ITEM 1. BUSINESS

Business Overview

We are a biopharmaceutical company, enabled by a world-class generics business. For over 120 years, our commitment to bettering health has never wavered. From innovating in the fields of neuroscience and immunology to providing complex generic medicines, biosimilars and pharmacy brands worldwide, we are dedicated to addressing patients’ needs, now and in the future.

We operate worldwide, with headquarters in Israel and a significant presence in the United States, Europe and many other markets around the world. Today, our global network of capabilities consists of approximately 34,000 employees across 57 markets.

Teva was incorporated in Israel on February 13, 1944 and is the successor to a number of Israeli corporations, the oldest of which was established in 1901.

Our Business Segments

We operate our business through three segments: United States, Europe and International Markets. Each business segment manages our entire product portfolio in its region, including generics, which includes biosimilars and over-the-counter (“OTC”) products, as well as innovative medicines. This structure enables strong alignment and integration between operations, commercial regions, R&D, and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas.

In addition to these three segments, we have other sources of revenues included in Other Activities, consisting primarily of our distribution business in the United States through Anda, the sale of active pharmaceutical ingredients (“API”) to third parties, an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis and certain contract manufacturing services. For information regarding our major customers, see note 19 to our consolidated financial statements.

Below is an overview of our three business segments:

United States Segment

We are one of the leading generic pharmaceutical companies in the United States. We market more than 350 generic prescription products in more than 1,100 dosage strengths, packaging sizes and forms, including oral solid dosage forms, injectable products, inhaled products, liquids, transdermal patches, ointments and creams. Most of our generic sales in the United States are made to retail drug chains, mail order distributors and wholesalers.

Our innovative medicines portfolio in the United States includes our core therapeutic area of central nervous system (“CNS”), with a strong emphasis on neurodegenerative disorders, movement disorders, migraine, neuropsychiatry, and multiple sclerosis (“MS”). We also have innovative medicines in respiratory, oncology and selected other areas.

Our CNS portfolio includes AUSTEDO^® and AUSTEDO XR^® (deutetrabenazine) tablets for the treatment of neurodegenerative and movement disorders – chorea associated with Huntington’s disease and tardive dyskinesia, AJOVY^® (fremanezumab-vfrm) injection for the preventive treatment of migraine in adults and children and adolescent patients aged 6 to 17 years, UZEDY^® (risperidone) extended-release injectable suspension for the treatment of schizophrenia in adults and bipolar 1 disorder (BD-1) in adults, and COPAXONE^® (glatiramer acetate) injection for the treatment of relapsing forms of MS.

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We maintain a presence in oncology, including innovative, generic and biosimilar medicines, such as TRUXIMA^® (rituximab-abbs) injection for intravenous use, our first oncology biosimilar product in the United States for the treatment of Non-Hodgkin’s Lymphoma (“NHL”) and Chronic Lymphocytic Leukemia (“CLL”), and BENDEKA^® (bendamustine HCl), which is a liquid, low-volume (50 mL) and short-time 10-minute infusion formulation of bendamustine hydrochloride for the treatment of CLL and indolent B-cell NHL, that we licensed from Eagle Pharmaceuticals, Inc. (“Eagle”).

We maintain a presence in the respiratory business by delivering a range of medicines for the treatment of asthma and chronic obstructive pulmonary disease (“COPD”).

Europe Segment

Our Europe segment includes the European Union, the United Kingdom and certain other European countries.

Our generics business (including OTC and biosimilars) makes us one of the leading pharmaceutical companies in Europe. We are not substantially dependent on any single country in Europe for our total generic European revenues, which could be affected by pricing reforms or changes in regulations and public policy.

Although the European markets are diverse and highly fragmented, they share many characteristics that allow us to leverage our pan-European presence and broad portfolio.

Our OTC portfolio in Europe includes global brands such as SUDOCREM^® as well as local and regional brands such as NasenDuo^®, DICLOX FORTE^®, OLFEN^® Max and FLEGAMINA^®.

Our innovative medicines portfolio in Europe focuses on CNS (including migraine) and respiratory therapeutic areas. Our leading products in Europe are AJOVY and COPAXONE. AJOVY was granted EU marketing authorization in 2019 and, as of December 31, 2025, we have launched AJOVY in most European countries. COPAXONE continues to be among the major products for the treatment of MS, although alternative therapies to glatiramer acetate products have been introduced to various European markets. In line with our Pivot to Growth strategy, we are constantly evaluating and optimizing our products portfolio, including through the sale of certain product rights in our Europe segment.

International Markets Segment

Our International Markets segment includes all countries in which we operate other than those in our United States and Europe segments. The International Markets segment covers a substantial portion of the global pharmaceutical industry, including more than 35 countries.

The countries in our International Markets segment include highly regulated, mainly generic markets, such as Canada and Israel, and branded generics-oriented markets, such as Russia and certain Latin America markets. Each market’s strategy is built upon differentiation and addressing the unmet needs of that market. Our integrated sales force enables us to extract synergies across our branded generic, OTC, biosimilars and innovative medicines product offerings and across various channels (e.g., retail, institutional).

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On March 31, 2025, we divested our Teva-Takeda business venture in Japan, which included generic products and legacy products. Since the establishment of the business venture and until the completion of its sale, Teva held 51% of the outstanding common stock of the business venture. On March 31, 2025, we deconsolidated the business venture from our financial statements. For additional information, see note 2 and note 22 to our consolidated financial statements.

Our innovative medicines portfolio in our International Markets segment focuses on three main areas: CNS (including migraine), respiratory and oncology. We launched AJOVY in certain countries within our International Markets segment, including in Canada, Japan, Australia, Israel, South Korea, Brazil and others. AUSTEDO was launched in China and Israel during 2021 and in Brazil in 2022. In April 2025, AUSTEDO received marketing authorization in South Korea.

Pivot to Growth Strategy

In 2025, we continued to execute on the four key pillars of our “Pivot to Growth” strategy, announced in May 2023. As part of this strategy, in 2025, we entered the strategy’s “Accelerate Growth” phase, during which we focus on growing our innovative portfolio, aligning capital allocation to invest in activities we expect to have the highest value, and modernizing our organization and operations to drive both efficiency and cost savings:

Artificial Intelligence Initiatives

We are committed to integrating, where appropriate, artificial intelligence (“AI”) technologies in our operations, in an effort to deliver innovative solutions to our customers, patients and stakeholders. Our initiatives include leveraging machine learning and generative AI to optimize internal processes and operations, strengthen risk management, and support product research and development. We selectively apply AI across our value chain where it can drive meaningful value, including for clinical trial planning and management, research and development and drug discovery, manufacturing and supply chain automation, financial forecasting, and customer engagement. These efforts are designed to reduce operational complexity and costs, and unlock new growth opportunities while maintaining a strong focus on responsible and ethical AI practices.

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Our Product Portfolio and Business Offering

Our product and service portfolio includes generic medicines, biosimilar medicines, innovative medicines, OTC products, a distribution business, API and contract manufacturing. Each region manages the entire range of products and services offered in its area, and our generics, innovative, biosimilars and OTC franchise units optimize our pipeline and product lifecycle across therapeutic areas. In most markets in which we operate, we use an integrated and comprehensive marketing model, offering a broad portfolio of products, including generic products, innovative medicines, biosimilars and OTC products. As part of our Pivot to Growth strategy, we intend to divest our API business, in order to focus on our core business strengths and capital allocation towards growth engines and innovation.

Generic Medicines

Generic medicines are the chemical and therapeutic equivalents of originator medicines and are typically more affordable in comparison to the originator’s products. Generic medicines are required to meet similar governmental requirements as their brand-name equivalents, such as those relating to current Good Manufacturing Practices (“cGMP”), manufacturing processes and health authorities’ inspections, and must receive regulatory approval prior to their sale in any given country. Generic medicines may be manufactured and marketed if relevant patents on their brand-name equivalents (and any additional government-mandated market exclusivity periods) have expired or have been challenged or otherwise circumvented.

We develop, manufacture and sell generic medicines in a variety of dosage forms, including tablets, capsules, injectables, inhalants, liquids, transdermal patches, ointments and creams. We offer a broad range of basic chemical entities, as well as specialized product families, such as sterile products, hormones, high-potency drugs and cytotoxic substances, in both parenteral and solid dosage forms. We also offer generic products with medical devices and combination products.

Our generics business has a wide-reaching commercial presence. We have a top three leadership position in many countries, including the United States and some key European markets. We have a robust product portfolio, comprehensive R&D capabilities and product pipeline, and a global operational network, which enables us to execute key generic launches to further expand our product pipeline and diversify our revenue stream. We use these capabilities to mitigate the effect of price erosion on our generics business.

When considering whether to develop a generic medicine, we take into account a number of factors, including regional and local patient and customer needs, our overall strategy, R&D and manufacturing capabilities, regulatory considerations, commercial factors and the intellectual property landscape. We will challenge patents when appropriate, if we believe they are either invalid or would not be infringed by our generic version. We may seek alliances to acquire rights to products we do not have in our portfolio, to share development costs or litigation risks, or to resolve patent and regulatory barriers to entry.

In recent years, including as part of our Pivot to Growth strategy, we have been optimizing our global generics portfolio through product discontinuation and cost-structure improvements, sale of certain product rights, to continue focusing on pipeline optimization and high-value generics, including complex generics. This has resulted in the ongoing network optimization of our generics business, including our manufacturing and supply network, and in the closure or divestment of a significant number of manufacturing plants around the world in recent years.

In markets such as the United States, the United Kingdom, Canada, the Netherlands and Israel, generic medicines may be substituted by the pharmacist for their brand name equivalent or according to their prescribed International Nonproprietary Name (“INN”). In these so-called “pure generic” markets, physicians and patients have little control over the choice of generic manufacturer, and consequently generic medicines are not actively marketed or promoted to physicians or consumers. Instead, the relationship between the manufacturer and

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pharmacy chains, distributors, health funds and other health insurers is critical. Many of these markets have automatic substitution models when generics are available as alternatives to brands. In Russia, Turkey, Ukraine, Kazakhstan and certain Latin American and European countries, generic medicines are generally sold under brand names alongside the originator brand. These markets are referred to as “branded generic” markets and in certain cases are “out of pocket” markets in which consumers can pay for a particular branded generic medicine (as opposed to government or privately funded medical health insurance), often at the recommendation of their physician. Branded generic products are actively promoted and a sales force is necessary to create and maintain brand awareness. Other markets, such as Germany, France, Italy and Spain, are hybrid markets with elements of both approaches.

Our position in the generics market has been supported by our global R&D function, as well as our API R&D and manufacturing activities, which provide vertical integration for many of our products. For information about our product launches and pipeline of generic medicines in the United States and Europe, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Segment Information—United States Segment” and “Item 7—Management’s Discussions and Analysis of Financial Condition and Results of Operations—Segment Information—Europe Segment.”

Biologic medicines are large and complex medicines produced by or made from living cells or organisms. Biosimilars are highly similar to the reference biologic, in both structure and function (e.g., pharmacodynamics, pharmacokinetics, safety, efficacy and immunogenicity) and, for any approved uses, have no clinically meaningful differences from the reference product in terms of safety, purity, and potency.

In recent years, we launched the following biosimilar medicines, including under our strategic collaborations: TRUXIMA^® (rituximab-abbs) (U.S.: 2019; Canada: 2020), HERZUMA^® (trastuzumab-pkrb) (U.S./Canada: 2020), RANIVISIO^® (ranibizumab) (EU/UK: 2022; Canada: 2023), SIMLANDI^® (adalimumab-ryvk) (U.S.: 2024), SELARSDI (ustekinumab-aekn) (U.S.: 2025), EPYSQLI^® (eculizumab-aagh) (U.S.: 2025) and FYMSKINA^®(ustekinumab) (Germany: 2025).

Below are some developments in our biosimilars business in 2025, as we make progress in expanding our global biosimilars portfolio and strategic collaborations, and in optimizing our capital resources, in line with our Pivot to Growth strategy:

On January 10, 2025, we announced that we entered into a strategic partnership with Samsung Bioepis for the commercialization of EPYSQLI^® (eculizumab), Samsung Bioepis’s biosimilar to Soliris^® (eculizumab-aagh) in the U.S., which was available and launched in the U.S. on April 7, 2025, for the treatment of patients with paroxysmal nocturnal hemoglobinuria (PNH), atypical hemolytic uremic syndrome (aHUS) and generalized myasthenia gravis (gMG). Under the terms of the agreement, Samsung Bioepis will be responsible for the development, regulatory registration, manufacture and supply of the product, and Teva will be responsible for commercialization of the product in the U.S.

On January 13, 2025, we announced we entered into a collaboration agreement with Formycon for the commercialization of FYB203, Formycon’s biosimilar candidate to Eylea^® (aflibercept) in Europe (excluding Italy), the United Kingdom, Switzerland and in Israel, for the treatment of neovascular age-related macular degeneration (nAMD) and other severe retinal diseases. Under the terms of the agreement, Teva will lead the commercialization of FYB203 in the designated regions, to be marketed under the brand name AHZANTIVE^®.

On October 20, 2025, we announced we entered into a collaboration agreement with Prestige Biopharma for the commercialization of Tuznue^®, Prestige’s biosimilar to Herceptin^® (trastuzumab), across a majority of European markets. Tuznue^® is approved in the EU for the treatment of breast cancer and metastatic gastric cancer.

