Teva Pharmaceutical Industries Limited (TEVA) Earnings Call Transcript & Summary

Please welcome Senior Vice President and Head of Investor Relations, Chris Stevo.

Good morning, everyone. Thank you so much for coming. We know things have been crazy lately and days are busy as always. So we appreciate you taking your morning out to come and stay with us and spend some time and hear from my colleagues who've done so much work to tell you all about their stories. So thank you very much. We ask, if possible, that you silence your phones or maybe even turn them off, if you'd like. We'd appreciate that. There's obviously Wi-Fi in the room. There's also a QR code there for the presentation and also for a survey later. We would love to get your views on how this day went and anything we could do to improve it in the future. So thank you for that. And again, press release, presentation slides are on our webcast already. So with that, the most important part of the day, forward-looking statements. So I will spend 20 minutes reading this. Let me give you a brief overview of the day, if I can. So after me, there's going to be a brief video and then Richard Francis will come out and really get you pumped up. I'm obviously not getting you pumped up yet, but I'll be a little bit more energetic now. After Richard, will come Chris Fox to talk about our commercial business, our innovative business. Chris will be followed -- Chris will have a speaker, Ilan Melnick, community practitioner from Florida. And then she'll be followed by Eric Hughes, our Head of R&D. Eric will be followed by Richard France -- sorry, Richard Daniell. Richard Daniell will be followed by Eli Kalif, walk you through some of our financials, and then we will have a Q&A session and then hopefully will be done by about 12 or 12:30. So with that, now there's going to be a brief video. [Presentation]

Good morning, everybody. Good morning to everybody who's come to see us in New York, and good morning, good afternoon for everybody online. So transforming people's lives like we've transformed Sherland's is about -- is the reason why I'm in this business. And the reason why I've been in this business for 30 years, and the reason why I'll be in this business till I retire. And I think what you're going to hear today about how we enter the next phase of Pivot to Growth, the acceleration phase. We have a real opportunity to transform many more thousands of people's lives like Sherland, many thousands of people who suffer from tardive dyskinesia. Now 2 years ago, almost to this day, I was in New York City, launching the start of the Pivot to Growth strategy. And some of you were in that room at that time, and it's nice to see some new faces as well. And the aim was, the first phase of our Pivot to Growth was return to growth. Now that seemed pretty aspirational at the time after 5 years of sales decline. But we've had 9 consecutive quarters of growth, 9 consecutive quarters. So I think we can safely say, we've done it. We have returned to growth. And I'm super proud of the team that have done that. Now I'm going to take you on to a slide that I did show in the New York Stock Exchange in May of 2023. And the reason why I want to show you this slide is a couple of things. Firstly, when it comes to the Pivot to Growth, it wasn't just a tag line. It was a detailed strategy built on 4 pillars, deliver on our growth engines, step-up innovation, sustain a generics powerhouse and focus the business. It was a very detailed strategy, a very detailed plan. The reason why I wanted to show you it today is what we've worked hard to do in the last 2 years is to make sure people understand that Teva does what it says it's going to do. I put this up here, so you can hold us accountable. We do what we say we're going to do. We said we're going to return to growth. We said we're going to do it through these 4 pillars, and we've done it. And I think that's really important that you understand we're committed to that, and we're committed to execution. Now on the 4 pillars. For those of you to who I have spoken to many times over the last 2 years, you know, I always talk about the 4 pillars. These are North Star. This guide us every day when it comes to capital allocation, when it comes to prioritization. To deliver on our growth engines, we've accelerated our innovative portfolio, and it's $2.3 billion. It's 30% CAGR over the last 2 years. That's transformative. We've changed the direction of AUSTEDO. We've rejuvenated AJOVY, and we've launched UZEDY. Step-up innovation, another area where maybe there was a bit of skepticism as to whether Teva could drive innovation through the clinic. We've launched UZEDY, and we've had 2 great data readouts on olanzapine and duvakitug. And by the way, I'll remind you, olanzapine, we accelerated that study 6 months, and that's in schizophrenia. And that isn't easy to do. And for duvakitug, we accelerated that study, Eric and his team. And that enabled us to have a full data readout end of last year versus an interim analysis. The theme there is execution. And then on sustained generics firehouse, after a number of years of, I'd say, volatility, our aim was to return it to stability. But we didn't. We grew the business. We grew at 5% CAGR. We grew across all regions in 2 years. And then the final pillar was focus the company, and that all comes down to capital allocation. We created a stand-alone business with TAPI to return that to growth, which we did. We continue to pay down our debt. But very importantly, we kept allocating capital to the areas which would help us drive growth and drive growth in the right areas. So I hope you can see, we were clear about what we were going to do, and we've executed what we said we're going to do. So what was the impact that had? Well, we returned to growth. But where did we return to growth? And I think this is really important. And it's really important as we look forward to what Teva can and will be. We put on $1 billion of innovative sales. AUSTEDO, we put a stake in the sand and said we're going to do $2.5 billion in revenue in '27. Now there was a lot of talk about $1.4 billion being peak sales back 2 years ago. We're on track to do $2 billion this year. So the $2.5 billion in '27 is very much in our line of sight. We then reinvigorated AJOVY, which will do $600 million this year, and we launched UZEDY into one of the most competitive markets, and we've shown that the capability we have in our commercial team is world-class. And then on the generics business, as I said, we returned that to growth. We maximized the opportunity in generic Revlimid. But also, we grew across all of our regions consistently. So I would say to you today, 2 years on, Teva is a very different company than it was 2 years ago. We have sustainable growth. We have a world-class late-stage pipeline. We have a good cash flow. And I would conclude by saying we are moving from a world-class generics company to a world-class biopharma company enabled by generics. Now having a strategy is really important. I believe strategic direction is critical when you're allocating capital and it helps you make decisions. Having a detailed plan is really important because otherwise, the strategy just stays on the shelf. So you got to execute it, you got to have the plan. But ultimately, you need people to execute a plan. And that is where leadership comes in. And we've assembled, I think, a world-class leadership team. A leadership team that has inspired 36,000 Teva employees to get behind this strategy, every day, every week, every month, every quarter because what we've done in 2 years is significant, and that requires us to prioritize and deprioritize, and you need to have a whole company doing that in unison to make that happen. And this leadership team has made that happen. And I would argue that this team made up of people from Teva and people externally could have probably gone anywhere, but they chose to be here at Teva. And that wasn't based on sentiment. That was based on the opportunity they see to create an incredible company, an incredible biopharma company and to transform this business. And this is the team that will be executing the next phase, the acceleration phase of our Pivot to Growth strategy. So if it ain't broke, don't fix it. This strategy is clearly working. We're moving on to the next phase, and that's about our 4 pillars. Once again, I'm going to be consistent, deliver on our growth engines, step up innovation, sustain generics powerhouse and focus the business. Now I'm going to walk you through on deliver on our growth engines. We have a line of sight for $4 billion of innovative sales by '27. But I always look a bit beyond that, and you'll see there's $5 billion and more to come, but I'll explain a bit about that. Then on step-up innovation. We have a truly exciting pipeline. Why? It's late stage, has proven MOAs, is either best-in-class or first-in-class. And then here's the kicker. They all have blockbuster potential. And for the company the size of Teva, that is significant. It's probably significant for any company, but a company the size of Teva it is significant. And focus the business. This is about the work we've done to make sure we have the capital to drive this growth continuously. And we've done that, as you know, we've kicked off a modernization of Teva plan and we aim to have $700 million of net savings by the end of 2027. But 2/3 of those will be done at the end of next year, but I'll come on to that later. So you put this together, once again, this feels like a transformation of a company, and a world-class biopharma company is emerging. But let me take these one by one. So innovative revenue. This is the transformation we've had. We've already put on $1 billion of innovative revenue. We're going to put on more than $1 billion of innovative revenue by '27. You'll see the continued strong performance of AUSTEDO. You see it supported by AJOVY and UZEDY, soon to be joined by olanzapine. But I can't help it. I have to look a bit further out because as much I'm looking to '27 and we're ruthlessly focused on execution, there's more to come. I'll have to put on this slide, 2030. And to highlight there is more innovative revenue to come because we're going to launch in asthma, DARI, our Dual-Action Rescue Inhaler, and that will come '27, '28. We'll have emrusolmin for MSA, and we'll have duvakitug in UC and Crohn's disease. So this trajectory is clear. And what I would want to highlight here is we have no major LOEs on the horizon. So this is launch on launch on launch. And the level of profitability from this business, I think you know, is significantly different from our base business. Now as we move on to step up innovation. Eric will walk you through this in a lot of detail. So I will keep it relatively simple. It's late stage. It is coming, and it's going to keep coming regularly. We're going to have launch after launch after launch. These are proven MOAs. These are either going to be best-in-class or first-in-class, as I said, and they all have blockbuster potential. Now if you add up those numbers, which I'm sure you will, and you probably have, depending on which one you take, you've got over $10 billion of innovative sales coming through, $10 billion of innovative sales and the company the size of Teva, with the financial profile the size of Teva. But I'd ask you to look a bit closer at this slide, because when you look at it first, it looks like there are 5 programs. But actually not, there could be 6 because duvakitug is in Crohn's and in UC. But I think we all know that duvakitug has multiple indications. So there's more there, and Eric will talk to you about that. And then if you go to anti-IL-15 at the bottom, we know we're talking about celiac disease, but we already know we're in vitiligo, and we're going to move into others. So maybe this is a misrepresentation of our pipeline actually because there is more here and more potential. And once again, I'd I like you to think about that. And once again, remind you of the fact that this is a late-stage pipeline. Now if I move on to the third pillar, sustain a generics powerhouse, yes. This is another one where I started talking to many of you in this room 2 years ago, and there's a lot of skepticism about what we could do with our generics business. Can we even stabilize it, let alone grow it. And we've actually grown it. We've grown it consistently across all of our regions, but there's a few things I think are really important as we move forward and why we have a key strength in generics. One is our regional breadth from the U.S. to Europe to international markets, and you'll see over time the reliance on the U.S. diminishes significantly. The second is our portfolio. We have generics. We have multiple complex generics coming through. We have 5 biosimilars coming through, and we have an OTC business. So when you think about it from a different growth levers, we have multiple different growth levers to drive this business. And that's important because we've committed to offsetting the loss of generic Revlimid by 2027. So this business will be stable. So we will absorb all of that revenue because we'll be growing those other aspects to other regions and those other portfolios. Now to move on to the final pillar, focus the business. We're transitioning Teva to a world-class biopharma company, and that means we have to modernize it. We have to prioritize resource allocation. We have to optimize our spend because we need to make sure capital is working hard. We need to make sure it's going into the growth drivers. And to do that, we kicked off 2 programs. One is about modernizing the whole infrastructure, particularly our manufacturing to make sure we can reduce the cost of goods going forward to offset some of that price erosion, but also to elevate and increase our gross margin. The second is around OpEx optimization and our global functions. How do you drive far more efficiency there? Now when we do that, we will generate $700 million of net savings, but we'll have still invested in our growth drivers in the AUSTEDOs, in the UZEDYs, in the olanzapines, and we will have invested in Eric's pipeline. We will have the ability then also to offset the loss of profit from generic Revlimid. But I think what's really important to keep in mind, 2/3 of the savings will be realized by the end of 2026. And I want to go back to our commitment to execution. We execute. We are already executing this. We're already making great progress. And so the line of sight to '26 is very clear in my mind, very clear. So when you put those together, the growth we've got from innovation, the pipeline coming through, the ability to offset generic Revlimid, both from driving other revenue sources in our business, our generics business as well as the optimization and modernization of Teva programs, we have clearly an opportunity to hit our 2027 targets. And we're not only committed to our 2027 targets, we're extremely confident about our 2027 targets because these plans are all in place. We know what we have to do across all of the pillars. We know where we have to execute. And I would say we're pretty maniacal about execution. Now I've talked a lot about Teva transitioning from a pure-play generics company to a world-class biopharmaceutical company. And that's not just changing the name above the door. That's not changing the logo. This is based on hard facts. If you look at this pipeline and if you look at the ability to generate growth going forward without any major LOEs, with a completely different profit profile of this portfolio, we are launching a lot of products now to 2030 and then beyond 2030 because obviously, we don't include our anti-IL-15 in this, which is multiple indications. We don't include the other indications that we're going to have in duvakitug. So what is really exciting here is we have these growth drivers continuously coming through. But also I want to remind everybody we've had a lot of discussion around AUSTEDO and $2.5 billion in '27. But I have to keep in mind, that is not the peak sales. That is just something we committed to do by '27 and we remain committed. But the peak sales go beyond that. And as you see, we put a number up there to just get you interested around $3 billion. But our schizophrenia franchise of UZEDY, which we're executing, and Chris' team is executing phenomenally well, will be joined by olanzapine, and that has the ability to build $1.5 billion to $2 billion franchise. We have 5 biosimilars to launch. We have duvakitug to launch. We have emrusolmin to launch, and we have DARI to launch. The last time I looked to Eric, we're on track with recruitment to close by the end of this year. So when you think about value creation, when you think about a transformation in the financial opportunity for Teva, I ask you to look at this slide and I ask you to hear my colleagues talk today, because for me, it is very clear where we're heading. The direction of Teva is clear. It's just a question of exactly when it's going to happen. So with that, I'm going to hand over to my colleague, Chris Fox, who's going to walk you through some of our excitement around our innovative portfolio.

