☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Israel
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Not Applicable
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of each class
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Trading Symbol(s)
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Name of each exchange on which registered
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American Depositary Shares, each representing one Ordinary Share
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TEVA
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New York Stock Exchange
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Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer
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☐ | Smaller reporting company | ☐ | |||
Emerging growth company | ☐ |
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Page
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1
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1
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PART I
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Item 1.
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2
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Item 1A.
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24
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Item 1B.
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47
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Item 2.
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48
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Item 3.
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48
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Item 4.
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48
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PART II
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Item 5.
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48
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Item 6.
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50
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Item 7.
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52
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Item 7A.
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82
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Item 8.
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85
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Item 9.
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169
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Item 9A.
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169
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Item 9B.
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170
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PART III
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Item 10.
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170
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Item 11.
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170
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Item 12.
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170
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Item 13.
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170
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Item 14.
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170
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PART IV
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Item 15.
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171
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Item 16.
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176
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|
• |
our ability to successfully compete in the marketplace, including: that we are substantially dependent on our generic products; consolidation of our customer base and commercial alliances among our customers; delays in launches of new generic products; the increase in the number of competitors targeting generic opportunities and seeking U.S. market exclusivity for generic versions of significant products; our ability to develop and commercialize biopharmaceutical products; competition for our specialty products, including AUSTEDO
®
, AJOVY
®
and COPAXONE
®
; our ability to achieve expected results from investments in our product pipeline; our ability to develop and commercialize additional pharmaceutical products; and the effectiveness of our patents and other measures to protect our intellectual property rights;
|
• |
our substantial indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, may result in a further downgrade of our credit ratings; and our inability to raise debt or borrow funds in amounts or on terms that are favorable to us;
|
• |
our business and operations in general, including: uncertainty regarding the magnitude, duration, and geographic reach of the
COVID-19
pandemic and its impact on our business, financial condition, operations, cash flows, and liquidity and on the economy in general; our ability to successfully execute and maintain the activities and efforts related to the measures we have taken or may take in response to the
COVID-19
pandemic and associated costs therewith; effectiveness of our optimization efforts; our ability to attract, hire and retain highly skilled personnel; manufacturing or quality control problems; interruptions in our supply chain; disruptions of information technology systems; breaches of our data security; variations in intellectual property laws; challenges associated with conducting business globally, including political or economic instability, major hostilities or terrorism; costs and delays resulting from the extensive pharmaceutical regulation to which we are subject or delays in governmental processing time due to travel and work restrictions caused by the
COVID-19
pandemic;
|
the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; significant sales to a limited number of customers; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; and our prospects and opportunities for growth if we sell assets;
|
• |
compliance, regulatory and litigation matters, including: failure to comply with complex legal and regulatory environments; increased legal and regulatory action in connection with public concern over the abuse of opioid medications and our ability to reach a final resolution of the remaining opioid-related litigation; scrutiny from competition and pricing authorities around the world, including our ability to successfully defend against the U.S. Department of Justice (“DOJ”) criminal charges of Sherman Act violations; potential liability for patent infringement; product liability claims; failure to comply with complex Medicare and Medicaid reporting and payment obligations; compliance with anti-corruption sanctions and trade control laws; and environmental risks;
|
• |
other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our intangible assets; potential significant increases in tax liabilities; and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business;
|
• |
AUSTEDO (deutetrabenazine) is a deuterated form of a small molecule inhibitor of vesicular monoamine 2 transporter, or VMAT2, that is designed to regulate the levels of a specific
|
neurotransmitter, dopamine, in the brain. The FDA granted Deutetrabenazine New Chemical Entity exclusivity until April 2022 and Orphan Drug exclusivity for the treatment of chorea associated with Huntington disease until April 2024.
|
• |
AUSTEDO was launched in the U.S. in 2017. It is indicated for the treatment of chorea associated with Huntington disease and for the treatment of tardive dyskinesia in adults, which is a debilitating, often irreversible movement disorder caused by certain medications used to treat mental health or gastrointestinal conditions.
|
• |
AUSTEDO launched in China for the treatment of chorea associated with Huntington disease and for the treatment of tardive dyskinesia in early 2021. We continue with additional submissions in various other countries around the world.
|
• |
AUSTEDO is protected in the United States by five Orange Book patents expiring between 2031 and 2033 and in Europe by two patents expiring in 2029. The first date for expected generic ANDA filings on AUSTEDO is in April 2021.
|
• |
AJOVY (fremanezumab-vfrm) injection is a fully humanized monoclonal antibody that binds to calcitonin gene-related peptide (“CGRP”) and it is indicated for the preventive treatment of migraine in adults. AJOVY was launched in the U.S. in 2018. AJOVY was approved in Canada in April 2020.
|
• |
During 2019, AJOVY was granted a marketing authorization in the European Union by the EMA in a centralized process and began receiving marketing authorizations in various countries in our International Markets segment. By the end of 2020, we launched AJOVY in most European countries and in certain International Markets countries. We are moving forward with plans to launch in other countries around the world.
|
• |
On January 27, 2020, the FDA approved an auto-injector device for AJOVY in the U.S., which became commercially available in April 2020. We have also received approval from the EMA for AJOVY’s auto-injector submission in the EU in October 2019, and we commenced launch in March 2020.
|
• |
AJOVY is protected by patents expiring in 2026 in Europe and in 2027 in the United States. Applications for patent term extensions have been submitted in various markets around the world, and certain extensions in Europe and other countries have already been granted until 2031. Additional patents relating to the use of AJOVY in the treatment of migraine have also been issued in the United States and will expire in 2035 and 2037. Such patents are also pending in other countries. AJOVY will also be protected by regulatory exclusivity of 12 years from marketing approval in the United States and 10 years from marketing approval in Europe.
