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

Okay. So I think we'll start. So good morning, everyone. My name is Thibault Boutherin. I am Co-Head of the European Equity Research Pharma team based in London. Before we start this session, I need to refer to important disclosures. Please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. And if you have any questions, please reach out to your Morgan Stanley sales representative. So for this session on Teva, I am delighted to have with me Richard Francis, CEO of Teva. Thank you very much for joining us today. So we'll go into Q&A. But before that, Richard, do you want to start with some introductory comments on the situation and the outlook at Teva?

Thank you. Thank you for having me, hosted. Appreciate it, as always, and thank you, everybody, for turning up. So I'll be quite brief so we can get to questions. Just over 2 years ago, maybe 2.5 years ago, we launched the Pivot to Growth strategy, which was a strategy we launched in New York to get the company back to growth after 5 years of decline. I think it's fair to say that strategy was created a smile on many people's faces. 2.5 years later, 10 quarters of consecutive growth, the transition from a pure-play generics company to a biopharma company, I think, is well on track and gaining momentum. And we've done that through consistently executing on our 4 pillars, which is driving our innovative business, our growth engines, AUSTEDO, AJOVY and UZEDY, which I'm sure we'll talk about. And then the great work we've done on our pipeline, a really, really high-quality pipeline, and Eric is with me here today, accelerating that through the clinic. So we'll be submitting olanzapine to the FDA this year. And then we will have an ability to conclude our asthma study end of this year. We've got great recruitment on emrusolmin in MSA, and we had a great readout of duvakitug in our Phase II study. So considering a company that was considered a pure-play generic, that feels like not a pure-play generic company type pipeline. So we've executed on that. And then our generics business after a bit of volatility, we returned to stability actually to growth across all of our regions. And then focus the capital. We're a company that believes in ruthless capital allocation and making sure we think about that internally. And we have to do that because we don't want to grow our cost base. We want to prioritize so we make sure our capital gets allocated to things that are going to drive shareholder value. And so we think about that very seriously. So 2.5 years on, we're in a position that we just had our 10th quarter of consecutive growth. But I think probably the one thing I'll end with -- the second quarter of '20 -- of this year was probably the most important in my view. And the reason why is because our generics business because had a big comparison year, the prior year declined 2% after many quarters of growth. But as I said, a big comparison year. But if you look at the performance of the P&L, we grew our gross margin, we grew our EBITDA, we grow operating margin, we grow EPS. How do we do that? We did that because we've moved the company to have a big innovative portfolio and ever-growing innovative, and that changes the fundamental of the economics. The proof of the pudding, I don't know what that's saying here, but the evidence is if you have a generics business of the size we do declined 2%, and yet you can grow all of those metrics, then that shows the innovative portfolio has reached a critical mass that actually is delivering on the promise. So that's my opening remarks. That's where we are today. Super excited. We got a great team. We're excited about the next few years ahead. It's all about accelerating our growth, accelerating the transition to a biopharma company, and we'll probably talk a bit more about that.

Yes, absolutely. Amazing. Thank you. So I mean, before we starting on the business, maybe we can touch very quickly on a couple of key U.S. policy points. If we can start on tariff, if you can tell us a little bit about how to think about Teva's exposure to potential U.S. tariffs on pharma. Is there a scope for generics to be excluded from this based on your discussions? And is there anything that would make you -- how consider your manufacturing footprint in terms of the U.S.?

So well, firstly, I think we're in a very strong position from our manufacturing footprint. We have 9 sites in the U.S. I think we're the largest generic manufacturer, one of the largest in the U.S. already. And our innovative lead product, AUSTEDO is manufactured in Florida. So I think from that, I think we're in a very strong position. And then from a supply chain, our supply chain is pretty much Canada, Europe and Israel. We don't really have a supply chain that goes into China and a minimal amount in India. So I think on a high macro level, I think we're well positioned in the tariffs. To your question of will generics be in or out? And do we have to onshore more generics? I think I'll go back to -- we have a good footprint in the U.S. from a generic manufacturing. I think as we work through the 232 discussions, I think generics has been seen as something which needs to be potentially looked at differently because of the value the U.S. already has from a generic point of view. The generics market is the -- has the lowest price in the world and I think that is looking to be protected. So as I said, I think in Q1, we've mitigated the 10%. And so we'll see where it plays out. I think what happened in Europe doesn't really necessarily change that trajectory for us. And if there are tariffs imposed on some countries like India of the scale that we talked about, maybe there's an opportunity there. But I think the question you've asked is, can we handle where they are? And the answer is yes.

