ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Business Overview

We are a biopharmaceutical company, enabled by a world-class generics business. For over 120 years, our commitment to bettering health has never wavered. From innovating in the fields of neuroscience and immunology to providing complex generic medicines, biosimilars and pharmacy brands worldwide, we are dedicated to addressing patients’ needs, now and in the future.

We operate worldwide, with headquarters in Israel and a significant presence in the United States, Europe and many other markets around the world. Today, our global network of capabilities consists of approximately 34,000 employees across 57 markets.

Teva was incorporated in Israel on February 13, 1944 and is the successor to a number of Israeli corporations, the oldest of which was established in 1901.

Our Business Segments

We operate our business through three segments: United States, Europe and International Markets. Each business segment manages our entire product portfolio in its region, including generics, which includes biosimilars and OTC products, as well as innovative medicines. This structure enables strong alignment and integration between operations, commercial regions, R&D and our global marketing and portfolio function, optimizing our product lifecycle across therapeutic areas.

In addition to these three segments, we have other activities, primarily the sale of API to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies through our affiliate Medis.

Pivot to Growth Strategy

In 2025, we continued to execute on the four key pillars of our “Pivot to Growth” strategy, announced in May 2023. As part of this strategy, in 2025, we entered the strategy’s “Accelerate Growth” phase, during which we focus on growing our innovative portfolio, aligning capital allocation to invest in activities we expect to have the highest value, and modernizing our organization and operations to drive both efficiency and cost savings. For additional information on our Pivot to Growth strategy, see “Item 1—Business—Pivot to Growth Strategy.”

Macroeconomic Environment

In recent years, the global economy has been impacted by fluctuating foreign exchange rates. A significant portion of our revenues is denominated in currencies other than the U.S. dollar and we manufacture many of our products outside of the United States. As a result, fluctuations in the U.S. dollar relative to other currencies in which we operate have in the past and may in the future materially impact our revenues, results of operations, profitability and cash flows. In addition, in many of the markets in which we operate, we have experienced elevated inflation in recent years, contributing to higher interest rates. In other markets, such as the EU, inflation has recently declined, resulting in lower interest rates. Although inflationary and other macroeconomic pressures have and may continue to ease, the higher costs we have incurred in recent periods have already affected our operations and are likely to continue influencing our financial results. Recent U.S. tariffs imposed or threatened to be imposed on materials and products from countries where we do business and any responsive or reciprocal actions taken by such countries could impact our costs and our global operations. The countries subject to tariffs and the tariff rate imposed on each country is uncertain and dynamic, and we continue to monitor and assess the potential impact on our supply chain and global operations.

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The pharmaceutical industry has also experienced disruptions in global supply chains, including our own supply chain, due to geopolitical tensions and other factors. In some cases, such disruptions have resulted in and may continue to result in delays in our production and distribution processes, impacting product availability and our ability to timely respond to consumer demand. We have taken measures and are continually considering various initiatives, including, enhanced inventory management, alternative sourcing strategies, and backup production plans for key products, to allow us to partially mitigate and offset the impact of these factors.

Highlights

Significant highlights of 2025 included:

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Results of Operations

The discussion that follows includes a comparison of our results of operations and liquidity and capital resources for fiscal years 2025 and 2024. For a comparison of our results of operations and financial condition for fiscal years 2024 and 2023, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our 2024 Annual Report on Form 10-K, filed with the SEC on February 5, 2025.

Segment Information

United States Segment

The following table presents revenues, expenses and profit for our United States segment for the past two years:

Year ended December 31,

(U.S. $ in millions /% of Segment Revenues)

Other loss (income) § § § §

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than $0.5 million or 0.5%, as applicable.

United States Revenues

Revenues from our United States segment in 2025 were $9,186 million, an increase of $1,152 million, or 14%, compared to 2024, mainly due to higher revenues from our key innovative products AUSTEDO, AJOVY, and UZEDY, development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), as well as higher revenues from generic products (including biosimilars).

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Revenues by Major Products and Activities

The following table presents revenues for our United States segment by major products and activities for the past two years:

(U.S. $ in millions)

Generic products (including biosimilars) $ 3,657 $ 3,599 2 %

Generic products (including biosimilars) revenues in our United States segment in 2025 increased by 2% to $3,657 million, compared to 2024, mainly driven by higher revenues from our portfolio of biosimilar products and new product launches.

Among the most significant generic products we sold in the United States in 2025 were lenalidomide capsules (the generic version of Revlimid®), Truxima® (the biosimilar to Rituxan®), epinephrine injectable solution (the generic equivalent of EpiPen® and EpiPen Jr®), and SIMLANDI® (the biosimilar to Humira®).

For more information on our generic products, including biosimilars, see “Item 1—Business—Our Product Portfolio and Business Offering—Generic Medicines.”

In 2025, our total prescriptions were approximately 254 million (based on trailing twelve months), representing 6.5% of total U.S. generic prescriptions according to IQVIA data.

AJOVY revenues in our United States segment in 2025 increased by 42% to $295 million, compared to 2024, mainly due to growth in volume. In 2025, AJOVY’s exit market share in the United States in terms of total number of prescriptions was 33.3%, out of the subcutaneous injectable anti-CGRP class, compared to 29.6% in 2024.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AJOVY.”

AUSTEDO revenues (which include AUSTEDO XR) in our United States segment in 2025 increased by 35% to $2,217 million, compared to 2024, mainly due to growth in volume.

For more information on AUSTEDO, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AUSTEDO.”

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UZEDY revenues in our United States segment in 2025 increased by 63% to $191 million compared to 2024, mainly due to growth in volume.

For more information on UZEDY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—UZEDY.”

BENDEKA and TREANDA combined revenues in our United States segment in 2025 decreased by 13% to $147 million, compared to 2024, mainly due to competition from alternative therapies, as well as from generic bendamustine products.

For more information on BENDEKA and TREANDA, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—Oncology.”

COPAXONE revenues in our United States segment in 2025 increased by 6% to $255 million, compared to 2024, mainly due to reduction in sales allowance, partially offset by lower volumes.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

Anda revenues from third parties in our United States segment in 2025 decreased by 3% to $1,496 million, compared to 2024, mainly due to lower volumes. Anda, our distribution business in the United States, distributes generic, biosimilar and innovative medicines and OTC pharmaceutical products from Teva and various third-party manufacturers to independent retail pharmacies, pharmacy retail chains, hospitals and physician offices in the United States. Anda is able to compete in the distribution market by maintaining a broad portfolio of products, competitive pricing and delivery throughout the United States.

To align with our Pivot to Growth strategy, commencing January 1, 2026, Anda will no longer be reported under our United States segment. This shift will allow the United States segment to continue to manage its entire product portfolio in the region, while strengthening focus on its biopharmaceutical business, growth engines and innovation. As a result, from that date, Anda will be reported as part of the Company’s Other Activities. We will align our internal financial and segment reporting in coordination with this shift effective January 1, 2026.

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Product Launches and Pipeline

In 2025, we launched the generic version and biosimilar version of the following branded products in the United States:

Mifepristone Tablets Korlym® January $ 2

SELARSDI (Ustekinumab-aekn) injection** N/A February No Data

EPYSQLI (eculizumab-aagh) Soliris® April $ 367

Ticagrelor Tablets Brilinta® tablets May $ 1,305

Hydroxyzine Hydrochloride Tablets, USP*** N/A June $ 17

Fidaxomicin Tablets Dificid® tablets July $ 410

Liraglutide Injection Saxenda® injection August $ 164

Dasatinib Tablets Sprycel® Tablets September $ 1,366

Cyclosporine Ophthalmic Emulsion Restasis® October $ 1,866

Dalbavancin for Injection Dalvance® for injection October $ 260

*** Product was relaunched.

As of December 31, 2025, our generic products pipeline in the United States includes 116 product applications awaiting FDA approval, including 66 tentative approvals. This total reflects all pending ANDAs, supplements for product line extensions and tentatively approved applications and includes some instances where more than one application was submitted for the same reference product. Excluding overlaps, the branded products underlying these pending applications had U.S. sales for the twelve months ended September 30, 2025 of approximately $124 billion, according to IQVIA. Approximately 80% of pending applications include a paragraph IV patent challenge and we believe we are first-to-file with respect to 54 of these products, or 77 products including final approvals where launch is pending a settlement agreement or court decision. Collectively, these first-to-file opportunities represent over $85 billion in U.S. brand sales for the twelve months ended September 30, 2025, according to IQVIA.