On November 25, 2025, we received European Medicines Agency (“EMA”) approvals for PONLIMSI^® (denosumab), our biosimilar to Prolia^® and for DEGEVMA^® (denosumab), our biosimilar to Xgeva^®.

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For information on our biosimilar products pipeline, see “—Research and Development” below.

Innovative Medicines

Our innovative medicines business is focused on delivering innovative solutions to patients and providers via medicines, devices and services in key regions and markets around the world, and includes our core therapeutic area of CNS, with a strong emphasis on neurodegenerative disorders, neuropsychiatry, movement disorders, migraine and MS. We also have innovative medicines in respiratory, oncology and selected other areas.

We deploy medical and sales and marketing professionals within specific therapeutic areas who seek to address the needs of patients and healthcare professionals. We tailor our patient support, payer relations and medical affairs activities to the distinct characteristics of each therapeutic area and medicine.

The U.S. market is the most significant market in our innovative medicines business. In Europe and International Markets, we leverage existing synergies between our innovative medicines business and our generics and OTC businesses.

We have built specialized “Patient Support Programs” in many countries around the world, to help patients adhere to their treatments, improve patient outcomes and, in certain markets, ensure timely delivery of medicines and assist in securing reimbursement. These programs reflect the importance we place on supporting patients and ensuring better medical outcomes for them. We believe that it is important to provide a range of services and solutions tailored to meet the needs of patients according to their specific condition and local market requirements. We believe this capability provides an important competitive advantage in the innovative medicines business.

Below is a description of our key innovative medicines:

CNS (including Movement Disorders and Migraine)

Our CNS portfolio includes AUSTEDO for the treatment of tardive dyskinesia and chorea associated with Huntington’s disease, AJOVY for the preventive treatment of migraine, UZEDY for the treatment of schizophrenia and bipolar 1 disorder, and COPAXONE for the treatment of relapsing forms of MS.

AUSTEDO and AUSTEDO XR

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AJOVY

UZEDY

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COPAXONE

Oncology

Our innovative oncology medicines portfolio mainly includes BENDEKA and TREANDA^® in the United States.

BENDEKA and TREANDA

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Respiratory

Our respiratory portfolio includes rescue and maintenance inhalers in treatment classes, that are most commonly used for patients with asthma and COPD. The list of products includes ProAir^® RespiClick^®, QVAR RediHaler^®, BRALTUS^®, CINQAIR^®/CINQAERO^®, DuoResp^® Spiromax^® and AirDuo^® RespiClick^®.

Our portfolio of inhalers utilizing an innovative multi-dose dry powder inhaler (“MDPI”) platform includes ProAir RespiClick (albuterol sulfate) inhalation powder and AirDuo RespiClick (fluticasone propionate and salmeterol) inhalation powder in the U.S., as well as DuoResp Spiromax (budesonide and formoterol) in Europe.

For information on our innovative medicines pipeline, see “—Research and Development” below.

Other Activities

We have other sources of revenues, consisting primarily of our distribution business in the United States through Anda, the sale of APIs to third parties, an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis and certain contract manufacturing services. Our Other Activities are not included in the United States, Europe or International Markets segments described above.

In alignment with our Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under our United States segment. As a result, from that date, Anda is reported as part of our Other Activities, as described above. Prior period amounts were recast to reflect this change. See note 19 to our consolidated financial statements. Anda, our distribution business in the United States, operates independently and distributes generic and innovative medicines and OTC pharmaceutical products from various manufacturers to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States. Anda competes in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.

We produce approximately 350 APIs both for our own use and for sale to third parties, in many therapeutic areas. APIs used in pharmaceutical products are subject to regulatory oversight by health authorities. We utilize a variety of production technologies, including chemical synthesis, semi-synthetic fermentation, enzymatic synthesis, high potency manufacturing, plant extract technology, peptide synthesis, vitamin D derivatives synthesis and steroids. Our advanced technology and expertise in the field of solid state particle technology enable us to meet specifications for particle size distribution, bulk density, specific surface area and polymorphism, as well as other characteristics.

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On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale. The intention to divest is in alignment with our Pivot to Growth strategy. On November 5, 2025, we announced that exclusive discussions with a selected buyer on the sale have terminated, and that Teva has initiated a renewed sales process, maintaining our strategic intention to divest our API business. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all.

We provide contract manufacturing services related to products divested in connection with the sale of certain business lines, as well as other miscellaneous items. Our Other Activities are not included in our United States, Europe and International Markets segments described above.

Research and Development

Our R&D activities span the breadth of our business, including innovative medicines, generic medicines (finished goods and API), biosimilars and OTC medicines.

Our R&D activities are concentrated under one global R&D group with overall responsibility for innovative medicines, generic medicines and biosimilars, with a focus on enabling efficiency across our global operations.

Our innovative R&D product pipeline is focused on biologic and small molecule products. Innovative medicines development activities include preclinical assessment (including toxicology, pharmacokinetics, pharmacodynamics and pharmacology studies), clinical development (including pharmacology and the design, execution and analysis of global safety and efficacy trials), as well as regulatory strategy to deliver registration of our pipeline products. We develop novel innovative medicines in our core therapeutic and disease focus areas. We have neuroscience projects in areas such as neuropsychiatry, migraine and movement disorders/neurodegeneration. Our immunology projects include both novel compounds and delivery systems designed to address unmet patient needs.

We develop generic products for our United States, Europe and International Markets segments. Our focus is on high-value generics and complex formulations with complex technologies, which have higher barriers to entry. Generic R&D activities, which are carried out in development centers located around the world, include product formulation, analytical method development, stability testing, management of bioequivalence, bio-analytical studies, other clinical studies and registration of generic drugs in all of the markets where we operate. We also operate several clinics where most of our bioequivalence studies are performed as well as most of our Phase 1 studies for innovative medicines. We have more than 900 generic products in our pre-approved global pipeline, which includes products in all stages of the approval process: pre-submission, post-submission and after tentative approval.

In addition, our generic R&D supports our OTC business in developing OTC products, as well as in overseeing the work performed by contract developers.

Our current R&D capabilities include solid oral dosage forms (such as tablets and capsules), inhalation, semi-solid and liquid formulations (such as ointments and creams), sterile formulations and other dosage forms, and delivery systems, such as matrix systems, special coating systems for sustained release products, orally disintegrating systems, sterile systems, such as vials, syringes, blow-fill-seal systems, long-acting release injectable, transdermal patches, drug device combinations and nasal delivery systems.

We pursue biosimilar pipeline projects in other therapeutic and disease areas that leverage our global R&D and commercial areas of expertise. Biosimilar development activities, such as analytical method development, testing for analytical biosimilarity, pre-clinical work, chemical manufacturing and control, clinical studies and regulatory strategy, are conducted either in Teva’s various global development sites, or through our collaborations and strategic partnerships as mentioned below (see note 2 to our consolidated financial statements).

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Our API R&D specializes in the development of processes and physical compound characterization for the manufacturing of generic and innovative APIs, including intermediates, synthetic and fermentation products both for internal use and for external customers. Our facilities in various locations worldwide include one large development center focusing on synthetic products, three centers with specific expertise specializing in fermentation, semi-synthetic products and high-potency APIs, and a center for oligonucleotides and peptides. Our substantial investment in API R&D generates a steady flow of API products, supporting the timely introduction of generic products to market in compliance with increasing regulatory requirements. The API R&D division also seeks methods to continuously reduce API production costs, enabling us to improve our cost structure. On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale.

In line with our Pivot to Growth strategy, and our focus on internal growth that leverages our R&D capabilities, we have entered into, and expect to pursue, in-licensing, acquisition, collaboration, funding and other strategic opportunities to supplement and expand our existing innovative medicines and biosimilar pipeline (e.g., the transactions with mAbxience, Launch Therapeutics, Alvotech, Modag, Sanofi, Royalty Pharma and Biolojic). In parallel, we evaluate and expand the development scope of our existing R&D pipeline products as well as our existing products for submission in additional markets and additional indications.

Innovative Medicines Pipeline

Below is a description of key products in our innovative medicines pipeline as of January 26, 2026:

Biosimilar Products Pipeline

We have additional biosimilar products in development internally and with our partners that are in various stages of development, including confirmatory clinical trials for biosimilars to Xolair^® (omalizumab); to Entyvio^® (vedolizumab) and Entyvio^® SC (vedolizumab), which are in collaboration with Alvotech for the U.S. market; and TEV-‘333 and TEV-‘316, both in collaboration with mAbxience. Our proposed biosimilar to Prolia^® (denosumab) and to Xgeva^® (denosumab) were submitted for regulatory review in the U.S. Our proposed biosimilars to Simponi^®, Simponi Aria^® (golimumab), and Eylea^® (aflibercept), which are in collaboration with Alvotech, were submitted for regulatory review in the U.S.

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Operations

We operate our business globally and believe that our global infrastructure provides us with the following capabilities and advantages:

These capabilities provide us with the means to respond on a global scale to a wide range of therapeutic and commercial requirements of patients, customers and healthcare providers.

Pharmaceutical Production

We operate 33 finished dosage and packaging pharmaceutical plants in 21 countries. These plants manufacture solid dosage forms, sterile injectables, liquids, semi-solids, inhalers, transdermal patches and other medicinal products. In 2025, we produced approximately 66 billion tablets and capsules, and approximately 600 million sterile units.

The vast majority of our production capacity of our manufacturing sites is located in North America, Europe, Latin America, India and Israel.

We use several external contract manufacturers to achieve operational and cost benefits. We continue to strengthen our third-party operations unit to strategically work with our supplier base in order to meet cost, supply security and quality targets on a sustainable basis in alignment with our global procurement organization.

Our policy is to maintain multiple supply sources for APIs to appropriately mitigate risk in our supply chain to the extent possible. However, our ability to do so may be limited by regulatory and other requirements.

In recent years, we have closed or divested a significant number of manufacturing plants in the United States, Europe, Israel, Japan and India in connection with a restructuring plan and our ongoing efforts to consolidate our manufacturing and supply network.

Raw Materials for Pharmaceutical Production

In general, we purchase our raw materials and supplies required for the production of our products in the open market. For some products, we purchase such raw materials and supplies from one source (the only source available to us) or a single source (the only approved source among many available to us), thereby requiring us to obtain such raw materials and supplies from that particular source. Where possible, we mitigate our raw material supply risks through inventory management and alternative sourcing strategies. See also “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Macroeconomic Environment.”

We source a portion of our APIs from our own manufacturing facilities. Additional APIs are purchased from suppliers located in Europe, Asia and the Americas. We have in place a supplier audit program to provide assurance that our suppliers meet regulatory expectations and are able to fulfill the requirements of our global operations.

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We currently have 13 API production facilities, producing approximately 350 APIs in various therapeutic areas. Our API intellectual property portfolio includes hundreds of granted patents and pending applications.

We have expertise in a variety of production technologies, including chemical synthesis, semi-synthetic fermentation, enzymatic synthesis, high-potency manufacturing, plant extract technology, peptides synthesis, vitamin D derivatives synthesis and steroids. Our advanced technology and expertise in the field of solid-state particle technology enable us to meet specifications for particle size distribution, bulk density, specific surface area and polymorphism, as well as other characteristics.

Our API facilities are required to comply with applicable cGMP requirements under U.S., European, Japanese and other applicable quality standards. Our API plants are regularly inspected by the FDA, European agencies and other authorities, as applicable. See also “Other Activities” above.

Patents and Other Intellectual Property Rights

We rely on a combination of patents, trademarks, copyrights, trade secrets and other proprietary know-how and regulatory exclusivities, as well as contractual protections, to establish and protect our intellectual property rights. We own or license numerous patents covering our products in the United States and other countries. We have also developed many brand names and own many trademarks covering our products. We consider the overall protection of our intellectual property rights to be of material value and act to protect these rights from infringement. We license or assign certain intellectual property rights to third parties in connection with certain business transactions.

Environment, Health and Safety

We are committed to business practices that promote socially and environmentally responsible economic growth. In 2025, we made significant progress on our sustainability strategy under Teva’s Healthy Future framework.

On Environment, Health and Safety (“EHS”), among other actions in 2025:

Quality

We are committed to complying with global quality and safety requirements and guidance by developing and manufacturing our products in accordance with Current Good Clinical Practices (cGCP), Current Good Laboratory Practices (cGLP), and Current Good Manufacturing Practices (cGMP), thereby seeking to leverage safety, effectiveness and quality as a competitive advantage. In 2025, we continued our commitment to comply

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with regulatory authorities’ expectations in our manufacturing sites across the globe. We actively engage in discussions with authorities to mitigate potential drug shortages and continue to focus on ensuring our systems and processes are designed to meet current regulatory expectations, are suitable to facilitate intended operations, and sustainable to ensure a reliable supply of quality products globally. Our Quality Management System (QMS) makes quality a priority, and we seek to ensure that quality is embedded in our corporate culture through employee training and is reflected in our daily operations.

Competition

Sales of generic medicines have benefited from increasing awareness and acceptance on the part of healthcare insurers and institutions, consumers, physicians and pharmacists around the world. Factors contributing to this increased awareness are the passage of legislation permitting or encouraging generic substitution and the publication by regulatory authorities of lists of equivalent pharmaceuticals, which provide physicians and pharmacists with generic alternatives. In addition, various government agencies and many private managed care or insurance programs encourage the substitution of brand-name pharmaceuticals with generic products as a cost-savings measure in the purchase of, or reimbursement for, prescription pharmaceuticals.