|
• |
We have filed a lawsuit in the U.S. District Court for the District of Massachusetts alleging that Eli Lilly & Co.’s (“Lilly”) marketing and sale of its galcanezumab product for the treatment of migraine infringes nine Teva patents. Lilly then submitted IPR (inter partes review) petitions to the Patent Trial and Appeal Board, challenging the validity of the nine patents asserted against it in the litigation. The litigation in the district court was stayed pending resolution of the IPR petitions. On February 18, 2020, the Patent Trial and Appeal Board issued decisions on the first six IPRs, finding the six composition of matter patents invalid as being obvious. On April 21, 2020, we filed notices of appeal in connection with these decisions. On March 31, 2020 the Patent Trial and Appeal Board issued a decision upholding the three method of treatment patents and, on June 1, 2020, Lilly filed notices of appeal in connection with the decisions on these three patents. The litigation stay ended following the issuance of the most recent IPR decisions, and the parties are proceeding with the litigation. In addition, in 2018 we entered into separate agreements with Alder Biopharmaceuticals, Inc. and Lilly, resolving the European Patent Office oppositions that they filed against our AJOVY patents. The settlement agreement with Lilly also resolved Lilly’s action to revoke the patent protecting AJOVY in the United Kingdom.
|
• |
COPAXONE (glatiramer acetate injection) is one of the leading MS therapies in the United States (according to IQVIA data as of late 2020). COPAXONE is indicated for the treatment of patients with relapsing forms of MS (“RMS”), including the reduction of the frequency of relapses in relapsing-remitting multiple sclerosis (“RRMS”), including in patients who have experienced a first clinical episode and have MRI features consistent with MS.
|
• |
COPAXONE is believed to have a unique mechanism of action that works with the immune system, unlike many therapies that are believed to rely on general immune suppression or cell sequestration to exert their effect. COPAXONE provides a proven mix of efficacy, safety and tolerability.
|
• |
One European patent protecting COPAXONE 40 mg/mL was found invalid by the Board of Appeal of the European Patent Office in September 2020. Two additional patents expiring in 2030 are currently under opposition at the European Patent Office. In certain countries, Teva remains in litigation against generic companies on an additional COPAXONE 40 mg/mL patent that expires in 2030.
|
• |
The market for MS treatments continues to develop, particularly with the approval of generic versions of COPAXONE. Oral treatments for MS, such as Tecfidera
®
, Gilenya
®
and Aubagio
®
, continue to present significant and increasing competition. COPAXONE also continues to face competition from existing injectable products, as well as from monoclonal antibodies, such as Ocrevus
®
.
|
• |
BENDEKA (bendamustine hydrochloride) injection and TREANDA (bendamustine hydrochloride) for injection are approved in the United States for the treatment of patients with Chronic Lymphocytic Leukemia (“CLL”) and patients with indolent
B-cell
Non-Hodgkin’s Lymphoma (“NHL”) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. We launched BENDEKA in the United States in January 2016. It is a liquid,
low-volume
(50 mL) and short-time
10-minute
infusion formulation of bendamustine hydrochloride that we licensed from Eagle.
|
• |
BENDEKA faces direct competition from Belrapzo
®
ready-to-dilute
R-CHOP
(a combination of cyclophosphamide, vincristine, doxorubicin and prednisone in combination with rituximab) and
CVP-R
(a combination of cyclophosphamide, vincristine and prednisolone in combination with rituximab) for the treatment of NHL, as well as a combination of fludarabine, doxorubicin and rituximab for the treatment of CLL and newer targeted oral therapies, such as ibrutinib, idelilisib and venetoclax.
|
• |
In July 2018, Eagle prevailed in its suit against the FDA to obtain seven years of orphan drug exclusivity in the United States for BENDEKA. On March 13, 2020, this decision was upheld in the appellate court. As things currently stand, drug applications referencing BENDEKA, TREANDA or any other bendamustine product will not be approved by the FDA until the orphan drug exclusivity expires in December 2022. In April 2019, we signed an amendment to the license agreement with Eagle extending the royalty term applicable to the United States to the full period for which we sell BENDEKA and increased the royalty rate. In consideration, Eagle agreed to assume a portion of BENDEKA-related patent litigation expenses.
|
• |
There are 15 patents listed in the U.S. Orange Book for BENDEKA with expiry dates in 2026 and 2031. In September 2019, a patent infringement action against four of six ANDA filers for generic versions of BENDEKA was tried in the United States District Court for the District of Delaware. On April 27, 2020, the District Court upheld the validity of all of the asserted patents and found that all four ANDA filers infringe at least one of the patents. Three of the four ANDA filers have appealed the district court decision, but barring an adverse appellate decision, these ANDA filers should be enjoined until the patents expire in 2031. The litigation against the fifth ANDA filer was dismissed after the withdrawal of its patent challenge, and the case against the sixth ANDA filer is in the early stages of litigation.
|
• |
Additionally, in July 2018, Teva and Eagle filed suit against Hospira, Inc. (“Hospira”) related to its 505(b)(2) new drug application (“NDA”) referencing BENDEKA in the U.S. District Court for the District of Delaware. On December 16, 2019, the Delaware District Court dismissed the case against Hospira on all but one of the asserted patents, which expires in 2031. Trial against Hospira on that patent is scheduled to begin on November 15, 2021.
|
• |
In addition to the settlement with Eagle regarding its bendamustine 505(b)(2) NDA, between 2015 and 2020, we reached final settlements with 22 ANDA filers for generic versions of the lyophilized form of TREANDA and one 505(b)(2) NDA filer for a generic version of the liquid form of TREANDA, providing for the launch of generic versions of TREANDA prior to patent expiration.
|
• |
ProAir HFA
®
|
• |
ProAir RespiClick
dry-powder,
short-acting beta-agonist inhaler for the treatment or prevention of bronchospasm with reversible obstructive airway disease and for the prevention of exercise-induced bronchospasm in patients four years of age and older.
|
• |
QVAR
|
• |
QVAR RediHaler
|
• |
ProAir Digihaler
built-in
sensors which connects to a companion mobile application and provides inhaler use information to people with asthma and COPD.
|
• |
ArmonAir Digihaler
|
• |
AirDuo Digihaler
built-in
sensors which connects to a companion mobile application and provides inhaler use information to people with asthma.
|
• |
BRALTUS
®
inhaler. It was launched in Europe in August 2016.