That's very clear. And maybe just on MFN potential pricing policy in the U.S. One of the push of the U.S. administration is to encourage pharma companies to create direct-to-consumer cash pay channels. So is it something that you could explore? And is it something that you think would be restricted to branded? Or could it be even considered for generics?

So yes, we are considering it. I mean it's -- the dynamics are changing. I think the supply chain in the U.S. creates opportunity to retain more value if you go direct to the patient and obviously help the patient as well. So we're pursuing all of those. I think from an MFN point of view, though, we're in a unique position because as I sort of try and describe to people, we are a biotech company with a biotech pipeline deeper than a biotech pipeline, broader than a biotech pipeline and with 3 products on the market, yet because of where we are in our evolution, we haven't really launched these outside the U.S. And so from an MFN point of view, we now can strategically plan what we want to do, when we want to do it at what price we want to do it. So we're not in that maybe more difficult position that some of my colleagues are because of just the nature of our maturity as a biopharma company.

That's very clear. So turning on to the business. I mean, AUSTEDO, obviously, the biggest growth driver. And before we spend some time on the trend, obviously, there's a big focus on what could happen in November with the announcement of the IRA price negotiation. So if you could just tell us how advanced you are in the negotiation process? Do you have an idea of where we could get an update on this? And yes, maybe starting here.

Yes. So just to be consistent, I'm not going to talk about the IRA in any shape or form because we are in negotiation. What I would remind everybody is when we launched the Pivot to Growth strategy in 2023, when we put $2.5 billion out there as a target for 2027, we had put in an impact from the IRA. So I just tell you that to know that we didn't exclude it. That's the IRA. So unfortunately, say nothing. I hope you all expect that. I understand why. On AUSTEDO, the trends, I think, are really positive, as you've seen in over, I suppose, the last 10 quarters, we continue to drive really good prescription growth. I think we're starting to see the benefit of some of the programs we've put around adherence and compliance, our titration pack, all of that is helping more patients stay on therapy, but it's also helping more patients with the introduction of XR once a day end up on the more optimal dose. So as you've seen over the last 2 quarters, we've shown that the milligrams -- average milligrams per patient is going up, which is good because that leads to a more optimal dose, which leads to a better outcome for the patient, but also from a point of view from a revenue trajectory is also advantageous as well.

That's clear. And so you mentioned your own initiatives and all the sort of commercial initiatives that have delivered growth. Can you talk a little bit about the sort of competitive landscape, market share within the indications where AUSTEDO is approved?

Yes. I don't -- so in the competitive landscape, I don't really talk about the competitive landscape too much because there's 650,000 patients yet to go on treatment. And so for me, this is less about who you're competing against and more about how do we make sure patients who are undiagnosed, get diagnosed, physicians who don't know how to diagnose or educated to diagnose. Because if you think about that unmet need, it's just huge. So for me, this is not about gaining market share. It's about making sure we get the right number of patients to come in. We convert those patients from scripts on drug. We titrate them and we get them to the optimal dosage for them to have their condition managed. And then we retain them on therapy to help them benefit for that for years. This is one of those unique markets. I've been in the industry 30 years where often a question like market dynamics, competitive market share is important. This one, it really isn't because there's so many patients who are yet to go on treatment. And I think that's what makes me confident that not just in the $2.5 billion in '27, but we said it's going to do over $3 billion. And it will because our job is to help those people who are not on therapy get on therapy and other people in the market can also help create that noise, that share of voice that attracts more people, people suffering from this condition into the market, and it helps educate physicians to identify those patients.

That's very clear. And the $3 billion target you just mentioned, is this U.S. only? Or are you starting to include some ex U.S. contribution into that target?

Yes. Within that, it's minimal ex U.S. just because of the fact that one is around -- a bit around timing and price. And as with the previous question around MFN, I think we've got to be very thoughtful about how we -- where we launch and what price we launch. So it's a small amount of the $3 billion. I'd like to think it could be an opportunity going forward, but that comes down to how we can price it in the other markets that we're looking to launch in.