In the United States, we are subject to competition in the generic drug market from domestic and international generic drug manufacturers and brand-name pharmaceutical companies through introduction of next-generation medicines, authorized generics, existing brand equivalents and manufacturers of therapeutically similar drugs. An increase in FDA approvals for existing generic products is increasing the competition on our base generic products. Price competition from additional generic versions of the same product typically results in margin pressures.

The European market continues to be competitive, especially in terms of pricing, quality standards, customer service and portfolio relevance. We are among a few companies with a pan-European footprint, while most of our European competitors focus on a limited number of selected markets or business lines. Our leadership position in Europe allows us to be a reliable partner to fulfill the needs of patients, physicians, pharmacies, customers and payers.

In our International Markets segment, our global scale and broad portfolio give us a competitive advantage over local competitors, allowing us to optimize our offerings through a combination of high-quality medicines and unique go-to-market approaches. In some markets, we face increased competition with generic companies competing based on pricing, time to market, reputation and customer service.

The biosimilars business is also highly competitive and continues to evolve as intellectual property protections for biological products continue to expire in the United States. While we believe that our biologics knowledge and experience provide us with competitive advantages, we anticipate increased competition in the biosimilar space, also following the lowering of barriers to enter, demonstrated by the recent FDA’s announcement to accelerate biosimilar development. Additional risks related to the commercialization of our prospective biosimilars include the number of competitors, potential for steeper than anticipated price erosion, and intellectual property challenges that may impact timely commercialization. There is also a risk of lower or slower uptake due to various factors that may differ among biosimilars such as competitive practices and level of financial incentives (payer or government).

Our innovative medicines business faces intense competition from both innovative and generic pharmaceutical companies. Our innovative medicines business may continue to be affected by price reforms and changes in the political landscape. See “Regulation” section below. We believe that our primary competitive advantages include our commercial marketing teams, global R&D capabilities and strategic collaborations, the body of scientific evidence substantiating the safety and efficacy of our various medicines, our patient-centric solutions, physician and patient experience with our medicines and our medical capabilities, which are tailored to our product offerings and markets.

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Human Capital Management Section

Our People

Our employees are the heart of our Company. In the highly competitive pharmaceutical industry, it is imperative that we attract, develop and retain top talent on an ongoing basis. This objective supports our Pivot to Growth strategy by enabling Teva to: drive growth through innovation and R&D capabilities, provide reliable supply for patients, and have efficient execution across our global footprint. To do this, we seek to make Teva an inclusive, diverse and safe workplace, with meaningful compensation, benefits and wellbeing programs, and we offer training and leadership development programs that foster career growth.

Oversight

Our Human Resources and Compensation Committee, Compliance Committee and Board of Directors oversee culture and talent at Teva, including human capital strategy and execution in such areas as employee engagement, training and development, recruiting and turnover, leadership development and succession planning. Management regularly updates our Board of Directors on internal metrics in these areas.

Employees

As of December 31, 2025, Teva’s global workforce consisted of 33,950 employees.

As a global company, we have employees in 57 countries around the world, representing a wide range of nationalities. In certain countries, we are party to collective bargaining agreements with certain groups of employees.

The following table presents our workforce headcount by employment type:

The following table presents our workforce headcount by geographic area (excluding contractors)⁽¹⁾:

We monitor our employee turnover on an ongoing basis to inform our understanding of our retention, recruitment and talent engagement.

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Under the Teva Transformation programs announced on May 7, 2025, we expect to achieve cost savings through a variety of initiatives including examining practices and efficiencies in methods of working, reduction in headcount and optimizing external spend. The reduction in workforce headcount in 2025 is a result of these Transformation programs. For additional information, see note 15 to our consolidated financial statements.

Inclusion and Diversity

Teva believes that when people from different viewpoints come together, bringing unique perspectives and experiences, we unlock new ideas, drive innovation and create a positive impact for patients worldwide. Providing opportunities and rewarding performance based on merit, is an important part of how we grow and succeed as an organization. Our inclusive practices help ensure that all individuals we work with are supported and empowered to thrive. Inclusion and diversity is woven into many aspects of our business, also, among other things, in order to advance our Pivot to Growth strategy. At Teva we hold a deep respect for each individual, and we are dedicated to nurturing a culture of dignity, fairness and psychological safety. We know that when our people feel respected, they can realize their full potential and apply their unique skills and talents. This not only strengthens individual growth – it also strengthens our organization, fueling our creativity and innovation as we work to improve the health of all people.

By actively seeking qualified candidates from variety of viewpoints and experiences, we seek to build a broad talent pool that reflects the diversity of the patients we serve and supports our ability to understand patient needs and deliver high-quality medicines and services globally. We provide flexible onboarding and a range of leadership and development programs, helping employees grow and advance in their careers based on their needs.

Health and Safety

The health and safety of our employees is critical to our ability to reliably supply medicines to our patients. Our Environment, Health, Safety and Sustainability (EHS&S) Policy and our global Environment, Health and Safety Management System guide our safety practices across all sites.

Employee Career Growth, Training and Development

We invest in employee career growth and development at Teva. Our talent development programs are aimed to benefit employees individually by providing them with the resources they need to enhance their professional and management abilities, develop leadership skills and achieve their career aspirations, which in turn helps us to remain competitive in our industry.

We maintain a range of learning resources to support employees of all levels in developing skills and contributing to Teva’s strategy. Much of our employee training is in-role, amplified by global online training and locally-tailored training modules to meet different challenges, help gain new leadership and essential skills and promote compliance with our policies. By the end of 2025, we rolled out a talent development system based on AI capabilities to match employee skills with development opportunities across the company to employees globally. Through this system, employees can set professional goals, take recommended and tailored learning courses, expand their network, join cross-organizational projects, and explore open roles and career paths across the organization.

Our Teva Grow program for employees provides development in essential soft skills, success in a global setting and company knowledge. We also provide an extensive catalog of lessons from an online learning platform. For Teva managers, we refreshed our development programs to develop the skills, capabilities and mindset required of managers, taking into account our Pivot to Growth strategy.

We focus on succession planning through global talent review processes that identify and accelerate successors’ readiness to fill senior positions across Teva. In order to measure our success, we track the proportion of positions filled with internal successors and other related statistics.

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Compensation, Benefits and Wellbeing

We provide competitive compensation, health and retirement programs for our employees. We offer variable pay in the form of bonuses and stock-based compensation for eligible employees and have one global annual bonus plan.

In 2025, we continued to focus on employee wellbeing. In addition to having our annual global wellbeing month dedicated to raising awareness of the importance of wellbeing, we leveraged practical tools and local programs to address the physical, financial, social and mental health needs of our employees and their families. We offer programs and initiatives that promote healthy nutrition, physical activity and mental wellbeing. For example, our organizations in many countries introduced or expanded employee assistance programs to cover psychological support and counseling for employees and their families. In addition, in the U.S., we leverage a preventative medicine application. This application fuses AI technology with medical protocols and expertise to provide employees with health check-ups adapted to their age, health plan, location, risk factors and personal history.

Employee Engagement and Satisfaction

We have been monitoring employee morale in many ways, including by conducting our annual employee survey. In 2025, we achieved an 83% response rate. Results of the survey show that employee satisfaction across the survey dimensions have generally remained stable. Employees reported feeling connected with Teva’s purpose and values, confident in Teva’s positive impact on society, and believing they are treated with respect. In addition, they reported feeling they are able to be themselves at work, they are treated fairly regardless of personal background or characteristics, and that Teva promotes a culture of diversity and inclusiveness.

Management reviews the survey results closely to determine areas for improvement and creates action plans to address any gaps. Survey results are communicated to employees though global communications and town halls and shared with our Board of Directors.

Regulation

United States

Food and Drug Administration and the Drug Enforcement Administration

All pharmaceutical manufacturers selling products in the United States are subject to extensive regulation by the United States federal government, principally by the Food and Drug Administration (“FDA”) and the Drug Enforcement Administration (“DEA”), and, to a lesser extent, by state and local governments. The Federal Food, Drug, and Cosmetic Act (“FDCA”), the Controlled Substances Act (“CSA”) and other federal and state statutes and regulations govern or influence the development, manufacture, testing, safety, efficacy, labeling, approval, storage, distribution, recordkeeping, advertising, promotion, sale, import and export of our products. Our facilities are periodically inspected by the FDA, which has extensive enforcement powers over the activities of pharmaceutical manufacturers. Noncompliance with applicable requirements may result in fines, criminal penalties, civil injunction against shipment of products, recall and seizure of products, total or partial suspension of production, sale or import of products, refusal of the government to enter into supply contracts or to approve New Drug Applications (“NDAs”), Abbreviated New Drug Applications (“ANDAs”) or Biologics License Application (“BLAs”) and criminal prosecution by the U.S. Department of Justice (“DOJ”). The FDA also has the authority to deny or revoke approvals of marketing applications and the power to halt the operations of non-complying manufacturers. Any failure to comply with applicable FDA policies and regulations could have a material adverse effect on our operations.

FDA approval is required before any “new drug” (including generic versions of previously approved drugs) may be marketed, including new strengths, dosage forms and formulations of previously approved drugs.

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Applications for FDA approval must contain information relating to bioequivalence (for generics), safety, toxicity and efficacy (for new drugs), product formulation, raw material suppliers, stability, manufacturing processes, packaging, labeling and quality control. FDA procedures generally require that commercial manufacturing equipment be used to produce test batches for FDA approval. The FDA also requires validation of manufacturing processes so that a company may market new products. The FDA conducts pre-approval and post-approval reviews and plant inspections to ensure compliance with regulatory standards and to verify the quality and safety of products.

The federal CSA and its implementing regulations establish a closed system and highly regulated system that limits the handling and distribution of controlled substances. The CSA imposes registration, security, recordkeeping and reporting, storage, manufacturing, distribution, importation and other requirements upon legitimate handlers of controlled substances under the oversight of the DEA. The DEA categorizes drugs, substances, and certain chemicals used to make drugs into one of five schedules—Schedule I, II, III, IV, or V —depending on the drug’s acceptable medical use and the abuse or dependency potential. Facilities that manufacture, distribute, conduct chemical analysis, import or export any controlled substance must register annually with the DEA. The DEA performs an inspection of all entities requesting a DEA registration prior to issuing a controlled substance registration for review of the facility and material security, material handling procedures, record keeping, and reporting procedures. The DEA also performs cyclical inspections of all DEA registrants to review accountability, record keeping, and security. Failure to maintain compliance with applicable requirements, particularly as manifested in the loss or diversion of controlled substances, can result in enforcement actions, civil penalties, refusal to renew necessary registrations or the initiation of proceedings to revoke those registrations. In certain circumstances, violations could lead to criminal prosecution.

The Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) established the procedures for obtaining FDA approval for generic drug products. This act also provides market exclusivity provisions that can delay the approval of certain NDAs and ANDAs. One such provision allows a five-year period of data exclusivity for NDAs containing new chemical entities and a three-year period of market exclusivity for NDAs (including different dosage forms) containing new clinical trial(s) essential to the approval of the application. The Orphan Drug Act grants seven years of exclusive marketing rights to a specific drug for treatment of a rare disease or condition. The FDCA defines “rare disease or condition” as one that either affects fewer than 200,000 people in the U.S., or for which a manufacturer has no reasonable expectation of recovering drug treatment research and development costs. Market exclusivity provisions are distinct from patent protections and apply equally to patented and non-patented drug products. Another provision of the Hatch-Waxman Act extends certain patents for up to five years due to the time spent in clinical trials and the FDA review process.

Under the Hatch-Waxman Act, any company submitting an ANDA or an NDA under Section 505(b)(2) of the FDCA (i.e., an NDA that, similar to an ANDA, relies, in whole or in part, on FDA’s prior approval of another company’s drug product; also known as a “505(b)(2) application”) must make certain certifications with respect to the patent status of the drug for which it is seeking approval. In the event that such applicant plans to challenge the validity or enforceability of an existing listed patent or asserts that the proposed product does not infringe an existing listed patent, it files a “Paragraph IV” certification. In the case of ANDAs, the Hatch-Waxman Act provides for a potential 180-day period of generic exclusivity for the first company to file a “substantially complete” ANDA with a Paragraph IV certification. This filing triggers a regulatory process in which the FDA is required to delay the final approval of subsequently filed ANDAs containing Paragraph IV certifications until 180 days after the first commercial marketing. For both ANDAs and 505(b)(2) applications, when litigation is brought by the patent holder, in response to this Paragraph IV certification, the FDA generally may not approve the ANDA or 505(b)(2) application until the earlier of 30 months or a court decision finding the patent invalid, not infringed or unenforceable. Submission of an ANDA or a 505(b)(2) application with a Paragraph IV certification can result in protracted and expensive patent litigation.

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Products manufactured outside the United States and marketed in the United States are subject to all of the above regulations, as well as to FDA, DEA and U.S. customs regulations at the port of entry. Products marketed outside the United States that are manufactured in the United States are additionally subject to various export statutes and regulations, as well as regulation by the country in which the products are to be sold.