Thank you, Richard, and good morning, everyone. I'm really delighted to be with you here today. And I want to start with a question. So depending upon how you started your day-to-day, a cup of coffee, maybe you took the kids to school, had a quick workout, from that moment until the time that we're going to spend here this morning, how many schizophrenia patients do you think have had a relapse? So a breakthrough of symptoms, 50, maybe 100, 500? It's actually closer to 1,000. Super shocking, at least super shocking for me. And why I bring that up and start with it is because it's one of the really big grounding things of what we do for commercial, that there's people at the end of the decisions that we make. It's really what gives meaning to Pivot to Growth and purpose to all of the things that we choose to do. So we'll cover off several things, and I'll kind of walk you through this, but accelerating our growth engines is really all about delivering it for patients, and that's why I start with that. As Richard mentioned, we've added $1 billion of revenue to our innovative portfolio, between '22 and '25, and we continue to accelerate our flagship brand AUSTEDO with the goal of $2.5 billion by 2027. TEV-479 or, as I will affectionately call it throughout the presentation, olanzapine LAI, will really complement UZEDY. And this is important because we'll go from a single product to best-in-franchise LAI compounds. And these molecules are really proven and distinct in risperidone and olanzapine. As we cover these topics, I also think it's important to show you the how. So give you a little insight into kind of our commercial excellence. What have we chosen to enhance on. And I'll highlight these things because I think it's not just important for our current portfolio, but also for where Eric is taking us in immunology and rare disease. And then last, I'll be joined by a special guest, and I'm really delighted that he can make it today. He's going to join us virtually from Psych Elevate in Las Vegas because he'll give you some context from a physician's perspective, on kind of our patient journey and how this all plays out in the real world. So I like this slide because I like to start with a macro lens. And this is really illustrative of kind of what we believe is possible through 2030 and beyond. Obviously, it's going to be very driven by our commercial excellence and execution across that portfolio that's here and now, as well as our near-term pipeline. We announced our Pivot to Growth strategy in 2023 and have now entered this acceleration phase in '25 through '27, and we'll talk a lot about this in my section. Our Pivot to Growth ambition really hinges on the growth of these innovative medicines. And it's as importantly, really important to unlock long-term value and position our company as a biopharma company. So AUSTEDO, this is everyone's favorite product, and we talk a lot about it in-house and to you all. It's our blockbuster asset and has really great momentum that's continuing. We'll continue to grow this flagship brand to $2.5 billion by 2027. And you'll notice on the slides that there was a key inflection point in 2024. Many of you experienced that with us. And the big impetus to that, the start of that was XR. So our 1 pill once a day across all of the doses. This is the real thing that kind of unlocked a lot of trapped value and opened the door for us to invest more. Some of the other things that we did in this time period was relaunch our TD campaign. We focused on key access wins to make sure that we have broad and deep access across our patient community. So when a script would get written that they'd actually get it. We started our IMPACT Registry reporting out on TD as an opportunity relative to the whole patient population, not just people that had severe movements, but the impact on their lives, even if the movements were less severe and more subtle. We kicked off our world-class patient services, and this is really important in the disease states in which we serve because it helps support physicians getting access and really important, removing any of those barriers, and also patients so that they get the medicine that they need ultimately. And last but not least, building our commercial ecosystem. So this means that world-class customer-facing team, both on the medical side as well as the sales side. So in summary, 2024 was a catalyst to kicking us off, and we really think that there's a lot of opportunity beyond this and certainly through 2030. So I'd like to start with this look and many of you know these numbers because we talk about it a lot. This is a big part of our plan is understanding the enormous unmet need. And you'll see here that there's about 785,000 TD patients, of which only about 15% are diagnosed and a small, small number of those, 5% to 6% actually ever make treatment. So to give context for that, I don't know, there's probably like 80 or so people in this room, something like that. That would mean, if all of you had, which you do not. But if you did, 12 of you would be the ones diagnosed. So maybe this table and half of that far table. And only you lucky 4 on the end here are actually treated. So it's a really, really shocking statistic to kind of feel and see the opportunity, and it gives you the sense of magnitude of the potential. So we have a very clear growth plan, as Richard said, execution is super important. And we've articulated a road map with comprehensive plans. But for today's purposes, we're going to focus on these 2 areas, maximizing the TD opportunity, and I'll unpack that a little a bit more on the next slide, and then deliver innovation for patient benefit. And this is really about the clinical value prop. How do we get patients to the optimized efficacious dose? Being laser-focused on these 2 areas, we think will allow our growth opportunity to continue and maintain a very positive trajectory even through IRA, which we've accounted for in our outlook. So let's start with the first one, driving awareness. This is absolutely, as you saw, based on the diagnosis and the treatment scale, one of our biggest priorities and also quite frankly one of our biggest challenges. What we've learned through the process is that most patients might not even recognize that they have TD. You heard from the opening video and Sherland, and this is a patient that we've spent a great deal of time with and followed. She actually didn't even really realize she had this movement until her daughter pointed it out. And obviously, massively life-changing for her to address that so that she could go to church again, do the things that she does. So this gap in knowledge really creates a ripple effect, meaning that, that inhibits the lack of -- or instigates the lack of diagnosis, the lack of treatment. People don't get help. They don't know that this can be addressed. So we've really, really invested in disease education, both for physicians, their office staff, patients and caregivers. It's a really, really important circle to make sure that we connect all the dots. And what that's allowed us to do is raise awareness, diagnosis and treatment. A couple of examples that I'll give you. This is the rekindling of that DTC campaign, but not just the one that you see on TV, all the companion diagnostics that happen outside of that, both for offices and support staff as well as for patients. The step change in our patient services that I talked about really helps us manage those access barriers. So at a very, very local level, so that we can remove any barriers that happen. And ultimately, then once the patient starts on it, we can also help them remove barriers to fill rates and help their adherence so that they stay on the medicine. And then I mentioned broad formulary coverage. This is a really big important part because it's the gateway to patients getting the product, obviously. But I wanted to give you a little statistic that we're really proud of. Over 90% of our insured covered patients are paying less than $10 a month for out-of-pocket. So really, really meaningful. Not only can they get treatment, but they can afford that treatment. So the second lever, this is really all about clinical value, and understanding the patient needs. And as I mentioned in 2024, we received approval for AUSTEDO XR, allowing patients to have the option of one pill once a day across all of our doses and the titration kit. And this really made a big difference in physicians saying, wow, I have now a really flexible option for me to figure out what the recipe is for this specific patient to get effective control. What does it mean to the patient? Well, depending upon what dose they were on or are on, the daily pill burden is really diminished from 50% to 75% less pills a day because of XR. And following the titration kit, if they take the titration kit and most patients now do, we have a 95% adherence rate, which is almost unheard of in this space. So as you would expect, given all these advantages, most physicians now start patients on XR. So about 60% of our new prescriptions are for AUSTEDO XR. And we've really honed our prowess in this space, our deep understanding, and what I love about doing that for AUSTEDO, is that actually synergistically is we're able to leverage that in the psych space. So we'll move to LAIs next. So our schizophrenia franchise. This is an area where we think we have a really unique opportunity to have a best-in-class LAI franchise, anchored to these well-established molecules that I mentioned before, in olanzapine and risperidone. And again, Eric, your team has done such an extraordinary job in this space of really demonstrating innovation because these LAIs are highly differentiated and designed to fulfill a broad spectrum of needs, meaning that we can use them in different patient types and cover most of the opportunity available. So we see this really best-in-class opportunity being meaningful, not just in the U.S. but globally as well. So here again, I'd like to start with the funnel because it gives you some perspective on what's the unmet need. And schizophrenia, as you likely are aware, is a really severe mental illness, super devastating for patients, for their families and for communities at large. And this is still very many unmet needs in this space. It's really shocking given the advancement of medicines that this is still the case. And one of the other confounding factors is overestimating adherence rates. So you can see from the graph that the market represents a significant number of patients with roughly similar numbers treated across the U.S. and EU. The great thing, though, is Europe actually uses LAIs much more significantly. And so we're starting already in a space where they know how to use LAIs, and they're much, much more open to it. We believe that this represents a really unique opportunity across our future LAIs franchise and are excited to play a meaningful and offer solutions in this space. So clinical data demonstrates the value that LAIs deliver to patients. There's no doubt about that. And we continue to expect growth in this segment, but it has changed over the last couple of years. So since about 2010, the LAI market has grown a 10-year CAGR of about 13%. And that was mostly driven by early additions of LAIs around that time period, around 2010. And we expect the LAI space to grow to about 5%. So obviously, we have a lot of hard work to do in this space to make that even harder -- to make that even higher and drive that even higher. So we'll facilitate growth again through kind of that similar playbook of physician education on the benefits of LAIs over orals as well as educating patients directly on the benefits, giving them that optionality to have more control over their disease state. So just to give you some perspective, to characterize the growth, if you just look at the U.S. from today to 2032, if we end in that 18% space, that's about a 40% increase and that translates to about 125,000 additional patients being on LAI and ultimately, having that optionality to be much, much more controlled. So understanding the patient journey is really, really critical. And when I show this to people, they're like, well, Chris, this seems pretty obvious. I mean, it's just a very linear situation, much like many other TAs. And in fact, it's nothing like that. It looks more similar to this. It's not straightforward at all, and it's a mess. Patients in this space start seeing symptoms in their late adolescence or teens, and they often are misdiagnosed or treated for things like depression or anxiety, and it literally takes years. In fact, the data would suggest that patients that are schizophrenic say that it took them 8.5 years to get on a treatment that properly addresses their disease state. So incredibly shocking that would take that long. And when they start, they typically start on an oral medicine and can cycle through many oral treatments before they get put on an LAI. That's kind of the unfortunate part because they're waiting so very long. And the impetus for the LAI is often a very, very emergent situation where they end up in hospital or needing care that requires that level of intervention. The data further supports that LAI makes a massive difference. I mean, obviously, it helps with adherence, lack of relapse, reducing the risk of hospitalization, which is incredibly meaningful in these patients' lives. But ultimately, and not widely known, it slows the disease progression. So meaning that it prevents structural change that happens over time as the patient relapses more. And there's an effect called the kindling effect that suggests that if you have a relapse and you continue to have relapses, you're going to be more inclined to continue to have relapses unless it's addressed properly. So why does this all matter? It's a lot of information, a lot of data on kind of our journey but it really, really matters because this is kind of our secret sauce. I think this is something that we do really, really well, and it is hard. It is very hard. And depending upon where you live in the U.S., this treatment journey can vary significantly, depending upon where the patient gets treated, a brick-and-mortar doctor's office, a place that takes events or hospital inpatient, really, really complex. And this is something that we've spent time studying and understanding so that we can intervene in any of these points. So anchored to the belief that LAIs make a meaningful difference and are a great solution, it's really important to set up the context for UZEDY and olanzapine. And you can see that they're designed to deliver value across a wide spectrum of needs. The chart will show some of the attributes that are inherent in risperidone and olanzapine. And they include proven efficacy, streamlined initiation, rapid absorption, a strong safety profile with no evidence of PDSS. And in short, we hear often from people's experience with UZEDY that, oh my goodness, this is something so meaningful. I didn't know I would have this option. I talked to a physician a couple of weeks ago and was asking him. He has a lot of patients on UZEDY and I said, what's been your experience so far? He said, Chris, I find it super comforting because I can dose someone in the office today. And maybe as soon as tonight, they're already starting to feel relief. But certainly by tomorrow at this same time, they're going to feel a lot better. And that makes me feel like I'm helping them take control of their disease. So how are we doing? Well, I think we're off to a really good start with UZEDY. We've got a long way to go based on the landscape that I just described to you. But I think a big part of this result is, again, because of us getting very close to the patient journey, as close as we possibly can, so that we can seek to understand and provide customized solutions. It will continue to be an incredibly complicated dynamic, competitive market. There's generic options available. So we have to sort through a lot of the clutter to really focus on education of the LAI benefits with 2 great differentiated options. So I think our team is in a really unique position to lead in this space, and we're excited about our future opportunities. So last but not least, I think AJOVY is one of my favorite products, and I think this because it's a little bit of our unsung hero in our -- it gets nested behind all the other things that we talked that's more recent. But I like this product because it demonstrates that we're truly global, and we're delivering on that promise of being a global commercial organization. In a very crowded market, dominated again by oral therapies, we're #1 in U.S. headache centers. We're available in 42 more markets. So Richard has 28 of those, Mark has 14 of those and we're looking to expand our coverage here. And we'll continue to drive volume and share and do that in a way that's really, really responsible for value preservation. So now I'd love to introduce our guest speaker, who will be joining me here in a minute via webcast, Dr. Ilan Melnick. And he's a consultant for Teva Pharmaceuticals, but he wears lots and lots of hats. He's a board-certified psychiatrist in Miami, Florida, the Chief Medical Officer of Passageway Residences of Dade County, which is the largest forensic community controlled program in the U.S., and I'll have him explain to you a little bit what that means. Dr. Melnick is also Assistant Professor at Florida International University School of Medicine. And I'm thrilled because I want him to be able to share his perspectives with all of you.

Hi, Chris.

Ilan, how are you?

I'm doing well. How are you?

Good. Thanks for taking time during Psych Elevate to join us. I'm really delighted, and we have lots of colleagues here in the room as well as online like you across the country. So thanks so much.

Thank you for the opportunity to discuss a little bit about what we do.