Okay. That's very clear. And if we can turn on your schizophrenia franchise. You had an initial guidance for UZEDY, I think, some time back, which was $400 million to $800 million. Your 2027 guidance this year is around $200 million. You are very well on track to do this and more. And you issued a new guidance, which is $1.5 billion to $2 billion peak sales, and that's grouping UZEDY and your pipeline asset all on that. So I guess, should we think that your previous guidance on UZEDY still stands? Or could it be a bit more fluid between the two products?

Yes. So look, I think what we've done with UZEDY has, I think, created a lot of excitement around our schizophrenia franchise. UZEDY, as you say, we've upped the guidance to $200 million this year. The team is doing a phenomenal job. It's a great product, great product profile. There's a huge unmet need in long-acting schizophrenia. And because of the technology we have, this drug can be injected and people reach therapeutic dose within 24 hours. That's critical because when you have an episode, you hospitalize and so the question is how quickly can you go home, and that's about reaching therapeutic levels. The competitor products take up to a week to 2 weeks and you have to have other therapies added to try and balance. Because we don't have that, UZEDY has really taken off, and it's a great team launching it. So there's a lot of optimism around that. And I think that optimism quite rightly has seeped into olanzapine, which one could argue is an even bigger opportunity. But -- and if you think about it, risperidone and our long-acting UZEDY and olanzapine, if you think about the patient population of schizophrenia, that covers about 75%. It covers right from mild to severe. So with our two products, we can treat 75% of people who suffer from schizophrenia with a long-acting. So I think that is really exciting. So I understand the optimism. I'm pleased that people are questioning the $1.5 billion, $2 billion because I think that speaks to the change in perception about Teva and how we can execute and commercialize products in what is a very competitive market as well as the product profile. So I like that because it's taken a bit of time to get traction there and we probably deserve it. That said, there's a thoughtful approach we have to thinking about how we guide, how we manage our P&L over time. And I think we'll still want to see -- I want to see how it plays out a bit longer with UZEDY. But what I will say is we're going to launch olanzapine at the end of next year or quarter 4. I'm going to launch it well because we're planning to launch it well. And so maybe when we come back next year, you can ask me the same question and maybe I'll give a slightly different answer, but let's wait for that.

I look forward to that. And just to finish on schizophrenia and these two assets. Is there a notable difference in profitability between the two? Because I think you had a deal with Royalty Pharma and olanzapine some time ago. So is there a meaningful difference in profitability?

No. Look, I think this is a bigger question actually or a bigger answer I'm going to give you than you probably expected. So when we arrived at the pivot to growth strategy, we saw our pipeline and there's a question of how can we prosecute that really, really quickly with the finances that we have, the balance sheet we have, and we got creative. We did some partnerships and financing partnerships, which meant we could go full on and allow us to accelerate our pipeline quicker through the clinic. Now your question is, does that affect the profitability as we come to market of these two assets? It hasn't at all. They are very good financing deals. They don't impact our profitability, and there's no real meaningful difference. I would say olanzapine has a significant unmet medical need. So there's, I think, bigger expectations around that. But from a profitability point of view, there isn't. And then I'm going to give you another data, which you haven't asked for, but I think is relevant is if you think about where we were in quarter 2, we're at 54% or thereabouts gross margin. Our innovative portfolio is all way above that in the 90s. So what we're talking about is we're talking about a complete change in the profitability in the P&L of Teva from if we're thinking about our innovative portfolio, as that grows, our gross margin can only go up as our gross margin goes up, it flows down right through the P&L. So I know that's a lot bigger answer to what is the profitability difference between UZEDY and olanzapine. There isn't really any difference, but it sort of would be immaterial anyway because the profitability of those products is so different to where we sit now, it's just upside.

Perfect. And actually, last one along that, when you think about the launch, is it just about replicating the playbook that you had with UZEDY? Or is there something fundamentally different and specific about that asset that makes it different when you think about commercialization?