|
• |
CINQAIR/CINQAERO
interleukin-5
antagonist monoclonal antibody for
add-on
maintenance treatment of adult patients with severe asthma and with an eosinophilic phenotype. This biologic treatment was launched in the U.S. and in certain European countries in 2016 and in Canada in 2017.
|
• |
AirDuo RespiClick
|
Phase 2
|
Phase 3
|
Pre-Submission
|
||||
Novel Biologics
|
Fremanezumab
Fibromyalgia
|
Fremanezumab
Additional indication
|
||||
TEV-48574
Respiratory
|
Fasinumab
Osteoarthritic Pain
(March 2016)
(1)
|
|||||
TEV-53275
Respiratory
|
||||||
Small Molecules
|
Deutetrabenazine
Dyskinesia in Cerebral Palsy
(September 2019)
|
Risperidone LAI
Schizophrenia
(2)
|
||||
Digital Respiratory
|
Digihaler
®
(budesonide and formoterol fumarate dihydrate)
(EU)
|
|||||
QVAR
®
Digihaler
®
(beclomethasone dipropionate HFA)
(U.S.)
|
(1) |
Developed in collaboration with Regeneron Pharmaceuticals, Inc. (“Regeneron”). Results for two phase 3 clinical trials, FACT OA1 and FACT OA2, were released on August 5, 2020, indicating that the
co-primary
endpoints for fasinumab 1 mg monthly were achieved. Fasinumab 1 mg monthly demonstrated significant improvements in pain and physical function over placebo at week 16 and week 24, respectively. Fasinumab 1 mg monthly also showed nominally significant benefits in physical function in two trials and pain in one trial, when compared to the maximum
FDA-approved
prescription doses of
non-steroidal
anti-inflammatory drugs for osteoarthritis. The FACT OA1 trial included an additional treatment arm, fasinumab 1 mg every two months, which showed numerical benefit over placebo, but did not reach statistical significance. In initial safety analyses from the phase 3 trials, there was an increase in arthropathies reported with fasinumab. In a
sub-group
of patients from one phase 3 long-term safety trial, there was an increase in joint replacement with fasinumab 1 mg monthly treatment during the
off-drug
follow-up
period, although this increase was not seen in the other trials to date.
|
(2) |
In January 2021, we announced positive results for a phase 3 clinical trial designed to evaluate the efficacy of risperidone LAI. No new safety signals were identified that are inconsistent with the known safety profile of other risperidone formulations. The second phase 3 study evaluating long-term safety and tolerability is ongoing.
|
• |
AUSTEDO for the treatment of Tourette syndrome in pediatric patients in the U.S., which was being developed under a partnership agreement with Nuvelution Pharma, Inc.; and
|
• |
fremanezumab (anti CGRP) for post-traumatic headache.
|
• |
global R&D facilities that enable us to have a broad global generic pipeline and product line, as well as a focused pipeline of specialty products;
|
• |
pharmaceutical manufacturing facilities approved by the FDA, EMA and other regulatory authorities located around the world, which offer a broad range of production technologies and the ability to concentrate production in order to achieve high quality and economies of scale;
|
• |
API manufacturing capabilities that offer a stable, high-quality supply of key APIs, vertically integrated with our pharmaceutical operations; and
|
• |
high-volume, technologically advanced distribution facilities that allow us to deliver new products to our customers quickly and efficiently, providing a cost-effective, safe and reliable supply.
|
• |
continued the implementation of our global EHS management system, which promotes proactive compliance with applicable EHS requirements, establishes EHS standards throughout our global operations and helps drive continuous improvement in our EHS performance;
|
• |
provided EHS regulatory monitoring tools in all countries where we have significant operations; and
|
• |
proactively evaluated EHS compliance through self-evaluation and an internal and external audit program, addressing
non-conformities
through appropriate corrective and preventative action.
|
December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Full-time
|
37,100 | 38,130 | 40,556 | |||||||||
Part-time
|
1,272 | 1,158 | 621 | |||||||||
Contractor
|
1,844 | 1,497 | 1,756 | |||||||||
Total
|
40,216 | 40,785 | 42,933 | |||||||||
Total full time equivalent
|
39,717 | 40,039 | 42,535 |
December 31,
|
||||||||||||
2020
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2019
|
2018
|
||||||||||
North America
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6,918 | 7,336 | 7,752 | |||||||||
Europe
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18,569 | 18,207 | 19,004 | |||||||||
International Markets (excluding Israel)
|
9,210 | 9,408 | 9,579 | |||||||||
Israel
|
3,675 | 4,337 | 4,843 | |||||||||
Total (excluding contractors)
|
38,372 | 39,288 | 41,177 |
ITEM 1A.
|
RISK FACTORS
|
• |
Our future success depends on our ability to maximize the growth and commercial success of AUSTEDO. If our revenues derived from AUSTEDO do not increase as expected, it may have an adverse effect on our results of operations.
|
• |
AJOVY faces strong competition from two products that were introduced into the market around the same time and are competing for market share in the same space, as well as from other emerging competing therapies. Our auto-injector for AJOVY launched in April 2020, but we may still be at a competitive disadvantage in our ability to sell and market this product compared to competing products that launched earlier with an auto-injector due to our late entry into the market.
|
• |
COPAXONE faces increasing competition from generic versions in the U.S. and competing glatiramer acetate products in Europe, as well as from orally-administered therapies. Following the approval of generic competition, COPAXONE’s revenues and profitability have decreased. We expect this trend to continue in the future, which may have a significant effect on our financial results and cash flow.
|
• |
making it more difficult for us to satisfy our obligations;
|
• |
limiting our ability to borrow additional funds and increasing the cost of any such borrowing;
|
• |
increasing our vulnerability to, and reducing our flexibility to respond to, general adverse economic and industry conditions;
|
• |
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
• |
placing us at a competitive disadvantage as compared to our competitors, to the extent that they are not as highly leveraged; and
|
• |
restricting us from pursuing certain business opportunities.
|
• |
some government programs may be discontinued, or the applicable tax rates may increase;
|
• |
we may be unable to meet the requirements for continuing to qualify for some programs and the restructuring plan may lead to the loss of certain tax benefits we currently receive;
|
• |
these programs and tax benefits may be unavailable at their current levels;
|
• |
upon expiration of a particular benefit, we may not be eligible to participate in a new program or qualify for a new tax benefit that would offset the loss of the expiring tax benefit; or
|
• |
we may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions.
|
ITEM 1B.
