Teva Q2 Earnings Lag Estimates, 2026 Revenue View Raised, Stock Rises

Revenues for the second quarter were $4.14 billion, which marginally beat the Zacks Consensus Estimate of $4.10 billion. Total revenues decreased 1% from the year-ago quarter on a reported basis and 3% on a constant currency basis due to lower generic product revenues

The company’s branded drugs Austedo, Ajovy and Uzedy witnessed strong momentum in the quarter.

TEVA’s Q2 U.S. Unit Sales

Sales in the United States segment were $1.70 billion, declining 5% year over year, mainly due to weaker sales of generic products notably lenalidomide capsules (generic Revlimid) in the United States, partly offset by higher revenues from key innovative products, notably Austedo. The segment’s sales beat the Zacks Consensus Estimate of $1.65 billion.

Generic/biosimilar product revenues were down 31% year over year to $660 million in the United States, mainly due to lower revenues from lenalidomide capsules as a result of increased generic competition in the United States, partially offset by higher revenues from Teva’s portfolio of biosimilar products. The figure missed the Zacks Consensus Estimate of $720 million.

Huntington's disease drug Austedo recorded sales of $676 million in the United States, up 37% year over year. Sales were mainly driven by volume growth as prescription trends continued to grow. Austedo sales beat the Zacks Consensus Estimate of $576 million.

Ajovy recorded sales of $116 million in the quarter, up 83% year over year, driven by a reduction in sales allowance as well as volume growth. Ajovy sales surpassed the Zacks Consensus Estimate of $81 million.

Uzedy (risperidone), a long-acting subcutaneous atypical antipsychotic injection for the treatment of schizophrenia, generated sales of $77 million in the second quarter, up 43% year over year, mainly driven by volume growth. Uzedy sales surpassed the Zacks Consensus Estimate of $71 million.

Copaxone recorded sales of $61 million in the United States, down 2% year over year, mainly due to lower volumes. Copaxone sales, however, beat the Zacks Consensus Estimate of $59 million.

TEVA’s Europe and International Market Units’ Sales

The Europe segment recorded revenues of $1.26 billion, down 3% year over year on a reported basis. Sales declined 8% on a constant currency basis, mainly due to lower revenues from generic products and lower proceeds from the sale of certain product rights. Teva launched Austedo in European markets earlier this year. Europe revenues missed the Zacks Consensus Estimate of $1.36 billion.

The International Markets segment recorded revenues of $550 million, up 11% year over year on a reported basis and 7% in constant currency terms. The increase was due to higher revenues from Ajovy and Austedo sales, primarily in China. International Markets revenues beat the Zacks Consensus Estimate of $537 million.

The Other segment (comprising the sales of active pharmaceutical ingredients to third parties and certain contract manufacturing services) recorded revenues of $627 million, up 5% year over year on both a reported basis and a constant currency basis.

TEVA’s Q2 Margin Discussion

Adjusted gross margin was 55.4% in the quarter, up 80 basis points (bps) year over year. The rise was mainly driven by higher Austedo and Ajovy revenues, partially offset by lower revenues from generic products in the United States segment.

Adjusted research & development expenses increased 298% year over year to $970 million, reflecting higher costs related to the acquisition of Emalex Biosciences. Selling and marketing (S&M) expenditure increased 10% year over year to $717 million. General and administrative expenses increased 4% from the prior-year level to $317 million.

Adjusted operating income declined to $375 million from $1.13 billion in the year-ago quarter. Adjusted operating margin contracted to 9% from 27.1%, mainly due to higher research and development expenses related to the acquisition of Emalex Biosciences.

Teva expects an adjusted operating margin of 30% by 2027 to be achieved through cost savings and the continued growth of its branded drugs.

TEVA Updates Guidance for 2026

Teva raised its 2026 revenue outlook to $16.50-$16.85 billion from the previous range of $16.40-$16.80 billion.

Despite the mixed earnings results, shares of Teva were up 9.6% yesterday, driven by the company's raised 2026 revenue outlook for its innovative portfolio, particularly Austedo, Ajovy and Uzedy.

Year to date, shares of Teva have risen 11.2% against the industry’s 1.2% decline.

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The company increased its Austedo revenue forecast to $2.45-$2.60 billion from $2.40-$2.55 billion. Ajovy guidance was raised to $850-$870 million from $750-$790 million, while Uzedy guidance was increased to $270-$290 million from $250-$280 million.

Teva expects combined 2026 revenues of approximately $3.7 billion for Austedo, Ajovy and Uzedy, reflecting around 17% yearly growth at the midpoint.

The company maintained adjusted EPS guidance of $1.91-$2.11 for 2026. Teva continues to expect adjusted operating income in the band of $3.8-$4 billion in 2026. The company also maintained its adjusted EBITDA guidance in the range of $4.23-$4.53 billion. Free cash flow is projected to be in the range of $2-$2.4 billion, and capital expenditures are expected to be $500 million in 2026, both unchanged from the previous expectation.

Teva Advances Its Innovative Pipeline

Teva completed the acquisition of Emalex Biosciences in June 2026. The transaction added ecopipam, a first-in-class investigational treatment for pediatric Tourette syndrome, to its neuroscience pipeline. The acquisition strengthened Teva’s innovative medicines pipeline.

In June, Teva submitted a new drug application (NDA) to the FDA seeking approval for ecopipam for treating pediatric Tourette syndrome. The company expects the potential launch of ecopipam in the first half of 2027, subject to approval.

Teva also remains on track for the anticipated launch of olanzapine long-acting injectable in the United States in the fourth quarter of 2026 upon potential approval from the FDA.

Along with the earnings release, Teva announced that it will replace its American Depositary Shares (ADSs) with its regular ordinary shares on the New York Stock Exchange (NYSE), which will commence trading on the NYSE from Sept. 14, 2026. By replacing ADSs with ordinary shares listed directly on the NYSE, Teva aims to make its stock more accessible to investors, which could increase investor interest and trading activity as well as reduce the company's financing costs over time.

TEVA’s Zacks Rank & Stocks to Consider

Teva currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the biotech sector are Harmony Biosciences HRMY, Kiniksa Pharmaceuticals KNSA and Liquidia Corporation LQDA, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for Harmony Biosciences’ 2026 earnings per share have risen from $3.20 to $3.30, while estimates for 2027 have increased from $3.64 to $3.87 during the same time. HRMY shares have lost 4.2% year to date.

Harmony Biosciences’ earnings missed estimates in each of the trailing four quarters, with the average negative surprise being 25.16%.

Over the past 60 days, estimates for Kiniksa Pharmaceuticals’ 2026 earnings per share have risen from $1.24 to $1.39, while estimates for 2027 have increased from $1.70 to $2.12 during the same time. KNSA shares have soared 96.1% year to date.

Kiniksa Pharmaceuticals’ earnings beat estimates in one of the trailing four quarters, met the same once and missed the same on the remaining two occasions, with the average negative surprise being 5.42%.

Over the past 60 days, estimates for Liquidia’s 2026 earnings per share have risen from $2.97 to $3.02, while estimates for 2027 have increased from $4.81 to $5.31 during the same time. LQDA shares have surged 159.7% year to date.

Liquidia’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 54.40%.

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