IQVIA reported brand sales are one of the many indicators of future potential value of a launch, but equally important are the mix and timing of competition, as well as cost effectiveness. The potential advantages of being the first filer with respect to some of these products may be subject to forfeiture, shared exclusivity or competition from so-called “authorized generics,” which may ultimately affect the value derived.

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In 2025, we received tentative approvals for generic equivalents of the products listed in the table below, excluding overlapping applications. A “tentative approval” indicates that the FDA has substantially completed its review of an application and final approval is expected once the relevant patent expires, a court decision is reached, a 30-month regulatory stay lapses or a 180-day exclusivity period awarded to another manufacturer either expires or is forfeited.

Rimegepant Orally Disintegrating Tablets, 75mg Nurtec ODT® $ 4,100

Prucalopride Tablets, 1 mg and 2 mg Motegrity® $ 173

Elagolix Tablets, 150 mg and 200 mg Orilissa® $ 150

Azacitidine Tablets, 200 mg and 300 mg Onureg® $ 141

Octreotide Delayed-release Capsules, 20 mg Mycapssa® No Data **

Nintedanib Capsules, 100 mg and 150 mg Ofev® $ 3,280

Macitentan Tablets Opsumit® $ 1,181

** Mycapssa® ships directly to patients, no IQVIA data is available.

For a description of our innovative medicines pipeline, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines” above.

United States Gross Profit

Gross profit from our United States segment in 2025 was $5,618 million, an increase of 28% compared to $4,388 million in 2024.

Gross profit margin for our United States segment in 2025 increased to 61.2%, compared to 54.6% in 2024. This increase was mainly due to the development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), and a favorable mix of products primarily driven by higher revenues from AUSTEDO.

United States R&D Expenses

R&D expenses relating to our United States segment in 2025 were $633 million, flat compared to 2024.

For a description of our R&D expenses in 2025, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

United States S&M Expenses

S&M expenses relating to our United States segment in 2025 were $1,172 million, an increase of 12% compared to $1,049 million in 2024. This increase was mainly due to promotional activities related to our key innovative products mainly AUSTEDO and UZEDY.

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United States G&A Expenses

G&A expenses relating to our United States segment in 2025 were $458 million, an increase of 12% compared to $410 million in 2024.

For a description of our G&A expenses in 2025, see “—Teva Consolidated Results— General and Administrative (G&A) Expenses” below.

United States Profit

Profit from our United States segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and any other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our United States segment in 2025 was $3,356 million, an increase of 46% compared to $2,296 million in 2024. This increase was mainly due to higher gross profit, partially offset by higher S&M and G&A expenses, as discussed above.

Europe Segment

The following table presents revenues, expenses and profit for our Europe segment for the past two years:

Year ended December 31,

(U.S. $ in millions / % of Segment Revenues)

Other loss (income) 1 § 3 §

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

Europe Revenues

Our Europe segment includes the European Union, the United Kingdom and certain other European countries.

Revenues from our Europe segment in 2025 were $5,040 million, a decrease of $63 million, or 1%, compared to 2024. In local currency terms, revenues decreased by 5%, mainly due to the year-over-year impact from the sale of certain product rights, lower revenues from generic and OTC products, as well as COPAXONE, partially offset by higher revenues from AJOVY.

In 2025, revenues were positively impacted by exchange rate fluctuations of $173 million, net of hedging effects, compared to 2024. Revenues in 2025 were affected by a $31 million negative hedging impact, compared to a positive hedging impact of $21 million in 2024, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

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Revenues by Major Products and Activities

The following table presents revenues for our Europe segment by major products and activities for the past two years:

(U.S. $ in millions)

Generic products (including OTC and biosimilars) $ 4,044 $ 3,926 3 %

* Other revenues in 2025 and 2024 include the sale of certain product rights.

Generic products revenues (including OTC and biosimilar products) in our Europe segment in 2025 increased by 3% to $4,044 million compared to 2024. In local currency terms, revenues decreased by 2%, mainly due to lower volumes and price reductions as a result of market dynamics, and lower sales of seasonal OTC products, partially offset by higher revenues from recently launched products.

AJOVY revenues in our Europe segment in 2025 were $270 million, an increase of 25%, in U.S. dollars. In local currency terms, revenues increased by 19%, compared to 2024. This increase was due to growth in volume.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AJOVY.”

COPAXONE revenues in our Europe segment in 2025 were $181 million, a decrease of 15% in U.S. dollars. In local currency terms, revenues decreased by 19%, compared to 2024. This decrease was mainly due to price reductions and lower volumes resulting from the availability of alternative therapies.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

Respiratory products revenues in our Europe segment in 2025 decreased by 7% to $227 million, compared to 2024. In local currency terms, revenues decreased by 11%, mainly due to net price reductions and lower volumes.

Product Launches and Pipeline

As of December 31, 2025, our generic products pipeline in Europe included 622 generic approvals relating to 61 compounds in 125 formulations, with no EMA approvals received. In addition, approximately 1,537 marketing authorization applications are pending approval in 37 European countries, which approvals relate to 95 compounds in 229 formulations. No applications are pending with the EMA.

For a description of our innovative medicines pipeline, see “Item 1—Business—Research and Development” above.

Europe Gross Profit

Gross profit from our Europe segment in 2025 was $2,747 million, a decrease of 5% compared to $2,905 million in 2024.

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Gross profit margin for our Europe segment in 2025 decreased to 54.5%, compared to 56.9% in 2024, mainly due to a change in the mix of products, lower proceeds from the sale of certain product rights, and a negative impact from hedging activities.

Europe R&D Expenses

R&D expenses relating to our Europe segment in 2025 were $247 million, an increase of 8% compared to $229 million in 2024.

For a description of our R&D expenses in 2025, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

Europe S&M Expenses

S&M expenses relating to our Europe segment in 2025 were $902 million, an increase of 9% compared to $826 million in 2024. This increase was mainly to support revenue growth of our generic and key innovative products, including new launches, and due to a negative impact from exchange rate fluctuations.

Europe G&A Expenses

G&A expenses relating to our Europe segment in 2025 were $295 million, an increase of 8% compared to $272 million in 2024.

For a description of our G&A expenses in 2025, see “—Teva Consolidated Results— General and Administrative (G&A) Expenses” below.

Europe Profit

Profit of our Europe segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and any other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our Europe segment in 2025 was $1,303 million, a decrease of 17% compared to $1,575 million in 2024, mainly due to lower gross profit, as well as higher operational expenses, as discussed above.

International Markets Segment

The following table presents revenues, expenses and profit for our International Markets segment for the past two years:

Year ended December 31,

(U.S. $ in millions / % of Segment Revenues)

Other loss (income) (14 ) (0.6%) (2 ) §

* Segment profit does not include amortization and certain other items.

§ Represents an amount less than 0.5%.

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International Markets Revenues

Our International Markets segment includes all countries in which we operate other than the United States and the countries included in our Europe segment, and commencing January 1, 2024, also includes Canada. The International Markets segment covers a substantial portion of the global pharmaceutical industry, including more than 35 countries. See note 19 to our consolidated financial statements.

The countries in our International Markets segment include highly regulated, mainly generic markets, such as Canada and Israel, and branded generics-oriented markets, such as Russia and certain Latin America markets.

On March 31, 2025, we divested our Teva-Takeda business venture in Japan, which included generic products and legacy products. Since the establishment of the business venture and until the completion of its sale, Teva held 51% of the outstanding common stock of the business venture. On March 31, 2025, we deconsolidated the business venture from our financial statements. For additional information, see notes 2 and 22 to our consolidated financial statements.

