Teva Pharmaceutical Industries Bank of America Global Healthcare Conference

That's okay. Good to have you on the screen, Jason.

Yeah. Okay. Thank you. The fact that we got a credit rating of investment grade from all three of the credit rating agencies, and we did that, to remind people, a year ahead of when we said we would. We said we'd do that by the end of 2027, so we did that a month or so ago. An important aspect to, which I'm sure everybody knows, but I'm quite proud of, and I know my CFO, Eli Kalif, who sits here, is very proud of, is you get a credit rating upgrade not because you paid down the debt only. It's because you've actually shown a future direction of your EBITDA.

When you look at net debt to EBITDA and where the company's going, they actually think, "Okay, it's not that we paid down the debt and now what?" It's the future of the company looks a lot better and why does it look a lot better and why is the EBITDA going to grow, and we'll talk a lot about that. I think that's important for people to understand because I always say that that metric of investment grade highlights our disciplined capital allocation to pay down debt, but our capital allocation within the company to grow our revenue, to grow our EBITDA, to show that that journey of financial stability, and I'd argue opportunity, is there.

That's one point which I think is important to. That's another milestone, another metric that we set out to do, and we've done ahead of when we would do it, and there's others we can talk about. The other one is to that, how do we allocate capital now and do we do BD? We had four capital allocation criteria, pay down debt, invest in our growth drivers, which was our commercial products, AUSTEDO, UZEDY, AJOVY, and product launches. The third one was develop our pipeline, which is very exciting, and do BD. The fourth one was return capital to shareholders. As you've highlighted, pretty much number one is gone because we'll pay off a chunk of debt this year and early next year.

As we've also seen, Eli Kalif and the team refinanced some of our debt a few weeks ago. We did that at a really good rate because we're a good company, we're investment grade. A lot of things have improved on that side, which allows us now to think about how we want to deploy the capital to those other three areas. A few things we have. Yes, we are very active in BD. Although we've only done one transaction at Amylyx, which I think was a good transaction, and it was very synergistic with what we do, that's based on the fact that we have a very disciplined approach to value and return on that capital.

Although we've been in discussions with other assets and companies, we don't feel it's the right price and the right return for us, we won't do it. We can be disciplined in that, one, because I think we've come from quite a difficult position, from a balance sheet position, and so we're thoughtful. The second thing is we have a great organic pipeline, which allows us to be choosy about what we bring in. As you know, we also potentially could be getting an asset, Biohaven, which is in bankruptcy, and we've been looking at that for some time. We will do more. We do look at a lot, but if the price isn't right, we won't do it. Those transactions could get bigger. We do, and Eric Hughes, head of R&D, and Tim O is here.

We do look at what we're buying and is it better than what we have, and if it is, then we can do it, and then we'll have to stop doing something internally. We're very agnostic about where our pipeline comes from. But definitely, we are planning, Jason Gerberry, for the world where our balance sheet starts to build cash on it, because it will very quickly. Just the refinance of the debt, we're probably going to save $400 million of finance expenses next year. That just shows you the progress. That's cash. So we're planning for what we can look at, what size those deals can be in 2 years' time versus now. So we're planning for the now, hoping to get some good deals, but being mindful of price.

We're also planning for what those could look like in 3 to 4 years where our balance sheet is very different. But we have a great pipeline, which we'll talk a lot about, and so it's not a must, it's an and/or.

Yeah. I think you're broadly right. The capital allocation for in-licensing and BD will be predominantly innovative. It will be predominantly in CNS neurology and more specifically, if we can, in and around the areas we operate, psychiatry, for example, movement disorders, things like that, and then also potentially immunology because of our innovative pipeline that's coming through. So you're right there. I would add, though, excuse me, that we have been, and we will continue to look at rare disease. And rare disease will be more agnostic as to what TA that is in, because we think rare disease is an area where it's based on core competencies, pricing, supply chain, go-to-market model. Those things that we think we have, we've built with AUSTEDO, we're going to expand with innovative pipeline, and we think that we can leverage, but it has to be the right asset, the right price.

That's just one nuance. I would say that we still do deploy capital to our generics business. It's born more biosimilar. So you've seen us do deals on biosimilars, partnering, and so that will continue because we're at 29 biosimilars now in our pipeline, or 15 on the market, 14 in our pipeline, and we want to keep expanding that. So we will be allocating capital to that, but the far majority of the capital will be to the innovative side, as you say.