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TEVA Q1 Earnings Top Estimates, Branded Drugs Drive Revenues, Stock Up
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Key Takeaways
TEVA beat Q1 estimates with EPS of 53 cents and revenues of $3.98B, up 2% year over year.
Branded drugs Austedo, Ajovy and Uzedy drove growth, offsetting weaker U.S. generics sales.
TEVA cut 2026 EPS and income outlook while acquiring Emalex to expand its neuroscience pipeline.
Teva Pharmaceutical Industries (TEVA - Free Report) reported first-quarter 2026 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate of 50 cents.
Revenues for the first quarter were $3.98 billion, beating the Zacks Consensus Estimate of $3.87 billion. Total revenues rose 2% from the year-ago quarter on a reported basis, but decreased 3% on a constant currency basis.
TEVA’s top line in the reported quarter was primarily driven by continued strong momentum in branded drugs, Austedo, Ajovy and Uzedy. However, the decline in local currency terms was primarily due to lower generic product revenues, notably lenalidomide capsules (generic Revlimid) in the United States, along with the divestment of its Japan business in the International Markets segment.
Shares of Teva have rallied 11.9% on Wednesday, likely as the investors were impressed by the better-than-expected first-quarter results.
TEVA’s Price Performance
Year to date, Teva stock has risen 13.3% against the industry’s 2.9% decline.
Image Source: Zacks Investment Research
TEVA’s Q1 U.S. Unit’s Sales
Sales in the United States segment were $1.53 billion, relatively flat year over year, mainly due to weaker sales of generic products, partly offset by higher revenues from key innovative products, notably Austedo. The segment’s sales missed the Zacks Consensus Estimate of $1.81 billion.
Generic/biosimilar product revenues were down 28% year over year to $612 million in the United States, mainly due to lower revenues from lenalidomide capsules as a result of increased generic competition in the United States, partially offset by higher revenues from Teva’s portfolio of biosimilar products. The figure missed the Zacks Consensus Estimate of $681 million.
Huntington's disease drug Austedo recorded sales of $559 million in the United States, up 41% year over year. Sales were mainly driven by volume growth as prescription trends continued to grow. Austedo sales comprehensively beat the Zacks Consensus Estimate of $450 million.
The Austedo franchise got a boost from the launch of Austedo XR, a new once-daily formulation of Austedo.
Ajovy recorded sales of $87 million in the quarter, up 64% year over year, driven by a reduction in sales allowance as well as market share gains. Ajovy sales surpassed the Zacks Consensus Estimate of $73 million.
Uzedy (risperidone), a long-acting subcutaneous atypical antipsychotic injection for the treatment of schizophrenia, generated sales of $63 million in the first quarter, up 62% year over year, mainly driven by volume growth.
Copaxone recorded sales of $62 million in the United States, up 16% year over year, mainly due to a reduction in sales allowances, partially offset by lower volumes. Copaxone sales beat the Zacks Consensus Estimate of $46 million.
TEVA’s Europe and International Market Units’ Sales
The Europe segment recorded revenues of $1.34 billion, up 12% year over year on a reported basis. Sales declined 1% on a constant currency basis, mainly due to lower revenues from generic products, partially offset by higher revenues from Ajovy. Teva launched Austedo in European markets earlier this year. Europe revenues beat the Zacks Consensus Estimate of $1.32 billion.
The International Markets segment recorded revenues of $524 million, down 10% year over year on a reported basis and 19% in constant currency terms. The decrease was mainly due to the divestment of Teva’s business venture in Japan. International Markets revenues missed the Zacks Consensus Estimate of $586 million.
The Other segment (comprising the sales of active pharmaceutical ingredients to third parties and certain contract manufacturing services) recorded revenues of $584 million, up 1% year over year on both a reported basis and constant currency basis.
TEVA’s Margin Discussion
Adjusted gross margin was 52.9% in the quarter, up 10 basis points (bps) year over year. The rise was mainly driven by higher Austedo revenues, partially offset by lower revenues from generic products in the United States segment.