As of the date of this Annual Report on Form 10-K, sustained conflict between Russia and Ukraine and disruption in the region is ongoing. Russia and Ukraine markets are included in our International Markets segment results and we have no manufacturing or R&D facilities in these markets. In 2025, the impact of this conflict on our International Markets segment’s results of operations and financial condition was immaterial. Consistent with our foreign exchange risk management hedging programs, in 2025, we partially hedged our exposure to currency exchange rate fluctuations with respect to our balance sheet assets, revenues and expenses. As of the end of 2025, we also hedge a small part of our projected net revenues in Russian ruble for 2026. Prior to and since the escalation of the conflict, we have been taking measures to reduce our operational cash balances in Russia and Ukraine. We have been monitoring the solvency of our customers in Russia and Ukraine and have taken measures, where practicable, to mitigate our exposure to risks related to the conflict in the region. However, the duration, severity and global implications (including potential inflation and devaluation consequences) of the conflict cannot be predicted, and could have an effect on our business, including on our exchange rate exposure, supply chain, operational costs and commercial presence in these markets.

Revenues from our International Markets segment in 2025 were $2,162 million, a decrease of $301 million, or 12%, compared to 2024. In local currency terms, revenues decreased by 11% compared to 2024. This decrease was mainly due to the divestment of our business venture in Japan, lower proceeds from the sale of certain product rights, as well as a negative hedging impact, partially offset by higher revenues from generic products in other markets and AJOVY.

In 2025, revenues were negatively impacted by exchange rate fluctuations of $36 million net of hedging effects, compared to 2024. Revenues in 2025, were affected by a $34 million negative hedging impact, compared to a $13 million positive hedging impact in 2024, which are included in “Other” in the table below. See note 10d to our consolidated financial statements.

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Revenues by Major Products and Activities

The following table presents revenues for our International Markets segment by major products and activities for the past two years:

Year ended December 31, PercentageChange

(U.S. $ in millions)

Generic products (including OTC and biosimilars) $ 1,721 $ 1,937 (11 %)

* Other revenues in 2025 and 2024 include the sale of certain product rights.

Generic products revenues (including OTC and biosimilar products) in our International Markets segment in 2025 were $1,721, a decrease of 11% in both U.S. dollars and local currency terms compared to 2024. This decrease was mainly due to the divestment of our business venture in Japan, partially offset by higher revenues in other markets.

AJOVY revenues in our International Markets segment in 2025 increased by 28% to $108 million, compared to 2024. In local currency terms, revenues increased by 27%, due to growth in existing markets in which AJOVY was launched.

For more information on AJOVY, see “Item 1—Business—Our Product Portfolio and Business Offering— Innovative Medicines—AJOVY.”

AUSTEDO revenues in our International Markets segment were $43 million in 2025, a decrease of 6%, in both U.S. dollars and local currency terms compared to 2024. This decrease was mainly due to timing of shipments.

For more information on AUSTEDO, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—AUSTEDO.”

COPAXONE revenues in our International Markets segment in 2025 decreased by 34% to $32 million, compared to 2024. In local currency terms, revenues decreased by 30%, mainly due to market share erosion and competition.

For more information on COPAXONE, see “Item 1—Business—Our Product Portfolio and Business Offering—Innovative Medicines—COPAXONE.”

International Markets Gross Profit

Gross profit from our International Markets segment in 2025 was $1,046 million, a decrease of 15% compared to $1,235 million in 2024.

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Gross profit margin for our International Markets segment in 2025 decreased to 48.4%, compared to 50.1% in 2024. This decrease was mainly due to lower proceeds from the sale of certain product rights and a negative hedging impact, partially offset by price increases due to inflationary pressure in certain markets and a favorable mix of products.

International Markets R&D Expenses

R&D expenses relating to our International Markets segment in 2025 were $103 million, a decrease of 8% compared to $112 million in 2024.

For a description of our R&D expenses in 2025, see “—Teva Consolidated Results—Research and Development (R&D) Expenses, net” below.

International Markets S&M Expenses

S&M expenses relating to our International Markets segment in 2025 were $475 million, a decrease of 11% compared to $534 million in 2024, mainly as a result of the divestment of our business venture in Japan, as well as cost efficiencies.

International Markets G&A Expenses

G&A expenses relating to our International Markets segment in 2025 were $147 million, a decrease of 2% compared to $150 million in 2024.

For a description of our G&A expenses in 2025, see “—Teva Consolidated Results— General and Administrative (G&A) Expenses below”.

International Markets Profit

Profit of our International Markets segment consists of revenues less cost of sales, R&D expenses, S&M expenses, G&A expenses and other expenses (income) related to this segment. Segment profit does not include amortization and certain other items.

Profit from our International Markets segment in 2025 was $336 million a decrease of 24% compared to $440 million in 2024. This decrease was mainly due to the divestment of our business venture in Japan, lower proceeds from the sale of certain product rights and a negative hedging impact.

Other Activities

We have other sources of revenues, primarily the sale of APIs to third parties, certain contract manufacturing services and an out-licensing platform offering a portfolio of products to other pharmaceutical companies, through our affiliate Medis. These other activities are not included in the United States, Europe or International Markets segments described above. For information on a change to our reporting segments commencing January 1, 2026, see above “—United States Segment”.

On January 31, 2024, we announced that we intend to divest our API business (including its R&D, manufacturing and commercial activities) through a sale. The intention to divest is in alignment with our Pivot to Growth strategy. On November 5, 2025, we announced that exclusive discussions with a selected buyer on the sale have terminated. Teva has initiated a renewed sales process, maintaining its strategic intention to divest its API business. However, there can be no assurance regarding the ultimate timing or structure of a potential divestiture or that a divestiture will be agreed or completed at all. For further information, see note 2 to our consolidated financial statements.

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Our revenues from other activities in 2025 were $870 million, a decrease of 8% compared to 2024. In local currency terms revenues decreased by 10% compared to 2024, mainly due to a decrease in revenues from contract manufacturing services.

API sales to third parties in 2025 were $526 million a decrease of 5% in both U.S. dollars and local currency terms compared to 2024, mainly due to lower demand.

Teva Consolidated Results

Revenues

Revenues in 2025 were $17,258 million, an increase of 4% in U.S. dollars, or 3%, in local currency terms, compared to 2024. This increase was mainly due to higher revenues from our key innovative products AUSTEDO, AJOVY and UZEDY, and from development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), partially offset by lower revenues from our International Markets segment due to the divestment of our business venture in Japan, from certain other innovative products across all our segments, lower proceeds from the sale of certain product rights and from generic products in our Europe segment. See “—United States Revenues,” “—Europe Revenues,” “—International Markets Revenues” and “—Other Activities” above.

Exchange rate movements during 2025, net of hedging effects, positively impacted our revenues by $152 million, compared to 2024. See note 10d to our consolidated financial statements.

Gross Profit

Gross profit in 2025 was $8,938 million, an increase of 11% compared to 2024.

Gross profit margin was 51.8% in 2025, compared to 48.7% in 2024. This increase in gross profit margin was mainly due to a favorable mix of products, primarily driven by higher revenues from AUSTEDO, and development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), partially offset by lower proceeds from the sale of certain product rights.

Research and Development (R&D) Expenses, net

Our R&D activities for innovative medicines and biosimilar products in each of our segments include costs of discovery research, preclinical work, drug formulation, early- and late-stage clinical development and product registration costs. These expenditures are reported net of contributions received from collaboration partners. Our spending takes place throughout the development process, including (i) early-stage projects in both discovery and preclinical phases; (ii) middle-stage projects in clinical programs up to Phase 3; (iii) late-stage projects in Phase 3 programs, including where a new drug application is currently pending approval; (iv) post-approval studies for marketed products; and (v) indirect expenses, such as costs of infrastructure and personnel.

Our R&D activities for generic products in each of our segments include both (i) direct expenses relating to product formulation, analytical method development, stability testing, management of bioequivalence and other clinical studies and regulatory filings; and (ii) indirect expenses, such as costs of infrastructure and personnel.