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UNRESOLVED STAFF COMMENTS
|
Business Segment
|
Number of
Facilities |
Square Feet
(in thousands)
|
||||||
North America
|
19 | 5,125 | ||||||
Europe
|
32 | 12,300 | ||||||
International Markets
|
35 | 7,769 | ||||||
|
|
|
|
|||||
Worldwide Total Manufacturing and R&D Facilities
|
86 | 25,194 |
* |
$100 invested on December 31, 2015 in stock or index—including reinvestment of dividends. Indexes calculated on
month-end
basis.
|
For the year ended December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
(U.S. dollars in millions, except share and per share amounts)
|
||||||||||||||||||||
Income Statement Data:
(a)
|
||||||||||||||||||||
Net revenues
|
16,659 | 16,887 | 18,271 | 21,853 | 21,464 | |||||||||||||||
Cost of sales
|
8,933 | 9,351 | 9,975 | 11,237 | 9,811 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Gross profit
|
7,726 | 7,537 | 8,296 | 10,615 | 11,653 | |||||||||||||||
Research and development expenses
|
997 | 1,010 | 1,213 | 1,778 | 2,077 | |||||||||||||||
Selling and marketing expenses
|
2,498 | 2,614 | 2,916 | 3,395 | 3,583 | |||||||||||||||
General and administrative expenses
|
1,173 | 1,192 | 1,298 | 1,451 | 1,390 | |||||||||||||||
Intangible assets impairment
|
1,502 | 1,639 | 1,991 | 3,238 | 589 | |||||||||||||||
Goodwill impairment
|
4,628 | — | 3,027 | 17,100 | 900 | |||||||||||||||
Other asset impairments, restructuring and other items
|
479 | 423 | 987 | 1,836 | 830 | |||||||||||||||
Legal settlements and loss contingencies
|
60 | 1,178 | (1,208 | ) | 500 | 899 | ||||||||||||||
Other Income
|
(40 | ) | (76 | ) | (291 | ) | (1,199 | ) | (769 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Operating income (loss)
|
(3,572 | ) | (443 | ) | (1,637 | ) | (17,484 | ) | 2,154 | |||||||||||
Financial expenses, net
|
834 | 822 | 959 | 895 | 1,330 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Income (loss) before income taxes
|
(4,406 | ) | (1,265 | ) | (2,596 | ) | (18,379 | ) | 824 | |||||||||||
Income taxes (benefit)
|
(168 | ) | (278 | ) | (195 | ) | (1,933 | ) | 521 | |||||||||||
Share in (profits) losses of associated companies, net
|
(138 | ) | 13 | 71 | 3 | (8 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss)
|
(4,099 | ) | (1,000 | ) | (2,472 | ) | (16,449 | ) | 311 | |||||||||||
Net income (loss) attributable to
non-controlling
interests
|
(109 | ) | (2 | ) | (322 | ) | (184 | ) | (18 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) attributable to Teva
|
(3,990 | ) | (999 | ) | (2,150 | ) | (16,265 | ) | 329 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Accrued dividends on preferred shares
|
— | — | 249 | 260 | 261 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net income (loss) attributable to ordinary shareholders
|
(3,990 | ) | (999 | ) | (2,399 | ) | (16,525 | ) | 68 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Earnings (loss) per share attributable to ordinary shareholders:
|
||||||||||||||||||||
Basic ($)
|
(3.64 | ) | (0.91 | ) | (2.35 | ) | (16.26 | ) | 0.07 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted ($)
|
(3.64 | ) | (0.91 | ) | (2.35 | ) | (16.26 | ) | 0.07 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Weighted average number of shares (in millions):
|
||||||||||||||||||||
Basic
|
1,095 | 1,091 | 1,021 | 1,016 | 955 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Diluted
|
1,095 | 1,091 | 1,021 | 1,016 | 961 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Dividend per ordinary share
|
— | — | $ | 0.51 | $ | 1.36 | $ | 1.36 |
(a) |
For a discussion of items that affected the comparability of results for the years 2020 and 2019, refer to “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
|
As at December 31,
|
||||||||||||||||||||
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||||||||
(U.S. dollars in millions)
|
||||||||||||||||||||
Financial assets (cash, cash equivalents and investment in securities)
|
2,478 | 2,033 | 1,846 | 1,060 | 1,949 | |||||||||||||||
Identifiable intangible assets, net
|
8,923 | 11,232 | 14,005 | 17,640 | 21,487 | |||||||||||||||
Goodwill
|
20,624 | 24,846 | 24,917 | 28,414 | 44,409 | |||||||||||||||
Working capital (operating assets minus liabilities)
|
662 | 74 | (186 | ) | (384 | ) | 303 | |||||||||||||
Total assets
|
50,640 | 57,470 | 60,683 | 70,615 | 93,057 | |||||||||||||||
Short-term debt, including current maturities
|
3,188 | 2,345 | 2,216 | 3,646 | 3,276 | |||||||||||||||
Long-term debt, net of current maturities
|
22,731 | 24,562 | 26,700 | 28,829 | 32,524 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total debt
|
25,919 | 26,908 | 28,916 | 32,475 | 35,800 | |||||||||||||||
Total equity
|
11,061 | 15,063 | 15,794 | 18,745 | 34,993 |
• |
Our revenues in 2020 were $16,659 million, a decrease of 1% in both U.S. dollar and local currency terms, compared to 2019, mainly due to a decline in revenues from certain oncology products, COPAXONE and certain respiratory products, partially offset by higher revenues from AUSTEDO and AJOVY. The decline in revenues was also affected by reduced demand for certain products resulting from the impact of the
COVID-19
pandemic.