Yes. Sounds great. Maybe we should start with that. Your practices within us are very unique. And maybe you could just give us some insight on the important work that you do.

Yes. So I do a lot of different things. I do run Passageways. I'm Chief Medical Officer of Passageways. It's the largest forensic community control program in the United States, where we transition people from the forensic psychiatric facilities into the community by teaching life skills and coping skills. And again, big -- what are the secret sauces to what we do in managing our patients at Passageways is we have about 87% of our population on long-acting injectables.

That's amazing.

I'm also the -- I also run 2 private offices in Miami where I treat patients with the full spectrum from everything from schizophrenia to bipolar. And in that population, again, working a lot with medicines similar to this, but also use long-acting injectables there as well to try to give patients control, back control of their illness, so trying to get them better. So I do treat the whole spectrum of psychiatry from the very sick who don't think they're sick to the not-so-sick who think they're desperately ill and pretty much everywhere in between.

Excellent. Thank you for that perspective. That gives us some context that -- I know that you're a global authority on this, but it helps give everyone in the room an understanding what you do every day. Maybe let's start with schizophrenia. Can you walk us through kind of some of the challenges your patients experience with diagnosis and treatment. I talked a little bit about that in my section and just how difficult that really is, but I'd love your view.

Yes. I mean it's one of the hardest things for us to really manage. We know as early as adolescents, patients with schizophrenia, their brains just start to shrivel up. We lose gray matter. And also we lose receptors on to which these medicines can work on, which is why over time, these medicines become less and less effective. But also with Henry Nasrallah published articles, we see this clinically where there's a widening of ventricles. This widening of these ventricles is one of the theories of the loss of cognition that we have with these patients as well. So we know that this has been going on for a long time as schizophrenia was called dementia praecox before it was called schizophrenia. And it's because, again, these patients, when they would do autopsies, their brains look just like dementia patients, but at much younger ages. So we're seeing how the importance of keeping our patients stable minimizes the damage long term and giving best outcomes.

That's amazing. Can you give us some perspective? I know you see very different types of patients in your practices. Give us a little sense of how the wide range of the types of people that you see.

Yes. I mean -- so we have it in our forensic facility patients. There's a big misconception in forensics that our patients are chronic that have been sick for 30, 40 years. I mean, we do have some of those. But most of the patients that commit crimes do this in the early stages of their disease state. Usually, I'd say about 50% do it within the first 5 years of them being diagnosed. And keeping them well allows them the best outcomes in being able to stabilize them. In my private office, I do treat patients with schizophrenia and with bipolar disorder. And oftentimes, we see this relapsing leading to patients not being able to function in their world. So a lot of them end up dropping out of school or dropping out of work. And you start seeing this cascading effect when they just stop using their medicines.

Yes. I appreciate that. I mean I've been in this industry for 35 years, and some of the things I've learned from you and some of our other colleagues, it's just extraordinary like how devastating this disease is and how unique it is depending on the patient. So not to be gratuitous, but I have to ask you because these are our investors after all. Tell us a little bit about your experience with UZEDY.

So UZEDY has been game-changing in our facility. One of the things that we do use a lot of long-acting injectables and we do use them all. What the advantage of UZEDY gave us is that it, first off, being a subcutaneous option was a huge advantage. As when you give a muscle -- when you give an intramuscular injectable which the vast majority of the other injections are, you end up ripping muscle fibers as you give this injection. And by doing so, it causes quite a bit of discomfort. Some patients will even call it pain. Oftentimes, they need to be given in the gluteal area, which is in the buttocks, and by doing so, it loses their modesty going around the world lecturing about this. In certain cultures, it becomes very problematic to do so. Having an option in which you can just give just in the back of the arm, allows a patient to keep their modesty because you're not getting into intramuscular space, really does a great job of minimizing any of those -- any of that discomfort, but also it also allows us to do it without any real secretion of fluids as you're not really going into the area where major blood vessels are, minimizing any chances of any kind of injection into a blood vessel.

Yes. Thank you for that. So let's go on to olanzapine because I know you're excited about that as are we, and offers another option, I think, in this space that's really, really important. Give us a little perspective, even though we don't have it yet, obviously, you're very well aware. So give us some insight on where you see that playing a role and what you think some of the advantages might be?

Yes. So first, let's start with the UZEDY side, where risperidone is like the gold standard of medicines, right? So give lectures all around the world and talk about how risperidone is, no one ever questions the efficacy and the need for patients to be on a medicine that is easy to give, but also something that works. The issue with risperidone is it's not very sedating. And so where risperidone works great for a 24-year-old female that you need to get her stable on a medicine and keep her stable over time, there's minimal weight gain. You're dealing with options and where you're able to get these patients stable without any of the metabolic issues. With olanzapine, it was considered the gold standard on the other side, something that was very effective, caused some calming effects to it and also was able to stabilize patients almost a little bit more rapidly because you're able to get that punchy impact. The trade-off to that was some of the metabolics. But there are certain areas where metabolics are kind of secondary. And these are patients that are more agitated, more aggressive, more violent. And in some of the forensic facilities I've worked at, the need to keep these patients controlled and being able to calm them down so that they're not more agitated with the trade-off of these patients maybe getting some metabolic issues. But now having -- hopefully, in the future, having an option in which we were able to get a patient on that olanzapine in which we were big users of olanzapine pamoate until in the U.S., it was pretty much taken mostly off the market. What we ended up worrying always was this post-injection delirium/sedation syndrome or PDSS, in which we would have to hold patients for about 2 to 3 hours, making sure that they didn't have this kind of effect. Having an opportunity to get a patient on a medicine that has the efficacy of olanzapine and able to stabilize them on that medicine without the worry that every injection may give them this PDSS is something that I think is going to be groundbreaking and life-changing for some of our patients.

That's amazing. Thank you for that perspective across both of those. So given all these benefits of LAIs, I mean, it's very hard for me to explain to someone that's not in our business, why do you think they're not more broadly used?

It's us. We were trained early to really use LAIs as a last resort option. In the U.S., we still are being trained this way. And it had to do with the medicines that were available to us back in the day in which using the typical antipsychotics increased the risk of movement disorders dramatically. And you had to make a choice between going down that path or using one of the oral atypical antipsychotics, which had less likelihood to have those kind of movements. And so once the advent of Risperdal long-acting, the microspheres, what ends up happening is that you start seeing this change, but our mindset really did it. And so you start seeing that we feel that especially in psychiatry, that we use these LAIs as a last resort option. And I constantly talk about that in other spaces like Depo-Provera for birth control, a long-acting birth control or we have other medicines like for PrEP, where it's a long-acting once-monthly injectable or it's every 2-month injectable for PrEP for prevention of HIV. These are things that we don't even think about in other spaces. But yet in psych, we still have the stigma that we have. And the retraining of clinicians to being able to go down the path of using LAIs is vital for us to be able to really start seeing the improvement of patients, not just short term but long term.

So what other things aside from retraining, do you think -- obviously, we do lots of speaker engagements where we have experts like you talking to other physicians, but what's the most important thing do you think trying to get this kind of massive change in behavior more directed at LAIs and earlier?

Yes. Residency training programs need to be well adapted. One of the things I'm really pushing for is trying to find ways to engage those residents into the early stages, working with nurse practitioner schools and again, educating them on the importance of preventing the brain damage that could happen by using some of these oral medicines. It's our overestimation of the adherence of these patients is what's really causing a lot of the damage. And in Europe, like you said earlier in your presentation, they're getting it. And the use of LAIs is dramatic, and I teach in Europe quite a bit. And I got to tell you, it's a breath of fresh air to listen to them speak. But it's here. It's our training facilities that really are lacking in being able to educate them. And we have to start losing that stigma that LAIs means that you're sicker. LAIs means that they're giving them an opportunity to get better long term.

That's amazing. Thank you for that. So do you mind if we switch gears and talk about TD a little bit? I know you have a lot of experience, obviously, very co-located given the journey that some of these patients are on. But can you talk to us about TD in your practice?

Yes. We -- let me tell you, we are the causation of this independent neurological condition. Our medicines are what caused this problem. And you're right, a lot of times, our patients with TD, tardive dyskinesia, they don't realize that they have the disease until someone else points it out. Unlike other issues like some extrapyramidal symptoms like akathisia, those patients will come to your office and complain on day 1. But it's TD that we really start seeing. And part of it, prior to 2017, there were no options. And basically, all the recommendations have been to do the best you can. At the end of 2017, early 2018, you start seeing changes in the guidelines, which I think is really not being emphasized enough. And now the guidelines from the American Academy of Neurology and the American Psychiatric Association both say that you need to start recognizing TD earlier. You need to diagnose it earlier. And now with VMAT2s, we need to start treating it earlier. And this is really the mindset that we need to start changing and training our next level of professionals is that it's not the clinicians that are the ones that are going to see it the most. It's everybody around them. It's empowering staff. It's telling the front desk to look at them when they walk in the door or when they're sitting there playing on their phone or watching TV and see if they have any movement disorders. And just like they have in the subways of New York, if you see something, say something. Empowering your staff, empowering caregivers is really the way you really make better diagnosis and expanding that pie because, again, as you said earlier, this is a very underdiagnosed problem. And not only that, once they get the diagnosis, if they don't understand that there's treatment available, and oftentimes, the treatment that they're giving them is the exact opposite of what you should do, which is either giving them benztropine or an anticholinergic, which actually makes it worse or having a lowering the medicine, which, again, worsens their psychiatric symptoms and actually unmasks some of the symptoms of TD. So using a VMAT2 is vital for the future of our patients' well-being.

So is there anything -- I know you give us advice and counsel all the time in kind of how we should help play a bigger role as industry. What would you recommend? What comes top of mind to guide us in having more of these patients diagnosed? All the things that you just said, I mean, the call to action is so clear. What would you say would help make this an easier journey?

Yes. I mean part of it is, again, empowering the staff, empowering caregivers. The more you guys educate caregivers, the better the chance that patients will get the treatment that they need. Going in there and empowering that caregiver, empowering the patient to go in and request help for this and really talk more about the guidelines. Although guidelines don't tell you how to practice medicine, one thing that we know is guidelines do set the standard of care. And I think we need to really do a better job of educating about the standard of care in this. And for Teva, in particular, it's three things, educate, educate, educate. We need to do what we can to have more education to the patient, more education to the caregiver, but also more education to the staff and to the clinician about the use of a VMAT2 inhibitor and getting those patients better. AUSTEDO has been game-changing in our population, especially since the once-a-day dosing. And we need to start seeing how we're able to really push that into the care of the patients so that we're able to get their TD under control and get them back into the real world.

Thank you so much. Listen, I feel really fortunate that you took time out of the conference to sit with us. I know it's very early there as well. So thanks for starting your day with us. Any parting words that you'd have for us or the folks that are joining us here today.

Thank you so much for the opportunity. Again, my goal is always to get as many people to understand the importance of early access and early treatment to medicines. And Teva has done a great job of pulling its resources together to make these medicines available. And please don't stop innovating. You guys need to push this forward. The more you guys are able to do R&D, the more innovation you guys have, the better the chances our patients are not only going to get better to stabilize, but hopefully, you all will be able to find some type of cure for some of these diseases in which we've really -- see our patients suffering from.

Thank you so much, Dr. Melnick. Really, really appreciate you as always, and lovely to see you. Thank you.

Thank you, Chris. Thank you for the opportunity.

Thank you. Take care. So pretty hard act to follow. How do you close after that. But I'll close this section by just saying this, Richard has this phrase that he always says to us that, the direction of travel is very clear. It's just a matter of when we're going to get there. And I believe that, I really, really do. And my reasons to believe, I think, are that -- are many, but some of them are that we have differentiated products that provide massive clinical value. So that's incredibly motivating. We are on this journey with building a team that's really commercially adept and focused on execution, amazing group of individuals that I get to work with every day. And lastly, and I don't take this part for granted, a deeply accountable team. So what I mean about accountable? Well, they're accountable to our patients, and you can see that in the work that we do every single day. They're also really accountable to our company. So where we're headed, where we're going, how we want to drive value long term. And ultimately, they're accountable to all of you and all of our investors to make sure that by doing all of this great work that we create a sustainable ecosystem that will then fuel our opportunity to have more and more products come to market and solve many more of these really grievous illnesses. So thank you, and it's my delight now to turn it over to my partner in crime across the aisle in R&D, Dr. Eric Hughes.