Our R&D expenses, net in 2025 were $1,013 million, an increase of 2% compared to $998 million in 2024, as we continue to execute on our Pivot to Growth strategy.

Our higher R&D expenses, net in 2025, compared to 2024, were mainly due to an increase in immunology and in immuno-oncology, as well as in neuroscience (mainly neurodegeneration), partially offset by the non-recurrence of milestone payments related to certain biosimilar projects, and lower expenses related to generics projects.

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Our R&D expenses, net in 2025 were also impacted by reimbursements and development cost sharing from our strategic collaborations. See note 2 to our consolidated financial statements.

R&D expenses as a percentage of revenues were 5.9% in 2025, compared to 6.0% in 2024.

Selling and Marketing (S&M) Expenses

S&M expenses in 2025 were $2,686 million, an increase of 6% compared to 2024. Our S&M expenses were primarily the result of the factors discussed above under “—United States Segment— S&M Expenses,” “—Europe Segment— S&M Expenses” and “—International Markets Segment— S&M Expenses.”

S&M expenses as a percentage of revenues were 15.6% in 2025, compared to 15.4% in 2024.

General and Administrative (G&A) Expenses

G&A expenses in 2025 were $1,287 million, an increase of 11% compared to 2024. This increase was mainly due to costs related to optimization activities of Teva’s global organization and operations in connection with Teva’s Transformation programs, as well as a negative impact from exchange rate fluctuations.

G&A expenses as a percentage of revenues were 7.5% in 2025, compared to 7.0% in 2024.

Identifiable Intangible Asset Impairments

We recorded expenses of $259 million for identifiable intangible asset impairments in 2025, compared to expenses of $251 million in 2024. See note 6 to our consolidated financial statements.

Goodwill Impairment

No goodwill impairment charge was recorded in 2025. We recorded a goodwill impairment charge of $1,280 million in the year ended December 31, 2024 related to our Teva API reporting unit. See note 7 to our consolidated financial statements.

Other Asset Impairments, Restructuring and Other Items

We recorded expenses of $1,050 million for other asset impairments, restructuring and other items in 2025, compared to expenses of $1,388 million in 2024. Expenses in 2025 were mainly comprised of an impairment related to a manufacturing facility in Europe. Expenses in 2024 were mainly comprised of impairments related to the classification of our business venture in Japan and our API business (including its R&D, manufacturing and commercial activities) as held for sale. See note 15 to our consolidated financial statements.

Legal Settlements and Loss Contingencies

In 2025, we recorded expenses of $467 million in legal settlements and loss contingencies, compared to expenses of $761 million in 2024. See note 11 to our consolidated financial statements.

Other Income (Loss)

Other loss in 2025 was $18 million, compared to other income of $14 million in 2024. See note 16 to our consolidated financial statements.

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Operating Income (Loss)

Operating income was $2,157 million in 2025, compared to an operating loss of $303 million in 2024. This change was mainly due to goodwill impairment charges incurred in 2024, lower other asset impairments, restructuring and other items in 2025, as well as higher gross profit and lower legal settlements and loss contingencies in 2025.

Operating income as a percentage of revenues was 12.5% in 2025, compared to operating loss as a percentage of revenues of 1.8% in 2024.

Financial Expenses, Net

Financial expenses, net were $934 million in 2025, compared to $981 million in 2024. Financial expenses in 2025 were mainly comprised of net-interest expenses of $824 million. Financial expenses in 2024 were mainly comprised of net-interest expenses of $915 million.

Reconciliation Table to Consolidated Income (Loss) Before Income Taxes

The following table presents a reconciliation of our segment profits to Teva’s consolidated operating income (loss) and to consolidated income (loss) before income taxes for the past three years:

Year endedDecember 31,

(U.S. $ in millions)

Profit (loss) of other activities (90 ) 18 24

Amounts not allocated to segments:

Other assets impairments, restructuring and other items 1,050 1,388 718

Legal settlements and loss contingencies 473 761 1,043

Consolidated operating income (loss) 2,157 (303 ) 433

Consolidated income (loss) before income taxes $ 1,223 $ (1,284 ) $ (624 )

Income Taxes

In 2025, we recognized a tax benefit of $180 million on a pre-tax income of $1,223 million. In 2024, we recognized a tax expense of $676 million on a pre-tax loss of $1,284 million. See note 13 to our consolidated financial statements.

Share In (Profits) Losses of Associated Companies, Net

Share in profits of associated companies, net was $15 million in 2025, compared to $1 million in 2024.

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Net Income (Loss) Attributable to redeemable and non-redeemablenon-controlling interests

Net income attributable to redeemable and non-redeemablenon-controlling interests was $7 million in 2025, compared to a net loss attributable to redeemable and non-redeemablenon-controlling interests of $320 million in 2024. The net loss in 2024 was mainly due to higher impairments of tangible assets, largely related to the classification of our business venture in Japan as held for sale. See note 15 to our consolidated financial statements.

Net Income (Loss) Attributable to Teva

Net income was $1,410 million in 2025, compared to a net loss of $1,639 million in 2024. This change was mainly due to the changes in operating income and income taxes, partially offset by net loss attributable to non-controlling interests in 2024, as discussed above.

Diluted Shares Outstanding and Earnings (Loss) Per Share

The weighted average diluted shares outstanding used for the fully diluted share calculation for the years 2025 and 2024 was 1,163 million and 1,131 million shares, respectively.

Diluted earnings per share was $1.21 for the year ended December 31, 2025, compared to diluted loss per share of $1.45 for the year ended December 31, 2024. See note 18 to our consolidated financial statements.

Share Count for Market Capitalization

We calculate share amounts using the outstanding number of shares (i.e., excluding treasury shares) plus shares that would be outstanding upon the exercise of options and vesting of RSUs and PSUs and the conversion of our convertible senior debentures, in each case, at period end.

As of December 31, 2025 and 2024, the fully diluted share count for purposes of calculating our market capitalization was approximately 1,184 million and 1,174 million, respectively.

Impact of Currency Fluctuations on Results of Operations

In 2025, approximately 43% of our revenues were denominated in currencies other than the U.S. dollar. Since our results are reported in U.S. dollars, we are subject to significant foreign currency risks. Accordingly, changes in the rate of exchange between the U.S. dollar and local currencies in the markets in which we operate (primarily the euro, British pound, Swiss franc, Russian ruble, Canadian dollar, new Israeli shekel, Polish złoty, Swedish krona and Chilean peso) impact our results.

During 2025, the following main currencies relevant to our operations decreased in value against the U.S. dollar (each on an annual average compared to annual average basis): the Argentinian peso by 26%, the Turkish lira by 17%, the Mexican peso by 5%, the Brazilian real by 4%, Indian rupee by 4% and the Ukraine hryvna by 4%. The following main currencies relevant to our operations increased in value against the U.S. dollar: the Russian ruble by 11%, the Swedish krona by 8%, the new Israeli shekel by 7%, the Swiss franc by 6%, the Polish złoty by 6%, the euro by 4%, the Bulgarian lev by 4% and the British pound by 3%.

As a result, exchange rate movements during 2025, net of hedging effects, positively impacted overall revenues by $152 million and negatively impacted operating income by $48 million compared to 2024.

In 2025, a negative hedging impact of $65 million was recognized under revenues and a positive hedging impact of $8 million was recognized under cost of sales. In 2024, a positive hedging impact of $34 million was recognized under revenues and a negative hedging impact of $5 million was recognized under cost of sales.

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The impact of hedging transactions against future projected revenues and expenses are recognized on the balance sheet at their fair value on a quarterly basis, while the foreign exchange impact on the underlying revenues and expenses may occur in subsequent quarters. See note 10d to our consolidated financial statements.

Commencing the third quarter of 2018, the cumulative inflation in Argentina exceeded 100% or more over a 3-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

Commencing the second quarter of 2022, the cumulative inflation in Turkey exceeded 100% or more over a three-year period. Although this triggered highly inflationary accounting treatment, it did not have a material impact on our results of operations.

