July 30, 2025 • 7 mins
Teva Pharmaceutical Industries reported its second-quarter 2025 financial results on Wednesday, reflecting a mixed performance amid continued shifts in its portfolio strategy. CEO Richard Francis speaks with Bloomberg's Scarlet Fu and Katie Griefeld.
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio, news.
Speaker 2 (00:07):
Business, Bloomberg Markets. I'm Scarlett Food. It's time now for
the stock of the hour, and we're focused on Teva Pharmaceuticals.
Those shares are rising after the drug maker reaffirmed its
full year revenue guidance, even after sales missed estimates for
the second quarter. For the quarter that ended, Teva is
gearing up to launch new products in the second half
of the year and looking at spinning off its active
(00:28):
ingredient business, which it hopes will work as catalysts. So
joining us live, I'm pleased to say, is the Teva CEO,
Richard Francis, and of course Bloomberg Open Interest co hosts
Katie Greifeld here with us as well. Richard, thank you
so much for speaking with us. I want to start
with the backdrop that you are operating against, which is tariffs,
and how that affects you the US and you kicked
(00:49):
off this week agreeing to fifteen percent tariffs on pharmaceuticals.
How does that affect your business, particularly here.
Speaker 3 (00:56):
In the US.
Speaker 4 (00:58):
Well, firstly, thank you Scott Kate for having me. I
do appreciate the time. So when it comes to tariffs, yes,
that is hot, hot topic and how it impacts us.
A couple of things I'd say is, firstly, we're not
super clear on exactly the detail of what's happened in
Europe and whether generics are included or whether they're not.
Speaker 3 (01:14):
I would like to say the exposure to China.
Speaker 4 (01:17):
We don't have an exposure to China, and we are
very limited exposure to India because obviously you saw the
tariff's beIN announced this morning.
Speaker 3 (01:24):
But I think the reason why I.
Speaker 4 (01:26):
Thought in a good position is our supply chain and
how it sets up. So we have eight manufacturing sites
in the US already, and our major product, which I'm
sure we'll talk about, oesteto, which grow twenty two percent
of the US, is manufactured in Florida. So I think
from a point of view a supply chain, we're in
a good position. But what we do need to have
is clarity on what these tariffs mean in Europe and
(01:48):
what they mean in other parts of the world, and
the detail of that, because there has been some rumors
that generics.
Speaker 3 (01:54):
May be excluded or not until we'll have to wait
and see.
Speaker 2 (01:57):
Yeah, no, you're working in a fog of uncertainty. Get that,
and I'm just curious whether you've had conversations with the
White House or surroguits of the White House on these
specific issues.
Speaker 3 (02:07):
Well, we've been.
Speaker 4 (02:07):
Working with them on two three two and make it,
helping them sort of work through what is the complexity
of the pharmaceutical market, the supply change as well as
on the innovative side and on the generic side.
Speaker 3 (02:18):
But with regard to these tariffs that.
Speaker 4 (02:20):
Have just recently announced, we don't have any clarity yet
on the detail.
Speaker 3 (02:24):
What I would say is because of.
Speaker 4 (02:25):
What I said about our supply chain and our footprint
in the US as well as we've been working the
last few months on mitigating plans.
Speaker 3 (02:33):
As to whatever may happen. Now let's see the detail.
Speaker 4 (02:36):
But it's something where I think we already would have
plans in place to at least mitigate some of this.
Speaker 1 (02:43):
I hear what you're saying, Richard, that there's a lot
of details that we would all like to have, especially
you where you're sitting as the CEO of a pharmaceutical business.
But you said in May that you would have to
raise drug prices if President Trump imposed those pharma tariffs.
So now that we have at least some details. When
it comes to the US and the EU, is that
(03:03):
still the plan? Is that a lever that you planned
a pull?
Speaker 4 (03:07):
Well, I g when you think about the two businesses
we have, we have the innovative business and we have
the generics. On the innovative business, we won't increased prices
because the way the system set up, we can't.
Speaker 3 (03:18):
So that's just the fact.
Speaker 4 (03:19):
But as I said, our major products actually made in
the United States, so tariffs are not actually relevant to that,
which is good for US. I think when it comes
to Generics, is a very competitive market and you can
you can only raise prices when you have a new contract,
and in that position, we would instill a free market.
So it depends what our competitors do. So I think
the ability for prices to change will depend on the
(03:42):
competitive environment and how some of our competitors move. So
I think will they go up? I think we'll have
to wait and see. There is the potential that they could.
But I would argue that you know, in the United States,
one in fifteen scripts is a tap a script. So
we are a major supplier of the healthcare system in
the United States, and we've been community into the administration
who are very aware of this, and I would say sympathetic.
(04:04):
They want to make sure there is a good supply
of medicines to the United States, and so I think
as that all plays together, we'll understand actually how tarifs
do fall on the generics and or if they do
or if they don't. But I think that's how it's
separated up is we have the innovative where we can't
raise prices. Theoretically you can in generics, right, but it
is a competitive environment.