It's great to be here today. I'm very excited to talk about the R&D efforts at Teva. It started for us about 2.5 years ago before the Pivot to Growth kicked in. We reorganized and created a modern drug development department at Teva. We brought in some great talent. And hopefully, you'll see today that we accelerated not only our early pipeline, but more importantly, our late-stage pipeline. And how did we do that? So our strategy is clear. It's stay focused, use proven science and really capitalize on how we allocate our capital and how we use partners to actually maximize our programs. So what do I mean by that more specifically? So our focus is on neuroscience. It's building on a heritage that we've had at Teva for decades at this point and our burgeoning immunology expertise. These are great areas to be developing in, and it fits very nicely with our commercial footprint. Magic in drug development doesn't happen unless R&D and commercial are running hand in hand. But more importantly, I think, is how we use proven science. Proven science, bringing it together in different combinations with different formulations does 2 great things. It brings great things to patients but it also improves your probability of success. So that's critically important. We have a lot of capabilities. There's a lot of synergies between generics, biosimilars and our innovative platform. And then finally, we are pretty ruthless in our capital allocation. We use the science and the data to drive what we do and put our money where we think we can win for patients. And we also capitalize on our partnerships. I think you've seen over the years that we've used funding partnerships, development partnerships to really maximize our portfolio of products. So this is a winning strategy. And hopefully, you'll see that today as I talk about our great pipeline. So I love this slide. So one of the things I say about our pipeline at Teva is it's well balanced. And then what do I mean by well balanced? One thing, you can see we have a lot of great programs preclinically Phase I, Phase II and Phase III. And more importantly, these have high probability of success. These late-stage programs, we have 3 programs in Phase III with a high probability of success using that known science in different combinations in better ways. So it's a great breadth of work we have, is very grounded in the science. And I like to point one thing out, it's very subtle here. There's little arrows on each one of these programs, we've accelerated all of this in the last 2 years with our focus and our drive to bring out all this innovation that's right in Teva right now. But it's not just about the probability of success. It's about the patients, the populations and the unmet medical need that we're addressing. Let me run down this in a little bit more depth. Olanzapine LAI, we just heard some great words from Dr. Melnick. This is going to bring a new treatment that's very important for patients with schizophrenia. Schizophrenia is a large population of patients. They need all the help they can get. And these long-acting injectables, as he mentioned, are bringing better treatments to patients. I was trained just like he mentioned, using oral medications. Adherence is very difficult. People in this room have probably difficulty taking high blood pressure medications. If you imagine, struggling with schizophrenia and trying to take a medication every day, maybe even twice a day, that's very difficult. And that's what's driving the pathology and the relapse, the hospitalizations and the worsening of the disease as Dr. Melnick mentioned. So olanzapine LAI is giving a better treatment for patients in a convenient subcutaneous dose. DARI, our Dual-Action Rescue Inhaler, I'll talk about this a little bit more, but this is a massive group of patients. 39 million people are diagnosed with asthma. And we brought -- using our 25 years of inhaler technology at Teva, we bring a better device forward that's probably best-in-class in my opinion. Duvakitug. Duvakitug has been an exciting story for the last 2 years. It started with our preclinical data and ended with some fantastic data at the end of the year that I'll talk about a little bit more, too. But that's another very exciting program. It's a multiple indication product potentially in the future. We've already shown that it works very well in ulcerative colitis and Crohn's disease. And then one of the things I'll talk about today a little bit more passionately, if I can get more passionate, is emrusolmin in multiple system atrophy. This is a high unmet medical need. And we really are bringing a differentiated small molecule to the table, and I'm very hopeful that, that will help those patients. And then the final program here, anti-IL-15. I'll show you some new data today. It's very exciting. This is another potential product that has many indications. IL-15 is a key cytokine in many different pathologies we know about today. So a lot of great programs with very important targeted patient populations with unmet medical need. So olanzapine LAI, I'm not going to talk about it too much today. You've heard a lot about the possibilities and Dr. Melnick, I think, did a great summary of what the value here is. It gives the folks in R&D great satisfaction to see how well UZEDY has been taken up. Both UZEDY and olanzapine LAI are using a technology platform that we've developed with Medincell that we knew we had a great product profile, subcutaneous, rapid PK within 24 hours, a prefilled syringe, no reconstitution, no supplemental oral therapies. That was a profile that you would think why wouldn't you use this? And the uptake of UZEDY has been fantastic, and we're very excited about olanzapine LAI because that's the field -- UZEDY is doing great in a very competitive field with risperidone. Olanzapine LAI, if we can develop this and show which we have, where we don't -- we have a safety profile that's superior to what's available today, that is a area that we can really help patients using a very potent and active molecule in a long-acting injectable. So we'll be presenting the long-term data this Friday actually at Psych Elevate where Dr. Melnick is. And we're excited that no PDSS is the punchline. And we're very proud of that program, and I think that will help a lot of patients in the future. Now moving on to ulcerative colitis and Crohn's disease. This was just a capstone for last year with the data that we produced in December. Ulcerative colitis and Crohn's disease, less than 50% of these patients actually get remission of their disease with all the treatment options out there. So they still have their disease known. They're still feeling the symptoms and less than 50% of the patients actually achieved that. But I always like to say, more importantly, 20% of patients with ulcerative colitis, 75% of patients with Crohn's disease still go on to get surgeries to correct the symptoms and the pathology that's developing over many years. That, in my mind, is a failure. The industry has to do better to make more durable and potent active molecules. So the duvakitug story, like I said, was very exciting. It started 2 years ago that we knew we had the fundamentals of drug development in place. We have the most potent antibody. We have the most selective antibody. We have the lowest level of antidrug antibodies. We have a very safe profile. But this is the data that really ended the year with the best efficacy profile. We posted the highest numbers for this MOA in ulcerative colitis and Crohn's disease. You can see it's 27% placebo adjusted for UC and 35% placebo adjusted for Crohn's. So spectacular data, we're very excited about that. Safety profile is very good, very well tolerated. We have low antidrug antibodies. That's important for the durability of the compound in the future. And we're going to be giving it in a subcutaneous, convenient dosing format. So great program, great results. But I wanted to emphasize one thing about the data today because what did I say? One of the problems in ulcerative colitis and Crohn's disease, there's a lot of treatment options out there. but they fail and they have to cycle through the next one. They have to add the next ones, change to the next one, multiple biologics, multiple oral therapies, and they're still failing. So having a compound that can actually treat those people who have failed a lot as well as the people who have never been treated before is going to be critical. And I've done a lot of biologics development in my career. And frequently, you see those people who are treatment-experienced don't do that well. Well, I was excited to show here where ulcerative colitis on the left-hand side and Crohn's disease on the right hand. You can see that there's treatment experience and naive patients in both studies. That is people who have cycled through the experienced people who have seen multiple oral agents, multiple biologics, and the naive people who haven't been treated with anything. But you can see that, that efficacy, that delta over placebo is maintained even in the people who have failed multiple treatments. Actually, the numbers were even higher for the experienced patients. And I always like to point out, in CD, the treatment experienced people had a 44% placebo response -- placebo-adjusted response, just phenomenal data that I think can really help patients in the future. So I'm really excited about this, and I think this is going to offer a lot of options. So we're excited to get our Phase III study going with our partner, Sanofi. We're anticipating a Phase III study design that has more than a year-long exposure for our patients in both indications. We're going to be studying multiple doses. And these are big studies. It's going to be a great data set of 1,000 patients in both ulcerative colitis and another 1,000 in Crohn's disease. So great studies. We're working very diligently with Sanofi. And we're anticipating those studies to really start in earnest in the second half of this year. So a lot more to come. But the story of duvakitug is not just ulcerative colitis and Crohn's disease. For me, those 2 indications were just a proof of concept that blocking and amplifying cytokine can actually treat a specific disease. And why is that important? This is novel. It's a novel biologic in its totality that we're blocking something that's just amplifying multiple different signals in the immune system. So why is that important? Well, that means that you can actually potentially treat many different types of indications with just one molecule. And we have a strategy going forward with our partner, Sanofi, because the potential is so large, you've got to be thoughtful in how you do this. We're going to divide these indications up. I think there's going to be a sentinel indication either a T2 inflammation versus a non-T2. I know this is all science-y, but those are the cytokine pathways that we need to define as possible. And the last thing I didn't mention before is, not only does TL1A impact inflammation, it's thought to have a direct impact on fibrotic cells. That's novel. Usually, we just treat the inflammation and hope the fibrosis gets better. There are actually receptors for TL1A on fibrotic cells that we potentially could block. So using sentinel indications to define the classes and then use that data as we do with data-driven drug discovery, we will broaden it into more indications in the future. So the potentials are large. There's a lot of patients we could potentially help with this new class of biologic. Now DARI, our Dual-Action Rescue Inhaler. This is an incredible story to me because the GINA guidelines are already come out. There's 10.6 million people who just use albuterol for their asthma exacerbations. We know that's not the proper treatment. We should be giving a little bit of steroid along with their albuterol when they have an asthma exacerbation. We know that, that's better. The clinical data already exists. And that response, that reflects that we could save 3,000 lives each year that are attributable to their asthma exacerbations. And 60% of adults are still not controlled. 44% of pediatrics are still not controlled. 25% of this population is actually kids. And we know what we should be doing is better. We should be using combination therapies for asthma exacerbations as the GINA guidelines recommend. So what did Teva do? Well, Teva made -- used their 25 years of experience in inhalers to create what I believe is the best device they can deliver, a dry powder, of the combination in an easy format. You just open it up, inhale and you close it. It doesn't require any kind of timed breathing. It doesn't require any maintenance to the device or a spacer. It's as easy as you can get. And that's important. When you're having an asthma exacerbation, you want to have something you can easily get that drug into your lungs and get your exacerbation under control. So how do we think we're differentiated? I think I've gotten a lot of this already. The GINA guidelines, we'll address. We actually have multiple -- we have 2 doses in our large Phase III study. It's the largest study Teva has ever run, 2,000 patients at this point. As I mentioned, the device, I think, is differentiated. It's a dry powder inhaler. It doesn't require any coordination of the breath. It doesn't need a spacer. It doesn't need any kind of maintenance to keep it working. So the convenience is there for the patient. And one of the things I'm most proud of our large 2,000-patient study has pediatrics, adolescents and adults. So we hope to have the entire indication when we launch this drug. So we're really addressing the entire population, which I'm very proud of. I think that these dry powder inhalers are easier for kids to use as well as some adults. So we're excited to have that study hopefully recruited by the end of this year. The team is doing a great job. But multiple system atrophy. As the physician in me, I get very excited by the fact of the potential of being able to solve a disease that's relentless. It's a relentless neurodegenerative disease. 50% of these people are in a wheelchair by like 5 to 6 years after their diagnosis. Unfortunately, most of these people have passed away by 10 to 12 years after diagnosis. So can you imagine being struck down with this in your 50s when it usually happens. And then you have no hope right now. There's no treatments for multiple systems atrophy. It is relentless. So I'm very excited to be able to bring a differentiated product to bring hope to these people and their families. Why is emrusolmin so interesting and so differentiated? So it's the only molecule out there that really hits the disease at the very beginning of the pathology. And let me tell you a little bit more about the science behind multiple system atrophy. So the problem is alpha-synuclein. This is a protein that in the brain cells aggregates. And those aggregates, clumps in the cell are toxic, it kills brain cells. It does that intracellularly, it does it on the membrane and actually gets secreted and hurts other brain cells in the area. So it's important to stop the formation of these aggregates at the very beginning. And that's exactly what emrusolmin has been developed to do. It binds right when those aggregates start to form and dissolves them back into their natural form. So it prevents the intracellular accumulation. It prevents the cell membrane bound accumulation and the accumulated proteins that are secreted out to other cells. So we really believe this molecule is differentiated. It's a small molecule. It's orally delivered and it's brain penetrant. So hopefully, you can see that we're hitting the alpha-synuclein at every stage of the game. We've got some great preclinical biology that shows in mouse models that we can not only get the drug to the brain cells, but also that it affects actual pathology in mouse models with alpha-synuclein. And we've already shown that it's safe and well tolerated in Phase I studies and Parkinson's patients at this point. So we're really excited. We're about 15% of the way into the enrollment at this point. We'll have it finished enrolling by the end of '26. And because we see so much value in this, we actually have a backup program to this as well that actually just went first in humans. So we're really doubling down on what is a real unmet medical need. Now let me switch gears a little bit to anti-IL-15. Our anti-IL-15 program is another one of our biologics that have been born from the Teva labs. It's the same team that made duvakitug, so they know what they're doing. Our anti-IL-15 has a unique binding site. It's the most potent, the greatest affinity of anti-IL-15s out there right now. We have a very good half life to this molecule. And we've actually shown that we can suppress IL-15 cytokine levels out to 60 or 90 days in our early studies. So we have the hope of a drug that could be given potentially quarterly. So really exciting. It's all a subcutaneous program. What's really exciting about IL-15. IL-15 has been implicated in many different disease areas. It's clear that it's a key cytokine of the pathology of celiac disease and vitiligo. And you can see we're in the clinic now treating patients with celiac disease and vitiligo and POC studies. But you can see there's a lot of other opportunities. We actually have preclinical data that suggests that alopecia areata is a possibility and even atopic dermatitis is a possibility. So that's encouraging preclinical data, but there's even more indications you can go into including rheumatology. So a really important cytokine. We've done a great job improving the safety and pharmacokinetic and pharmacodynamic effects at this point. So a very exciting program with multiple potential opportunities in the future. But let me do what I love to do. I'll talk a little bit about some data. Some of the data, it's been out there, much of this is actually new. One of the things we did early on was looked at celiac disease in monkeys. You might not realize but 10% of monkeys spontaneously generate or develop celiac disease. And the scientists at Teva were smart. They found these animals, and they treated them with placebo or TEV-408. And then we looked at their gut and see what effect we have on the pathology. So you can see, when we challenged them with gluten, we gave the monkeys gluten, you get a disorganized histology in the gut. It really impacts the structure of your gut lining. And it's all disorganized here, you can see on the left. But then on the right, the patients who received TEV-408 had that normal architecture, that healthy looking villus that helps absorb nutrients. So great preclinical monkey data for celiac disease. Vitiligo, we did a great study with a mouse model that you can see here that the mouse that's exposed to the cells that cause vitiligo, you have a modeling of that left -- that tail on the left, is the tail of the mice, but then you can see with the treatment of TEV-408 that color comes back and it becomes more dark and more even. And that's the proof in the pudding. I've always said, I've been in dermatology for a long time. I mean if you can have a visual impact on a patient's skin, it's incredibly important and highly motivating because vitiligo causes an isolation in patients. It's really impactful on a patient's quality of life when they have a skin disease. So if we can have an impact that's visually changing, that's the key. But I'm really excited by the graph on the right. So the graph on the right actually is showing a biomarker from our proof-of-concept study in patients with celiac disease. And let me walk you through this a little bit. So what I'm showing here is a biomarker that actually measures gut health. It's a common biomarker, sometimes used to help diagnose patients with celiac disease, but also monitor their response to therapy like when you go on a gluten-free diet. And what we did in this study, it's a small POC. What we did was either gave patients placebo or we gave them the TEV-408. And then 2 weeks later, we challenged them with a gluten diet. Believe it or not, people do this and we're very thankful that they volunteer for these studies, but it's critically important. And let me walk you through this. So the black line is placebo. When they got placebo and then you got challenged with the gluten, that gluten caused inflammation and damage to the gut and the biomarkers shot up, right? So this is percent changes. 50% change in the baseline level of this biomarker. For the folks who got the TEV-408, not only did we block that injury and that bump in the biomarker, but more interestingly, over time, it continued to get better. But to me, my speculation is that we're actually treating smoldering celiac disease in these patients. So not only we block the injury from the gluten diet, we also might be treating what they had elevated at baseline. So we're very excited by this data. This is objective data, clear separation from placebo and treatment. So very exciting. I'm hopeful to capitalize on this. We're running a next POC study, including biopsies in these patients as well. So that's one of the most important things we showed a change in the actual biopsy, just like we showed in the monkeys. And the last program I want to talk about today kind of epitomizes how we think about drug development at Teva. So TSLP and IL-13, 2 very well-known targets, the science is there, the biology is known. But bringing them together was always thought to be something that would be very important. And there's now literature data out there that suggests that, in fact, this is a very potent combination of 2 known cytokines. So again, we're using proven science to drive our development program. But even more exciting, we did something very exciting here. We use AI technology and computational science to actually generate these antibodies, this antibody in a computer. And it's very cool what we did here where the 2 tips of the antibody not only just bind one molecule, both chips bind either TSLP or an IL-13. And that's important for a number of different reasons. But for one thing, we're using an antibody platform. And we can make antibodies. We actually do a very good job in making a very high-yield cell lines at Teva. So it's a known technology. It will be low immunogenicity most likely. And it also this idea that it can bind one or the other, depending on the concentration of the environment is very exciting. So it's a very modern cutting-edge technology to generate an antibody that you couldn't even make in a mouse. This is the only way you could have done this. And then we're using that technology to speed drug development in a high probability success program. So very excited. I can't wait to start talking about the data when this starts getting into the clinic. So hopefully, you'll see that after I've gone through this and Richard presented some of this and Chris has shown what the potential is in the market, we've got a lot of things rolling out in the next couple of years. The submission for olanzapine LAI will be in the second half of this year. The duvakitug Phase III program, we'll be starting the second half of this year. The DARI program, our large Phase III study in asthma will finish enrollment by the end of this year. Emrusolmin is already enrolling in our Phase II study. And our anti-IL-15 data program is already showing some encouraging data that we want to capitalize on as quickly as possible. So it's simple. We're going to stay focused. We're going to use proven science. And hopefully, you'll see that we made great success over the last 2 years, accelerating not only our early stage, but our late-stage programs, and that will continue the growth for many years to come. So with that, I'm going to pass it off to Richard Daniell, and thank you for your time. I appreciate it.