Liquidity and Capital Resources

Total balance sheet assets were $40,748 million as of December 31, 2025, compared to $39,326 million as of December 31, 2024.

Our working capital balance, which includes accounts receivables net of SR&A, inventories, prepaid expenses and other current assets, accounts payables, employee-related obligations, accrued expenses and other current liabilities, was negative $2,733 million as of December 31, 2025, compared to negative $2,837 million as of December 31, 2024. This increase was mainly due to higher inventory levels primarily due to exchange rate fluctuations and an increase in accounts receivables, net of SR&A, related to reduced utilization of our U.S. securitization program, partially offset by an increase in accounts payables. We continue our efforts to optimize our working capital management.

Cash investment in property, plant and equipment and intangible assets in 2025 was $501 million, compared to $498 million in 2024. Depreciation was $421 million in 2025, compared to $471 million in 2024.

Cash and cash equivalents as of December 31, 2025 were $3,556 million compared to $3,300 million as of December 31, 2024.

In the first quarter of 2025, we paid a dividend of $340 million to redeemable non-controlling interests in our business venture in Japan.

Our cash on hand that is not used for ongoing operations is generally invested in bank deposits, as well as liquid securities that bear fixed and floating rates.

Teva’s principal sources of short-term liquidity are its cash on hand, existing cash investments, liquid securities and available credit facilities, primarily its $1.8 billion unsecured syndicated sustainability-linked revolving credit facility entered into in April 2022, as amended most recently in December 2025 (“RCF”). See note 9 to our consolidated financial statements.

2025 Debt Balance and Movements

As of December 31, 2025, our debt was $16,807 million, compared to $17,783 million as of December 31, 2024.This decrease was mainly due to repayment at maturity of $1,812 million of our senior notes (as detailed below), partially offset by an increase of $803 million due to exchange rate fluctuations. Additionally, during the second quarter of 2025, we repurchased $2,290 million aggregate principal amount of notes upon consummation of a cash tender offer, and issued $2,298 million of senior notes, net of discount and issuance costs. For further information, see note 9 to our consolidated financial statements.

In January 2025, we repaid $426 million of the 6% senior notes at maturity and $427 million of the 7.13% senior notes at maturity.

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In March 2025, we repaid $515 million of the 4.50% senior notes at maturity.

In July 2025, we repaid $444 million of the 1% senior notes at maturity.

In February 2026, we repaid $23 million of the 0.25% convertible senior debentures at maturity.

Our debt as of December 31, 2025 was 57% denominated in U.S. dollar, with the remainder denominated in euro.

The portion of total debt classified as short-term as of December 31, 2025 was 11%, compared to 10% as of December 31, 2024.

Our financial leverage, which is the ratio between our debt and the sum of our debt and equity, was 68% as of December 31, 2025, compared to 77% as of December 31, 2024.

Our average debt maturity was approximately 5.6 years as of December 31, 2025, compared to 5.5 years as of December 31, 2024.

2024 Debt Balance and Movements

In April 2024, we repaid $956 million of the 6% senior notes at maturity.

In October 2024, we repaid $685 million of the 1.13% senior notes at maturity.

Total Equity

Total equity was $7,914 million as of December 31, 2025, compared to $5,380 million as of December 31, 2024. This increase was mainly due to a net income attributable to Teva of $1,410 million, and a positive impact of $719 million from exchange rate fluctuations.

Exchange rate fluctuations affected our balance sheet, as approximately 62% of our net assets (including both non-monetary and monetary assets) were in currencies other than the U.S. dollar. When compared to December 31, 2024, changes in currency rates had a positive impact of $719 million on our equity as of December 31, 2025. The following main currencies increased in value against the U.S. dollar: Russian ruble by 28%, Mexican peso by 13%, Polish złoty by 13%, Swiss franc by 12%, Bulgarian lev by 12%, euro by 11%, Chilean peso by 9%, British pound by 7%, and Canadian dollar by 5%. All comparisons are on a year-end to year-end basis.

Cash Flow

We continually seek to improve the efficiency of our working capital management. Periodically, as part of our cash and commercial relationship management activities, we make decisions in our commercial, supply chain, and other activities which drive an optimization of our inventory levels, an acceleration of receivable payments from customers, or deceleration of payments to vendors, including timing of payments related to legal settlements, tax authorities and other matters. These have the effect of increasing or decreasing cash from operations, as well as working capital balance items during any given period. Increased cash from operations has the effect of reducing our leverage ratio, which is measured net of cash and cash equivalents, as of the end of such period. In connection with these efforts, we were able to secure more favorable payment terms from many of our vendors which are expected to continue in future periods. In addition, in periods in which collections from customers are delayed, we have and expect we may in the future extend the time to pay certain vendors, so as to balance our liquidity position. Such decisions have had, and may in the future have, a material impact on our annual operating cash flow measurement and results of operations.

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Cash flow generated from operating activities in 2025 was $1,649 million, compared to $1,247 million in 2024. The increase in 2025 resulted mainly from development milestone payments received in connection with the initiation of Phase 3 studies for duvakitug (anti-TL1A), partially offset by higher legal settlement payments. Net changes in working capital items were neutral.

During 2025, we generated free cash flow of $2,396 million, which we define as comprising $1,649 million in cash flow generated from operating activities, $1,214 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $34 million in proceeds from divestitures of businesses and other assets, partially offset by $501 million in cash used for capital investments. During 2024, we generated free cash flow of $2,068 million, which we define as comprising $1,247 million in cash flow generated from operating activities, $1,291 million in beneficial interest collected in exchange for securitized accounts receivables (under our EU securitization program) and $43 million proceeds from divestitures of businesses and other assets, partially offset by $498 million in cash used for capital investments and $15 million in cash used for acquisition of businesses, net of cash acquired. The increase in 2025 resulted mainly from higher cash flow generated from operating activities.

Dividends

We have not paid dividends on our ordinary shares or ADSs since December 2017.

Commitments

In addition to financing obligations under short-term debt and long-term senior notes and loans, debentures and convertible debentures, our major contractual obligations and commercial commitments include leases, royalty payments, contingent payments pursuant to acquisition agreements, collaboration agreements and participation in joint ventures associated with R&D activities. For further information on our agreements with mAbxience, Launch Therapeutics and Abingworth, Biolojic Design, Royalty Pharma, Sanofi, Modag, Alvotech, Takeda and MedinCell, see note 2 to our consolidated financial statements.

We are committed to pay royalties to owners of know-how, partners in alliances and certain other arrangements, and to parties that financed R&D at a wide range of rates as a percentage of sales of certain products, as defined in the agreements. In some cases, the royalty period is not defined; in other cases, royalties will be paid over various periods not exceeding 20 years. Certain of our collaboration agreements include cost-sharing arrangements for development activities which represent additional contractual commitments with the amount and timing of such payments dependent on the progress of such activities.

In connection with certain development, supply and marketing, and research and collaboration or services agreements, we are required to indemnify, in unspecified amounts, the parties to such agreements against third-party claims relating to (i) infringement or violation of intellectual property or other rights of such third party; or (ii) damages to users of the related products. Except as described in our financial statements, we are not aware of any material pending action that may result in the counterparties to these agreements claiming such indemnification.

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Aggregated Contractual Obligations

The following table summarizes our material contractual obligations and commitments as of December 31, 2025:

Payments Due by Period

Total Less than1 year 1-3years 3-5years More than5 years

(U.S. $ in millions)

The total gross amount of unrecognized tax benefits for uncertain tax positions was $596 million on December 31, 2025. Payment of these obligations would result from settlements with tax authorities. Due to the difficulty in determining the timing and magnitude of settlements, these obligations are not included in the table above. Correspondingly, it is difficult to ascertain whether we will pay any significant amount related to these obligations within the next year.