Our products also include biopharmaceutical products that are comparable to brand-name biologics, as well as products that are approved as biosimilar versions of brand-name biological products. While regulations are still being developed by the FDA relating to the Biologics Price Competition and Innovation Act of 2009 (“BCPIA”), which created a statutory pathway for the approval of biosimilar versions of brand-name biological products. The BPCIA authorizes the FDA to approve “abbreviated” BLAs for products whose sponsors demonstrate biosimilarity to reference products previously approved under BLAs. Biosimilarity to an approved reference product requires, among other things, that there are no differences in route of administration, dosage, form and strength and conditions of use. The FDA may also separately determine whether biosimilar products are interchangeable with their reference products. To be interchangeable, a biosimilar product must have the same clinical result as the reference product. The BPCIA provides a framework for addressing potential patent infringement disputes. The FDA has issued multiple guidance documents to provide a roadmap for demonstrating the interchangeability and development of biosimilar products.

In September 2022, the FDA User Fee Reauthorization Act of 2022 (“FUFRA”) was enacted in the United States. The FUFRA authorizes the FDA to collect user fees from parties that submit drug, biosimilar or medical device product applications for review or that are named in approved applications as the sponsor of certain products through FDA fiscal year 2027. These fees are used by the FDA to support the product review process at the agency. Various fees must be paid by these manufacturers at different times, such as annually and with the submission of different types of applications. In return for this additional funding, the FDA has entered into agreements with each of the affected industries (known as the “user fee agreements”) that commit the agency to interacting with manufacturers and reviewing applications such as NDAs, ANDAs and BLAs in certain ways, and taking action on those applications at certain times. The agency is obligated to set specific timelines to communicate with companies, meet with company product sponsors during the review process and take action on their applications.

The overall regulatory environment with respect to pharmaceutical advertising remains highly uncertain and increasingly complex. Recent regulatory activity has focused on tightening oversight of pharmaceutical advertising. On September 9, 2025, the Administration, led by HHS and the FDA, announced a new initiative to address direct-to-consumer (DTC) advertising. Following the announcement, the FDA issued regulatory correspondence to certain pharmaceutical manufacturers regarding DTC compliance. The Company received two such letters, responded within the timeframe set out by FDA, and is actively monitoring these developments.

The Inflation Reduction Act and Certain Government Programs

The Inflation Reduction Act (“IRA”) of 2022 was signed into law in August 2022. The IRA restructures Medicare’s benefit design and requires manufacturers of certain drugs to engage in price setting discussions with Medicare, imposes rebates and discount requirements under Medicare Part B and Medicare Part D, and replaces the Part D coverage gap discount program with a new discounting program. In particular, the U.S. Department of Health and Human Services (“HHS”) is directed to select a subset of medicines with the highest annual expenditures to Medicare Parts B and D that have been on the market for 9 years (or 13 years for biologics) without an available generic (or biosimilar) on the market. Drugs with an available generic or biosimilar, certain drugs that represent a limited portion of Medicare program spending, drugs with an orphan designation as their only FDA approved indication, and all plasma-derived products are exempt from the process. The law allows HHS to levy an excise tax and civil monetary penalties against non-compliant manufacturers or those who refuse to participate in the process. The CMS selected 10 Part D drugs for the first round in August 2024 which became effective January 1, 2026. The second set of 15 Part D drugs selected by CMS was announced by CMS on January 17, 2025, which list included Teva’s AUSTEDO and AUSTEDO XR. During 2025, Teva and the Centers for Medicare and Medicaid Services (“CMS”) negotiated a maximum fair price for the AUSTEDO products. On November 25, 2025, CMS announced the negotiated ‘Maximum Fair Price’ for the products, which is scheduled to become effective on January 1, 2027 and will apply to eligible Medicare patients.

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The IRA also imposes rebate requirements on manufacturers of single-source generics and other drugs covered under Medicare Part B and Part D where the price increases of the drug outpace inflation. Multisource generics and all products with an average manufacturer’s price less than $100 per year, per individual, are exempt from these inflationary rebate requirements. The CMS will monitor for products with price increases higher than the rate of inflation on a quarterly basis. Rebates will be calculated as the total number of units sold multiplied by the amount the product exceeds the inflation-adjusted price, with 2021 as the base year to measure cumulative changes relative to inflation. Noncompliant manufacturers will be subject to a civil monetary penalty of at least 125% of the calculated rebate amount.

The drug price-setting program is currently subject to legal challenges, including by Teva. On January 15, 2025, Teva filed a lawsuit against CMS in the U.S. District Court for the District of Columbia, alleging that CMS’s implementation of the Drug Price Negotiation Program portion of the IRA is arbitrary and contrary to the plain meaning of the statute, in violation of the Administrative Procedure Act (“APA”), and is therefore unconstitutional. On November 20, 2025, the U.S. District Court for the District of Columbia granted CMS’s motion for summary judgment. Teva is appealing that decision.

The CMS administers the Medicaid drug rebate program, in which pharmaceutical manufacturers pay quarterly rebates to each state Medicaid agency. Generally, for generic drugs marketed under ANDAs, manufacturers (including Teva) are required to rebate 13% of the average manufacturer price, and for products marketed under NDAs or BLAs, manufacturers are required to rebate the greater of 23.1% of the average manufacturer price or the difference between such price and the commercial best price during a specified period. An additional rebate for products marketed under ANDAs, NDAs or BLAs is payable if the average manufacturer price increases at a rate higher than inflation and other methodologies apply to new formulations of existing drugs.

The Health Resources and Services Administration (“HRSA”) administers the Public Health Service’s 340B drug pricing program (the “340B program”). Ongoing and future 340B policy changes may create additional uncertainty for Teva. These may include changes to the level of scrutiny applied by HRSA to enforce any perceived 340B program noncompliance or impose restrictions on manufacturers as to how manufacturers administer their 340B pricing, and what requirements manufacturers can impose on 340B covered entities. Some regulatory restrictions by HRSA are currently subject to legal challenges and may undergo regulatory updates following administration changes or court decisions. Beginning January 1, 2026, drug manufacturers in the first round of Medicare price negotiations may participate in an HRSA pilot program that replaces upfront 340B discounts with retroactive rebates. HRSA may later allow manufacturers in the second round of negotiations to join the program as well. Additionally, state legislators may also enact laws and regulations that restrict how manufacturers administer their 340B pricing and the requirements manufacturers may impose on 340B covered entities. Some states have already enacted such laws and regulations, which are currently subject to legal challenges.

All state Medicaid programs have implemented voluntary supplemental drug rebate programs that may provide states with additional manufacturer rebates in exchange for preferred status on a state’s formulary or for patient populations that are not included in the traditional Medicaid drug benefit coverage. In addition, a number of states, including New York, have enacted legislation that requires entities to pay assessments or taxes on the sale or distribution of opioid medications in order to address the misuse of prescription opioid medications. Finally, a number of states have established Prescription Drug Affordability Boards or similar review boards and implemented IRA-like price controls on pharmaceutical manufacturers. These proposals create new authorities for state regulatory bodies to control prices and/or limit reimbursement for certain drugs. Such efforts may expand to additional states.

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On May 12, 2025, the U.S. Administration directed federal government agencies to pursue most-favored-nation price targets with pharmaceutical manufacturers through an Executive Order titled “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” On July 31, 2025, the Administration followed this Executive Order with letters to seventeen manufacturers (but not to the Company) requesting lower existing prescription drug prices in Medicaid, and to guarantee lower pricing for newly-launched drugs for Medicare, Medicaid, and commercial payers to match the lowest price offered in other developed nations. Starting in late September 2025, some drug manufacturers have announced agreements with the federal government to offer most-favored-nation pricing on certain existing and future products. On November 6, 2025, CMS announced the availability of the “Generating Cost Reductions for U.S. Medicaid (GENEROUS) Model,” a limited duration payment model conducted through the CMS Innovation Center to allow drug manufacturers to voluntarily provide coordinated supplemental rebates to state Medicaid agencies that match international prices in a basket of developed market countries. Failure to participate in the model could result in less favorable Medicaid coverage against competitors that choose to participate.

On December 19, 2025, CMS issued two additional notices of proposed rulemaking to establish mandatory, limited duration Medicare drug pricing models known as the “Global Benchmark for Efficient Drug Pricing (GLOBE) Model” for certain Medicare Part B drugs and the “Guarding U.S. Medicare Against Rising Drug Costs (GUARD) Model” for certain Medicare Part D drugs. Under these proposals, CMS would replace existing domestic inflation-based rebate calculations with new rebate obligations tied to international reference pricing benchmarks in a basket of economically comparable countries. If finalized, the models could require the Company to pay additional rebates for certain of its products, depending on CMS selection criteria and international price levels.

Teva is monitoring these developments and assessing the impact it may have on its business.

Other U.S. Healthcare Laws and Compliance Requirements

In the United States, our current and future operations are subject to regulation by various federal, state and local authorities in addition to the FDA, including but not limited to, CMS, other divisions of the HHS, (e.g., the Office of Inspector General (“OIG”), Office for Civil Rights (“OCR”) and the Health Resources and Service Administration (“HRSA”)), the DOJ, and individual U.S. Attorney offices within the DOJ, and state and local governments. For example, our business practices, including our contractual arrangements and any future sales, marketing and scientific or educational grant programs may be required to comply with federal fraud and abuse laws, transparency requirements, and similar state laws, each as amended, as applicable. Such laws include, without limitation, state and federal fraud and abuse laws, including the federal Antikickback Statute (“AKS”), federal False Claims Act (“FCA”), and transparency laws and regulations related to drug pricing and payments and other transfers of value made to physicians and other healthcare providers.

If our operations are found to be in violation of any such laws or any other governmental regulations that apply, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, integrity oversight and reporting obligations, exclusion from participation in federal and state healthcare programs and responsible individuals may be subject to imprisonment. The civil monetary penalties statute imposes penalties against any person or entity who, among other things, is determined to have presented or caused to be presented a claim to, among others, a federal healthcare program that the person knows or should know is for a medical or other item or service that was not provided as claimed or is false or fraudulent.

Additionally, the federal Physician Payments Sunshine Act (the “Sunshine Act”), and its implementing regulations, require that certain manufacturers of drugs, devices, biological and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program (with certain exceptions) report information related to certain payments or other transfers of value made or distributed to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), certain non-physician practitioners (such as physician assistants and nurse practitioners), and teaching hospitals, or to

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entities or individuals at the request of, or designated on behalf of, the physicians and teaching hospitals and to report annually to CMS certain ownership and investment interests held by physicians and their immediate family members. Failure to report accurately could result in penalties. In addition, many states also govern the reporting of payments or other transfers of value, many which differ from each other in significant ways, are often not pre-empted, and may have a more prohibitive effect than the Sunshine Act, thus further complicating compliance efforts.

Europe

General

In Europe, marketing authorizations for pharmaceutical products may be obtained either through a centralized procedure for a license valid in all member countries of the European Union, which is granted by the EMA, or through national procedures granted by the national competent authorities via a mutual recognition procedure which requires submission of applications in other chosen member states following approval by a so-called reference member state, a decentralized procedure that entails simultaneous submission of applications to chosen member states or occasionally through a local national procedure.

During 2025, we continued to register products in the European Union, primarily using the decentralized procedure (simultaneous submission of applications to chosen member states). We continue to use, on occasion, the mutual recognition and centralized procedures.

The European pharmaceutical industry is highly regulated and much of the legislative and regulatory framework is driven by the European Commission, together with the European Parliament and the Council of Europe. This has many benefits, including the potential to harmonize standards across the complex European market, but it also has the potential to create complexities affecting the entire European market.

European Union

The medicines regulatory framework of the European Union requires that medicinal products, including generic versions of previously approved products and new strengths, dosage forms and formulations of previously approved products, receive a marketing authorization before they can be placed on the market in the European Union. Authorizations are granted after a favorable assessment of quality, safety and efficacy by the respective health authorities. To comply with formal requirements, the application must contain the quality related information of the product (chemical, physical, biological and microbiological data, information about manufacturing process, raw materials, packaging and labelling data, quality control procedures), data confirming product safety (toxicological and pharmacological information), and product efficacy information (clinical studies or clinical trials).

In order to control expenditures on pharmaceuticals, most member states of the European Union regulate the pricing of such products and in some cases limit the range of different forms of a drug available for prescription by national health services. These controls can result in considerable price differences among member states.

In addition to patent protection, exclusivity provisions in the European Union may prevent companies from applying for marketing approval for a generic product for eight years (or 10 years for orphan medicinal products) from the date of the first marketing authorization of the original product in the European Union. Further, the generic product will be barred from market entry (marketing exclusivity) for a further two years, with the possibility of extending the market exclusivity by one additional year under certain circumstances. As part of the European Commission’s review of the general pharmaceutical legislation, the provisions relating to regulatory exclusivity are currently under review. Proposed changes have been published in 2023 and amendments are being discussed. The final amendments are expected in 2026, although the transitional provisions remain unclear.

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The term of certain pharmaceutical patents may be extended in the European Union by up to five years upon grant of Supplementary Protection Certificates (“SPC”). The purpose of this extension is to increase effective patent life (i.e., the period between grant of a marketing authorization and patent expiration) to 15 years.

Subject to the respective pediatric regulation, the holder of an SPC may obtain a further patent term extension of up to six months under certain conditions. This six-month period cannot be claimed if the license holder claims a one-year extension of the period of marketing exclusivity based on the grounds that a new pediatric indication brings a significant clinical benefit in comparison with other existing therapies.