Yes, the sort of -- there are some sort of things from our playbook we'll take and we'll use and some things that are different. The playbook is we have a team out there with the payers, with the physicians who know everybody have been having conversations with them. And so my expectation is when we launch olanzapine, those relationships, that understanding of who we are, who they are, what their unmet need is with the -- whether they're a payer, whether they're a physician, whether they're a pharmacy, D&T committee, we know far better than we did with UZEDY. So I think we'll have not a standing start. We'll have a running start. That said, I do caution everybody to say that the one thing that we do think about carefully is access, and we will not give access at any cost. We think we have a significant product that can help a lot of patients who need a long-acting olanzapine. There is not a long-acting olanzapine used in the market right now. So there's a big unmet need, and we think that what we're offering deserves a fair price. And so we'll hold for that. So that may be something we'll have to work with. But that said, we know these payers now, we can have those conversations. So I think there is a playbook there that we should use, and our team is getting better every quarter. So I think that gives me optimism. But I think the big difference versus UZEDY is, UZEDY, there are many long-acting risperidone, both generic and branded. Olanzapine, there is only one long-acting that has no market share because of a side effect. So -- and there's a big unmet need. And I'd finish with when you have severe schizophrenia, efficacy is the most important and efficacy comes with compliance and compliance comes with using a long-acting. So I really have quite a bit of excitement about what olanzapine can do for the schizophrenia community, particularly those severe patients. But I'll remind you, both products, that's 75% of the patient population we will cover and will be very synergistic because we don't really have much to add to our infrastructure to make that happen.

That's very clear. And I want to turn to another sort of late-stage pipeline asset that you have, your dual action rescue inhaler, the ICS/SABA combination. So you have a $1 billion peak sales target ambition for this product. And AstraZeneca, I think, is first with a product already on the market in the -- with the same mechanism. They are currently annualizing around $170 million after 18 months. Consensus is just about $1 billion for the AstraZeneca drug. So just if you could give us some elements that give you confidence in your peak sales target for the ICS/SABA, yes maybe something?

Yes. Well, look, maybe I believe more in AstraZeneca and Pascal than the analysts do. Look, there are 10 million patients who should be on a combination. That's by the guidelines. If it gets to 1 billion, that means very few of those 10 million on treatment that the guidelines have suggested. It also in respiratory, people follow the guidelines. That said, it takes time. The guidelines are out. There was no product to fulfill those guidelines. Now there is. And I think it takes a bit of time, and I've seen that in many therapeutic areas for the physicians' prescribing habits to catch up with the guidelines. I have no doubt that will happen. And then the other reason why we're confident is don't forget with AstraZeneca, they don't have a pediatric indication. We will have a pediatric indication. So there's a 25% of the population which can't go on to those therapies right now, which will be allowed to go to those therapies. So I think we have a real opportunity there. And as much as we've accelerated the Phase III study of DARI, which will finish this year, which is very fast. We probably won't be able to get that to the market before '27. So it gives AstraZeneca still more time to create that market. And if you look at actually the prescription volume, rather less than the revenue, prescription volume is pretty significant. And once again, that just builds a momentum. So I remain confident about the 1 billion. But you've given me a chance to mention something else, which you didn't ask me, but I'll answer is it goes back to that -- the reason why you got 1 billion is I presented a slide which have shown all of our pipeline assets with olanzapine, duvakitug, anti-IL-15, PD1-IL2. And if you go through all of those [indiscernible], peak sales total between $11 billion and $13 billion. And every one of them is going to be above 1 billion. Now we can debate what that's going to happen, but isn't that just incredible that Teva is considered pure-play generics company now is a pipeline, which we can see as having peak sales of potentially $11 billion to $13 billion. And that's not taking into account other indications for duvakitug, our TL1A asset or anti-IL-15, which we currently have in celiac disease and vitiligo.

Perfect. That's clear. And if we can spend a bit of time duvakitug, so the TL1A. We had great, I think, very impressive Phase II data so far. We're waiting for a little bit more for maintenance Phase II data. I think later this year '26. And if you could just tell us what you're expecting to learn or what the data could bring on top of what we have?

Yes. Well, I haven't seen the data. So I can't -- I'll tell you what I think -- what I hope is that what we saw in the Phase II readout, we -- which was basically -- we had -- you can't compare, but everybody compared and the Phase II readout to the Q2 showed both in Crohn's and UC, it was excellent efficacy data. But I think myself and Eric, Head of R&D has been really consistent, and we believe that because it's more potent, it has more specificity and it has lower neutralizing antibodies. And if we know those to be true and if those play out as they did in our initial findings from our Phase II, then I think we're optimistic about how it's going to look, but we'll see with the data. But I would remind everybody that in UC and CD, the results of Phase II is quite indicative of what's going to happen in Phase III. So I think we have a high probability of success, but we have a high belief that we are going to end up with the TL1A that has the best profile, efficacious. But we're entering Phase III in the coming -- actually coming weeks. And so we'll start recruiting on that. And then the proof of the pudding will be when we actually produce those results, which will hopefully be in a few years.