We have committed to make potential future milestone payments to third parties under various agreements. These payments are contingent upon the occurrence of certain future events and, given the nature of these events, it is unclear when, if ever, we may be required to pay such amounts. As of December 31, 2025, if all development milestones and targets, for compounds in Phase 2 and more advanced stages of development, are achieved, the total contingent payments could reach an aggregate amount of up to $104 million. Additional contingent payments are owed upon achievement of product approval or launch milestones.

We have committed to pay royalties to owners of know-how, partners in alliances and pursuant to certain other arrangements and to parties that financed research and development, at a wide range of rates as a percentage of sales or of the gross margin of certain products, as defined in the underlying agreements.

Due to the uncertainty of the timing of these payments, these amounts, and the amounts described in the previous paragraph, are not included in the table above.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements, except for: (i) surety underwritten guarantees Teva has provided the European Commission in an amount of 462.2 million euros, together with specified post-decision interest, which remain in force for three years, and which includes substantially similar covenants as our RCF, as disclosed in note 12b to our consolidated financial statements, and (ii) securitization transactions, which are disclosed in note 10f to our consolidated financial statements.

Non-GAAP Net Income and Non-GAAP EPS Data

We present non-GAAP net income and non-GAAP earnings per share (“EPS”) as management believes that such data provide useful information to investors because they are used by management and our Board of Directors, in conjunction with other performance metrics, to evaluate our operational performance, to prepare and evaluate our work plans and annual budgets and ultimately to evaluate the performance of management, including annual compensation. While other qualitative factors and judgment also affect annual compensation, the principal quantitative element in the determination of such compensation are performance targets tied to the work plan, which are based on these non-GAAP measures.

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Non-GAAP financial measures have no standardized meaning and accordingly have limitations in their usefulness to investors. Investors are cautioned that, unlike financial measures prepared in accordance with U.S. GAAP, non-GAAP measures may not be comparable with the calculation of similar measures for other companies. These non-GAAP financial measures are presented solely to permit investors to more fully understand how management assesses our performance. The limitations of using non-GAAP financial measures as performance measures are that they provide a view of our results of operations without including all events during a period and may not provide a comparable view of our performance to other companies in the pharmaceutical industry. Investors should consider non-GAAP net income and non-GAAP EPS in addition to, and not as replacements for, or superior to, measures of financial performance prepared in accordance with GAAP.

In preparing our non-GAAP net income and non-GAAP EPS data, we exclude items that either have a non-recurring impact on our financial performance or which, in the judgment of our management, are items that, either as a result of their nature or size, could, were they not excluded, potentially cause investors to extrapolate future performance from an improper base that is not reflective of our underlying business performance. Certain of these items are also excluded because of the difficulty in predicting their timing and scope. The items excluded from our non-GAAP net income and non-GAAP EPS include:

• amortization of purchased intangible assets;

• expenses related to our equity compensation;

• unusual tax items;

• other awards or settlement amounts, either paid or received;

• corresponding tax effects of the foregoing items.

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The following table presents our non-GAAP net income and non-GAAP EPS for the years ended December 31, 2025 and 2024, as well as reconciliations of each measure to their nearest GAAP equivalents:

Year endedDecember 31,

($ in millions except per share amounts) 2025 2024

Net income (Loss) attributable to Teva ($) ($) 1,410 (1,639 )

Increase (decrease) for excluded items:

Amortization of purchased intangible assets 581 588

Legal settlements and loss contingencies(1) 473 761

Goodwill impairment(2) — 1,280

Impairment of long-lived assets(3) 1,029 1,275

Contingent consideration(5) 54 303

Loss (Gain) on sale of business 22 (15 )

Accelerated depreciation 21 13

Financial expenses 69 49

Items attributable to non-controlling interests(3) 2 (339 )

Corresponding tax effects and unusual tax items(7) (819 ) 157

Non-GAAP net income attributable to Teva ($) ($) 3,411 2,860

GAAP diluted earnings (loss) per share attributable to Teva ($) ($) 1.21 (1.45 )

Non-GAAP diluted EPS attributable to Teva(9) ($) ($) 2.93 2.49

Non-GAAP average number of shares (in millions)(9) 1,163 1,150

Adjustments for legal settlements and loss contingencies in 2024 were mainly related to legal expenses of $357 million recorded in connection with a decision by the European Commission in its antitrust investigation into COPAXONE, and an update to the estimated settlement provision of $278 million for the opioid cases (mainly the effect of the passage of time on the net present value of the discounted payments and the settlement agreement with the city of Baltimore).

Adjustments for corresponding tax effects and unusual tax items in 2024 include a tax item in an amount of $495 million related to the settlement agreement with the ITA to settle certain litigation with respect to taxes payable for the Company’s taxable years 2008 through 2020.

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Trend Information

The following factors are expected to have a significant effect on our 2026 results:

• continued growth of our key innovative medicines AUSTEDO, AJOVY and UZEDY;

• our continued financial discipline and debt repayment schedule;

• continued payments related to litigation and tax settlements;

• continued efforts towards achieving our long-term financial goals; and

• continued improvement in our credit ratings by credit agencies.

For additional information, please see “Item 1—Business” above and elsewhere in this Item 7.

Critical Accounting Policies

For a description of our significant accounting policies, see note 1 to our consolidated financial statements.

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions in certain circumstances that affect the amounts reported in the accompanying consolidated financial statements and related footnotes. Actual results may differ from these estimates. We base our judgments on our experience and on various assumptions that we believe to be reasonable under the circumstances.

Of our policies, the following are considered critical to an understanding of our consolidated financial statements as they require the application of subjective and complex judgment, involving critical accounting estimates and assumptions impacting our consolidated financial statements. We have applied our policies and critical accounting estimates consistently across our businesses.

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The critical accounting estimates relate to the following:

• Revenue Recognition and SR&A in the United States

• Income Taxes

• Contingencies

• Impairment of Property, Plant and Equipment

Revenue Recognition and SR&A in the United States

Our gross product revenues are subject to a variety of deductions which are generally estimated and recorded in the same period that the revenues are recognized, and primarily represent chargebacks, rebates and sales allowances to wholesalers, retailers and government agencies with respect to our pharmaceutical products. Those deductions represent estimates of rebates and discounts related to gross sales for the reporting period and, as such, knowledge and judgment of market conditions and practice are required when estimating the impact of these revenue deductions on gross sales for a reporting period.

Historically, our changes of estimates reflecting actual results or updated expectations, have not been material to our overall business. Product-specific rebates, however, may have a significant impact on year-over-year individual product growth trends. If any of our ratios, factors, assessments, experiences or judgments are not indicative or accurate predictors of our future experience, our results could be materially affected. The sensitivity of our estimates can vary by program, type of customer and geographic location. However, estimates associated with governmental allowances, U.S. Medicaid and other performance-based contract rebates are most at risk for material adjustment because of the extensive time delay between the recording of the accrual and its ultimate settlement, an interval that can generally range up to one year. Because of this time lag, in any given quarter, our adjustments to actual can incorporate revisions of several prior quarters. See also “Revenue recognition” in note 1 to the consolidated financial statements.

Income Taxes

The provision for income tax is calculated based on our assumptions as to our entitlement to various benefits under the applicable tax laws in the jurisdictions in which we operate. The entitlement to such benefits depends upon our compliance with the terms and conditions set out in these laws.

Accounting for uncertainty in income taxes requires that it be more likely than not that the tax benefits recognized in the financial statements be sustained based on technical merits. The amount of benefits recorded for these positions is measured as the largest benefit more likely than not to be sustained. Significant judgment is required in making these determinations.

Deferred taxes are determined utilizing the asset and liability method based on the estimated future tax effects of differences between the financial accounting and tax bases of assets and liabilities under the applicable tax laws. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the determination of the appropriate valuation allowances, we have considered the most recent projections of future business results and prudent tax planning alternatives that may allow us to realize the deferred tax assets. Taxes which would apply in the event of disposal of investments in subsidiaries have not been taken into account in computing deferred taxes, as it is our intention to hold these investments rather than realize them.