In July 2019, the SPC Manufacturing Waiver Regulation came into force in the European Union (subject to certain conditions) allowing products manufactured prior to SPC expiration to be exempt from SPC infringement if such products are manufactured for export to non-European Union markets or (no earlier than six months before SPC expiry) for launch in the European Union upon expiration of the SPC. This waiver applies from July 2, 2022 to all SPCs that came into effect after July 1, 2019 or, if the SPC was applied for after July 1, 2019, from the date the SPC comes into effect. This legislation was due to be reviewed prior to July 2024, but the review has been delayed.

Orphan designated products, which receive, under certain conditions, a blanket period of 10 years of market exclusivity, may receive an additional two years of exclusivity instead of an extension of the SPC if the requirements of the pediatric regulation are met. The criteria and protection period for orphan designated products are currently under review by the European Commission, as part of the review of the general pharmaceutical legislation referred to above.

The legislation also allows for R&D work during the patent and SPC term for the purpose of developing and submitting registration dossiers.

In November 2020, the European Commission published a “Pharmaceutical Strategy for Europe,” which sets out a suite of policies that will shape the future European regulatory environment. In late 2025, the European Union institutions reached a political agreement on the comprehensive revision of the pharmaceutical legislation. The agreed framework is intended to foster innovation and enhance access, availability of medicines within the EU, while streamlining regulatory requirements. Formal adoption of the legislation is anticipated in 2026, after which a transition period will apply prior to full implementation.

On June 1, 2023, the Unified Patent Court (“UPC”) Agreement and the unitary patent regulations entered into force. The UPC is a new European court with jurisdiction over disputes relating to European patents and currently covers 18 European Union participating Member States. During an initial transitional period ending in 2030 (which may be extended to 2037), both the UPC and national courts have jurisdiction over infringement or invalidity actions relating to European patents, unless the patentee has opted-out the patent from the jurisdiction of the UPC. After the transitional period, the UPC will have exclusive competence for disputes relating to European patents, without a possibility to opt-out. The unitary patent regulations introduced a new option for applicants at the European patent office to request the grant of a European patent with unitary effect over the 18 European Union participating Member States (instead of the traditional combination of national designations).

United Kingdom

The United Kingdom regulates medicines and medical devices independently from the European Union. The United Kingdom’s Medicines and Healthcare Products Regulatory Agency (“MHRA”) handles the approval process and regulatory compliance requirements for products supplied to United Kingdom patients, the MHRA’s regulatory process still generally follows those of the EMA. We continue to have processes in place in the United Kingdom that are separate from the EMA, which maintain our ability to supply medicines to patients in the United Kingdom and to supply medicines made in the United Kingdom to other markets.

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Medical Devices

Although not subject to FDA regulation as standalone medical devices, certain of our products are regulated as medical devices in the European Union under the European Union Medical Device Regulation (“EU MDR”). The EU MDR specifies risk classification rules and rules related to clinical studies, post-marketing surveillance, device traceability and oversight by notified bodies. In the UK, the previous EU legislation, as adopted into UK law, remains applicable to a large extent. However, the government has announced proposals to progressively reform the regime for medical devices, with new requirements for post-market surveillance of medical devices becoming effective in June 2025 and further changes planned for the next few years.

International Markets

In addition to regulations in the United States and Europe, we, and our partners, are subject to a variety of regulations in other jurisdictions governing, among other things, clinical trials and any commercial sales, marketing and distribution of our products. Such regulations may be similar or, in some cases, more stringent than those applicable in the United States and Europe.

Whether or not we, or our partners, obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of such product in those countries. The requirements and processes governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country. In addition, we, and our partners, may be subject to foreign laws and regulations and other compliance requirements, including, without limitation, anti-kickback laws, false claims laws and other fraud and abuse laws, as well as laws and regulations requiring transparency of pricing and marketing information and governing the privacy and security of personal information. The majority of the countries in which we market our products have enacted and/or amended privacy regulation.

If we, or our partners, fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.

Miscellaneous Regulatory Matters

We are subject to various national, regional and local laws of general applicability, such as laws regulating working conditions. We are also subject to country specific data protection laws and regulations applicable to the collection and processing of personal data around the world. In addition, we are subject to various national, regional and local environmental protection laws and regulations, including those governing sustainability related matters, such as mandatory reporting and due diligence obligations. We are also subject to various national, regional and local laws regulating how we interact with healthcare professionals and representatives of government that impact our promotional and other commercial activities. Additionally, we may be subject to various new national, regional and local laws and regulations, such as the NIS2 Directive, the Cyber Resilience Act, the Digital Services Act, the Data Act, the Data Governance Act, the California Climate Corporate Date Accountability Act, the California Climate-Related Financial Risk Act, the EU’s Directive No. 2464/2022 on Corporate Sustainability Reporting (“CSRD”), the European Health Data Space or the revision of the European Pharmaceutical Legislation (not agreed yet), which could impact our business activities and processes. Many countries outside the EU have enacted cybersecurity laws, which laws may relate to Teva depending on the circumstances.

Data exclusivity provisions exist in many countries around the world and may be introduced in additional countries in the future, although their application is not uniform. In general, these exclusivity provisions prevent the approval and/or submission of generic drug applications to the health authorities for a fixed period of time following the first approval of the brand-name product in that country. As these exclusivity provisions operate independently of patent exclusivity, they may prevent the submission of generic drug applications for some products even after the patent protection has expired.

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As a result “Schrems II”, which invalidated the adequacy of the EU-US Privacy Shield Certification Programme under the EU General Data Protection Regulation (“GDPR”), companies are required to conduct and document comprehensive data transfer assessments, and if supplementary measures cannot address an adequate level of protection, then such transfers shall be restricted. In July 2023, the European Commission determined that the Data Privacy Framework (“DPF”), a replacement for the invalidated EU-US Privacy Shield, ensures an adequate level of protection for EU personal data transferred to the United States. Today, many other countries outside the EU are also implementing their own personal data transfer framework, and as such we continue to monitor global developments to address requirements regarding international data transfers. On August 1, 2024, the EU Artificial Intelligence Act Regulation (EU) 2024/1689 came into force, which regulates companies’ use of artificial intelligence systems and general purpose AI models. Requirements of the AI Act come into force in various phases over the next few years, with the bulk of the obligations on AI systems coming into force on August 2, 2026. We have already begun to prepare for implementation once the relevant provisions come into force and are continuously monitoring further regulatory developments in the area both within the EU and in other jurisdictions. Many countries outside the EU have started working on local laws, or issued administrative measures, frameworks or guidance related to the use of artificial intelligence. In addition, the European Commission has released a proposal for changes in several pieces of legislation including the AI Act, GDPR and other related data and digital legislation with the goal to simplify and harmonize. We are closely following these developments in order to ensure continued compliance, including in the areas of international data transfers.

In August 2025, the Israel Data Protection legislation amendment came into force. The amendment aligned local requirements more closely with global standards such as the EU GDPR. The amendment introduces enhanced enforcement mechanisms, including monetary sanctions and administrative fines, expanded data subject rights, and new organizational obligations. Teva has prepared and updated its internal compliance programs to comply with this amendment.

In the United States, the legislative and regulatory landscape for data privacy and protection continues to evolve with an increasing focus on privacy, data protection issues and artificial intelligence. There are numerous federal and state laws and regulations governing the collection, use, processing and protection of personal data. Most states have data security breach laws requiring data protection measures and potentially requiring notification to regulators and impacted individuals.

The Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (collectively, “HIPAA”) mandates the adoption of specific standards for electronic transactions and code sets that are used to transmit certain types of health information. HIPAA also sets forth federal rules protecting the privacy and security of protected health information (“PHI”). We have established administrative, physical and technical safeguards to protect the confidentiality, integrity and availability of PHI to the extent we are subject to HIPAA.

Numerous states have or are in the process of enacting state level consumer privacy laws and regulations governing the collection, use and processing of personal data. Additionally, the California Consumer Privacy Act of 2018 (“CCPA”) as amended established a privacy framework for covered businesses by creating an expanded definition of personal information, establishing new data privacy rights for consumers in the State of California, imposing special rules on the collection of consumer data from minors, and creating a new and potentially severe statutory damages framework for violations of the CCPA and for businesses that fail to implement reasonable security procedures and practices to prevent data breaches. Further, the California Privacy Rights Act (“CPRA”), effective January 1, 2023 (with certain provisions having retroactive effect to January 1, 2022), creates additional obligations with respect to processing and storing personal information. While clinical trial data and information governed by HIPAA are currently exempt from the current versions of the CCPA and CPRA, other personal information may be applicable and possible changes to the CCPA and CPRA may broaden its scope.

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Some states have or are in the process of enacting state consumer health information privacy laws (e.g., Washington’s My Health My Data Act) requiring protection of state residents’ health information not protected by HIPAA and potentially requiring reporting to state regulators with respect to our health and patient information privacy governance and practices.

In October 2015, the European Commission adopted regulations providing detailed rules for the safety features appearing on the packaging of medicinal products for human use. This legislation, part of the Falsified Medicines Directive (“FMD”), is intended to prevent counterfeit medicines entering into the supply chain and will allow wholesale distributors and others who supply medicines to the public to verify the authenticity of the medicine at the level of the individual pack. The safety features comprise a unique identifier and a tamper-evident seal on the outer packaging, which are to be applied to certain categories of medicines. FMD is effective as of February 2019. Teva’s packaging sites, distribution centers and contract manufacturing operators (“CMOs”) for the European market comply with this new requirement.

In February 2019, the EU enacted the Falsified Medicines Directive (“FMD”), traceability requirements for drug products, which Teva complies with as well. Other countries are following suit with variations of two main requirements: (i) to be able to associate the unit data with the uniquely-identified shipping package, or (ii) to report the data for tracking and tracing of products, reimbursements and other purposes. Certain countries, such as Russia, China, Korea, Turkey, Argentina, Brazil and India (for exported products), already have laws mandating serialization and aggregation and we are working to comply with these requirements. Other countries, including India (for domestic market), Indonesia, Kazakhstan, Malaysia, Taiwan, Ukraine and other Latin American countries are currently considering mandating similar requirements.

Available Information

Our main corporate website address is http://www.tevapharm.com. Copies of our Quarterly Reports on Form 10-Q, Annual Report on Form 10-K and Current Reports on Form 8-K filed or furnished to the U.S. Securities and Exchange Commission (the “SEC”), and any amendments to the foregoing, will be provided without charge to any shareholder submitting a written request to our company secretary at our principal executive offices or by sending an email to TevaIR@tevapharm.com. All of our SEC filings are also available on our website at http://www.tevapharm.com, as soon as reasonably practicable after having been electronically filed or furnished to the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC at www.sec.gov. The information on our website is not, and will not be deemed, a part of this report or incorporated into any other filings we make with the SEC. We also file our annual reports and other information with the Israeli Securities Authority through its fair disclosure electronic system called MAGNA. You may review these filings on the website of the MAGNA system operated by the Israeli Securities Authority at www.magna.isa.gov.il or on the website of the Tel Aviv Stock Exchange (the “TASE”) at www.tase.co.il.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

We are a biopharmaceutical company, enabled by a world-class generics business. For over 120 years, our commitment to bettering health has never wavered. From innovating in the fields of neuroscience and immunology to providing complex generic medicines, biosimilars and pharmacy brands worldwide, we are dedicated to addressing patients’ needs, now and in the future.

We operate worldwide, with headquarters in Israel and a significant presence in the United States, Europe and many other markets around the world. Today, our global network of capabilities consists of approximately 34,000 employees across 57 markets.

Teva was incorporated in Israel on February 13, 1944 and is the successor to a number of Israeli corporations, the oldest of which was established in 1901.

Our Business Segments

We operate our business through three segments: United States, Europe and International Markets. Each business segment manages our entire product portfolio in its region, including generics, which includes biosimilars and OTC products, as well as innovative medicines. This structure enables strong alignment and integration between operations, commercial regions, R&D and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas.

In addition to these three segments, our other sources of revenues included in “Other Activities” consist primarily of our distribution business in the U.S. through Anda, the sale of APIs to third parties, an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis and certain contract manufacturing services. For additional segment information, see note 19 to our consolidated financial statements.

Pivot to Growth Strategy

In 2025, we continued to execute on the four key pillars of our “Pivot to Growth” strategy, announced in May 2023. As part of this strategy, in 2025, we entered the strategy’s “Accelerate Growth” phase, during which we focus on growing our innovative portfolio, aligning capital allocation to invest in activities we expect to have the highest value, and modernizing our organization and operations to drive both efficiency and cost savings. For additional information on our Pivot to Growth strategy, see “Item 1—Business—Pivot to Growth Strategy.”

Macroeconomic Environment

In recent years, the global economy has been impacted by fluctuating foreign exchange rates. A significant portion of our revenues is denominated in currencies other than the U.S. dollar and we manufacture many of our products outside of the United States. As a result, fluctuations in the U.S. dollar relative to other currencies in which we operate have in the past and may in the future materially impact our revenues, results of operations, profitability and cash flows. In addition, in many of the markets in which we operate, we have experienced elevated inflation in recent years, contributing to higher interest rates. In other markets, such as the EU, inflation has recently declined, resulting in lower interest rates. Although inflationary and other macroeconomic pressures have and may continue to ease, the higher costs we have incurred in recent periods have already affected our operations and are likely to continue influencing our financial results. Recent U.S. tariffs imposed or threatened to be imposed on materials and products from countries where we do business and any responsive or reciprocal actions taken by such countries could impact our costs and our global operations. The countries subject to tariffs and the tariff rate imposed on each country is uncertain and dynamic, and we continue to monitor and assess the potential impact on our supply chain and global operations.

