemic had on markets and on customer stocking and purchasing
`patterns.
`
`Europe Gross Profit
`
`Gross profit from our Europe segment in the third quarter of 2021 was $714 million, an increase of 12% compared to $637 million in the third quarter of
`2020, mainly due to the impact the COVID-19 pandemic had on markets and on customer stocking and purchasing patterns.
`
`Gross profit margin for our Europe segment in the third quarter of 2021 increased to 58.6%, compared to 57.1% in the third quarter of 2020.
`
`Europe Profit
`
`Profit from our Europe segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to this segment.
`Segment profit does not include amortization and certain other items.
`
`Profit from our Europe segment in the third quarter of 2021 was $394 million, an increase of 26%, compared to $312 million in the third quarter of 2020.
`This increase was mainly due to higher revenues, as discussed above.
`
`International Markets Segment
`
`Our International Markets segment includes all countries in which we operate other than those in our North America and Europe segments. The key markets
`in this segment are Japan, Russia and Israel.
`
`On February 1, 2021, we completed the sale of the majority of the generic and operational assets of our business venture in Japan.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 9
`
`

`

`The following table presents revenues, expenses and profit for our International Markets segment for the three months ended September 30, 2021 and 2020:
`
`Three months ended September 30,
`
`2021
`2020
`
`
`
`(U.S. $ in millions / % of Segment Revenues)
`
`530
`100% $
`529
`100%
`$
`Revenues
`296
`55.9%
`
`275
`52.0%
`
`Gross profit
`16
`3.0%
`
`17
`3.2%
`
`R&D expenses
`102
`19.2%
`
`101
`19.1%
`
`S&M expenses
`29
`5.4%
`
`33
`6.3%
`
`G&A expenses
`(2)
`§
`
`(1)
`§
`
`Other income
`152
`28.8% $
`125
`23.6%
`Segment profit* $
`
`
`
`
`
`
`
`
`
`* Segment profit does not include amortization and certain other items.
`§ Represents an amount less than 0.5%.
`
`Revenues from our International Markets segment in the third quarter of 2021 were $530 million, flat compared to the third quarter of 2020. In local
`currency terms, revenues increased by 1% compared to the third quarter of 2020, mainly due to higher revenues in most markets and a milestone payment of
`$35 million from Otsuka related to the launch of AJOVY in Japan, partially offset by lower revenues in Japan resulting from the divestment mentioned
`above, as well as regulatory price reductions and generic competition to off-patented products. Revenues continued to be affected by the ongoing impact of
`the COVID-19 pandemic on markets and on customer stocking and purchasing patterns.
`
`Revenues by Major Products and Activities
`
`The following table presents revenues for our International Markets segment by major products and activities for the three months ended September 30, 2021
`and 2020:
`
`
`
`
`
`Percentage
`Three months ended
`
`
`Change
`September 30,
`
`
`
` 2020-2021
`2021
`2020
`
`
`
`(U.S. $ in millions)
`
`
`
`
`Generic products $
`412 $
`429
`AJOVY
`
`
`39
`
`16
`COPAXONE
`
`
`10
`
`14
`
`69
`
`71
`Other
`
` $
`530 $
`529
`Total
`____________________________
`§ Represents an amount less than 0.5%.
`
`(4%)
`145%
`(30%)
`(3%)
`§
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 10
`
`

`

`Generic products revenues in our International Markets segment in the third quarter of 2021, which include OTC products, decreased by 4% in U.S. dollar
`or 3% in local currency terms, to $412 million, compared to the third quarter of 2020. This decrease was mainly due to lower sales in Japan resulting from the
`divestment mentioned above, as well as regulatory price reductions and generic competition to off-patented products in Japan, partially offset by higher
`revenues in most other markets.
`
`AJOVY was launched in certain markets in our International Markets segment, including in Japan during the third quarter of 2021. We are moving forward
`with plans to launch AJOVY in other markets. AJOVY revenues in our International Markets segment in the third quarter of 2021 were $39 million,
`compared to $16 million in the third quarter of 2020. Revenues in the third quarter of 2021 included milestone payment of $35 million received from Otsuka
`related to the launch of AJOVY in Japan. Revenues in the third quarter of 2020 included a milestone payment of $15 million received from Otsuka.
`
`COPAXONE revenues in our International Markets segment in the third quarter of 2021 were $10 million, compared to $14 million in the third quarter of
`2020.
`
`AUSTEDO was launched in China for the treatment of chorea associated with Huntington disease and for the treatment of tardive dyskinesia in early 2021.
`We continue with additional submissions in various other markets.
`
`International Markets Gross Profit
`
`Gross profit from our International Markets segment in the third quarter of 2021 was $296 million, an increase of 8% compared to $275 million in the third
`quarter of 2020.
`
`Gross profit margin for our International Markets segment in the third quarter of 2021 increased to 55.9%, compared to 52.0% in the third quarter of 2020.
`This increase was mainly due to the divestment in Japan mentioned above, the Otsuka milestone payment for AJOVY and a change in product portfolio mix,
`partially offset by regulatory price reductions and generic competition to off-patented products in Japan.
`
`International Markets Profit
`
`Profit from our International Markets segment consists of gross profit less R&D expenses, S&M expenses, G&A expenses and any other income related to
`this segment. Segment profit does not include amortization and certain other items.
`
`Profit from our International Markets segment in the third quarter of 2021 was $152 million, an increase of 22%, compared to $125 million in the third
`quarter of 2020. This increase was mainly due to higher gross profit.
`
`Other Activities
`
`We have other sources of revenues, primarily the sale of active pharmaceutical ingredients ("APIs") to third parties, certain contract manufacturing services
`and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis. Our other activities are not
`included in our North America, Europe or International Markets segments described above.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 11
`
`