Thank you, Eric. Wow, what an exciting innovative pipeline and future we have. Good morning to you all, and it's great to be here. I'm really looking forward to talking to you and enthusing you about how solid our generic powerhouses sitting right at the heart of Teva serving our patients. We're really, really proud that approximately 1 in 14 prescriptions here in the U.S. and 1 in 9 in Europe are filled with a Teva medicine. We're crucially important to health care systems all over the world. And our generic powerhouse also serves Teva by delivering cash to fuel our innovative future. There are 3 things you need to be brilliant at to win in generics. You need a great portfolio that customers value, a strong and broad pipeline delivering first or first-equal valuable launches. Secondly, you need an excellent commercial platform with deep customer relationships, a launch springboard for that pipeline. And finally, you need a supply network that is efficient and customer service focused. At Teva, we have all 3 of these elements, and I'm excited to give you color on each of those today. So as Richard walked us through, we've enjoyed considerable success in our generic business over the past 2 years as a key pillar of our Pivot to Growth strategy. We enjoy commercial leadership across all geographies. We have very thoughtful pipeline selection, high value and with strong execution. We have considerable opportunity to accelerate our biosimilar business and to tap into our strong over-the-counter medicine category, all whilst continuing to diversify our geographic split, thus reducing our reliance on the U.S. market to make our generic powerhouse even more robust and stable in the future. So firstly, let's talk about our generic launch machine. There's enormous opportunity ahead of us as we see $175 billion of small molecule patent expiries in the U.S. and Europe over the next 6 years. That is approximately a 50% step-up over the previous 6 years. So really quite an increase in the available value pool. And we have great coverage of that pool, with the highest value, 60% covered here in the U.S. and a really broad 80% in Europe, supporting all market types from branded generic to all the way through to INN. And in the near term, we have 15 complex generics. These are high-value, durable launches. A majority of those include our U.S. market. In total, we have more than 300 dossiers under review globally as of today. A really world-leading pipeline that will give us solid growth through '27 and beyond, once we exclude the generic Revlimid anticipated impact next year. When we compare ourselves to the industry, we're among the best in the world at extracting value from patent expiries. We understand what it takes to be great at this, and we are obsessive, I mean, really obsessive in improving even more. Just 2 examples here, our parts of the global generic pipeline process. On the left, U.S. first cycle approvals where we lead the market. And in the European example on the right, you see that when we launch, we win. Even when we don't launch first, we win, irrespective of the launch order. We are really excited about our biosimilars business. We'll benefit from 5 potential near-term launches addressing significant patent expiries, $20 billion worth of innovator value. This is a really, really meaningful increased contribution to our generic powerhouse given our biosimilar base. There is much, much more to come beyond that as we bring through our early stage pipeline. We're already covering $55 billion in innovative value here, and we're selecting further assets right now to continue to rapidly build and diversify one of the best portfolios in the industry. In particular, we look forward to bringing more and more assets to Europe, leveraging our generic market-leading position to grow our biosimilar business. From this expanded and accelerated portfolio, we will double our biosimilar revenues over the next couple of years. Now I bet if I asked how many of you are aware that we have more than $1 billion over-the-counter medicines business, I'd see very few hands raised. Our OTC category is a great growth contributor. It's a large business. It's almost exclusively ex-U.S., and it's mostly pharmacy-driven. We operate in attractive categories that demonstrate overall predictable mid-single-digit growth. We have a great balance across those categories, with a mix of a few global brands augmented by a number of local jewels, and we outperformed the market where we play. It has huge synergy with our generic business. As I noted, predominantly, it's pharmacy focused rather than supermarket or online retailer focused. It's a great business, and we're achieving both price and volume growth. Reminding us all, there are no patent expiries and no payer pressures in this business. If we add together our OTC and our biosimilar businesses, they'll represent about 25%. So that's up from 16% of our generic powerhouse today, thus further adding to the stability and robustness in the future. So moving from portfolio to commercial excellence. We are great at winning with our launches. I shared the European example with you earlier. We're also great at winning with our in-line portfolio. At Teva we're the #1 generic company worldwide with our largest business in Europe. We have a great pharmacy, hospital, wholesaler and payer relationships in more than 55 markets across the globe. And this benefits and provides scale and synergies across all of our product categories, generics, biosimilars and OTC medicines. Remember, about 1 in 14 prescriptions in the U.S. and 1 in 9 in Europe are filled with the Teva medicine. This demonstrates the huge amount of trust that our customers and our patients have in us. So turning to the third element, what's doing a great, great job. Our supply network represents a considerable opportunity, and we have a fully fledged transformation underway right now. That will take us from where it is right now, which is quite complex to a more leaner and effective operation. Network simplification, both internal and external, that will free up capital. Lean management system improvements will reduce headcount and inventory. Supply chain improvements and customer service at best-in-class, this really helps us win in the market, along with significant procurement consolidation and scale benefits will reduce our cost per unit, all leading to margin expansion and increased competitiveness. When we bring all of these levers together, we compensate for the anticipated generic Revlimid impact with a stable generic powerhouse when we compare 2027 with 2024. And really, really, really importantly, at that point, we have a much more robust business with an increased contribution from biosimilars, driven by an increased and accelerated portfolio and from our OTC category, driven by our OTC medicine brands in a strong market, all with less geographical reliance on the U.S. In fact, the U.S. business will come down to 25% of our overall generic powerhouse business. So to wrap up. What did you take away from me today? As I began with, there are three things that you need to be great at in generics. And we check all three of those boxes, pipeline portfolio, go-to-market excellence and a great supply network. Looking forward, our generic business will provide a predictable solid base for accelerated growth from our innovative assets. We have multiple growth drivers to be able to compensate generic Revlimid and drive stable generic revenue when we compare 2027 with 2024, and we'll be even more robust at the end of that period, and our gross margins and competitiveness will increase as we transform our operations network. In short, a great business underpinning our Pivot to Growth strategy acceleration. And with that, now I'd love to welcome my colleague and friend, our CFO, Eli Kalif, to the stage.