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The pharmaceutical industry has also experienced disruptions in global supply chains, including our own supply chain, due to geopolitical tensions and other factors. In some cases, such disruptions have resulted in and may continue to result in delays in our production and distribution processes, impacting product availability and our ability to timely respond to consumer demand. We have taken measures and are continually considering various initiatives, including, enhanced inventory management, alternative sourcing strategies, and backup production plans for key products, to allow us to partially mitigate and offset the impact of these factors.

Highlights

Significant highlights of 2025 included:

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Results of Operations

The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2025 and 2024. For a comparison of our results of operations and financial condition for fiscal years 2024 and 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K, filed with the SEC on February 5, 2025.

Segment Information

United States Segment

The following table presents revenues, expenses and profit for our United States segment for the past two years:

United States Revenues

In alignment with our Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under our United States segment. This shift allows the United States segment to continue to manage its entire product portfolio in the region, while strengthening focus on its biopharmaceutical business, growth engines and innovation. As a result, from that date, Anda is reported as part of the Company’s Other Activities. Prior period amounts were recast to reflect this change. See note 19 to our consolidated financial statements. Revenues from our United States segment in 2025 were $7,690 million, an increase of $1,192 million, or 18%, compared to 2024, mainly due to higher revenues from our key innovative products AUSTEDO, AJOVY, and UZEDY, development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), as well as higher revenues from generic products (including biosimilars).

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Revenues by Major Products and Activities

The following table presents revenues for our United States segment by major products and activities for the past two years:

Generic products (including biosimilars) revenues in our United States segment in 2025 increased by 2% to $3,657 million, compared to 2024, mainly driven by higher revenues from our portfolio of biosimilar products and new product launches.

Among the most significant generic products we sold in the United States in 2025 were lenalidomide capsules (the generic version of Revlimid^®), Truxima^® (the biosimilar to Rituxan^®), epinephrine injectable solution (the generic equivalent of EpiPen^® and EpiPen Jr^®), and SIMLANDI^® (the biosimilar to Humira^®).

For more information on our generic products, including biosimilars, see “Item 1—Business—Our Product Portfolio and Business Offering—Generic Medicines.”

In 2025, our total prescriptions were approximately 254 million (based on trailing twelve months), representing 6.5% of total U.S. generic prescriptions according to IQVIA data.

AJOVY revenues in our United States segment in 2025 increased by 42% to $295 million, compared to 2024, mainly due to growth in volume. In 2025, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 33.3%, out of the subcutaneous injectable anti-CGRP class, compared to 29.6% in 2024.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AJOVY.”

AUSTEDO revenues (which include AUSTEDO XR) in our United States segment in 2025 increased by 35% to $2,217 million, compared to 2024, mainly due to growth in volume.

For more information on AUSTEDO, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AUSTEDO.”

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UZEDY revenues in our United States segment in 2025 increased by 63% to $191 million compared to 2024, mainly due to growth in volume.

For more information on UZEDY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—UZEDY.”

BENDEKA and TREANDA combined revenues in our United States segment in 2025 decreased by 13% to $147 million, compared to 2024, mainly due to competition from alternative therapies, as well as from generic bendamustine products.

For more information on BENDEKA and TREANDA, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—Oncology.”

COPAXONE revenues in our United States segment in 2025 increased by 6% to $255 million, compared to 2024, mainly due to reduction in sales allowance, partially offset by lower volumes.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

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Product Launches and Pipeline

In 2025, we launched the generic version and biosimilar version of the following branded products in the United States:

As of December 31, 2025, our generic products pipeline in the United States includes 116 product applications awaiting FDA approval, including 66 tentative approvals. This total reflects all pending ANDAs, supplements for product line extensions and tentatively approved applications and includes some instances where more than one application was submitted for the same reference product. Excluding overlaps, the branded products underlying these pending applications had U.S. sales for the twelve months ended September 30, 2025 of approximately $124 billion, according to IQVIA. Approximately 80% of pending applications include a paragraph IV patent challenge and we believe we are first-to-file with respect to 54 of these products, or 77 products including final approvals where launch is pending a settlement agreement or court decision. Collectively, these first-to-file opportunities represent over $85 billion in U.S. brand sales for the twelve months ended September 30, 2025, according to IQVIA.

IQVIA reported brand sales are one of the many indicators of future potential value of a launch, but equally important are the mix and timing of competition, as well as cost effectiveness. The potential advantages of being the first filer with respect to some of these products may be subject to forfeiture, shared exclusivity or competition from so-called “authorized generics,” which may ultimately affect the value derived.

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In 2025, we received tentative approvals for generic equivalents of the products listed in the table below, excluding overlapping applications. A “tentative approval” indicates that the FDA has substantially completed its review of an application and final approval is expected once the relevant patent expires, a court decision is reached, a 30-month regulatory stay lapses or a 180-day exclusivity period awarded to another manufacturer either expires or is forfeited.

For a description of our innovative medicines pipeline, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines” above.

United States Gross Profit

Gross profit from our United States segment in 2025 was $5,455 million, an increase of 30% compared to $4,186 million in 2024.

Gross profit margin for our United States segment in 2025 increased to 70.9%, compared to 64.4% in 2024. This increase was mainly due to the development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), and a favorable mix of products primarily driven by higher revenues from AUSTEDO.

United States R&D Expenses

R&D expenses relating to our United States segment in 2025 were $633 million, flat compared to 2024.

For a description of our R&D expenses in 2025, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

United States S&M Expenses

S&M expenses relating to our United States segment in 2025 were $1,051 million, an increase of 14% compared to $925 million in 2024. This increase was mainly due to promotional activities related to our key innovative products mainly AUSTEDO and UZEDY.

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United States G&A Expenses

G&A expenses relating to our United States segment in 2025 were $456 million, an increase of 12% compared to $407 million in 2024.

For a description of our G&A expenses in 2025, see “—Teva Consolidated Results— General and Administrative (G&A) Expenses” below.

United States Profit

Profit from our United States segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and any other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our United States segment in 2025 was $3,313 million, an increase of 49% compared to $2,219 million in 2024. This increase was mainly due to higher gross profit, partially offset by higher S&M and G&A expenses, as discussed above.

Europe Segment

The following table presents revenues, expenses and profit for our Europe segment for the past two years:

Europe Revenues

Our Europe segment includes the European Union, the United Kingdom and certain other European countries.

Revenues from our Europe segment in 2025 were $5,040 million, a decrease of $63 million, or 1%, compared to 2024. In local currency terms, revenues decreased by 5%, mainly due to the year-over-year impact from the sale of certain product rights, lower revenues from generic and OTC products, as well as COPAXONE, partially offset by higher revenues from AJOVY.

In 2025, revenues were positively impacted by exchange rate fluctuations of $173 million, net of hedging effects, compared to 2024. Revenues in 2025 were affected by a $31 million negative hedging impact, compared to a positive hedging impact of $21 million in 2024, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

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Revenues by Major Products and Activities

The following table presents revenues for our Europe segment by major products and activities for the past two years:

Generic products revenues (including OTC and biosimilar products) in our Europe segment in 2025 increased by 3% to $4,044 million compared to 2024. In local currency terms, revenues decreased by 2%, mainly due to lower volumes and price reductions as a result of market dynamics, and lower sales of seasonal OTC products, partially offset by higher revenues from recently launched products.

AJOVY revenues in our Europe segment in 2025 were $270 million, an increase of 25%, in U.S. dollars. In local currency terms, revenues increased by 19%, compared to 2024. This increase was due to growth in volume.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AJOVY.”

COPAXONE revenues in our Europe segment in 2025 were $181 million, a decrease of 15% in U.S. dollars. In local currency terms, revenues decreased by 19%, compared to 2024. This decrease was mainly due to price reductions and lower volumes resulting from the availability of alternative therapies.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

Respiratory products revenues in our Europe segment in 2025 decreased by 7% to $227 million, compared to 2024. In local currency terms, revenues decreased by 11%, mainly due to net price reductions and lower volumes.

Product Launches and Pipeline

As of December 31, 2025, our generic products pipeline in Europe included 622 generic approvals relating to 61 compounds in 125 formulations, with no EMA approvals received. In addition, approximately 1,537 marketing authorization applications are pending approval in 37 European countries, which approvals relate to 95 compounds in 229 formulations. No applications are pending with the EMA.

For a description of our innovative medicines pipeline, see “Item 1—Business—Research and Development” above.

Europe Gross Profit

Gross profit from our Europe segment in 2025 was $2,747 million, a decrease of 5% compared to $2,905 million in 2024.

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Gross profit margin for our Europe segment in 2025 decreased to 54.5%, compared to 56.9% in 2024, mainly due to a change in the mix of products, lower proceeds from the sale of certain product rights, and a negative impact from hedging activities.

Europe R&D Expenses

R&D expenses relating to our Europe segment in 2025 were $247 million, an increase of 8% compared to $229 million in 2024.

For a description of our R&D expenses in 2025, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

Europe S&M Expenses

S&M expenses relating to our Europe segment in 2025 were $902 million, an increase of 9% compared to $826 million in 2024. This increase was mainly to support revenue growth of our generic and key innovative products, including new launches, and due to a negative impact from exchange rate fluctuations.

Europe G&A Expenses

G&A expenses relating to our Europe segment in 2025 were $295 million, an increase of 8% compared to $272 million in 2024.

For a description of our G&A expenses in 2025, see “—Teva Consolidated Results— General and Administrative (G&A) Expenses” below.

Europe Profit

Profit of our Europe segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and any other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in 2025 was $1,303 million, a decrease of 17% compared to $1,575 million in 2024, mainly due to lower gross profit, as well as higher operational expenses, as discussed above.

International Markets Segment

The following table presents revenues, expenses and profit for our International Markets segment for the past two years:

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International Markets Revenues

Our International Markets segment includes all countries in which we operate other than the United States and the countries included in our Europe segment, and commencing January 1, 2024, also includes Canada. The International Markets segment covers a substantial portion of the global pharmaceutical industry, including more than 35 countries. See note 19 to our consolidated financial statements.

The countries in our International Markets segment include highly regulated, mainly generic markets, such as Canada and Israel, and branded generics-oriented markets, such as Russia and certain Latin America markets.

On March 31, 2025, we divested our Teva-Takeda business venture in Japan, which included generic products and legacy products. Since the establishment of the business venture and until the completion of its sale, Teva held 51% of the outstanding common stock of the business venture. On March 31, 2025, we deconsolidated the business venture from our financial statements. For additional information, see notes 2 and 22 to our consolidated financial statements.

As of the date of this Annual Report on Form 10-K, sustained conflict between Russia and Ukraine and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results and we have no manufacturing or R&D facilities in these markets. In 2025, the impact of this conflict on our International Markets segment’s results of operations and financial condition was immaterial. Consistent with our foreign exchange risk management hedging programs, in 2025, we partially hedged our exposure to currency exchange rate fluctuations with respect to our balance sheet assets, revenues and expenses. As of the end of 2025, we also hedge a small part of our projected net revenues in Russian ruble for 2026. Prior to and since the escalation of the conflict, we have been taking measures to reduce our operational cash balances in Russia and Ukraine. We have been monitoring the solvency of our customers in Russia and Ukraine and have taken measures, where practicable, to mitigate our exposure to risks related to the conflict in the region. However, the duration, severity and global implications (including potential inflation and devaluation consequences) of the conflict cannot be predicted, and could have an effect on our business, including on our exchange rate exposure, supply chain, operational costs and commercial presence in these markets.

Revenues from our International Markets segment in 2025 were $2,162 million, a decrease of $301 million, or 12%, compared to 2024. In local currency terms, revenues decreased by 11% compared to 2024. This decrease was mainly due to the divestment of our business venture in Japan, lower proceeds from the sale of certain product rights, as well as a negative hedging impact, partially offset by higher revenues from generic products in other markets and AJOVY.

In 2025, revenues were negatively impacted by exchange rate fluctuations of $36 million net of hedging effects, compared to 2024. Revenues in 2025, were affected by a $34 million negative hedging impact, compared to a $13 million positive hedging impact in 2024, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

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Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the past two years:

Generic products revenues (including OTC and biosimilar products) in our International Markets segment in 2025 were $1,721, a decrease of 11% in both U.S. dollars and local currency terms compared to 2024. This decrease was mainly due to the divestment of our business venture in Japan, partially offset by higher revenues in other markets.

AJOVY revenues in our International Markets segment in 2025 increased by 28% to $108 million, compared to 2024. In local currency terms, revenues increased by 27%, due to growth in existing markets in which AJOVY was launched.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering— Innovative Medicines—AJOVY.”

AUSTEDO revenues in our International Markets segment were $43 million in 2025, a decrease of 6%, in both U.S. dollars and local currency terms compared to 2024. This decrease was mainly due to timing of shipments.

For more information on AUSTEDO, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AUSTEDO.”

COPAXONE revenues in our International Markets segment in 2025 decreased by 34% to $32 million, compared to 2024. In local currency terms, revenues decreased by 30%, mainly due to market share erosion and competition.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

International Markets Gross Profit

Gross profit from our International Markets segment in 2025 was $1,046 million, a decrease of 15% compared to $1,235 million in 2024.

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Gross profit margin for our International Markets segment in 2025 decreased to 48.4%, compared to 50.1% in 2024. This decrease was mainly due to lower proceeds from the sale of certain product rights and a negative hedging impact, partially offset by price increases due to inflationary pressure in certain markets and a favorable mix of products.

