Short answer
Teva Pharmaceutical Industries Ltd (TEVA) filed its fiscal 2017 10-K annual report with the SEC on Feb 12, 2018. It reported revenue of $22.4B (+2.2% year over year) and net income of −$16.3B.
- Top risk flagged: FCPA resolution: $519 million penalties, three-year DOJ deferred prosecution agreement, and independent compliance monitor
FY2017 key financial metrics · XBRL
- Revenue
- $22.4B
- +2.2% YoY
- Net income
- −$16.3B
- −5043.8% YoY
- Operating margin
- -78.1%
- −87.9 pp YoY
- Gross margin
- 47.4%
- −5.8 pp YoY
- EPS (diluted)
- −$16.26
- −23328.6% YoY
- ROE
- -93.7%
- −94.6 pp YoY
- Operating cash flow
- $2.2B
- −42.8% YoY
Source: XBRL data from the Teva Pharmaceutical Industries Ltd (TEVA) FY2017 10-K on SEC EDGAR. USD.
Teva Pharmaceutical Industries Ltd FY2017 10-K analysis
AI summary of each section, grounded in the filing text
Business Overview
- Global pharmaceutical model combining market-leading generics, focused specialty medicines and OTC products across three regions
- 2017 launches and approvals: AUSTEDO for Huntington disease and tardive dyskinesia, AirDuo RespiClick, ArmonAir RespiClick and QVAR RediHaler
- Major strategic reset: unified commercial organization, generics portfolio optimization and planned closure or divestment of facilities
- Workforce 51,792, down from 56,960; restructuring targeted 14,000 additional positions by end-2019
- Distinctive filing-year pressure: generic COPAXONE approvals, intensified U.S. pricing competition and specialty-asset divestitures totaling $1.1 billion, $675 million and $703 million
Management Discussion & Analysis
- Revenue $22.4B, up 2% YoY, or 6% in local currency, driven by generics and Anda
- Gross margin 48.4% vs 54.1%; operating margin (78.1%) vs 9.8%, reflecting $17.1B goodwill impairment
- Best segment: Specialty, revenue $7.9B, profit $4.3B, 54.8% margin; worst: Generics, $12.3B revenue, $2.8B profit, 23.1% margin
- Operating cash flow $3.5B vs $5.2B; capex $0.9B; net debt repayments $4.4B; dividends suspended
- Outlook: restructuring and asset divestitures; risks from $32.5B debt, COPAXONE competition, U.S. generics price erosion and currency volatility
Risk Factors
- FCPA resolution: $519 million penalties, three-year DOJ deferred prosecution agreement, and independent compliance monitor
- Geopolitical exposure: approximately 80% of sales in U.S. and Western Europe, with operations challenged by Venezuela instability and South Korean military threats
- Supply-chain vulnerability: single external sources for some key raw materials, increasing dependence on plants during manufacturing-network streamlining
- Competitive disruption: Amazon pharmaceutical distribution entry and CVS Health-Aetna merger threatening customer bargaining power and generic price erosion
- Financial risk: $32.5 billion debt, including approximately $3.4 billion unhedged floating-rate debt and $3.7 billion covenant-linked debt
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