Teva’s transformation gains momentum as innovative drug sales rise 33%
The company’s three leading proprietary medicines generated approximately $1.1 billion in quarterly revenue, prompting higher full-year forecasts. Their growth helped offset increased competition in the U.S. generics market.
Teva is continuing to build momentum, with its market capitalization approaching $50 billion over the past week, as growth in its innovative medicines helps offset mounting pressure on its generics business. The pharmaceutical company reported third-quarter revenue of $4.4 billion, down 2% from the same period last year but above analysts’ expectations of $4.2 billion.
The decline was primarily driven by increased competition in the United States for lenalidomide capsules, a generic version of Revlimid. Global generics revenue fell 16% year over year in local-currency terms, with the U.S. business particularly affected. Revenue from generic products in the U.S. segment dropped 39% to $718 million.
That weakness was partly offset by continued growth in Teva’s three leading innovative medicines: Austedo, Ajovy and Uzedy. Together, the drugs generated approximately $1.1 billion in quarterly revenue, an increase of 33% in local-currency terms. Austedo brought in $751 million, up 21%; Ajovy generated $269 million, up 61%; and Uzedy reached $85 million, up 96%.
The performance prompted Teva to raise its full-year 2026 revenue forecasts for all three products. It now expects Austedo to generate $2.55 billion to $2.65 billion, compared with its previous forecast of $2.45 billion to $2.60 billion. The outlook for Ajovy was raised to $930 million to $960 million from $850 million to $870 million, while the forecast for Uzedy increased to $290 million to $310 million from $270 million to $290 million.
The shift toward higher-margin innovative medicines also helped improve profitability. Teva’s reported gross profit margin rose to 55.5%, from 51.4% a year earlier. Its non-GAAP gross margin, which excludes certain expenses, reached 58.7%, up 345 basis points year over year and the highest quarterly level in a decade when excluding the $500 million development milestone payments received for duvakitug in the fourth quarter of 2025.
Teva reported net income attributable to the company of $233 million, or 20 cents per diluted share, compared with $433 million, or 37 cents per share, a year earlier. On a non-GAAP basis, which excludes certain expenses and other items, net income reached $1.013 billion, or 86 cents per diluted share, up from $910 million and 78 cents per share in the corresponding quarter of 2025. That exceeded analysts’ expectations of 73 cents per share.
The gap between the two profit figures reflects, among other items, $201 million in legal settlement provisions, $228 million in asset impairments and $235 million in financial expenses excluded from the non-GAAP calculation. Financial expenses included a $224 million loss related to the early extinguishment of debt. Operating income fell to $714 million from $882 million a year earlier, despite the improvement in gross profit. Non-GAAP operating income, by contrast, rose to $1.393 billion from $1.294 billion.
Teva is also expanding its neuroscience business in an effort to build on the momentum of its existing drugs. In October, the U.S. Food and Drug Administration approved Weltruza, a once-monthly injectable treatment for schizophrenia in adults. The drug joins Uzedy in Teva’s long-acting injectable schizophrenia portfolio, which the company estimates has peak annual sales potential of $1.5 billion to $2 billion. Weltruza is expected to become available in the U.S. in the coming weeks.