International Markets R&D Expenses

R&D expenses relating to our International Markets segment in 2025 were $103 million, a decrease of 8% compared to $112 million in 2024.

For a description of our R&D expenses in 2025, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

International Markets S&M Expenses

S&M expenses relating to our International Markets segment in 2025 were $475 million, a decrease of 11% compared to $534 million in 2024, mainly as a result of the divestment of our business venture in Japan, as well as cost efficiencies.

International Markets G&A Expenses

G&A expenses relating to our International Markets segment in 2025 were $147 million, a decrease of 2% compared to $150 million in 2024.

For a description of our G&A expenses in 2025, see “—Teva Consolidated Results— General and Administrative (G&A) Expenses below”.

International Markets Profit

Profit of our International Markets segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our International Markets segment in 2025 was $336 million a decrease of 24% compared to $440 million in 2024. This decrease was mainly due to the divestment of our business venture in Japan, lower proceeds from the sale of certain product rights and a negative hedging impact.

Other Activities

We have other sources of revenues that consist primarily of our distribution business in the United States through Anda, the sale of APIs to third parties, an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis and certain contract manufacturing services. Our Other Activities are not included in the United States, Europe or International Markets segments described above.

In alignment with our Pivot to Growth strategy, commencing January 1, 2026, Anda is no longer reported under our United States segment as described above. As a result, from that date, Anda is reported as part of our Other Activities. Prior period amounts were recast to reflect this change. See note 19 to our consolidated financial statements.

On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale. The intention to divest is in alignment with our Pivot to Growth strategy. On November 5, 2025, we announced that exclusive discussions with a selected buyer on the sale have terminated. Teva has initiated a renewed sales process, maintaining its strategic intention to divest its API business. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all. For further information, see note 2 to our consolidated financial statements.

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Our revenues from Other Activities in 2025 were $2,365 million, a decrease of 5% in both U.S. dollars and local currency terms, compared to 2024. This decrease was mainly due to lower revenues from contract manufacturing services and from Anda.

Anda revenues from third parties in our United States segment in 2025 decreased by 3% to $1,496 million, compared to 2024, mainly due to lower volumes. Anda, our distribution business in the United States, operates independently and distributes generic and innovative medicines and OTC pharmaceutical products from various manufacturers to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States. Anda competes in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.

API sales to third parties in 2025 were $526 million a decrease of 5% in both U.S. dollars and local currency terms compared to 2024, mainly due to lower demand.

Teva Consolidated Results

Revenues

Revenues in 2025 were $17,258 million, an increase of 4% in U.S. dollars, or 3%, in local currency terms, compared to 2024. This increase was mainly due to higher revenues from our key innovative products AUSTEDO, AJOVY and UZEDY, and from development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), partially offset by lower revenues from our International Markets segment due to the divestment of our business venture in Japan, from certain other innovative products across all our segments, lower proceeds from the sale of certain product rights and from generic products in our Europe segment. See “—United States Revenues,” “—Europe Revenues,” “—International Markets Revenues” and “—Other Activities” above.

Exchange rate movements during 2025, net of hedging effects, positively impacted our revenues by $152 million, compared to 2024. See note 10d to our consolidated financial statements.

Gross Profit

Gross profit in 2025 was $8,938 million, an increase of 11% compared to 2024.

Gross profit margin was 51.8% in 2025, compared to 48.7% in 2024. This increase in gross profit margin was mainly due to a favorable mix of products, primarily driven by higher revenues from AUSTEDO, and development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), partially offset by lower proceeds from the sale of certain product rights.

Research and Development (R&D) Expenses, net

Our R&D activities for innovative medicines and biosimilar products in each of our segments include costs of discovery research, preclinical work, drug formulation, early- and late-stage clinical development and product registration costs. These expenditures are reported net of contributions received from collaboration partners. Our spending takes place throughout the development process, including (i) early-stage projects in both discovery and preclinical phases; (ii) middle-stage projects in clinical programs up to Phase 3; (iii) late-stage projects in Phase 3 programs, including where a new drug application is currently pending approval; (iv) post-approval studies for marketed products; and (v) indirect expenses, such as costs of infrastructure and personnel.

Our R&D activities for generic products in each of our segments include both (i) direct expenses relating to product formulation, analytical method development, stability testing, management of bioequivalence and other clinical studies and regulatory filings; and (ii) indirect expenses, such as costs of infrastructure and personnel.

Our R&D expenses, net in 2025 were $1,013 million, an increase of 2% compared to $998 million in 2024, as we continue to execute on our Pivot to Growth strategy.

Our higher R&D expenses, net in 2025, compared to 2024, were mainly due to an increase in immunology and in immuno-oncology, as well as in neuroscience (mainly neurodegeneration), partially offset by the non-recurrence of milestone payments related to certain biosimilar projects, and lower expenses related to generics projects.

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Our R&D expenses, net in 2025 were also impacted by reimbursements and development cost sharing from our strategic collaborations. See note 2 to our consolidated financial statements.

R&D expenses as a percentage of revenues were 5.9% in 2025, compared to 6.0% in 2024.

Selling and Marketing (S&M) Expenses

S&M expenses in 2025 were $2,686 million, an increase of 6% compared to 2024. Our S&M expenses were primarily the result of the factors discussed above under “—United States Segment— S&M Expenses,” “—Europe Segment— S&M Expenses” and “—International Markets Segment— S&M Expenses.”

S&M expenses as a percentage of revenues were 15.6% in 2025, compared to 15.4% in 2024.

General and Administrative (G&A) Expenses

G&A expenses in 2025 were $1,287 million, an increase of 11% compared to 2024. This increase was mainly due to costs related to optimization activities of Teva’s global organization and operations in connection with Teva’s Transformation programs, as well as a negative impact from exchange rate fluctuations.

G&A expenses as a percentage of revenues were 7.5% in 2025, compared to 7.0% in 2024.

Identifiable Intangible Asset Impairments

We recorded expenses of $259 million for identifiable intangible asset impairments in 2025, compared to expenses of $251 million in 2024. See note 6 to our consolidated financial statements.

Goodwill Impairment

No goodwill impairment charge was recorded in 2025. We recorded a goodwill impairment charge of $1,280 million in the year ended December 31, 2024 related to our Teva API reporting unit. See note 7 to our consolidated financial statements.

Other Asset Impairments, Restructuring and Other Items

We recorded expenses of $1,050 million for other asset impairments, restructuring and other items in 2025, compared to expenses of $1,388 million in 2024. Expenses in 2025 were mainly comprised of an impairment related to a manufacturing facility in Europe. Expenses in 2024 were mainly comprised of impairments related to the classification of our business venture in Japan and our API business (including its R&D, manufacturing and commercial activities) as held for sale. See note 15 to our consolidated financial statements.

Legal Settlements and Loss Contingencies

In 2025, we recorded expenses of $467 million in legal settlements and loss contingencies, compared to expenses of $761 million in 2024. See note 11 to our consolidated financial statements.

Other Income (Loss)

Other loss in 2025 was $18 million, compared to other income of $14 million in 2024. See note 16 to our consolidated financial statements.

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Operating Income (Loss)

Operating income was $2,157 million in 2025, compared to an operating loss of $303 million in 2024. This change was mainly due to goodwill impairment charges incurred in 2024, lower other asset impairments, restructuring and other items in 2025, as well as higher gross profit and lower legal settlements and loss contingencies in 2025.

Operating income as a percentage of revenues was 12.5% in 2025, compared to operating loss as a percentage of revenues of 1.8% in 2024.

Financial Expenses, Net

Financial expenses, net were $934 million in 2025, compared to $981 million in 2024. Financial expenses in 2025 were mainly comprised of net-interest expenses of $824 million. Financial expenses in 2024 were mainly comprised of net-interest expenses of $915 million.

Reconciliation Table to Consolidated Income (Loss) Before Income Taxes

The following table presents a reconciliation of our segment profits to Teva’s consolidated operating income (loss) and to consolidated income (loss) before income taxes for the past three years:

Income Taxes

In 2025, we recognized a tax benefit of $180 million on a pre-tax income of $1,223 million. In 2024, we recognized a tax expense of $676 million on a pre-tax loss of $1,284 million. See note 13 to our consolidated financial statements.

Share In (Profits) Losses of Associated Companies, Net 

Share in profits of associated companies, net was $15 million in 2025, compared to $1 million in 2024.

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Net Income (Loss) Attributable to redeemable and non-redeemable non-controlling interests

Net income attributable to redeemable and non-redeemable non-controlling interests was $7 million in 2025, compared to a net loss attributable to redeemable and non-redeemable non-controlling interests of $320 million in 2024. The net loss in 2024 was mainly due to higher impairments of tangible assets, largely related to the classification of our business venture in Japan as held for sale. See note 15 to our consolidated financial statements.

Net Income (Loss) Attributable to Teva

Net income was $1,410 million in 2025, compared to a net loss of $1,639 million in 2024. This change was mainly due to the changes in operating income and income taxes, partially offset by net loss attributable to non-controlling interests in 2024, as discussed above.

Diluted Shares Outstanding and Earnings (Loss) Per Share

The weighted average diluted shares outstanding used for the fully diluted share calculation for the years 2025 and 2024 was 1,163 million and 1,131 million shares, respectively.

Diluted earnings per share was $1.21 for the year ended December 31, 2025, compared to diluted loss per share of $1.45 for the year ended December 31, 2024. See note 18 to our consolidated financial statements.

Share Count for Market Capitalization

We calculate share amounts using the outstanding number of shares (i.e., excluding treasury shares) plus shares that would be outstanding upon the exercise of options and vesting of RSUs and PSUs and the conversion of our convertible senior debentures, in each case, at period end.

As of December 31, 2025 and 2024, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,184 million and 1,174 million, respectively.

Impact of Currency Fluctuations on Results of Operations

In 2025, approximately 43% of our revenues were denominated in currencies other than the U.S. dollar. Since our results are reported in U.S. dollars, we are subject to significant foreign currency risks. Accordingly, changes in the rate of exchange between the U.S. dollar and local currencies in the markets in which we operate (primarily the euro, British pound, Swiss franc, Russian ruble, Canadian dollar, new Israeli shekel, Polish złoty, Swedish krona and Chilean peso) impact our results.

During 2025, the following main currencies relevant to our operations decreased in value against the U.S. dollar (each on an annual average compared to annual average basis): the Argentinian peso by 26%, the Turkish lira by 17%, the Mexican peso by 5%, the Brazilian real by 4%, Indian rupee by 4% and the Ukraine hryvna by 4%. The following main currencies relevant to our operations increased in value against the U.S. dollar: the Russian ruble by 11%, the Swedish krona by 8%, the new Israeli shekel by 7%, the Swiss franc by 6%, the Polish złoty by 6%, the euro by 4%, the Bulgarian lev by 4% and the British pound by 3%.

As a result, exchange rate movements during 2025, net of hedging effects, positively impacted overall revenues by $152 million and negatively impacted operating income by $48 million compared to 2024.

In 2025, a negative hedging impact of $65 million was recognized under revenues and a positive hedging impact of $8 million was recognized under cost of sales. In 2024, a positive hedging impact of $34 million was recognized under revenues and a negative hedging impact of $5 million was recognized under cost of sales.

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The impact of hedging transactions against future projected revenues and expenses are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. See note 10d to our consolidated financial statements.

Commencing the third quarter of 2018, the cumulative inflation in Argentina exceeded 100% or more over a 3-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

Commencing the second quarter of 2022, the cumulative inflation in Turkey exceeded 100% or more over a three-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

Liquidity and Capital Resources

Total balance sheet assets were $40,748 million as of December 31, 2025, compared to $39,326 million as of December 31, 2024.

Our working capital balance, which includes accounts receivables net of SR&A, inventories, prepaid expenses and other current assets, accounts payables, employee-related obligations, accrued expenses and other current liabilities, was negative $2,733 million as of December 31, 2025, compared to negative $2,837 million as of December 31, 2024. This increase was mainly due to higher inventory levels primarily due to exchange rate fluctuations and an increase in accounts receivables, net of SR&A, related to reduced utilization of our U.S. securitization program, partially offset by an increase in accounts payables. We continue our efforts to optimize our working capital management.

Cash investment in property, plant and equipment and intangible assets in 2025 was $501 million, compared to $498 million in 2024. Depreciation was $421 million in 2025, compared to $471 million in 2024.

Cash and cash equivalents as of December 31, 2025 were $3,556 million compared to $3,300 million as of December 31, 2024.

In the first quarter of 2025, we paid a dividend of $340 million to redeemable non-controlling interests in our business venture in Japan.

Our cash on hand that is not used for ongoing operations is generally invested in bank deposits, as well as liquid securities that bear fixed and floating rates.

Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily its $1.8 billion unsecured syndicated sustainability-linked revolving credit facility entered into in April 2022, as amended most recently in December 2025 (“RCF”). See note 9 to our consolidated financial statements.

2025 Debt Balance and Movements

As of December 31, 2025, our debt was $16,807 million, compared to $17,783 million as of December 31, 2024. This decrease was mainly due to repayment at maturity of $1,812 million of our senior notes (as detailed below), partially offset by an increase of $803 million due to exchange rate fluctuations. Additionally, during the second quarter of 2025, we repurchased $2,290 million aggregate principal amount of notes upon consummation of a cash tender offer, and issued $2,298 million of senior notes, net of discount and issuance costs. For further information, see note 9 to our consolidated financial statements.