Taxes have not been provided for tax-exempt income, as the Company intends to permanently reinvest these earnings and does not currently foresee a need to distribute dividends out of these earnings. In addition, the Company announced a suspension of dividend distribution on ordinary shares and ADSs in 2017. Furthermore, deferred taxes have not been provided for the retained earnings of the Company’s foreign subsidiaries because

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the Company does not expect these subsidiaries to distribute taxable dividends in the foreseeable future, as their earnings and excess cash are used to pay down the group’s external liabilities, and the Company expects to have sufficient resources in the Israeli companies to fund its cash needs in Israel. An assessment of the tax that would have been payable had the Company’s foreign subsidiaries distributed their income to the Company is not practicable because of the multiple levels of corporate ownership and multiple tax jurisdictions involved in each hypothetical dividend distribution.

For a discussion of the uncertain tax positions, deferred tax and valuation allowance estimates see notes 1 and 13 to our consolidated financial statements.

Contingencies

From time to time, Teva and/or its subsidiaries are subject to claims for damages and/or equitable relief arising in the ordinary course of business. In addition, in large part as a result of the nature of its business, Teva is frequently subject to litigation, governmental investigations and other legal proceedings. Except for income tax contingencies or contingent consideration acquired in a business combination, Teva records a provision in its consolidated financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is reasonably estimable. When accruing these costs, Teva will recognize an accrual in the amount within a range of loss that is the best estimate within the range. When no amount within the range is a better estimate than any other amount, Teva accrues for the minimum amount within the range. Teva records anticipated recoveries under existing insurance contracts at the gross amount that is expected to be collected when they are considered probable to occur.

Teva reviews the adequacy of the accruals on a periodic basis and, although it believes that its present reserves are adequate, changes in facts and circumstances in the future may lead to adjustments to reserve estimates and could have a material impact on Teva’s results of operations, cash flows and financial condition in the period that reserve estimates are adjusted or paid. As such accruals are based on management’s judgment as to the probability of losses and, where applicable, actuarially determined estimates, accruals may materially differ from actual verdicts, settlements or other agreements made with regards to such contingencies. Litigation outcomes and contingencies are unpredictable and excessive verdicts can occur. Accordingly, management’s assessments involve complex judgments concerning future events and often rely heavily on estimates and assumptions.

Impairment of Property, Plant and Equipment

The Company assesses changes in economic, regulatory and legal conditions and makes assumptions regarding estimated future cash flows in evaluating the value of the Company’s property, plant and equipment.

The Company periodically evaluates whether current facts or circumstances indicate that the carrying values of its property, plant and equipment assets to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of the undiscounted future cash flows of these assets, or appropriate asset groupings, is compared to the carrying value to determine whether an impairment exists. If the asset is determined to be impaired, the loss is measured based on the difference between the asset’s fair value and its carrying value. If quoted market prices are not available, the Company will estimate fair value using a discounted value of estimated future cash flows approach.

Recently Issued Accounting Pronouncements

See note 1 to our consolidated financial statements.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

General

The objective of our financial risk management measures is to minimize the impact of risks arising from foreign exchange and interest rate fluctuations. To reduce these risks, we take various operational measures in order to achieve a natural hedge and may enter, from time to time, into financial derivative instruments. Our derivative transactions are executed under International Swaps and Derivatives Association, Inc. (“ISDA”) master agreements with global banks under agreed terms and conditions that mitigate credit risk. We also believe that due to our diversified derivatives portfolio, the credit risk associated with any of these banks is minimal. No derivative instruments are entered into for trading purposes.

Exchange Rate Risk Management

We operate our business worldwide and, as such, we are subject to foreign exchange risks on our results of operations, our monetary assets and liabilities and our foreign subsidiaries’ net assets. For further information on currencies in which we operate, see “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Impact of Currency Fluctuations on Results of Operations.”

We generally prefer to borrow in U.S. dollars or euros; however, from time to time we borrow funds in other currencies, such as the Swiss franc, in order to benefit from same currency revenues in relation to same currency costs and same currency assets in relation to same currency liabilities.

Cash Flow Exposure

Our total revenues were $17,258 million in 2025. Of these revenues, approximately 43% were denominated in currencies other than the U.S. dollar, of which 20% in euros and the rest in other currencies, none of which accounted for more than 3% of total revenues in 2025. In most currencies, we recorded corresponding expenses.

In certain currencies, primarily the euro, our revenues generally exceed our expenses. Conversely, in other currencies, primarily the new Israeli shekel and the Indian rupee, our expenses generally exceed our revenues.

We enter into financial derivatives to hedge part of those currencies which do not have a sufficient natural hedge, in order to reduce the impact of foreign exchange fluctuations on our operating results.

As of December 31, 2025, we hedged part of our expected operating results for 2026 in currencies other than the U.S. dollar, primarily the British pound, Canadian dollar, Swiss franc, Russian ruble, Polish złoty, Indian rupee and Israeli shekel.

In certain cases, we may hedge exposure arising from a specific transaction, executed in a currency other than the functional currency, by entering into forward contracts and/or by using plain-vanilla and exotic option strategies. We generally limit the term of hedging transactions to a maximum of eighteen months.

Balance Sheet Exposure

With respect to our monetary assets and liabilities, the exposure arises when the monetary assets and/or liabilities are denominated in currencies other than the functional currency of our subsidiaries. We strive to limit our exposure through natural hedging. The remaining exposure is hedged almost in full by entering into financial derivative instruments. To the extent possible, the hedging activity is carried out on a consolidated level.

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The table below presents exposures exceeding $50 million in absolute values:

Net exposure as of December 31, 2025

Liability/Asset (U.S. $ in millions)

Outstanding Foreign Exchange Hedging Transactions

As of December 31, 2025 and 2024, we had outstanding derivatives, primarily forwards contracts, with a corresponding notional amount of approximately $3.35 billion and $3.9 billion, respectively.

The table below presents the net notional and fair values of the financial derivatives entered into as of December 31, 2025, in order to reduce currency exposure arising from our cash flow and balance sheet exposures. The table below presents only currency paired with hedged net notional values exceeding $50 million.

(U.S. $ in millions)

Forward:

Foreign Subsidiaries Net Assets

Under certain market conditions, we may hedge against possible fluctuations in foreign subsidiaries’ net assets (“net investment hedge”). In these cases, we may use cross currency swaps and forward contracts.

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Interest Rate Risk Management

We are subject to interest rate risk on our investments and on our borrowings. We manage interest rate risk in the aggregate, while focusing on our immediate and intermediate liquidity needs.

We raise capital through various debt instruments including senior notes, sustainability-linked senior notes, and convertible debentures that bear fixed or variable interest rates, as well as a syndicated sustainability-linked revolving credit facility and securitization programs that bear a variable interest rate. In some cases, we have swapped from a fixed to a variable interest rate (“fair value hedge”), from a variable to a fixed interest rate and from a fixed to a fixed interest rate with an exchange from a currency other than the functional currency (“cash flow hedge”), reducing overall interest expenses or hedging risks associated with interest rate fluctuations. As of December 31, 2025, all outstanding senior notes, sustainability-linked senior notes and convertible debentures bear a fixed interest rate.

In certain cases, we may hedge, in whole or in part, against exposure arising from a specific transaction, such as debt issuances related to an acquisition or debt refinancing, by entering into forward and interest rate swap contracts and/or by using options.

The table below presents the aggregate outstanding debt by currencies and maturities as of December 31, 2025:

(U.S. dollars in millions)

Fixed Rate:

USD convertible debentures 23 0.25 % 0.25 % 23 — — — — —

Variable Rate:

Less debt issuance costs (66 )

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2025

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Consolidated Financial Statements:

Balance sheets 92

Statements of income 93

Statements of comprehensive income (loss) 94

Statements of changes in equity 95

Statements of cash flows 96

Notes to consolidated financial statements 98

Financial Statement Schedule:

Schedule II—Valuation and Qualifying Accounts 176

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of Teva Pharmaceuticals Industries Limited

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Teva Pharmaceutical Industries Limited and its subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related consolidated statements of income (loss), of comprehensive income (loss), of changes in equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes and schedule of valuation and qualifying accounts for each of the three years in the period ended December 31, 2025 appearing under Item 8 (collectively referred to as the “consolidated financial statements”).