|
• |
Our North America segment generated revenues of $8,447 million and profit of $2,421 million in 2020. Revenues decreased by 1% compared to 2019, mainly due to a decline in revenues from COPAXONE, BENDEKA/TREANDA and certain other specialty products, partially offset by higher revenues from AUSTEDO, AJOVY and our U.S. generics business. Our North America segment has experienced some reductions in volume due to less physician and hospital activity during the
COVID-19
pandemic, but has also experienced increase in demand for certain products related to the treatment of
COVID-19
|
and its symptoms. In addition, the ability to promote our new specialty products, primarily AJOVY and AUSTEDO, has been impacted by less physician visits by patients and less physician interactions by our sales personnel. Profit increased by 7%, mainly due to higher gross profit margin and lower R&D expenses. |
• |
Our Europe segment generated revenues of $4,757 million and profit of $1,331 million in 2020. Revenues decreased by 1%, or 2% in local currency terms compared to 2019, mainly due to price declines for our oncology products as a result of generic competition and a decline in COPAXONE revenues due to competing glatiramer acetate products, partially offset by the launch of AJOVY. Revenues from generic products were flat, due to a decline in doctor and hospital visits by patients resulting in fewer prescriptions during the second half of 2020 due to the
COVID-19
pandemic, partially offset by new generic product launches. The
COVID-19
pandemic caused significant fluctuations in customer stocking throughout 2020, which mostly offset each other by
year-end.
Profit increased by 1%, mainly due to lower S&M expenses.
|
• |
Our International Markets segment generated revenues of $2,154 million and profit of $474 million in 2020. Revenues decreased by 4%, or flat in local currency terms compared to 2019, with higher revenues in most markets offsetting the lower sales in Japan and loss of revenues from divested businesses in Israel. Revenues in 2020 were also impacted by reduced demand for certain products and higher demand for other products, resulting from the impact of the
COVID-19
pandemic. In addition, the
COVID-19
pandemic has led to a decline in doctor and hospital visits by patients resulting in fewer prescriptions during 2020. Profit increased by 2%, mainly due to higher revenues in most markets and lower S&M expenses, partially offset by lower sales in Japan.
|
• |
Our revenues from other activities in 2020 were $1,302 million, flat compared to 2019. In local currency terms, revenues decreased by 1%.
|
• |
Impairments of identifiable intangible assets were $1,502 million and $1,639 million in the years ended December 31, 2020 and 2019, respectively. See note 6 to our consolidated financial statements.
|
• |
We recorded a goodwill impairment charge of $4,628 million related to our North America reporting unit in the year ended December 31, 2020. See note 7 to our consolidated financial statements.
|
• |
We recorded expenses of $479 million for other asset impairments, restructuring and other items in 2020, compared to expenses of $423 million in 2019. See note 15 to our consolidated financial statements.
|
• |
In 2020, we recorded an expense of $60 million in legal settlements and loss contingencies, compared to $1,178 million in 2019. See note 11 to our consolidated financial statements.
|
• |
Operating loss was $3,572 million in 2020, compared to an operating loss of $443 million in 2019. The increase in operating loss in 2020 was mainly due to goodwill impairment charges, partially offset by lower provisions in connection with legal settlements and loss contingencies, as well as higher profit in our North America segment.
|
• |
Financial expenses were $834 million in 2020, compared to $822 million in 2019. Financial expenses in 2020 were mainly comprised of interest expenses of $963 million, partially offset by gains on revaluations of marketable securities of $85 million (see note 20 to our consolidated financial statements) as well as a gain of $26 million resulting from our hedging and derivatives activities. Financial expenses in 2019 were mainly comprised of interest expenses of $881 million.
|
• |
In 2020, we recognized a tax benefit of $168 million, or 4%, on a
pre-tax
loss of $4,406 million. In 2019, we recognized a tax benefit of $278 million, or 22%, on a
pre-tax
loss of $1,265 million. Our tax rate for 2020 was lower than in 2019, mainly due to goodwill impairments that did not have a corresponding tax effect.
|
• |
Exchange rate movements during 2020, including hedging effects, in comparison with 2019, negatively impacted revenues by $33 million and operating income (loss) by $56 million.
|
• |
As of December 31, 2020, our debt was $25,919 million, compared to $26,908 million as of December 31, 2019. This decrease was mainly due to senior notes repaid at maturity with cash generated during the year, partially offset by exchange rate fluctuations.
|
• |
Cash flow generated from operating activities was $1,216 million in 2020, compared to $748 million in 2019. This increase was mainly due to higher profit in our North America segment during 2020.
|
• |
During 2020, we generated free cash flow of $2,110 million, which we define as comprising $1,216 million in cash flow generated from operating activities, $1,405 million in beneficial interest collected in exchange for securitized accounts receivables and $67 million in proceeds from sale of property, plant and equipment and intangible assets, partially offset by $578 million in cash used for capital investments. The increase in 2020 compared to 2019, resulted mainly from higher cash flow generated from operating activities, partially offset by less cash generated from sales of assets and higher capital investments.
|
Year ended December 31,
|
||||||||||||||||
2020
|
2019
|
|||||||||||||||
(U.S. $ in millions / % of Segment Revenues)
|
||||||||||||||||
Revenues
|
$ | 8,447 | 100 | % | $ | 8,542 | 100.0 | % | ||||||||
Gross profit
|
4,489 | 53.1 | % | 4,350 | 50.9 | % | ||||||||||
R&D expenses
|
622 | 7.4 | % | 652 | 7.6 | % | ||||||||||
S&M expenses
|
1,013 | 12.0 | % | 1,021 | 12.0 | % | ||||||||||
G&A expenses
|
443 | 5.2 | % | 439 | 5.1 | % | ||||||||||
Other (income) expense
|
(10 | ) | § | (14 | ) | § | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment profit*
|
$ | 2,421 | 28.7 | % | $ | 2,252 | 26.4 | % | ||||||||
|
|
|
|
|
|
|
|
* |
Segment profit does not include amortization and certain other items.
|
§ |
Represents an amount less than 0.5%.
|
Year ended December 31,
|
Percentage
Change
2019-2020
|
|||||||||||
2020
|
2019
|
|||||||||||
(U.S. $ in millions)
|
||||||||||||
Generic products
|
$ | 4,010 | $ | 3,963 | 1 | % | ||||||
AJOVY
|
134 | 93 | 45 | % | ||||||||
AUSTEDO
|
637 | 412 | 55 | % | ||||||||
BENDEKA/TREANDA
|
415 | 496 | (16 | %) | ||||||||
COPAXONE
|
884 | 1,017 | (13 | %) | ||||||||
ProAir*
|
241 | 274 | (12 | %) | ||||||||
QVAR
|
179 | 250 | (28 | %) | ||||||||
Anda
|
1,462 | 1,492 | (2 | %) | ||||||||
Other
|
485 | 546 | (11 | %) | ||||||||
|
|
|
|
|||||||||
Total
|
$ | 8,447 | $ | 8,542 | (1 | %) | ||||||
|
|
|
|
* |
Does not include revenues from the ProAir authorized generic, which are included under generic products.
|
Product Name
|
Brand
Name |
Launch
Date |
Total Annual U.S.