Adjusted research & development expenses decreased 10% year over year to $222 million. Selling and marketing (S&M) expenditure increased 12% year over year to $696 million. General and administrative expenses increased 2% from the prior-year level to $304 million.
Adjusted operating income rose 11% year over year in the first quarter to $956 million. Adjusted operating margin decreased 30 bps to 24% in the quarter, mainly due to higher S&M expenses as a percentage of revenues, partially offset by higher gross profit margin.
Teva expects an adjusted operating margin of 30% by 2027 to be achieved through cost savings and the continued growth of its branded drugs.
TEVA Updates Guidance for 2026
Teva continues to expect total revenues in the range of $16.4-$16.8 billion for the full year of 2026. The Zacks Consensus Estimate for total sales in 2026 is pinned at $16.53 billion.
Per management, the guidance reflects continued strong momentum in TEVA’s innovative portfolio, particularly Austedo, Ajovy and Uzedy, alongside low single-digit growth in the global generics business.
Teva expects Austedo sales to be in the $2.40-$2.55 billion band and Ajovy sales of approximately $750-$790 million in 2026. TEVA anticipates Uzedy sales to be in the range of $250-$280 million in 2026.
The company now expects adjusted EPS to be in the range of $1.91-$2.11 in 2026 compared with the previous estimate of $2.57-$2.77. The Zacks Consensus Estimate for the metric stands at $2.69 per share. The expectation for the adjusted tax rate has also been revised to be in the range of 20-23% compared with the previous estimate of 16-19%.
Teva now expects adjusted operating income in the band of $3.8-$4 billion in 2026 compared with the previously guided range of $4.55-$4.8 billion. The company has also revised its adjusted EBITDA to the range of $4.23-$4.53 billion compared with the previous expectation of $5-$5.3 billion. Free cash flow is projected to be in the range of $2-$2.4 billion, and capital expenditures are expected to be $500 million in 2026.
Teva Pharmaceutical Industries Ltd. Price, Consensus and EPS Surprise
Teva Expands Neuroscience Pipeline With Emalex Deal
In a separate press release, Teva announced agreeing to acquire Emalex Biosciences in a deal valued at $700 million in upfront payment, with up to $200 million in additional milestone payments and royalties tied to future sales. The transaction brings ecopipam, a late-stage, first-in-class therapy for pediatric Tourette syndrome, into Teva’s portfolio. The asset has demonstrated statistically significant efficacy in phase III studies and is expected to be submitted for regulatory approval in the second half of 2026, targeting a high unmet need in a specialized neuroscience segment. This has also likely contributed to the stock price rally on Wednesday.
The acquisition strengthens Teva’s innovative medicines pipeline and aligns with its strategy to shift toward growth through differentiated, late-stage assets. Ecopipam’s unique mechanism as a selective dopamine D1 receptor antagonist sets it apart from existing treatments that primarily target D2 receptors, potentially offering improved symptom control with a differentiated safety profile. The therapy has already received Orphan Drug and Fast Track designations in the United States, underscoring its clinical and regulatory potential.
The deal is expected to close by the third quarter of 2026, pending regulatory approvals. While the acquisition may have a near-term impact on margins, Teva expects to manage this while remaining on track to meet its longer-term financial targets, positioning the addition as both a strategic and growth-oriented move.
Over the past 60 days, estimates for Catalyst Pharmaceuticals’ 2026 EPS have increased from $2.82 to $2.87. CPRX shares have gained 21.1% year to date.
Catalyst Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, with the average surprise being 35.19%.
Over the past 60 days, the estimate for Alkermes’ 2026 loss per share has widened from 6 cents to 69 cents. ALKS shares have rallied 20.4% year to date.
Alkermes’ earnings beat estimates in three of the trailing four quarters and missed on the remaining occasion, with the average negative surprise being 0.77%.
Over the past 60 days, estimates for Inovio Pharmaceuticals’ 2026 loss per share have narrowed from $1.26 to $1.06. INO shares have plunged 35.7% year to date.
Inovio Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, with the average surprise being 57.94%.
