Key Highlights

  • Third quarter 2026 Revenue was USD 4,395 million, down 2% in both U.S. dollars and local currency, as generic lenalidomide sales fell.
  • Gross profit margin rose to 55.5% from 51.4%, helped by a richer product mix led by AUSTEDO.
  • U.S. generic product revenue dropped 39% to USD 718 million, while AUSTEDO rose 21% to USD 727 million and UZEDY rose 96% to USD 85 million.
  • Operating income was USD 714 million against USD 882 million a year earlier, with legal settlement and loss contingency expenses of USD 202 million.

Generics Decline Offsets Growth in Branded Medicines

Teva Pharmaceutical (NYSE:TEVA) filed its Quarterly Report for the period ended September 30, 2026 on November 3, 2026. Revenue of USD 4,395 million fell 2%, mainly because of lower generic revenue, especially lenalidomide capsules, the generic version of Revlimid, in the United States. U.S. segment revenue fell 11% to USD 1,870 million and segment profit slipped to USD 791 million from USD 927 million. Europe grew 7% to USD 1,319 million with segment profit up 39%, and International Markets grew 6% to USD 592 million with segment profit up 32%. Other Activities, which include the Anda distribution business, brought in USD 613 million, up 3%, and Anda has been reported outside the U.S. segment since January 1, 2026, with prior periods recast.

Mix Shift Lifts Margin but Costs and Settlements Bite

The mix shift worked as management intended: AUSTEDO sales in the United States rose to USD 727 million, AJOVY rose 88% to USD 138 million, and UZEDY nearly doubled, up 96% to USD 85 million. Gross margin gained 4.1 points to 55.5%. Against that, Research and Development expenses rose 16% to USD 297 million, legal settlements and loss contingencies reached USD 202 million from USD 60 million, and net financial expenses climbed to USD 414 million from USD 237 million. Pre-tax income was USD 300 million, against USD 646 million a year earlier, with tax expense of USD 66 million.

Debt, Pipeline Setback and Tariff Terms

Debt stood at USD 16,718 million at September 30, 2026. During the quarter the company redeemed USD 4,678 million of senior notes early and issued new notes, and in October it repaid USD 1,798 million of 3.15% notes at maturity. Operating Cash Flow was USD 241 million, down from USD 369 million, while free cash flow, as the company defines it, was USD 495 million. On the call, management said it stopped the emrusolmin Phase II study after an interim futility analysis with no safety concerns. It also agreed in October to Medicaid price cuts on selected medicines and a prospective most-favored-nation pricing commitment, and it warned that tariff protections may not cover future products.

Where Things Stand

Revenue fell because a large generic product faded faster than newer medicines grew, but margin improved because those newer medicines carry higher profit. Teva Pharmaceutical (NYSE:TEVA) also reported that its innovative portfolio rose 33%, according to the CEO, and said it is raising full-year guidance on AUSTEDO, AJOVY and UZEDY. Higher interest costs, legal charges and the futility stop on emrusolmin temper the picture. The company began trading ordinary shares on the New York Stock Exchange on September 14, 2026, replacing ADSs, and, per the CEO, reached investment-grade status at all three major rating agencies after an S&P upgrade. It closed the BioXcel neuroscience asset purchase on October 27, 2026.