Speaker 1 (04:25):
I appreciate the context there. I want to talk about
another issue that we are also searching for details on,
and that is Most Favored Nation drug pricing. That is
a proposal that President Trump has floated. We've been talking
about your generics business, but when it comes to your
branded franchise, how might MFN affect that and are you
putting any plans in place there?
Speaker 4 (04:47):
Well, actually, we're in a really unique position here, Katie.
Speaker 3 (04:51):
So I don't think most people are sit in my
seat will.
Speaker 4 (04:54):
Answer it this way. Is because our innovative portfolio is
so young. I mean, it's twenty seven cent growth and
is closing on two point nine billion dollars of revenue.
And this is a Stato a jovi and you said it,
but apart from a Jovi, these are basically sold in
the United States. We haven't gone global yet and so
(05:15):
because of that, the most favored nation pricing I think one,
we need to see what it says and when it's
going to be.
Speaker 3 (05:20):
Put in place.
Speaker 4 (05:21):
But we're not a mature by a farmer company yet
where we have that geographical footprint of our innovative business.
So that gives us, I think, time to think about
what we do, to think about where we launch our products,
and to think about the pricing. But right now, Oestio
and your studia are pretty much sold in the United States.
A Jovi is sped across Europe and international markets, so
(05:44):
that's a very limited footprint compared to many other biofarmer companies.
What I would say is it's important to understand what
the most favored nation look like. Because another thing I'd
say is when you look at the actual net price
of products in the United States, on many cases, because
of what has happened with the PBMs over time, the
net price versus the price in Europe, there's not as
(06:06):
big a differentiation that's differential as you'd imagine on many.
Speaker 3 (06:11):
Drugs, so let's wait and see how it plays up.
Speaker 4 (06:13):
But I think we're in a strong position as TeV
and that's important because our innovative portfolio is growing so
well at twenty seven percent.
Speaker 1 (06:20):
And Richard, we have less than a minute left here.
But Scarlett alluded to this in the intro that there's
a lot of interest in the Tappy business over at Teva.
Have you found a buyer yet?
Speaker 4 (06:32):
So we've been in active discussions and we are in
active discussions, which is why I'll probably keep this quite
short and we'll have an announcement on this at the
end of Q three. What we are doing is taking
the time to make sure whatever we do, we really
bring value to our shelders, which is the prime responsibility
I have is to make sure we create a long term,
sustainable company that creates shelder value.
Speaker 2 (06:54):
Richard Francis, you've just earned yourself an invitation to come
back by the end of the third quarter with that announcement.
Thank you so much for joining us today, Pharmaceutical CEO,
Richard Francis, And of course Katie where I fell at
Bloomberg Open Interests co host
Bloomberg Audio Studios, Podcasts, radio, news.
Speaker 2 (00:07):
Business, Bloomberg Markets. I'm Scarlett Food. It's time now for
the stock of the hour, and we're focused on Teva Pharmaceuticals.
Those shares are rising after the drug maker reaffirmed its
full year revenue guidance, even after sales missed estimates for
the second quarter. For the quarter that ended, Teva is
gearing up to launch new products in the second half
of the year and looking at spinning off its active
(00:28):
ingredient business, which it hopes will work as catalysts. So
joining us live, I'm pleased to say, is the Teva CEO,
Richard Francis, and of course Bloomberg Open Interest co hosts
Katie Greifeld here with us as well. Richard, thank you
so much for speaking with us. I want to start
with the backdrop that you are operating against, which is tariffs,
and how that affects you the US and you kicked
(00:49):
off this week agreeing to fifteen percent tariffs on pharmaceuticals.
How does that affect your business, particularly here.
Speaker 3 (00:56):
In the US.
Speaker 4 (00:58):
Well, firstly, thank you Scott Kate for having me. I
do appreciate the time. So when it comes to tariffs, yes,
that is hot, hot topic and how it impacts us.
A couple of things I'd say is, firstly, we're not
super clear on exactly the detail of what's happened in
Europe and whether generics are included or whether they're not.
Speaker 3 (01:14):
I would like to say the exposure to China.
Speaker 4 (01:17):
We don't have an exposure to China, and we are
very limited exposure to India because obviously you saw the
tariff's beIN announced this morning.
Speaker 3 (01:24):
But I think the reason why I.
Speaker 4 (01:26):
Thought in a good position is our supply chain and
how it sets up. So we have eight manufacturing sites
in the US already, and our major product, which I'm
sure we'll talk about, oesteto, which grow twenty two percent
of the US, is manufactured in Florida. So I think
from a point of view a supply chain, we're in
a good position. But what we do need to have
is clarity on what these tariffs mean in Europe and
(01:48):
what they mean in other parts of the world, and
the detail of that, because there has been some rumors
that generics.
Speaker 3 (01:54):
May be excluded or not until we'll have to wait
and see.
Speaker 2 (01:57):
Yeah, no, you're working in a fog of uncertainty. Get that,
and I'm just curious whether you've had conversations with the
White House or surroguits of the White House on these
specific issues.
Speaker 3 (02:07):
Well, we've been.