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TEVA Q1 Earnings Top Estimates, Branded Drugs Drive Revenues, Stock Up
Key Takeaways
Teva Pharmaceutical Industries (TEVA - Free Report) reported first-quarter 2026 adjusted earnings of 53 cents per share, which beat the Zacks Consensus Estimate of 50 cents.
Revenues for the first quarter were $3.98 billion, beating the Zacks Consensus Estimate of $3.87 billion. Total revenues rose 2% from the year-ago quarter on a reported basis, but decreased 3% on a constant currency basis.
TEVA’s top line in the reported quarter was primarily driven by continued strong momentum in branded drugs, Austedo, Ajovy and Uzedy. However, the decline in local currency terms was primarily due to lower generic product revenues, notably lenalidomide capsules (generic Revlimid) in the United States, along with the divestment of its Japan business in the International Markets segment.
Shares of Teva have rallied 11.9% on Wednesday, likely as the investors were impressed by the better-than-expected first-quarter results.
TEVA’s Price Performance
Year to date, Teva stock has risen 13.3% against the industry’s 2.9% decline.
Image Source: Zacks Investment Research
TEVA’s Q1 U.S. Unit’s Sales
Sales in the United States segment were $1.53 billion, relatively flat year over year, mainly due to weaker sales of generic products, partly offset by higher revenues from key innovative products, notably Austedo. The segment’s sales missed the Zacks Consensus Estimate of $1.81 billion.
Generic/biosimilar product revenues were down 28% year over year to $612 million in the United States, mainly due to lower revenues from lenalidomide capsules as a result of increased generic competition in the United States, partially offset by higher revenues from Teva’s portfolio of biosimilar products. The figure missed the Zacks Consensus Estimate of $681 million.
Huntington's disease drug Austedo recorded sales of $559 million in the United States, up 41% year over year. Sales were mainly driven by volume growth as prescription trends continued to grow. Austedo sales comprehensively beat the Zacks Consensus Estimate of $450 million.
The Austedo franchise got a boost from the launch of Austedo XR, a new once-daily formulation of Austedo.
Ajovy recorded sales of $87 million in the quarter, up 64% year over year, driven by a reduction in sales allowance as well as market share gains. Ajovy sales surpassed the Zacks Consensus Estimate of $73 million.
Uzedy (risperidone), a long-acting subcutaneous atypical antipsychotic injection for the treatment of schizophrenia, generated sales of $63 million in the first quarter, up 62% year over year, mainly driven by volume growth.
Copaxone recorded sales of $62 million in the United States, up 16% year over year, mainly due to a reduction in sales allowances, partially offset by lower volumes. Copaxone sales beat the Zacks Consensus Estimate of $46 million.
TEVA’s Europe and International Market Units’ Sales
The Europe segment recorded revenues of $1.34 billion, up 12% year over year on a reported basis. Sales declined 1% on a constant currency basis, mainly due to lower revenues from generic products, partially offset by higher revenues from Ajovy. Teva launched Austedo in European markets earlier this year. Europe revenues beat the Zacks Consensus Estimate of $1.32 billion.
The International Markets segment recorded revenues of $524 million, down 10% year over year on a reported basis and 19% in constant currency terms. The decrease was mainly due to the divestment of Teva’s business venture in Japan. International Markets revenues missed the Zacks Consensus Estimate of $586 million.
The Other segment (comprising the sales of active pharmaceutical ingredients to third parties and certain contract manufacturing services) recorded revenues of $584 million, up 1% year over year on both a reported basis and constant currency basis.
TEVA’s Margin Discussion
Adjusted gross margin was 52.9% in the quarter, up 10 basis points (bps) year over year. The rise was mainly driven by higher Austedo revenues, partially offset by lower revenues from generic products in the United States segment.
Adjusted research & development expenses decreased 10% year over year to $222 million. Selling and marketing (S&M) expenditure increased 12% year over year to $696 million. General and administrative expenses increased 2% from the prior-year level to $304 million.
Adjusted operating income rose 11% year over year in the first quarter to $956 million. Adjusted operating margin decreased 30 bps to 24% in the quarter, mainly due to higher S&M expenses as a percentage of revenues, partially offset by higher gross profit margin.