`

`Our revenues from other activities in the third quarter of 2021 were $262 million, a decrease of 17% compared to the third quarter of 2020 in both U.S dollar
`and local currency terms, mainly due to a decrease in volumes from API and Medis resulting from the COVID-19 pandemic, as well as lower revenues from
`contract manufacturing services.
`
`API sales to third parties in the third quarter of 2021 were $161 million, a decrease of 8% in both U.S. dollar and local currency terms, compared to the
`third quarter of 2020.
`
`Conference Call
`
`Teva will host a conference call and live webcast including a slide presentation on Wednesday, October 27, 2021, at 8:00 a.m. ET to discuss its third quarter
`2021 results and overall business environment. A question & answer session will follow.
`
`In order to participate, please dial the following numbers:
`
` 1 (877) 870-9135
`United States:
`International: +44 (0) 2071 928338
`Israel: 1 (809) 213-985
`Passcode: 6466787
`
`A live webcast of the call will be available on Teva’s website at: ir.tevapharm.com.
`
`Following the conclusion of the call, a replay of the webcast will be available within 24 hours on the Company's website or by calling the following numbers:
`United States 1-866-331-1332; International +44 (0) 3333 009785; passcode: 6466787.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 12
`
`

`

`About Teva
`
`Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) has been developing and producing medicines to improve people’s lives for more than a
`century. We are a global leader in generic and specialty medicines with a portfolio consisting of over 3,500 products in nearly every therapeutic area. Around
`200 million people around the world take a Teva medicine every day, and are served by one of the largest and most complex supply chains in the
`pharmaceutical industry. Along with our established presence in generics, we have significant innovative research and operations supporting our growing
`portfolio of specialty and biopharmaceutical products. Learn more at http://www.tevapharm.com.
`
`Some amounts in this press release may not add up due to rounding. All percentages have been calculated using unrounded amounts.
`
`Auspex Exhibit 2021
`Apotex v. Auspex
`IPR2021-01507
`Page 13
`
`

`

`Non-GAAP Financial Measures
`
`This press release contains certain financial information that differs from what is reported under accounting principles generally accepted in the United States
`("GAAP"). These non-GAAP financial measures, including, but not limited to, non-GAAP EPS, non-GAAP operating income, non-GAAP gross profit, non-
`GAAP gross profit margin, EBITDA, Adjusted EBITDA, non-GAAP R&D expenses, non-GAAP S&M expenses, non-GAAP G&A expenses, non-GAAP
`financial expenses, non-GAAP income taxes, non-GAAP income (loss) before income taxes, non-GAAP tax rate, non-GAAP net income (loss), non-GAAP
`net income (loss) attributable to Teva and non-GAAP diluted EPS are presented in order to facilitates investors' understanding of our business. We utilize
`certain non-GAAP financial measures to evaluate performance, in conjunction with other performance metrics. The following are examples of how we utilize
`the non-GAAP measures: 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. See the attached tables for a reconciliation of the GAAP results to
`the adjusted non-GAAP figures. Investors should consider non-GAAP financial measures in addition to, and not as replacements for, or superior to, measures
`of financial performance prepared in accordance with GAAP. We are not providing forward looking guidance for GAAP reported financial measures or a
`quantitative reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP measure because we are unable to
`predict with reasonable certainty the ultimate outcome of certain significant items without unreasonable effort.
`
`Cautionary Note Regarding Forward-Looking Statements
`
`This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, which are based on
`management’s current beliefs and expectations and are subject to substantial risks and uncertainties, both known and unknown, that could cause our future
`results, performance or achievements to differ significantly from that expressed or implied by such forward-looking statements. Important factors that could
`cause or contribute to such differences include risks relating to:
`
`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 favor