We also have audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in

Internal Control – Integrated Framework

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control

– Integrated Framework

(2013) issued by the COSO.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the Report of Teva Management on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

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accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Sales Reserves and Allowances (“SR&A”) – Chargebacks and Medicaid in the United States

As described in Notes 1 and 3 to the consolidated financial statements, revenues are recorded in the amount of consideration to which the Company expects to be entitled in exchange for performance obligations upon transfer of control to the customer. The amount of consideration to which the Company expects to be entitled varies as a result of rebates, chargebacks and other SR&A that the Company offers to its customers and their customers. Variable consideration is recorded by the Company concurrently with the satisfaction of performance obligations to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. As of December 31, 2025, consolidated SR&A for chargebacks and Medicaid and other governmental allowances were $1,638 million. Provisions for chargebacks involve estimates of usage by indirect buyers with varying contract prices and wholesaler inventory levels. The provision for chargebacks varies in relation to changes in product mix, pricing and the level of inventory at the wholesalers. Provisions for estimating chargebacks are calculated using historical chargeback experience and/or expected chargeback levels for new products and anticipated pricing changes. Provisions for Medicaid are based on historical trends of rebates paid, as well as on changes in wholesaler and retail inventory levels and increases or decreases in sales.

The principal considerations for our determination that performing procedures relating to SR&A for chargebacks and Medicaid in the United States is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty involved in developing the reserves, as the reserves are based on assumptions developed using contractual and mandated terms with customers, historical experience, and projected market conditions in the U.S.; and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to open claims for Medicaid, wholesaler inventory levels and expected chargeback levels.

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(i) developing independent estimates of the reserves using third party information, the contractual or mandated terms of the specific rebate or chargeback programs, and the historical trends of payments and comparing the independent estimates to management’s estimates; (ii) evaluating the reasonableness of significant assumptions used by management related to open claims for Medicaid, wholesaler inventory levels and expected chargeback levels; and (iii) testing the completeness, accuracy, and relevance of underlying data used to estimate the reserves, including testing actual claims processed by the Company.

Long-lived assets impairment assessment – Manufacturing facility in Europe (“Asset Group”)

As described in Notes 1 and 15 to the consolidated financial statements, the Company recorded an impairment charge of $726 million for long-lived assets in connection with the Asset Group, for the year ended December 31, 2025. Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. When impairment indicators are identified, an estimate of the future undiscounted cash flows of the assets group is compared to its carrying value to determine whether an impairment exists. If such evaluation indicates that the carrying amount of the asset group is not recoverable, the assets are considered to be impaired. The impairment to be recognized is measured as the amount by which the carrying amount of the Asset Group exceeds its fair value. Management’s cash flow projections included significant judgments and assumptions relating to the amount and timing of expected projected cash flows, discount rates and revenue growth rate.

The principal considerations for our determination that performing procedures relating to the long-lived assets impairment assessment of the Asset Group, is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the Asset Group; and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the amount and timing of projected future cash flows, discount rates and the revenue growth rate.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s long-lived assets impairment assessment. These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the Asset Group to assess the recoverability of carrying amounts of the long lived assets in connection with the Asset Group; (ii) evaluating the appropriateness of the undiscounted cash flow models used by management; (iii) testing the completeness and accuracy and relevance of underlying data used in the undiscounted cash flow models; (iv) evaluating the reasonableness of significant assumptions used by management related to amount and timing of projected future cash flows, the discount rates and the revenue growth rate based on factors related to the Company’s forecast; and (v) performing sensitivity analysis around the significant assumptions to understand the effect of reasonably possible alternative assumptions on fair value.

/s/ Kesselman & Kesselman

Certified Public Accountants (Isr.)

A member of PricewaterhouseCoopers International Limited

Tel Aviv, Israel

February 3, 2026

We have served as the Company’s auditor since at least 1976. We have not been able to determine the specific year we began serving as the auditor of the Company.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED BALANCE SHEETS

(U.S. dollars in millions)

ASSETS

Current assets:

Cash and cash equivalents $ 3,556 $ 3,300

Other non-current assets 405 462

Property, plant and equipment, net 4,080 4,581

Operating lease right-of-use assets 345 367

Identifiable intangible assets, net 3,781 4,418

LIABILITIES AND EQUITY

Current liabilities:

Sales reserves and allowances 4,143 3,678

Employee-related obligations 739 624

Liabilities held for sale 354 698

Long-term liabilities:

Other taxes and long-term liabilities 3,808 4,028

Operating lease liabilities 288 296

Commitments and contingencies, see note 12

Redeemable non-controlling interests — 340

Equity:

Teva shareholders’ equity:

Accumulated other comprehensive loss (2,391 ) (3,148 )

Non-controlling interests 4 7

Amounts may not add up due to rounding.

The accompanying notes are an integral part of the financial statements.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(U.S. dollars in millions, except share and per share data)

Year ended December 31,

Research and development expenses, net 1,013 998 953

Other asset impairments, restructuring and other items 1,050 1,388 718

Legal settlements and loss contingencies 467 761 1,043

Other loss (income) 18 (14 ) (49 )

Income taxes (benefit) (180 ) 676 (7 )

Share in (profits) losses of associated companies – net (15 ) (1 ) (2 )

Net income (loss) attributable to Teva 1,410 (1,639 ) (559 )

Earnings (loss) per share attributable to ordinary shareholders:

Weighted average number of shares (in millions):

Amounts may not add up due to rounding.

The accompanying notes are an integral part of the financial statements.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(U.S. dollars in millions)

Year ended December 31,

Other comprehensive income (loss), net of tax:

Currency translation adjustment 732 (530 ) 80

Unrealized gain (loss) on derivative financial instruments, net 39 28 29

Unrealized gain (loss) on defined benefit plans, net 13 (6 ) (18 )

Total other comprehensive income (loss) 784 (508 ) 91

Comprehensive income (loss) attributable to Teva $ 2,168 $ (2,086 ) $ (418 )

Amounts may not add up due to rounding.

The accompanying notes are an integral part of the financial statements.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Teva shareholders’ equity

Ordinary shares

(U.S. dollars in millions)

Issuance of shares 10 * * * *

Dividend to non-controlling interests** (68 ) (68 )

Other comprehensive income (loss) (447 ) (447 ) (61 ) (508 )

Issuance of shares 13 1 * 1 1

Proceeds from exercise of options 19 19 19

Dividend to non-controlling interests** (18 ) (18 )

Issuance of shares 16 * * 1 1

Proceeds from exercise of options 47 47 47

Purchase of shares from redeemable non-controlling interests**** 165 165 165

Dividend to non-controlling interests***** (4 ) (4 )

* Represents an amount less than $0.5 million.

Amounts may not add up due to rounding.

The accompanying notes are an integral part of the financial statements.

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TEVA PHARMACEUTICAL INDUSTRIES LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(U.S. dollars in millions)

Year ended December 31,

Operating activities:

Adjustments to reconcile net income (loss) to net cash provided by operations:

Impairment of long-lived assets and assets held for sale 1,028 1,275 378

Net change in operating assets and liabilities (1,366 ) (435 ) (72 )

Deferred income taxes — net and uncertain tax positions (671 ) (634 ) (317 )

Net loss (gain) from sale of business and long-lived assets — (22 ) (41 )

Net cash provided by (used in) operating activities 1,649 1,247 1,368

Investing activities:

Proceeds from sale of business and long-lived assets 34 43 68

Purchases of investments and other assets (57 ) (71 ) (46 )

Proceeds from sale of investments 42 40 —

Acquisitions of businesses, net of cash acquired — (15 ) —

Other investing activities 5 2 (5 )

Net cash provided by (used in) investing activities 737 792 968

Financing activities:

TEVA US Equity

TEVA · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TEVA US Equity☆

TEVA · 10-K · period ended 2025-12-31

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

TEVA US Equity