Branded Sales at Time of Launch (U.S. $ in millions (IQVIA))
(1)
|
|||||
Doxepin tablets, 3 mg & 6 mg
|
Silenor
®
|
January | $ | 50 | ||||
HERZUMA
®
(trastuzumab-pkrb) for injection, 150 mg/vial & 420 mg/vial
(2)
|
Herceptin
®
|
March | $ | 3,042 | ||||
Deferasirox Tablets, 180mg
|
Jadenu
®
|
April | $ | 53 | ||||
Romidepsin Injection, 27.5mg/5.5 mL (5mg/mL)
(3)
|
(3)
|
April | — | |||||
Vigabatrin for Oral Solution, USP, 500mg
|
Sabril
®
|
May | $ | 254 | ||||
Everolimus Tablets, 2.5mg, 5mg & 7.5mg
|
Anfinitor
®
|
June | $ | 401 | ||||
Imiquimod Cream 3.75%
(4)
|
Zyclara
®
|
July | $ | 24 | ||||
Sildenafil for Oral Suspension
|
Revatio
®
|
August | $ | 121 | ||||
PEG-3350,
Sodium Sulfate, Sodium Chloride, Potassium Chloride, Sodium Ascorbate, and Ascorbic Acid for Oral Solution
|
MoviPrep
®
|
August | $ | 10 | ||||
Tobramycin Inhalation Solution, USP
|
Bethkis
®
|
September | $ | 42 | ||||
Dimethyl Fumarate Delayed-Release Capsules
|
Tecfidera
®
|
September | $ | 3,788 | ||||
Efavirenz, Emtricitabine and Tenofovir Disoproxil Fumarate Tablets
|
Atripla
®
|
September | $ | 578 | ||||
Emtricitabine and Tenofovir Disoproxil Fumarate Tablets, 200mg/300mg
|
Truvada
®
|
September | $ | 2,872 | ||||
Methylphenidate Hydrochloride Extended-Release Capsules
|
Aptensio
XR
®
|
October | $ | 38 | ||||
Alvimopan Capsules
|
Entereg
®
|
December | $ | 92 | ||||
Colchicine Tablets, USP
|
Colcrys
®
|
December | $ | 415 |
(1) |
The figures presented are for the twelve months ended in the calendar quarter immediately prior to our launch or
re-launch.
|
(2) |
Biosimilar.
|
(3) |
Approved via 505(b)(2) regulatory pathway; not equivalent to a brand product.
|
(4) |
Authorized generic.
|
Generic Name
|
Brand Name
|
Total U.S. Annual Branded
Market (U.S. $ in millions (IQVIA))* |
||||
Eliglustat Capsules, 84mg
|
Cerdela
®
|
$ | 111 | |||
Icosapent Capsules, 500mg & 1000mg
|
Vascepa
®
|
$ | 972 | |||
Macitenta Tablets, 10mg
|
Opsumit
®
|
$ | 590 | |||
Pemetrexed Disodium Injection, 100mg vial
|
Alimta
®
|
$ | 255 | |||
Apixaban Tablets, 2.5 mg and 5 mg
|
Eliquisr
®
|
$ | 11,445 | |||
Pirfenidone Tablets
|
Esbriet
®
|
$ | 540 | |||
Micafungin for Injection
|
Mycamine
®
|
$ | 125 |
* |
For the twelve months ended in the calendar quarter immediately prior to the receipt of tentative approval.
|
Year ended December 31,
|
||||||||||||||||
2020
|
2019
|
|||||||||||||||
(U.S. $ in millions / % of Segment Revenues)
|
||||||||||||||||
Revenues
|
$ | 4,757 | 100 | % | $ | 4,795 | 100 | % | ||||||||
Gross profit
|
2,666 | 56.0 | % | 2,704 | 56.4 | % | ||||||||||
R&D expenses
|
247 | 5.2 | % | 262 | 5.5 | % | ||||||||||
S&M expenses
|
830 | 17.4 | % | 890 | 18.6 | % | ||||||||||
G&A expenses
|
261 | 5.5 | % | 239 | 5.0 | % | ||||||||||
Other (income) expense
|
(3 | ) | § | (5 | ) | § | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment profit*
|
$ | 1,331 | 28.0 | % | $ | 1,318 | 27.5 | % | ||||||||
|
|
|
|
|
|
|
|
* |
Segment profit does not include amortization and certain other items.
|
§ |
Represents an amount less than 0.5%.
|
Year ended December 31,
|
Percentage
Change
2019-2020
|
|||||||||||
2020
|
2019
|
|||||||||||
(U.S. $ in millions)
|
||||||||||||
Generic products
|
$ | 3,513 | $ | 3,470 | 1 | % | ||||||
AJOVY
|
31 | 3 | 852 | % | ||||||||
COPAXONE
|
400 | 432 | (7 | %) | ||||||||
Respiratory products
|
353 | 354 | § | |||||||||
Other
|
459 | 536 | (14 | %) | ||||||||
|
|
|
|
|||||||||
Total
|
$ | 4,757 | $ | 4,795 | (1 | %) | ||||||
|
|
|
|
§ |
Represents an amount less than 0.5%.