Thank you, Richard. Welcome, everyone, and thanks to you all for your interest in Teva. It's really a pleasure to see all of you here, and thanks for those who are joining us online. I hope that you can see from all the presentation so far that we are a different company. We are well on our way moving from being mainly generics powerhouse into a biopharmaceutical company. Now the value that we created over the last several years is truly exceptional. I will walk you through the story today. But more importantly, I will show you where we are going. This is about our strategy. This is about our team, about our culture. It's about our pipeline. It's about our assets. And I will help you today to connect all those dots that you can see the significant potential we have to create additional value in Teva. As a CFO, you are constantly striving to optimize your company financial performance. Today, I want to share with you the approach that has enabled us to create the value so far. More than that, as we thought into pivoting on acceleration of growth, I will show you how we're able to keep accelerate our shareholder value. When I joined Teva in 2019, it was a totally different company, meaning our objective were around paying down debts and manage litigation. And then from really 4 years of tremendous efforts by our teams, focusing on execution and on discipline, where those teams step up and make the impossible happen, we're able to be in a different position. And then in 2023, when we launched the Pivot to Growth strategy, we were focusing on growth. Now -- since then, you saw nine consecutive quarters of growth quarter-over-quarter. In the meantime, we're able to have a stronger balance sheet. We kept deleveraging, and we improved significantly our working capital. And we kept invest in our business. Now let me tell you that what we did here is dramatic. This is absolutely outstanding. We're able to grow revenue with a meaningful growth rate of mid-single digit. We're able to expand our operating margin from [ '19 to '24 ] by 200 basis points, and this is net from investment in the business. We significantly lowered our debts. We lowered our net debt-to-EBITDA to the level of 3. We took a massive effort on reshaping our working capital. We become a leader in the industry in terms of adopting financial policies. And just lately, we got recognized by the rating agencies with 5 upgrades in less than 8 months. We are on our path to become an investment-grade company. Last week, one of our shareholders told me, it seems like the agency is starting to catch up on what we've long viewed Teva improving their credit trajectory. I really like this quote and why? Because it's recognized that we are focused and able to translate all of those into shareholder value. Today, I will take you through the main 3 fundamentals to show how we're doing it. First, it's about growth. We'll keep constantly going to invest in our growth on the innovative side and on our generic side. And that will allow us in the short term to compensate on Revlimid. Secondly, we are transforming. We are transforming the company. When you transform the company, you need to change your cost base. We're actually taking Teva into a structurally higher gross -- sorry, higher operating margin with accretive margin profile that will come from our innovative mix. And third, we'll keep optimizing our free cash flow. We continue to leverage on generics powerhouse in the U.S. and ex-U.S., that will contribute a solid free cash flow with a nice conversion. And over the last 5 years, we concentrate on the mainly 2 elements, which is, first, we cleaned the runway by accelerating settlement on litigation. That's going to change totally our litigation profile. It's going to provide more certainty and clearance about how we're managing our liquidity. And in addition to that one, we work on our working capital that I will elaborate more. Just recently, last week, we were able to refinance our '26, '27 and '29 maturities, and we're able to match it to our projections on our organic free cash flow. But all those 3 fundamentals that's really driving multiples, they are sitting on one of the most important layers, which is capital allocation. So it's about how we strategically allocating our capital with a clear path to be less than 2x net debt-to-EBITDA by end of '27, which give us the freedom to allocate where it drives returns, how we're able to still accelerate our growth and provide additional shareholder value. Now I will go through each one of those 3 in more details. This is how we're going to think about revenue. You heard Richard talking about how we're going to accelerate our revenue. You heard Chris sharing that it's not just about the top line, and now we are shifting the mix into innovative. This is also about how we are stepping up to serve patients. Patients who are underserved, patients are misdiagnosed and people with unmet medical needs. On our generics, which is including OTC and biosimilars, we're going to see a stable growth. Building on Richard review, we're going to see higher volume with a much more optimal COGS. So from my perspective as the CFO, we are going to see a really accretive gross margin. It will drive accretive cash conversion and will allow us to keep reshaping our working capital. Now here is how we're going to think about the 30% operating margin by end of '27. We have a clear strategy in place that capture 3 main principles across 2 programs. When we're looking on gross margin, it's not only that we are concentrating on shifting our product mix to get accretive margin on the top line, it's also how we are transforming the company. We're going to transform our manufacturing cost base. We're going to simplify our network, and we're going to optimize our procurement. Our OpEx improvement from our transformation program, we're going to have us a more lean organization in terms of commercial and our support function. That will allow us to sustain the current run rate on 27% to 28% OpEx of revenue. And here is how it's looking in a bit more details in terms of their operations and COGS. Here, I'm sharing with you how Teva is going to transform into a higher gross margin business. We will improve our manufacturing productivity. It will be more agile, lean-based manufacturing. Today, we are operating with 35 pharma sites. By end of '27, we're going to be below 30 sites. We need to understand these massive activities, we know how to do it. We did it in the past. It's going to remove from the system a lot of fixed costs. It's going to free capital. On the procurement, we have way more vendors. There are already actions underway to consolidate those to implement what we call strategic sourcing. And then if you think about those 2 with seamless execution, we're going to be able to leverage on our supply chain. But it's further progressing to OpEx optimization. First and foremost, we're transforming Teva from a pure-play generics company into a leading biopharmaceutical company. And we're going to do it in 3 ways. First, we're going to modernize the organization. We will optimize layers. We will focus on spend-based allocation, and all of this was driven based on business prioritization. We will continue to leverage our regional hubs. We're going to put more automation and then further resource allocation, reducing cost in support function and looking out on how we can optimize the external spend. But this is not just about making savings, this is about how we're able to shift. When we're optimizing OpEx, we're thinking how we can shift resources into more innovative. In the last 2 years, you saw us doing 2 main things. One, we're able to build several funding programs into R&D in order to accelerate our pipeline. We also invest heavily in the S&M in order to support our growth engine. That allows us to build the momentum. Now when you're talking about capital allocation in the P&L, we need to understand that it required 2 main things: one, the ability to make fast decisions and high level of precisions. We have those capabilities. We show it. We were able not only to grow our margin, we were able to actually reinvest in the business. Now building on the last 2 years' executions on how we were able to invest, optimizing our OpEx, as more as we can optimize our OpEx, the more we can invest in innovation, and we are on the way to get there. Our margin profile going to shift. I will walk you now through the main dynamics in the P&L to explain how it's going to work in the next 3 years. In the next 3 years, we're going to increase our operating margin by 400 basis points. During that period, we're going to experience from the impact on Revlimid and the potential headwinds from IRA, Medicare Part D for AUSTEDO. Our transformation program that I just explained, with our growth trajectory will enable us to grow our EBITDA in '26 and after that in '27. It will be based on dollars incremental and it will be also as a percentage of revenue incremental. And as I explained, we will keep constantly the 27% to 28% OpEx over revenue. That will allow us to get to the 30% operating margin. But when you grow the company and you transform the company, it's not just growing the margin. You want to make sure that you are able to expand your free cash flow. In the next 3 years, we're going to double down on our free cash flow. We're going to increase it from the level of $2.1 billion to $2.7 billion, 30%, this is massive. There are 4 main elements that's going to create that incremental free cash flow. One, we'll keep deleveraging. We'll keep deleveraging. It means that we are reducing our financial expenses. The second element, we're keeping our working capital enhancement. That will contribute to higher cash conversion. The third element, it's about everything related to the transformation programs that I spoke and the savings related. And the last one, which is coming from our top line, we're shifting into more innovative. It's more accretive margin with higher conversion. And over time, due to the massive work we've done on accelerating our litigation, we'll see our legal profile going down and down and down and all those staggered payments that we had so far going to be reduced. Now coming next is I want to show you how our strategy on deleveraging is going to build shareholder value. I remember very well the days that we are working with the executive management and reviewing our annual budget. And when it's come to pipeline, it was very difficult for me as a CFO to make a decision because at that time, the R&D budget was lower than financial expenses. It was lower than $1 billion -- financial expenses was about $1 billion. Now from what you see here on the slide, those days are gone. As we continue to improve our credit profile and keep deleveraging, our finance expense is going to be half from where we're operating. The math is very simple. Post our refinancing, we are at 4.5% weighted cost of average on our outstanding debt. Each year, we're taking out $1.6 billion, $1.8 billion. You do the math. It's around $350 million in the next 3 years. What is it going to do? It's going to expand our free cash flow. It's going to expand our EPS. It's going to drive multiple. But not only deleveraging, allowing us to accelerate growth. This is about how we keep progress on our working capital. Healthier balance sheet with better industry terms driving a better fit for a biopharma company. Over the last 4 years, we were able to unlock $1.7 billion of capital from our balance sheet. Our cash conversions were about 7 months. We're actually now even below the peers. Our working capital over revenue end up in Q1 around 6%. We're going to be 4%. This activity is going to contribute between $300 million to $400 million additional cash that we're going to unlock from our balance sheet. It is going to drive more conversion. So before I'm reflecting on the overall pieces, there is another note I want to take. Trade policies in the U.S., challenging pharma. I think that the message in this slide is very clear. Teva has a substantial manufacturing footprint in the U.S. We're operating with 8 manufacturing sites. It's the larger than the generic players, and it's contributing us for the innovative and for the generics business. Our geography profile benefiting us with a limited exposure to China and India. And we're also benefiting from our flexible operating model. We have a full value chain diverse model that allow us already to take certain measures in order to mitigate any potential risk. So up to now, I discussed about growth, margin and free cash flow expansion. Those 2 -- sorry, those 3 will accelerate growth and also shareholder value. But when we are looking on what is in front of us, it's also about capital allocation. And we're thinking about it broadly. And more than that, I want to make sure that people really understanding what is in front of us. We are taking capital allocation very, very seriously. We're putting a lot of efforts in order to enhance our growth and also shareholder value. All the financial fundamentals that I just mentioned coming into play, we are making decisions on capital allocation. Well, 2 years ago, when we introduced our people to Growth strategy, we also established a clear methodology on capital allocation. What you see from this slide didn't change, the same methodology. But at that time, it was perceived [indiscernible] story. Well, we are 2 years in the strategy. And you can see how we're able to provide shareholder value, how we're able to grow the company. So for me, it's about more than just financial figures. This is about the compelling reason and why you should all really believe in our future. We will meet our net debt-to-EBITDA by 2x in 2027. We will sustain that ratio. And at that moment, we will actually review how we're going to provide additional capital returns to our shareholders. Now here is how I want to frame the total dynamics and to leave you today with some big picture to how you should view us. What if we could basically build on the last 2 years' execution while looking forward on the objective we have. I'm here today to tell you that we have a high level of confidence to achieve our 2027 financial targets. We're going to keep drive revenue. We're going to execute on our transformation programs. We are going to keep investing in our business. We are very well positioned to expand our EBITDA in '26 and in '27 and again, dollar perspective and percentage of revenue perspective. And we'll keep expand our free cash flow. We will keep deleverage and we'll keep -- optimize our working capital. Before turning it back to Chris, I want to connect the dots. I hope that you can see that we are well on our way to become a biopharma company. We are delivering on our commitment for 2027. We are improving our balance sheet and expanding our free cash flow. We are continuing to be thoughtful on how we are allocating capital, how we are investing in our business. We're continuing to review how we can optimize our asset portfolio. We are constantly looking on more partnership and strategic business development deals. We are well on our way to become an investor-grade company. We are becoming to be a biopharma company. From what you see, we're able to clear and build our runway. And now we are ready to take off. Thank you very much, and I will hand it back to Chris.

All right. Thank you, everyone. For some of you, this next segment will be your favorite part of the day. That's a 20-minute coffee break. So if we could have you back here in the room about 10:46 -- sorry, 10:47 after, so 10:47, we would appreciate that. And then we'll do our Q&A session and then conclude the day. So thank you very much, everyone. [Break]

All right. Thank you for all coming back. We're going to lock the doors now. So any stragglers can't get in. So now we have 40 minutes for the Q&A session. So there are going to be runners throughout the room here with microphones. If you want to ask a question non-anonymously, please raise your hands. If you want to ask a question anonymously, you can scan the QR code. And at that same link where you can get the presentation, you can also ask a question anonymously in that way. And while we're waiting for the people to get mics, Sanjeev, do you want to start with a question from the Internet?

Sure. We have quite a few. So I'll pick one of them, which is a much broader question on the 2030 targets that we've shared on the innovative portfolio. So Richard, you've shared a $5 billion-plus revenue target for 2030 for the innovative portfolio. It's more than doubling the business in the next 5 years. What are some of the key risks that you see in terms of achieving this target?

So thanks for the question. So, a bit of a glass half empty question. I'd probably cover the glass half full answer. And maybe -- but I'll come back to answer the question. When you think about what we have going forward with the potential of AUSTEDO that Chris highlighted -- can people hear me now? Okay. So from when you look at what we have, so with AUSTEDO and the trajectory we're on and what Chris talked about from the unmet medical need and the untreated patient population, I think the line of sight to $2.5 billion is clear, and we sort of put out the opportunity to $3 billion. Then you sort of couple that with AJOVY and you couple that with our long-acting franchise, if you said, in olanzapine, then I think those are things that are either here now or olanzapine just to be here. So I think when you scale those, I think that takes us a significant part of the way. Then you start adding in DARI. And I think you're there. Obviously, we can have an opportunity with an early approval of emrusolmin if that actually achieves good efficacy, that's powered that study to do that. And then duvakitug creeps into the end of the decade. So -- it's interesting that we focus on can we do the $5 billion. And by the way, we put greater than $5 billion for a reason, right? And that highlights the confidence. But part of that is because just the multiple launches we have and the fact that the current products we have are growing at such an impressive rate. So for me, I don't necessarily see a risk there. But let me try and address the question as if there are. One could argue that maybe some of those assets don't come through in the pipeline. But then my added comment to that would be because they're towards the tail end of the decade, they're really not going to be a significant growth drivers. And then I -- so I think for me, I don't see -- and I don't put numbers out there, want to see risk. We did the $2.5 billion for AUSTEDO, and we thought that through in great detail. We looked at epidemiology and incidents. We've done the same with all our other assets. And I think it's framed in a way that we believe in the $5 billion number that we put for 2030. So that's probably the only way I can really answer that one.

Thank you, Sanjeev. Next question from the audience. Jason Gerberry, Bank of America.

Jason Gerberry from BofA. So first question on the updated LAI peak sales contract, specifically for olanzapine LAI. Wondering, just to confirm, is that all in the 300 or so schizophrenia patients? And does it make sense at some point to look to expand the program to study in other areas like bipolar, where I believe there's 1 million total patients getting oral olanzapine. So wondering how you kind of go after that broader opportunity? And then my second question is just -- where within the spectrum of your deleveraging efforts, does it make sense for you to pivot to inorganic growth, with M&A specifically?

What's that?

WWith M&A specifically?

With M&A, yes. So thank you for that. And I'll partner with Chris and Eliyahu on the answer to this. But look, I'm glad you've seen the opportunity in the LAI franchise in schizophrenia, but maybe even beyond that. But I think that what Chris has already highlighted is a significant opportunity within that. But maybe I'll hand it to you to pick up.

Yes, maybe I'll ask you to cover off on indication first, and then we can kind of talk about scope.

Yes. So like you're thinking, we're doing the same thing for UZEDY and expanding the indications beyond schizophrenia and bipolar. That's a possibility for olanzapine LAI as well.

Yes. And I think we're kind of fragmenting the market because as you heard from Dr. Melnick, significant opportunities. I think why I'm excited not just about olanzapine, but the scale of both together really allows us to hit the kind of less severe patients with UZEDY and offer a really meaningful option for the more serious patients, some of them that have signs and symptoms of regression and need more control. So -- and we'll obviously take more indications as Eric deems that appropriate, but that would be meaningful.

And then I'd probably add before Eli and I partner on the next question. I would always build into the fact that what Chris' team has done with UZEDY. And I think that just highlights the significant unmet medical need and just the commercial capability we have to execute on that. Going on to the capital allocation and this idea about potential, I think, expanded BD and M&A and the fact that it will be delevered. I think it's great that we're having that discussion and we're having the discussion about having that freed up capital in the not-too-distant future. I think what I'd add before I pass on to Eli is what we've played out over the course of today is all organic. It is all organic, right? Now what I believe and what I've seen with our commercial capability, both in the U.S. and international markets in Europe is we have a real commercial muscle. And so we're constantly looking at opportunities to leverage that more with other assets. And most of that is through BD and in-licensing rather than M&A. One I think is an efficient use of capital allocation. But particularly if we can do that in the CNS space, it's super synergistic. And that's the opportunity we see. So we're always active, but we want to make sure it's good value, gives a good return because we have places to put our capital organically within our pipeline within the assets we've got now. So we're quite critical when we look at that, But maybe a...

I think we should split it into 2, meaning up to '27, we're going to see the same trajectory that we have today. We also need to understand that when we are saying less than 2x net debt-to-EBITDA, this is not just us paying debt. This is also coming from 2 main things. The transformation that we're going to have inside the EBITDA, which is more accretive on innovative profit and the fact that we're going to generate more cash. And because we're measuring net debt-to-EBITDA, it's not only that trajectory. Now when you approach a deal, it's very different on which stage was that deal in terms of clinical stage, pre-approval, after approval, what does it mean in terms of counting and how this one can impact the EBITDA margin or your balance sheet. But I think we will face that questions beyond '27. Currently, we're focusing on our growth, and we're able to demonstrate it in the last 2 years.