In January 2025, we repaid $426 million of the 6% senior notes at maturity and $427 million of the 7.13% senior notes at maturity.

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In March 2025, we repaid $515 million of the 4.50% senior notes at maturity.

In July 2025, we repaid $444 million of the 1% senior notes at maturity.

In February 2026, we repaid $23 million of the 0.25% convertible senior debentures at maturity.

Our debt as of December 31, 2025 was 57% denominated in U.S. dollar, with the remainder denominated in euro.

The portion of total debt classified as short-term as of December 31, 2025 was 11%, compared to 10% as of December 31, 2024.

Our financial leverage, which is the ratio between our debt and the sum of our debt and equity, was 68% as of December 31, 2025, compared to 77% as of December 31, 2024.

Our average debt maturity was approximately 5.6 years as of December 31, 2025, compared to 5.5 years as of December 31, 2024.

2024 Debt Balance and Movements

In April 2024, we repaid $956 million of the 6% senior notes at maturity.

In October 2024, we repaid $685 million of the 1.13% senior notes at maturity.

Total Equity

Total equity was $7,914 million as of December 31, 2025, compared to $5,380 million as of December 31, 2024. This increase was mainly due to a net income attributable to Teva of $1,410 million, and a positive impact of $719 million from exchange rate fluctuations.

Exchange rate fluctuations affected our balance sheet, as approximately 62% of our net assets (including both non-monetary and monetary assets) were in currencies other than the U.S. dollar. When compared to December 31, 2024, changes in currency rates had a positive impact of $719 million on our equity as of December 31, 2025. The following main currencies increased in value against the U.S. dollar: Russian ruble by 28%, Mexican peso by 13%, Polish złoty by 13%, Swiss franc by 12%, Bulgarian lev by 12%, euro by 11%, Chilean peso by 9%, British pound by 7%, and Canadian dollar by 5%. All comparisons are on a year-end to year-end basis.

Cash Flow

We continually seek to improve the efficiency of our working capital management. Periodically, as part of our cash and commercial relationship management activities, we make decisions in our commercial, supply chain, and other activities which drive an optimization of our inventory levels, an acceleration of receivable payments from customers, or deceleration of payments to vendors, including timing of payments related to legal settlements, tax authorities and other matters. These have the effect of increasing or decreasing cash from operations, as well as working capital balance items during any given period. Increased cash from operations has the effect of reducing our leverage ratio, which is measured net of cash and cash equivalents, as of the end of such period. In connection with these efforts, we were able to secure more favorable payment terms from many of our vendors which are expected to continue in future periods. In addition, in periods in which collections from customers are delayed, we have and expect we may in the future extend the time to pay certain vendors, so as to balance our liquidity position. Such decisions have had, and may in the future have, a material impact on our annual operating cash flow measurement and results of operations.

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Cash flow generated from operating activities in 2025 was $1,649 million, compared to $1,247 million in 2024. The increase in 2025 resulted mainly from development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), partially offset by higher legal settlement payments. Net changes in working capital items were neutral.

During 2025, we generated free cash flow of $2,396 million, which we define as comprising $1,649 million in cash flow generated from operating activities, $1,214 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $34 million in proceeds from divestitures of businesses and other assets, partially offset by $501 million in cash used for capital investments. During 2024, we generated free cash flow of $2,068 million, which we define as comprising $1,247 million in cash flow generated from operating activities, $1,291 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $43 million proceeds from divestitures of businesses and other assets, partially offset by $498 million in cash used for capital investments and $15 million in cash used for acquisition of businesses, net of cash acquired. The increase in 2025 resulted mainly from higher cash flow generated from operating activities.

Dividends

We have not paid dividends on our ordinary shares or ADSs since December 2017.

Commitments

In addition to financing obligations under short-term debt and long-term senior notes and loans, debentures and convertible debentures, our major contractual obligations and commercial commitments include leases, royalty payments, contingent payments pursuant to acquisition agreements, collaboration agreements and participation in joint ventures associated with R&D activities. For further information on our agreements with mAbxience, Launch Therapeutics and Abingworth, Biolojic Design, Royalty Pharma, Sanofi, Modag, Alvotech, Takeda and MedinCell, see note 2 to our consolidated financial statements.

We are committed to pay royalties to owners of know-how, partners in alliances and certain other arrangements, and to parties that financed R&D at a wide range of rates as a percentage of sales of certain products, as defined in the agreements. In some cases, the royalty period is not defined; in other cases, royalties will be paid over various periods not exceeding 20 years. Certain of our collaboration agreements include cost-sharing arrangements for development activities which represent additional contractual commitments with the amount and timing of such payments dependent on the progress of such activities.

In connection with certain development, supply and marketing, and research and collaboration or services agreements, we are required to indemnify, in unspecified amounts, the parties to such agreements against third-party claims relating to (i) infringement or violation of intellectual property or other rights of such third party; or (ii) damages to users of the related products. Except as described in our financial statements, we are not aware of any material pending action that may result in the counterparties to these agreements claiming such indemnification.

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Aggregated Contractual Obligations

The following table summarizes our material contractual obligations and commitments as of December 31, 2025:

The total gross amount of unrecognized tax benefits for uncertain tax positions was $596 million on December 31, 2025. Payment of these obligations would result from settlements with tax authorities. Due to the difficulty in determining the timing and magnitude of settlements, these obligations are not included in the table above. Correspondingly, it is difficult to ascertain whether we will pay any significant amount related to these obligations within the next year.

We have committed to make potential future milestone payments to third parties under various agreements. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, we may be required to pay such amounts. As of December 31, 2025, if all development milestones and targets, for compounds in Phase 2 and more advanced stages of development, are achieved, the total contingent payments could reach an aggregate amount of up to $104 million. Additional contingent payments are owed upon achievement of product approval or launch milestones.

We have committed to pay royalties to owners of know-how, partners in alliances and pursuant to certain other arrangements and to parties that financed research and development, at a wide range of rates as a percentage of sales or of the gross margin of certain products, as defined in the underlying agreements.

Due to the uncertainty of the timing of these payments, these amounts, and the amounts described in the previous paragraph, are not included in the table above.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements, except for: (i) surety underwritten guarantees Teva has provided the European Commission in an amount of 462.2 million euros, together with specified post-decision interest, which remain in force for three years, and which includes substantially similar covenants as our RCF, as disclosed in note 12b to our consolidated financial statements, and (ii) securitization transactions, which are disclosed in note 10f to our consolidated financial statements.

Non-GAAP Net Income and Non-GAAP EPS Data

We present non-GAAP net income and non-GAAP earnings per share (“EPS”) as management believes that such data provide useful information to investors because they are used by management and our Board of Directors, in conjunction with other performance metrics, to evaluate our operational performance, to prepare and evaluate our work plans and annual budgets and ultimately to evaluate the performance of management, including annual compensation. While other qualitative factors and judgment also affect annual compensation, the principal quantitative element in the determination of such compensation are performance targets tied to the work plan, which are based on these non-GAAP measures.

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Non-GAAP financial measures have no standardized meaning and accordingly have limitations in their usefulness to investors. Investors are cautioned that, unlike financial measures prepared in accordance with U.S. GAAP, non-GAAP measures may not be comparable with the calculation of similar measures for other companies. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses our performance. The limitations of using non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all events during a period and may not provide a comparable view of our performance to other companies in the pharmaceutical industry. Investors should consider non-GAAP net income and non-GAAP EPS in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.

In preparing our non-GAAP net income and non-GAAP EPS data, we exclude items that either have a non-recurring impact on our financial performance or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not excluded, potentially cause investors to extrapolate future performance from an improper base that is not reflective of our underlying business performance. Certain of these items are also excluded because of the difficulty in predicting their timing and scope. The items excluded from our non-GAAP net income and non-GAAP EPS include:

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The following table presents our non-GAAP net income and non-GAAP EPS for the years ended December 31, 2025 and 2024, as well as reconciliations of each measure to their nearest GAAP equivalents:

Adjustments for legal settlements and loss contingencies in 2024 were mainly related to legal expenses of $357 million recorded in connection with a decision by the European Commission in its antitrust investigation into COPAXONE, and an update to the estimated settlement provision of $278 million for the opioid cases (mainly the effect of the passage of time on the net present value of the discounted payments and the settlement agreement with the city of Baltimore).

Adjustments for corresponding tax effects and unusual tax items in 2024 include a tax item in an amount of $495 million related to the settlement agreement with the ITA to settle certain litigation with respect to taxes payable for the Company’s taxable years 2008 through 2020.

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Trend Information

The following factors are expected to have a significant effect on our 2026 results:

For additional information, please see “Item 1—Business” above and elsewhere in this Item 7.

Critical Accounting Policies

For a description of our significant accounting policies, see note 1 to our consolidated financial statements.

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and related footnotes. Actual results may differ from these estimates. We base our judgments on our experience and on various assumptions that we believe to be reasonable under the circumstances.

Of our policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our consolidated financial statements. We have applied our policies and critical accounting estimates consistently across our businesses.

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The critical accounting estimates relate to the following:

Revenue Recognition and SR&A in the United States

Our gross product revenues are subject to a variety of deductions which are generally estimated and recorded in the same period that the revenues are recognized, and primarily represent chargebacks, rebates and sales allowances to wholesalers, retailers and government agencies with respect to our pharmaceutical products. Those deductions represent estimates of rebates and discounts related to gross sales for the reporting period and, as such, knowledge and judgment of market conditions and practice are required when estimating the impact of these revenue deductions on gross sales for a reporting period.

Historically, our changes of estimates reflecting actual results or updated expectations, have not been material to our overall business. Product-specific rebates, however, may have a significant impact on year-over-year individual product growth trends. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate predictors of our future experience, our results could be materially affected. The sensitivity of our estimates can vary by program, type of customer and geographic location. However, estimates associated with governmental allowances, U.S. Medicaid and other performance-based contract rebates are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this time lag, in any given quarter, our adjustments to actual can incorporate revisions of several prior quarters. See also “Revenue recognition” in note 1 to the consolidated financial statements.

Income Taxes

The provision for income tax is calculated based on our assumptions as to our entitlement to various benefits under the applicable tax laws in the jurisdictions in which we operate. The entitlement to such benefits depends upon our compliance with the terms and conditions set out in these laws.

Accounting for uncertainty in income taxes requires that it be more likely than not that the tax benefits recognized in the financial statements be sustained based on technical merits. The amount of benefits recorded for these positions is measured as the largest benefit more likely than not to be sustained. Significant judgment is required in making these determinations.

Deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the determination of the appropriate valuation allowances, we have considered the most recent projections of future business results and prudent tax planning alternatives that may allow us to realize the deferred tax assets. Taxes which would apply in the event of disposal of investments in subsidiaries have not been taken into account in computing deferred taxes, as it is our intention to hold these investments rather than realize them.

Taxes have not been provided for tax-exempt income, as the Company intends to permanently reinvest these earnings and does not currently foresee a need to distribute dividends out of these earnings. In addition, the Company announced a suspension of dividend distribution on ordinary shares and ADSs in 2017. Furthermore, deferred taxes have not been provided for the retained earnings of the Company’s foreign subsidiaries because

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the Company does not expect these subsidiaries to distribute taxable dividends in the foreseeable future, as their earnings and excess cash are used to pay down the group’s external liabilities, and the Company expects to have sufficient resources in the Israeli companies to fund its cash needs in Israel. An assessment of the tax that would have been payable had the Company’s foreign subsidiaries distributed their income to the Company is not practicable because of the multiple levels of corporate ownership and multiple tax jurisdictions involved in each hypothetical dividend distribution.

For a discussion of the uncertain tax positions, deferred tax and valuation allowance estimates see notes 1 and 13 to our consolidated financial statements.

Contingencies

From time to time, Teva and/or its subsidiaries are subject to claims for damages and/or equitable relief arising in the ordinary course of business. In addition, in large part as a result of the nature of its business, Teva is frequently subject to litigation, governmental investigations and other legal proceedings. Except for income tax contingencies or contingent consideration acquired in a business combination, Teva records a provision in its consolidated financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is reasonably estimable. When accruing these costs, Teva will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, Teva accrues for the minimum amount within the range. Teva records anticipated recoveries under existing insurance contracts at the gross amount that is expected to be collected when they are considered probable to occur.

Teva reviews the adequacy of the accruals on a periodic basis and, although it believes that its present reserves are adequate, changes in facts and circumstances in the future may lead to adjustments to reserve estimates and could have a material impact on Teva’s results of operations, cash flows and financial condition in the period that reserve estimates are adjusted or paid. As such accruals are based on management’s judgment as to the probability of losses and, where applicable, actuarially determined estimates, accruals may materially differ from actual verdicts, settlements or other agreements made with regards to such contingencies. Litigation outcomes and contingencies are unpredictable and excessive verdicts can occur. Accordingly, management’s assessments involve complex judgments concerning future events and often rely heavily on estimates and assumptions.

Impairment of Property, Plant and Equipment

The Company assesses changes in economic, regulatory and legal conditions and makes assumptions regarding estimated future cash flows in evaluating the value of the Company’s property, plant and equipment.

The Company periodically evaluates whether current facts or circumstances indicate that the carrying values of its property, plant and equipment assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, the Company will estimate fair value using a discounted value of estimated future cash flows approach.

Recently Issued Accounting Pronouncements

See note 1 to our consolidated financial statements.

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