That's exciting. And on additional indications, we started to see some of your competitors moving to new indication with that mechanism. Roche started the study on atopic dermatitis [indiscernible]. So how are you thinking about this? And when could we hear about your plans for additional indications?

Yes. I mean I think this highlights, I mean we've said we think duvakitug is a pipeline in a product, which I know some people -- a lot of people can say sometimes. But when you have two other companies going into other indications, I think it just shows it's true. So it's a great asset. And I remind people that if we just stayed in UC and CD, it's transformative to Teva. It is absolutely transformative, but we're not. To answer your question about indications, we spent the last -- since we did the deal with Sanofi the last year going through all possible indications. And by the way, that is a long list, which is exciting. And now we prioritized it. And so we want to go into new indications next year, and we will. Whether we'll communicate that like other companies, we may not be as enthusiastic to do that. At the end of the day, it's the results that are most important, not when you start something, it's where you finish something. So let's see. But we are going to -- we are moving into other indications. And once again, for us, I mean, that's transformative for Sanofi. It's a game changer for us without taking into account olanzapine, DARI, emrusolmin, anti-IL-15, PD-1L2. I mean these are all in the clinic. So it's exciting times, and we'll have more trials in the clinic for duvakitug next year, which I think once again is transformative for Teva. I mean that means we're on a biopharma company. And the other thing I'll throw in here is the only meaningful LOE we have is in 2042. So this is really a growth story that's going to keep playing out.

That's very clear. And can you just marginally beyond the couple of [indiscernible] assets, talk about how you think about the pipeline in terms of you have a few more assets as well. But also how you want this pipeline to evolve over time, how business development will play a role in terms of building this and how you balance this with, obviously, your capital allocation?

Yes. I mean it all comes down to capital allocation. And for us, we spend a lot of time thinking about when we move into the clinic, we really think about that. And Eric and his team have created a really clear R&D strategy, which is generally, we like proven targets, MOAs that have yet to be -- may be perfected, but they're proven from an efficacy and the TL1A is a great example. Anti-IL15 is a great example. PD-1 IL-2 is a great example. We're just making the best antibodies. And I say that with the level of conservatism, I hope you'd expect from a British guy, but a true belief that we have the best antibodies. We do antibody engineering team, we have phenomenal. And that's what we keep doing. So that's important because when I look at the pipeline, I get excited about it because it's not moonshots. I believe all of these things will work, but it may be the one exception of emrusolmin, which is a challenging disease in MSA. The rest, we have a high belief that the POS is high. So from a capital allocation, it's good to allocate capital because we have a good return. When we think about BD, we're going to be thinking about it in the same way. We're not going to be taking high risk on BD, one, because we have a good organic opportunity to create revenue growth on the top and bottom line as well. So when we do BD, we want to have it derisked. We don't want to take risk because we don't have to take risk. That could change over time, but the risk profile won't change dramatically. We may take things into the clinic that have been -- have the proof of concept. Once again, the target is being validated. We believe the science is there. So that's how we think about BD. And then we think about BD, does that help us drive our long-term financial commitments we've made and the ability to keep growing the company, creating shareholder value. And if it does, we'll do them, but we'll be really thoughtful. And you'll probably hear us talk about capital allocation, return on capital deployed more than any other company because we take that very seriously.

Amazing. So we should still, I think, spend a little bit of time on generics. If you could talk about the outlook for this business in the next couple of years. So the U.S. part of the generic division will be impacted by the loss of Revlimid generic revenues next year. What do you expect from the Europe and international side? And how should we think about the growth potential of this business overall in the next couple of years?