David Amsellem at Piper Sandler. So I have 2 questions. First, Eric, you talked about optimizing and improving upon validated targets as something of a drug discovery/development playbook. So I guess with that in mind, can you talk through maybe the cadence of development in terms of other agents that are focusing on other targets that you plan to bring through into the clinic over the next, call it, 2 to 3 years? When does the anti-TSLP/IL-13 go into the clinic? Just talk about how prolific you expect to be in terms of moving these kind of novel agents into the clinic. That's number one. And then number two is you, I think, alluded to return of capital to shareholders post '27. Does that entail reinstatement of the dividend? And would that make sense given that many of the large caps do, in fact, pay dividends? How do you think about that philosophically over the long term?

Thanks for the question, David. So look, I think on the first part, it's interesting you picked up on the strategy, which Eric put together, which is working, which I think is really important to understand because it comes down to capital allocation and to allocate capital to the things that we think have the right risk profile. So as Eric talks about proven MoAs, that's really important. I'm glad you picked up on it because we think we are not going to be the company that goes into areas where the target is not validated or the MoA is not proven, we'll leave that to others. We don't want to allocate capital in that way. And I think that's important. Everybody knows that. But -- and that goes back to we have other areas to allocate capital. So I think I'll maybe start that, and then Eric, you can.

Yes, sure. Thanks for bringing up TSLP/IL-13. I think it's an exciting program. It illustrates how to think about it. Immunology is a fantastic area to play in because there's so many different possibilities of known mechanisms. The field has been slower than it should have been probably over the last 10 years, but now it's really gaining speed. The selection of that one compound that we accelerated, which we just had a press release and we're enabling the R&D work now to get it into the clinic soon. That's a great example of what you can accelerate on known targets. I mentioned that TLA1 (sic) [TL1A]. TL1A is a great another possibility because of the safety profile is so favorable right now. And the possibility of combinations with that, again, is another example of where we can play more. So there's a lot of things we can do. Moving it quickly is the key and having a team that knows how to do it is the other part.

And then to your second question around capital allocation and buybacks and dividends. And you saw Eli put that on our capital allocation slide, which has always been 3, and you saw now it's 4. And that's just because of the fact that we know where we're heading from a cash flow point of view and where our EBITDA is heading. And so before I hand that it to Eli, I would say we're always looking at the best return on capital deployed because that's our job. And so to not have that on that as we become more financially stable and have more cash, I think, would be not adhering to that principle. So everything will be taken into consideration as we get to that point, but we're going to look at it in that priority and making sure, as we have shown in the last 2 years where we've allocated capital, I think we generated significant return in the short, but also the long term.

I don't know if have anything to add. Thanks.

Thank you for the question, David. Chris, you've been waiting patiently.

Chris Schott, JPMorgan. Just a couple for me. Maybe just one last one on capital allocation, just to continue. I think you're mentioning 2027 and beyond 2x. It seems like to the extent that TAPI is divested and where your leverage sits today, that could be sooner. So is it really just a 2x leverage target that's the rate limiter for thinking about this? Or is there something you just want to see how the business progresses in the next few years before you kind of embark on the capital deployment piece. The second question I had was kind of maybe a bigger picture question on R&D investment. It seems we have charts to continue to show the shift in R&D spend, shifting more towards brands over time. I know the last few years, you've used partnerships and some funding alternatives to accelerate programs to help fund this. Like as Teva gets on a stronger financial footing, do we think about the company self-funding all of these? Or do you still see partnerships as a way to either diversify risk or allow you to do kind of more in the portfolio, just as we think about kind of the bolus of spend '27 and maybe beyond as the pipeline comes together?

So thanks for the question, Chris. I'm going to take the second one. Eli, you take the first one. So the second one is, as we think about -- and it's a great question to have that what you're saying is because our pipeline is becoming quite rich and with multiple indications, is that something we can fund? And if we can fund going forward, should we fund it on our own? I think first and foremost, I'd say is we funded -- we always find a way to fund great science, which is a good return on the capital we deploy. And as you've seen, we've done that in pretty creative ways in the last 2 years to make sure we can move programs forward at speed. Now, it always depends upon the breadth of your pipeline as to whether you have enough money. And then it's a question of do you prioritize or do you partner? Because if you prioritize, then maybe some assets have to be slowed down or if you partner, then you can keep all the assets going. I think one of the things that's quite interesting about Teva is our ability to do that and our willingness to do it. It's because we have a very different level of gross margin in this business right now. So our ability to partner assets and still get something that's massively accretive when we bring to market is still an optionality we have. So I think for me, I always think if we've got good science, good reason to believe, good assets, we should fund them. And if we struggle to fund them in a way that stays true to our financial guidance, then we think about, well, how do we do that from a partnership. And that's the way we think about it. But it's a good problem to have, and I think we've shown we can navigate that well. But maybe, Eli, you take the first question.

Yes. So first of all, as Richard mentioned, everything you saw today, it's pure organic, which means we're not capturing any potential proceeds from Teva API to come into play to the net debt of 2. This is just the trajectory. But if this one is coming even early, yes, we're going to use part of the proceeds in order to tender the debt. That will do to do 2 main things. It will actually accelerate the trajectory to be below 2 earlier, and it will save us more financial expenses, which will expand more free cash flow and EPS. But the trajectory to really think about capital returns beyond '27, it's about how you're really, really able to stand on your feet and generate accretive free cash flow. When you commit to dividends, when you commit to something else, you need to have substantial free cash flow. So that trajectory will not get shorted because we are actually selling TAPI, right? So we are still need to go on that trajectory. And as you saw, the $2.7 billion free cash flow, it's kind of, I would say, mark for us to shift and to become a company that enable to provide better returns to our shareholders.

Thank you for the question, Chris. Ash?

This is Ash with UBS. So yes, maybe just on AUSTEDO, I wanted to understand your level of confidence on the $3 billion number for 2030, given that IRA negotiations still need to be decided on where the pricing is. And I think there is fair bit of uncertainty on it from how investors are thinking about it. I think even the first offer from CMS is coming June 1. So I just wanted to understand what gives you confidence that your guidance bakes in that? And then secondly, on the 2030 outlook, so yes, this is a pretty growth -- strong growth profile getting to $5 billion plus on the branded growth. In terms of the margin, the operating margin, like how much of an uplift do you get beyond the 30%? Is it a few percentage points? Or does it really start to step up and go towards mid-30s, 40s, even? Just wanted to -- I would love to get your thoughts on that.

Yes. Thanks for the question. I'm going to take the second question first. It gives Chris time to think about the first question. What I would say, though, is, once again, we don't put numbers on slides unless we have a high level of belief that we can achieve them. It goes back to my opening remarks, which are we want to do what we say we're going to do. And so we think really carefully. And that's an important part, and then Chris can answer that. When it goes back to the second part of your question, which I've just suddenly forgot. Margins, yes, I didn't pick up on purpose. So on margins, you're sort of teasing me out to give my new 2027 targets, right? And we're not going to do that. I think what we want to do is we want to get to keep executing, hit our '27 targets. And as we go forward, we can think about what those margins could be. Obviously, we did put the greater than. And so we believe we can be greater than 30%. And there's every reason to believe with the portfolio coming through with the efficiencies we're driving in our manufacturing and our generic business and the innovative growth that we've got. But I don't want to get drawn into what those are today. I think that's 2030. I'm glad you asked the question because it shows you're thinking about it, and that's what I hope you do. Over to Chris.

Perfect. So IRA is evolving. So you're right to be cautious about it. I think we are as well, and we've modeled it many, many ways. I would say our learnings have been different this time, this negotiation than what we observed the first round. A lot of those products were much later in their life cycle, also much, much multi-blockbuster. And what we're experiencing, and we've had many meetings with CMS about this well before we were even selected to better understand their thought process, particularly given AUSTEDO is a much smaller patient population, more distinct in its disease state, things like that. It's not a mass product. And I'd say that they really reflected in this process, some of the things that we talked about, meaning that they offered physicians to be able to call in and have an advocacy panel, physicians to give their viewpoint. Cost did not come up at all, which was interesting versus last year at this time, some of the things that came up. Additionally, totally coincidentally, they -- Sherland, the lady that we featured this morning, she called into one of the patient and advocacy panels, which was phenomenal and gave a play-by-play look of her experience with the disease and what that looks like. And what I'd say is we don't know where it's going to land. We've estimated it. But from our interactions with CMS, they're being really thoughtful about the data that we're sharing and the discussions that we're having about how this is a unique disease state, and it's very different than some of the other mass population diseases that they've addressed before and how specific this patient is and how high risk they are, given the other medical issues that they're solving for. It's not a singular like managing diabetes or cardiovascular disease. It has lots of implications. So we'll see where it lands. But I don't want to be overly confident because I think we need to be pragmatic. This is outside of our control. But I think we've managed the variables really well that we -- that were available to us, and we're going to have some meaningful conversations as we negotiate the outcome.

Thank you, Ash. Next question, JP.

This is [Jesus Pacheco] in from Umer Raffat of Evercore ISI. I have a couple of questions on AUSTEDO. Can you please give us a little more details on the switching dynamics? I mean you guys talked a lot about the new patients today, but we want to understand what the switching dynamics even within AUSTEDO, right, like from the twice a day to once a day. And on the bridge for revenues to cover Revlimid, you mentioned you're going to double biosimilars. And can you please add a little bit more color on that, too, like what's the strategy on doubling the biosimilar revenues?

Okay. Thanks for the questions. I think -- and I'll make sure Richard gets prep for the second question, the biosimilars. On the first one with AUSTEDO, I'll hand that to Chris. I think to keep in mind because we often get quite a lot of questions about the competitiveness of that marketplace. The way we think about that internally, and you hear we don't talk about competition at all is because we just see the unmet medical need. We see the huge hundreds of thousands of patients are not on therapy. And so we sort of control our destiny and saying how many patients do we need to pull through and help and how does that go down on to help our revenue? And how does it once a day play into that. I'll hand over to Chris to give you more.

Yes. So within kind of starting on AUSTEDO XR, most of those patients are naive to treatment and about 60% of them start on XR. Switching from BID to XR is about 20%, switching from the other brands around 20%. But most of the business is this untapped treated population that we're solving to get introduced to the product and have a real option.

And then on the -- I think it was the compensating for the generic Revlimid loss next year. I think it was partly the biosimilars, but I think it'd be surrounded with how we think we're going to do that, Richard.

Yes. So just as I said, there's 3 components to it. There's biosimilars. I'll come back to that in a second, but there's also the growth in our OTC medicines business and the significant number of generic launches we've got coming up, including 15 complex ones as well. But specifically on biosimilars, and we've launched 2 in the U.S. so far this year. We have another 5 near term. We're having tuck-ins in Europe as well. So it's basically multiple shots on goal that will allow us to be able to build that business as we expect to close to double it over the next couple of years.

And then the OTC business, which I think Richard talked about growing at double digit. So you put those three together, and I think the math works out to cover generic Revlimid.

Next question please.

Les from Truist. Christine, perhaps on olanzapine opportunity, what is the investment needed in terms of additional sales force, market access? And have you kickstarted any premarket -- prelaunch activities? For Eric, on duvakitug, how do you prioritize label expansion studies among the 3 classes that you highlighted today? Is there a pick in order for these studies? Do you require additional feedback and support from Sanofi? And then Richard Daniell, lastly, I appreciate the color around biosimilars. Maybe just kind of talk about how the competitive market will evolve. And then in general, for the gross margin profile for generics business overall, could you speak to the balance and what's driven by the high-value revenue mix versus the cost reduction initiatives?

Thanks for those questions. Well, I think I'll hand it on straight away because I know Chris knows definitely about this one. So I'll hand you on olanzapine.

For sure. So we're excited because I feel like we're not about olanzapine specifically, but we're doing premarket conditioning right now. So as I talked about, that journey is so incredibly complicated. So our experience with UZEDY is really the biggest informing factor of what that landscape is going to look like. So FTEs, I mean, around the edges, we might be adding folks, but that footprint is really, really sound. We reach most of the prescribers, as you can see kind of from our performance already. And we'll continue to look for what's our access proposition based on how physicians will use it. So once we have a final label from Eric and the FDA, then we kind of sort out the go-to-market, both the value preservation of the product as well as the access and how we want to negotiate for that.

Yes, for the indication. So we're working hand-in-hand with Sanofi to choose our indications. It's the same formula we use for all drug development, what we select going forward. So it's going to be the validity of the science, where is the most likely place you're going to win? What's the size of the population, what's the possibility of the revenue you can generate from an indication. Then you work down from there, once you unlock a certain category, whether it's T2, non-T2 or fibrotic, you can then unlock maybe the next higher risk, maybe other different value indications. But it's a clear sequence selection that we do in the process. You have to do it kind of logically here because there's so many different ways you can go. You have to really let the science drive you.

Richard?