|
2020
|
2019
|
|||||||||||||||
(U.S. $ in millions / % of Segment Revenues)
|
||||||||||||||||
Revenues
|
$ | 2,154 | 100 | % | $ | 2,246 | 100 | % | ||||||||
Gross profit
|
1,096 | 50.9 | % | 1,167 | 51.9 | % | ||||||||||
R&D expenses
|
70 | 3.3 | % | 88 | 3.9 | % | ||||||||||
S&M expenses
|
427 | 19.8 | % | 481 | 21.4 | % | ||||||||||
G&A expenses
|
136 | 6.3 | % | 138 | 6.1 | % | ||||||||||
Other (income) expense
|
(11 | ) | (0.5 | %) | (3 | ) | § | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Segment profit*
|
$ | 474 | 22.0 | % | $ | 464 | 20.6 | % | ||||||||
|
|
|
|
|
|
|
|
* |
Segment profit does not include amortization and certain other items.
|
§ |
Represents an amount less than 0.5%.
|
Year ended
December 31, |
Percentage
Change
2019-2020
|
|||||||||||
2020
|
2019
|
|||||||||||
(U.S. $ in millions)
|
||||||||||||
Generic products
|
$ | 1,792 | $ | 1,893 | (5 | %) | ||||||
COPAXONE
|
53 | 63 | (16 | %) | ||||||||
Other
|
309 | 291 | 6 | % | ||||||||
|
|
|
|
|||||||||
Total
|
$ | 2,154 | $ | 2,246 | (4 | %) | ||||||
|
|
|
|
Year ended
December 31, |
||||||||
2020
|
2019
|
|||||||
(U.S.$ in millions)
|
||||||||
North America profit
|
$ | 2,421 | $ | 2,252 | ||||
Europe profit
|
1,331 | 1,318 | ||||||
International Markets profit
|
474 | 464 | ||||||
|
|
|
|
|||||
Total reportable segments profit
|
4,225 | 4,034 | ||||||
Profit (loss) of other activities
|
163 | 108 | ||||||
|
|
|
|
|||||
Total segments profit
|
4,388 | 4,142 | ||||||
Amounts not allocated to segments:
|
||||||||
Amortization
|
1,020 | 1,113 | ||||||
Other asset impairments, restructuring and other items
|
479 | 423 | ||||||
Goodwill impairment
|
4,628 | — | ||||||
Intangible asset impairments
|
1,502 | 1,639 | ||||||
Gain on divestitures, net of divestitures related costs
|
(8 | ) | (50 | ) | ||||
Other R&D expenses (income)
|
37 | (15 | ) | |||||
Costs related to regulatory actions taken in facilities
|
23 | 45 | ||||||
Legal settlements and loss contingencies
|
60 | 1,178 | ||||||
Other unallocated amounts
|
219 | 252 | ||||||
|
|
|
|
|||||
Consolidated operating income (loss)
|
(3,572 | ) | (443 | ) | ||||
|
|
|
|
|||||
Financial expenses, net
|
834 | 822 | ||||||
|
|
|
|
|||||
Consolidated income (loss) before income taxes
|
$ | (4,406 | ) | $ | (1,265 | ) | ||
|
|
|
|
• |
our management and Board of Directors use the
non-GAAP
measures to evaluate our operational performance, to compare against work plans and budgets, and ultimately to evaluate the performance of management;
|
• |
our annual budgets are prepared on a
non-GAAP
basis; and
|
• |
senior management’s annual compensation is derived, in part, using these
non-GAAP
measures. While qualitative factors and judgment also affect annual bonuses, the principal quantitative element in the determination of such bonuses is performance targets tied to the work plan, which is based on the
non-GAAP
presentation set forth below.
|
• |
amortization of purchased intangible assets;
|
• |
legal settlements and/or loss contingencies, due to the difficulty in predicting their timing and scope;
|
• |
impairments of long-lived assets, including intangibles, property, plant and equipment and goodwill;
|
• |
restructuring expenses, including severance, retention costs, contract cancellation costs and certain accelerated depreciation expenses primarily related to the rationalization of our plants or to certain other strategic activities, such as the realignment of R&D focus or other similar activities;
|
• |
acquisition- or divestment- related items, including changes in contingent consideration, integration costs, banker and other professional fees, inventory
step-up
and
in-process
R&D acquired in development arrangements;
|
• |
expenses related to our equity compensation;
|
• |
significant
one-time
financing costs and valuation gains or losses;
|
• |
unusual tax items;
|
• |
other awards or settlement amounts, either paid or received;
|
• |
other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as impacts due to changes in accounting, significant costs for remediation of plants, such as inventory write-offs or related consulting costs, or other unusual events; and
|
• |
corresponding tax effects of the foregoing items.