Teva expects an adjusted operating margin of 30% by 2027 to be achieved through cost savings and the continued growth of its branded drugs.
TEVA Updates Guidance for 2026
Teva continues to expect total revenues in the range of $16.4-$16.8 billion for the full year of 2026. The Zacks Consensus Estimate for total sales in 2026 is pinned at $16.53 billion.
Per management, the guidance reflects continued strong momentum in TEVA’s innovative portfolio, particularly Austedo, Ajovy and Uzedy, alongside low single-digit growth in the global generics business.
Teva expects Austedo sales to be in the $2.40-$2.55 billion band and Ajovy sales of approximately $750-$790 million in 2026. TEVA anticipates Uzedy sales to be in the range of $250-$280 million in 2026.
The company now expects adjusted EPS to be in the range of $1.91-$2.11 in 2026 compared with the previous estimate of $2.57-$2.77. The Zacks Consensus Estimate for the metric stands at $2.69 per share. The expectation for the adjusted tax rate has also been revised to be in the range of 20-23% compared with the previous estimate of 16-19%.
Teva now expects adjusted operating income in the band of $3.8-$4 billion in 2026 compared with the previously guided range of $4.55-$4.8 billion. The company has also revised its adjusted EBITDA to the range of $4.23-$4.53 billion compared with the previous expectation of $5-$5.3 billion. Free cash flow is projected to be in the range of $2-$2.4 billion, and capital expenditures are expected to be $500 million in 2026.
Teva Pharmaceutical Industries Ltd. Price, Consensus and EPS Surprise
Teva Pharmaceutical Industries Ltd. price-consensus-eps-surprise-chart | Teva Pharmaceutical Industries Ltd. Quote
Teva Expands Neuroscience Pipeline With Emalex Deal
In a separate press release, Teva announced agreeing to acquire Emalex Biosciences in a deal valued at $700 million in upfront payment, with up to $200 million in additional milestone payments and royalties tied to future sales. The transaction brings ecopipam, a late-stage, first-in-class therapy for pediatric Tourette syndrome, into Teva’s portfolio. The asset has demonstrated statistically significant efficacy in phase III studies and is expected to be submitted for regulatory approval in the second half of 2026, targeting a high unmet need in a specialized neuroscience segment. This has also likely contributed to the stock price rally on Wednesday.
The acquisition strengthens Teva’s innovative medicines pipeline and aligns with its strategy to shift toward growth through differentiated, late-stage assets. Ecopipam’s unique mechanism as a selective dopamine D1 receptor antagonist sets it apart from existing treatments that primarily target D2 receptors, potentially offering improved symptom control with a differentiated safety profile. The therapy has already received Orphan Drug and Fast Track designations in the United States, underscoring its clinical and regulatory potential.
The deal is expected to close by the third quarter of 2026, pending regulatory approvals. While the acquisition may have a near-term impact on margins, Teva expects to manage this while remaining on track to meet its longer-term financial targets, positioning the addition as both a strategic and growth-oriented move.
TEVA’s Zacks Rank & Stocks to Consider
Teva currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Catalyst Pharmaceuticals (CPRX - Free Report) , Alkermes (ALKS - Free Report) and Inovio Pharmaceuticals (INO - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Over the past 60 days, estimates for Catalyst Pharmaceuticals’ 2026 EPS have increased from $2.82 to $2.87. CPRX shares have gained 21.1% year to date.
Catalyst Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, with the average surprise being 35.19%.
Over the past 60 days, the estimate for Alkermes’ 2026 loss per share has widened from 6 cents to 69 cents. ALKS shares have rallied 20.4% year to date.
Alkermes’ earnings beat estimates in three of the trailing four quarters and missed on the remaining occasion, with the average negative surprise being 0.77%.
Over the past 60 days, estimates for Inovio Pharmaceuticals’ 2026 loss per share have narrowed from $1.26 to $1.06. INO shares have plunged 35.7% year to date.
Inovio Pharmaceuticals’ earnings beat estimates in each of the trailing four quarters, with the average surprise being 57.94%.