Yes. The question was around margin evolution in the generics business, I believe. And there's a few drivers within that. First of all, there's the launches. Now of course, you can have more launches in one year than you will have in another year, but they are, of course, a contributor. But we're also moving our geographical weight, if you like, a little more towards Europe and international markets. And there, we tend to see a little more predictability in terms of price evolution also for biosimilars as well. And we're going to -- beyond the next couple of years, we'll see more biosimilars in Europe. And then last, that rather large OTC medicines business. We grow volume, but we're able to put prices up there. As I called out, there's no payer pressure there, no patent expiries as well. So that's helpful. And then lastly, the work we're doing within our supply network, of course, those levers I called out will all benefit our cost per unit, which will help support gross margins and competitiveness.

I think just maybe just one thing I'd add just to what Chris said on olanzapine. And I think it's really important back in my days when I was at a company that specialized in MS, when you know the stakeholders, the payers, the hospital pharmacists, the D&T committees, the physicians, the nurse practitioners, you know them and you see them every single day. When you're going to launch another product in that, which is based on the same technology that gives you a really opportunity from understanding their needs, they understand and they trust you. And I think that's something which is not just synergistic financially, but that really changes the whole dynamic of an uptake of a product and the potential to do that well.

Matt Dellatorre, Goldman Sachs. So clearly, the innovative portfolio is taking shape. But as you continue to build that out, how do you balance the necessary R&D investments with your long-term margin targets just in the context of many branded pharma spending 15% to 20% of sales in R&D? And then is it fair to say the risk to the upside on the long-acting portfolio just in the context of J&J's business?

Thanks for that question, Matt. I mean -- so I'll start answering this. I know Eli desperately wants to answer this as well. So I'm going to -- so when it comes to our R&D, firstly, I go back to what I answered earlier. We never miss on a good opportunity to drive something that's going to create long-term value for the company going forward. And then people often do talk about are we spending enough? And I remind everybody, we have not spent on something we need to move through the clinic. And that will continue. If it gets to a point where we have so many indications, so many products, then once again, I think we've shown the flexibility to think differently than other companies would. But I do think the way people look at the math is wrong, and I'll hand it over to my math expert to explain why.

Yes. So Matt, look, first of all, in the last 2 years, the reported R&D numbers are net from funding, right? So there is some couple of hundreds on top that allow us to fund be it olanzapine, be it DARI, and the partnership we have with Sanofi. So this is something that we need to understand. The baseline is actually higher, right? And when we move forward, you saw the slide that I presented in my session, we're moving to more 70%, 75% on the mix on R&D. You know high level what will be the number of total R&D, but the revenue related to that one is the innovative revenue. So if you do the math, you actually on the low mid-teens, you're not at the 6% to 6.5% because the generics is actually diluting the entire percentage. So that's the way you should think about it.

And then with regard to the LAI franchise, I think the way I'd answer it because obviously, we put up the numbers, $1.5 billion to $2 billion. And so yours is a bit of a push as to is that ambitious enough? I think that just goes to the size of the opportunity that Chris highlighted both in the U.S. and in Europe and the different penetration of those. But once again, I don't want to get drawn into -- there's a good opportunity. There's a big schizophrenia market there when you take into account the orals. There's a big market, and Chris highlighted the growth on that. We've shown we've done really well in UZEDY, which I think people were less excited about and now they're excited because of the product profile and the excellence in commercial execution. I think there's a reason to be optimistic about olanzapine. But let's see how that plays out. And obviously, if we think that's a different trajectory, we'd come back and give a different peak sales profile, but not at this stage, not before we've launched one of them.

Matt, thanks for the question. Next question. Any from online? Sanjeev?

Yes. There's a question on DARI. AstraZeneca dual action rescue inhaler. AstraZeneca launched their ICS/SABA earlier last year, and the progress has been rather slow in terms of how revenue has progressed for them. What gives you confidence that Teva's product can do $1 billion plus in this category?

So I think I've said in the past, I said you always want to be first to market, almost always. And the reason why I say that is this is a market which, although the guidelines which Eric talked about have been out there for some time, the market has to be created and AstraZeneca in the process of creating that market. And I think if there's a company you want in respiratory to create a market, I think AstraZeneca would be a good company to pick. So I think the guidelines are there. There's clear unmet medical need. And if you look at the amount of death that could be avoided if this product was used. So I think this market will be formed. The fact that will be coming to the market 3-plus years after AstraZeneca, our belief is that market will be shaped. I think they've created a good payer engagement and a good price point, and that's about the conversion. And so the way we look at it is we'll be coming in behind them. We'll be coming in with a differentiated inhaler device, and we'll have a pediatric population, which is 25% of that. So that's why we have ambition of the $1 billion. I would say, don't forget that's over time as well. This market has to be created. We're sort of forecasting we're going to take 25% of that just from an indication point of view. And we could take more than that as Eric is very enthusiastic about our device and the fact that, that is more convenient and we'll actually have adults using that as well. So that's where we get comfortable in putting that peak sales out there.

Next question. I'm sorry. I saw a hand up there. Go ahead, Ash. Sorry, Chris.

I just want to come back to the manufacturing restructuring. I know that's a big piece of kind of the bridge to mix and that part of the bridge to get to 27%. Can you just talk a little bit more about -- I know has done a lot over time. Kind of why were some of these changes not done in past kind of evaluations of the business? And how is this one different, I guess, in terms of what's being focused on restructuring and reorganization versus some of the efforts over the last 4 or 5 years?

I'll tag team that with Eli. I think -- and this was on purpose. So when I came in and we did the pivot to growth strategy, we saw the opportunity to improve the efficiency of the manufacturing. But we also saw that we had a customer service level that was below what it should be. So we weren't -- we could sell more generics if we supply them. And we also saw that we had AUSTEDO to get on a different trajectory. We wanted to reinvigorate AJOVY. We wanted to accelerate our pipeline. And the decision that I made at the time was as much as those all have opportunity, if we try and do them all at once, maybe we'll impact the ability to execute any of them. And so the idea was on the manufacturing, we would make sure we've got our innovative portfolio up and running. We've got the pipeline going. We'd improve our customer service level, which is about making sure we supply the orders we've got and we defer driving efficiency and all the stuff you're seeing now to a later date. So that was planned. I'd also ask Eli to talk a bit about that when you go from 90-plus sites down to 50-plus sites, to do that and drive efficiencies in the sites you've got. I wouldn't say it's impossible, but to close that many sites and then drive efficiencies in the sites you remain, it's the same people. So it's a hard thing to do. But Eli, you were here, so maybe talk.

Yes. So first of all, about the manufacturing footprint, Q1 '24, almost more than a year, I presented a very nice bridge that if you exclude the 13 sites we have with API, we're going to have below 30 sites. So actually, what we did here, we just put again the spotlight on this one, so people will understand as part of our efforts to keep expanding margin and how everything getting into that play. When you make decisions on the network, it's not happening in 2, 3 months, right? So those activities were done already before, right? So your question is on why now that was already in the trajectory.

Ash, go ahead.

Yes. I wanted to ask about just the pipeline. So TL1A, Eric, if you can give us your latest on where you're shaking out in terms of new indications where you could go either in fibrosis type or autoimmune diseases. And then secondly, on the ICS/SABA, I think just looking at the clinical trial design, it seems the end point is up to 36 months and if you're able to enroll by the end of this year and you're basically guiding to the data in next year, how does that work out? Like is there earlier separation that you're expecting versus what the endpoint is? And then just second question that I'll ask or the third question is, yes, if you can give us your latest on the TAPI process, where are we? I mean the macro was bad for a while, but just in terms of, I think, private equity deals starting to come back again a little bit. So if you can give us a sense of where we are in that process.

Thanks, Ash. Look, I'll go straight to you.

Take them in order. So TL1A. So I described our strategy. I'm not going to make any announcements about indications today. That's something we're doing, keeping close to the chest with Sanofi. We think that's a competitive advantage at this point. But it's key that there's a clear pecking order. There's indications we think are going to be the most likely. I think they're going to be the larger, more important indications, then we'll work down the list. I think fibrosis is the last on that list. And then when we open up those indications, we will unlock much more potential. But we have to be logical on how we do it. We have to be -- like I said before, we're kind of be ruthless on our capital allocation on these indications. You could fire a lot and lose a lot. We want to go with the highest probability of successes. And we're also a hell bent on making sure that our Phase III program in ulcerative colitis and Crohn's disease moves quickly. This is a horse race. I think that we have great data going into the Phase III. I think we're in a good position. And I think we've learned a lot about how to accelerate these programs. So I'm really bullish on that. But we'll get to these indications in due time. The ICS/SABA, your question was about the Phase III exacerbation study. I'll remind you, remember, that's an event-driven study. So we've been very focused on making sure we get the study enrolled as fast as possible with all the patients lined up in all the pediatric, adolescent, and adult patients. So we have to get them as fast as possible so that we get those events happening over time. So that's just one thing to keep. It's not a defined period in the future. We anticipate that we'll hit that at the end of '26. That's how we model out the rate that we're seeing exacerbations now and the number of patients we've got coming into the study.

And then, Eli, do you want to take the TAPI?

Yes. We are in a really advanced discussion on that transaction with potential buyers. At the moment that we'll be able to share, we will share. But currently, we cannot talk about it too much.

Thank you, Ash. Maybe one very brief question. Sorry, Matt, go ahead.

Thanks, Matt again. A few for Eric. For the IL-15, how are you thinking about the potential profile versus some of the oral and topical JAKs? And then for the TSLP program, how do you think about the potential profile or improvement over a Tezspire in asthma? And then finally, on TL1A, is it fair to say that we could see a few Phase IIa proof-of-concept readouts over the next 3 years or so?

Okay. So I'm blanking on the first one already. It was the...

Anti-IL-15. Vitiligo.

So the point about the IL-15 was -- I forgot you were asking about like oral or topical JAKs. Yes. So that's a very good point. So many people who suffer from vitiligo, it's not just 10% of their body. Those are -- those topicals are limited in the surface areas you can cover. It's harder to take that. You have to smear on yourself all the time. So I think the real unmet medical need is people who have disseminated vitiligo. They need systemic therapies to actually change the entire pathology of the disease. I think that systemic therapies are going to be differentiated if you have one that really has an effect. The TSLP/IL-13 program, there's literature data out there right now that really suggests that the combination is considerably better based on some proof of study -- proof-of-concept studies with a biomarker of nitric oxide release. And those -- that was impressive results. I mean I'm very encouraged by that. I think that we have a differentiated product in the way that we brought the 2 targets together. So that's exciting. I think that's in asthma. What we can do in atopic dermatitis is the next thing that's got us very interested. And your final question, what was the final readout...

Proof of concept readouts.

Potential Phase IIa.

Yes, we're working with that. Like I said, I'm going to keep that close to the chest. We'll probably announce that when those studies are actually kicking off.

And with that, I get the privilege of asking the last question. But before I do that, I'd like to invite the other speakers to leave the stage. No, no, you don't leave the stage. You're on the spot for the last question. And before I ask you that question, I'd like to thank everyone for coming very briefly. There'll be box lunches outside for you to take or eat. And obviously, we'll be around for quite a bit longer to answer any questions you have. And please also fill out your feedback survey. It's tremendously important to us. And then to the last question, Richard, do you have any concluding thoughts for us?

All right. I do, Chris. Thank you very much. So I'd just like to reiterate what Chris said, and thank you all for coming. I really appreciate everybody sparing the time and coming along in person. I appreciate people who have dialed in on the web to also hear about the pivot to growth journey and the acceleration phase. I'm not going to take much of your time because I think we're all hungry, but I will conclude with some of a summary of what I believe I'd like you to take home and take back with you. And in this slide, I've only got 2 slides, so to give you heads up. This slide, I hope sums it up, sums up everything we've talked about. The transition from Teva from a pure-play generics to a preeminent biopharma company. And that's just based on substance and the fact here. Everything in the middle, the slide 25 to 27 has happened or is about to happen with regard to olanzapine. So that -- I think that future is under our control, and we're good at executing. And then when you go beyond that in '28, we just see this innovative pipeline just keep coming through. And as I said, these are good MoAs. These are best-in-class or first-in-class, and they all have blockbuster potential. This is completely transformative from a company perspective. It's transformative from the duration of growth we can have. It's not about a short-term growth, it's not about a medium. Because there are no major LOEs in the future, this is -- I'd like to sometimes think of this as a biopharma company that starts, but it skips straight to adolescents and then straight into its 30s. And we have the ability to do that. So what does that mean for many people in the room and online? So ultimately, it's about allocation of capital and creating return for shareholders. That's our job. That's our role. That's what we are paid to do, making sure we improve the value of the company and the return for shareholders. And this is a rather crude equation, but it starts out how we think about it. We drive revenue, we drive top line growth, but we're driving bottom line growth all the time with our innovative portfolio. We continue to supplement that and add to that with our innovative pipeline, which is coming through at a real regularity. And that allows us to throw off significant cash flow. And this cash flow, we're talking about $3.5 billion. We talked about $2.7 billion in '27, but the line of sight to $3.5 billion is clear. This gives us multiple opportunities to increase shareholder value. And so everything you've heard ultimately comes back to do we have the capability, do we have the confidence to do this to transform the company and to create real shareholder value? I think we do. I think what we talked a lot today is about facts. Now we can have a different opinion on where those will take us, but I think that's a plus or minus discussion rather than a categoric yes or no. And so with that, I'd ask you to take that -- a way we do that slide and understand that we are committed to creating value for our shareholders. I think we have the plan to do it. We've shown over the last 2 years, we can execute, we plan and we execute. And I think you've seen that from the team today. We have a world-class team who I know have the ability to execute and transform this company going forward. So with that, I thank you for your time, your attendance and your attention.