Speaker 4 (02:07):
Working with them on two three two and make it,
helping them sort of work through what is the complexity
of the pharmaceutical market, the supply change as well as
on the innovative side and on the generic side.
Speaker 3 (02:18):
But with regard to these tariffs that.
Speaker 4 (02:20):
Have just recently announced, we don't have any clarity yet
on the detail.
Speaker 3 (02:24):
What I would say is because of.
Speaker 4 (02:25):
What I said about our supply chain and our footprint
in the US as well as we've been working the
last few months on mitigating plans.
Speaker 3 (02:33):
As to whatever may happen. Now let's see the detail.
Speaker 4 (02:36):
But it's something where I think we already would have
plans in place to at least mitigate some of this.
Speaker 1 (02:43):
I hear what you're saying, Richard, that there's a lot
of details that we would all like to have, especially
you where you're sitting as the CEO of a pharmaceutical business.
But you said in May that you would have to
raise drug prices if President Trump imposed those pharma tariffs.
So now that we have at least some details. When
it comes to the US and the EU, is that
(03:03):
still the plan? Is that a lever that you planned
a pull?
Speaker 4 (03:07):
Well, I g when you think about the two businesses
we have, we have the innovative business and we have
the generics. On the innovative business, we won't increased prices
because the way the system set up, we can't.
Speaker 3 (03:18):
So that's just the fact.
Speaker 4 (03:19):
But as I said, our major products actually made in
the United States, so tariffs are not actually relevant to that,
which is good for US. I think when it comes
to Generics, is a very competitive market and you can
you can only raise prices when you have a new contract,
and in that position, we would instill a free market.
So it depends what our competitors do. So I think
the ability for prices to change will depend on the
(03:42):
competitive environment and how some of our competitors move. So
I think will they go up? I think we'll have
to wait and see. There is the potential that they could.
But I would argue that you know, in the United States,
one in fifteen scripts is a tap a script. So
we are a major supplier of the healthcare system in
the United States, and we've been community into the administration
who are very aware of this, and I would say sympathetic.
(04:04):
They want to make sure there is a good supply
of medicines to the United States, and so I think
as that all plays together, we'll understand actually how tarifs
do fall on the generics and or if they do
or if they don't. But I think that's how it's
separated up is we have the innovative where we can't
raise prices. Theoretically you can in generics, right, but it
is a competitive environment.
Speaker 1 (04:25):
I appreciate the context there. I want to talk about
another issue that we are also searching for details on,
and that is Most Favored Nation drug pricing. That is
a proposal that President Trump has floated. We've been talking
about your generics business, but when it comes to your
branded franchise, how might MFN affect that and are you
putting any plans in place there?
Speaker 4 (04:47):
Well, actually, we're in a really unique position here, Katie.
Speaker 3 (04:51):
So I don't think most people are sit in my
seat will.
Speaker 4 (04:54):
Answer it this way. Is because our innovative portfolio is
so young. I mean, it's twenty seven cent growth and
is closing on two point nine billion dollars of revenue.
And this is a Stato a jovi and you said it,
but apart from a Jovi, these are basically sold in
the United States. We haven't gone global yet and so
(05:15):
because of that, the most favored nation pricing I think one,
we need to see what it says and when it's
going to be.
Speaker 3 (05:20):
Put in place.
Speaker 4 (05:21):
But we're not a mature by a farmer company yet
where we have that geographical footprint of our innovative business.
So that gives us, I think, time to think about
what we do, to think about where we launch our products,
and to think about the pricing. But right now, Oestio
and your studia are pretty much sold in the United States.
A Jovi is sped across Europe and international markets, so
(05:44):
that's a very limited footprint compared to many other biofarmer companies.
What I would say is it's important to understand what
the most favored nation look like. Because another thing I'd
say is when you look at the actual net price
of products in the United States, on many cases, because
of what has happened with the PBMs over time, the
net price versus the price in Europe, there's not as
(06:06):
big a differentiation that's differential as you'd imagine on many.
Speaker 3 (06:11):
Drugs, so let's wait and see how it plays up.
Speaker 4 (06:13):
But I think we're in a strong position as TeV
and that's important because our innovative portfolio is growing so
well at twenty seven percent.
Speaker 1 (06:20):
And Richard, we have less than a minute left here.
But Scarlett alluded to this in the intro that there's
a lot of interest in the Tappy business over at Teva.
Have you found a buyer yet?
Speaker 4 (06:32):
So we've been in active discussions and we are in
active discussions, which is why I'll probably keep this quite
short and we'll have an announcement on this at the
end of Q three. What we are doing is taking
the time to make sure whatever we do, we really
bring value to our shelders, which is the prime responsibility
I have is to make sure we create a long term,
sustainable company that creates shelder value.
Speaker 2 (06:54):
Richard Francis, you've just earned yourself an invitation to come
back by the end of the third quarter with that announcement.
Thank you so much for joining us today, Pharmaceutical CEO,
Richard Francis, And of course Katie where I fell at
Bloomberg Open Interests co host
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