Yes. I think it's -- first, I'd like to point out the fact that we have 6 minutes to go and you've asked me about generic for the Teva, which was considered a generics company. So the times have changed because you're good at your job and you know what to ask. And so I think that shows what I've been saying about the transition is happening. But to answer your question, firstly, and to get to the fundamentals, when we lose generic Revlimid, which will be next year, the U.S. business will be 25% of our global generics business and I just want to put that into context of a frame of reference. So I think the generics business in the U.S. has garnered far more attention than it probably should, and it should have less attention going forward regardless of how it performs because just from a math point of view, it will have less impact on the business, whether it's doing really well or has a more challenging year. So that's one. Now saying that, I think our generics business is really set up well, and we'll keep getting better. We have a great pipeline. We've focused on a massive transformation in our manufacturing network, which allows us to improve cost of goods going forward, which helps us manage the margin going forward. So I think we're reset up and we'll keep executing better on that. How we should think about -- how people should think about it is a low single-digit growth over going forward. Some years we'll do a lot better than that. Some years, we won't because you can't predict how many generic launches you're going to have every year across all your markets. We have a very deep pipeline. So I'm confident we'll have a lot. And we're going to launch between '25 and '27 biosimilars, and we have a biosimilar portfolio now that's over 25. So the growth potential for our generics business is there. The reason why I give that rather steady forecast is because we want to manage the business, take into account some of those long-term CAGR, so we can think about how we allocate capital, how we think about OpEx, how we think about our growth rates. The generics business has been a critical element of this transition because it throws off a huge amount of cash. We use that to pay down debt, and we use that to invest in our innovative pipeline. So it's a really good marriage. And I often describe our generics business as our venture capital arm. Its job is to feed the other part of our business, and it does that well. But also the last 2 years, it's helped grow Teva as well. We've had double-digit growth in our generics business. So I think it's gone from being a questionable to being seen as an asset and a good foundation for the company.

That's great. And maybe just a follow-up on the generics pipeline. There's a lot of, I would say, interest into the GLP-1 generic opportunity. So can you remind us of your stance here? Some of your competitors and generics are gearing to the opportunity in Canada and some ex U.S. market next year. Could you take part on this?

Yes. Well, I'll just remind everybody, we were the first to launch a GLP-1 last year. We launched another GLP-1 last month. So we're not talking about what we're going to do. We're actually launching GLP-1s. But I think your question is the next wave of GLP-1s. And we've done what I think is a very clever capital allocation. So we've done a partnership. We did that at the end of last year, where we will be able to launch the GLP-1s in the U.S., Europe and other markets around the world. That's a well-structured deal from a capital allocation because it means we don't have to build manufacturing capability. We don't have to invest in the R&D and that will still be accretive to the gross margin and allow us to benefit from the GLP-1 opportunity. So once again, theme there, thoughtful capital allocation, understanding the growth drivers we have at Teva, not wanting to invest a huge amount of capital in manufacturing. But we're definitely in that market to play in that market as it emerges over the next few years.

Okay. Amazing. Maybe a last question on strategy. So a lot of things have changed since you joined Teva, a lot of capital allocated towards innovation. You started the review of the API business, reaffirmed commitment to profitability targets, lots of products on deleveraging. How should we think about the next strategic shift for the organization? Is it more of everything you implemented so far? Or should we expect a continuation of the organization change?

Yes. I appreciate the question. Look, when we developed the strategy, the Pivot to Growth strategy, have 3 phases: return to growth, accelerate and maintain. And we're in the acceleration phase now. So this strategy like -- I was told a strategy is like a marriage. A consultant told me that. You don't know how much it costs me, but he told me that. And so you should think really carefully before you put a strategy together and then it should last a long time because if you have to change it, it's probably going to cost you quite a lot of money, which is probably similar to marriage. So Pivot to Growth strategy is three chapters. We're in the acceleration phase. We mapped this out in 2023. So we knew what the acceleration phase was going to be. We know what the maintain phase is going to be. So there is no change. There's a sub-study, difference in execution now. There's ruthless execution on our innovative assets. There's a ruthless focus on olanzapine launch. There's ruthless focus on our studies in Phase II and Phase III to get them through the clinic as fast as possible. But we're not having to change and rework something because the idea was we had a 10-year plan, and we wanted to make sure that 10-year plan was robust. Things do slightly deviate. I don't want to say we predicted everything and some things go better, some things go not quite as well as we thought. But we're very much on track to hit our financial targets in 2027. Absolutely. That's 30% operating margin, 5% CAGR revenue growth, 80% cash conversion and net debt to EBITDA of 2x, definitely on track to do that. And I think now people are starting to see the emergence of olanzapine, DARI, emrusolmin, duvakitug, anti-IL15 without BD. But this is a growth company, both on the top line, the gross margin, the EBITDA and on the operating margin. So I think the strategy is doing what it's supposed to do. So we're just going to keep executing it. And that's what we spend a lot of time at Teva. We just execute. Quarter-on-quarter, we execute.

Okay. We are at the end of the time. So thank you very much for joining us today and taking part in the conference.

Thank you. Thank you for your questions.