|
Year Ended December 31, 2020
(U.S. $ and shares in millions, except per share amounts)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP |
Excluded for
non-GAAP
measurement
|
Non-
GAAP |
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization
of purchased intangible assets |
Legal
settlements and loss contingencies |
Goodwill
impairment |
Impairment
of long- lived assets |
Other
R&D expenses |
Restructuring
costs |
Costs
related to regulatory actions taken in facilities |
Equity
compensation |
Contingent
consideration |
Gain on
sale of business |
Other
non-
GAAP items |
Other
items |
|||||||||||||||||||||||||||||||||||||||||||||
COGS
|
8,933 | 894 | 23 | 27 | 63 | 7,925 | ||||||||||||||||||||||||||||||||||||||||||||||||||
R&D
|
997 | 37 | 20 | — | 941 | |||||||||||||||||||||||||||||||||||||||||||||||||||
S&M
|
2,498 | 126 | 36 | 14 | 2,322 | |||||||||||||||||||||||||||||||||||||||||||||||||||
G&A
|
1,173 | 46 | 12 | 1,115 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Other income
|
(40 | ) | (8 | ) | (31 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies
|
60 | 60 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Other asset impairments, restructuring and other items
|
479 | 416 | 120 | (81 | ) | 24 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairment
|
1,502 | 1,502 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill impairment
|
4,628 | 4,628 | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial expenses
|
834 | (85 | ) | 918 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes
|
(168 | ) | (745 | ) | 577 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share in profits (losses) of associated companies, net
|
(138 | ) | (134 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to
non-controlling
interests
|
(109 | ) | (177 | ) | 68 | |||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
Total reconciled items
|
1,020 | 60 | 4,628 | 1,918 | 37 | 120 | 23 | 129 | (81 | ) | (8 | ) | 114 | (1,140 | ) | |||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
EPS—Basic
|
(3.64 | ) | 6.23 | 2.58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
EPS—Diluted
|
(3.64 | ) | 6.22 | 2.57 |
Year ended December 31, 2019
(U.S. $ and shares in millions, except per share amounts)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
GAAP |
Excluded for
non-GAAP
measurement
|
Non-
GAAP |
||||||||||||||||||||||||||||||||||||||||||||||||||
Amortization
of purchased intangible assets |
Legal
settlements and loss contingencies |
Impairment
of long- lived assets |
Other
R&D expenses |
Restructuring
costs |
Costs
related to regulatory actions taken in facilities |
Equity
compensation |
Contingent
consideration |
Gain on
sale of
business
|
Other
non-
GAAP items |
Other
items |
||||||||||||||||||||||||||||||||||||||||||
COGS
|
9,351 | 973 | 45 | 26 | 121 | 8,185 | ||||||||||||||||||||||||||||||||||||||||||||||
R&D
|
1,010 | (15 | ) | 20 | 1 | 1,004 | ||||||||||||||||||||||||||||||||||||||||||||||
S&M
|
2,614 | 139 | 35 | 1 | 2,438 | |||||||||||||||||||||||||||||||||||||||||||||||
G&A
|
1,192 | 42 | 5 | 1,145 | ||||||||||||||||||||||||||||||||||||||||||||||||
Other income
|
(76 | ) | (50 | ) | (27 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies
|
1,178 | 1,178 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Other asset impairments, restructuring and other items
|
423 | 139 | 199 | 59 | 26 | — | ||||||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairment
|
1,639 | 1,639 | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Financial expenses
|
822 | (3 | ) | 824 | ||||||||||||||||||||||||||||||||||||||||||||||||
Income taxes
|
(278 | ) | (875 | ) | 597 | |||||||||||||||||||||||||||||||||||||||||||||||
Share in profits (losses) of associated companies, net
|
13 | — | 13 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net income (loss) attributable to
non-controlling
interests
|
(2 | ) | (82 | ) | 80 | |||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
Total reconciled items
|
1,113 | 1,178 | 1,778 | (15 | ) | 199 | 45 | 123 | 59 | (50 | ) | 155 | (959 | ) | ||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
EPS—Basic
|
(0.91 | ) | 3.32 | 2.41 | ||||||||||||||||||||||||||||||||||||||||||||||||
EPS—Diluted
|
(0.91 | ) | 3.32 | 2.40 |
• |
variable demand for certain products in certain markets and changes in physician and hospital activity due to the impact of the
COVID-19
pandemic. For further details, see “—The
COVID-19
Pandemic—Trends” above;
|
• |
continued success of our specialty products AUSTEDO and AJOVY;
|
• |
success of clinical trials and approval of our specialty product fasinumab, which is under development by Regeneron;
|
• |
ability to successfully execute key generic launches in a timely manner;
|
• |
ability to successfully develop and launch new biosimiliar products;
|
• |
a decrease in sales of COPAXONE following the launches of generic versions to the product, and the possibility of additional generic competition in the future;
|
• |
a decrease in sales of other specialty products due to potential loss of exclusivity or generic competition;
|
• |
we expect continued competition for our generic products where multiple similar generic products have been launched, resulting in pricing pressure in the generics markets. We do, however, also see certain generic segments in which opportunities exist to grow our business, our portfolio of new drug applications and our portfolio of approved complex products;
|
• |
our disciplined cash management and debt repayment schedule;
|
• |
our high debt levels and
non-investment
grade credit rating may increase the cost of any new borrowing;
|
• |
continued impact of currency fluctuations on revenues and operating income, as well as on various balance sheet and statements of income line items;
|
• |
ongoing evaluation of opportunities to further optimize our manufacturing and supply network to achieve additional operational efficiencies, which may affect our business and operations; and
|
• |
continued efforts towards achieving our long-term financial goals.
|
Payments Due by Period
|
||||||||||||||||||||
Total
|
Less than
1 year |
1-3 years
|
3-5 years
|
More than
5 years |
||||||||||||||||
(U.S. $ in millions)
|
||||||||||||||||||||
Long-term debt obligations, including estimated interest*
|
$ | 32,187 | $ | 3,563 | $ | 8,254 | $ | 7,902 | $ | 12,468 | ||||||||||
Purchase obligations (including purchase orders)
|
1,766 | 1,465 | 246 | 38 | 17 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total
|
$ | 33,953 | $ | 5,028 | $ | 8,500 | $ | 7,940 | $ | 12,485 | ||||||||||
|
|
|
|
|
|
|
|
|
|
* |
Long-term debt obligations mainly include senior notes and convertible senior debentures as disclosed in note 9 to our consolidated financial statements.
|
• |
Revenue Recognition and SR&A in the United States
|
• |
Income Taxes
|
• |
Contingencies
|
• |
Goodwill
|
• |
Identifiable Intangible Assets
|
• |
Restructuring Costs
|
• |
A projection or forecast that indicates losses or reduced profits associated with an asset. This could result, for example, from a change in the competitive landscape modifying our assumptions about market share or pricing prospectively, a government reimbursement program that results in an inability to sustain projected product revenues and profitability, or lack of acceptance of a product by patients, physicians or payers limiting our projected growth.
|
• |
A significant adverse change in legal factors or in the business climate that could affect the value of the asset. For example, a successful challenge of our patent rights by a competitor would likely result in generic competition earlier than expected. And conversely, a lost challenge of patent rights in connection with our generic file would likely result in delayed entry.
|
• |
A significant adverse change in the extent or manner in which an asset is used. For example, restrictions imposed by the FDA or other regulatory authorities could affect our ability to manufacture or sell a product.
|
• |
For IPR&D projects, this could result from, among other things, a change in outlook affecting assumptions around competition or timing of entry such as approval success or the related timing of approval, clinical trial data results, other delays in the projected launch dates or additional expenditures required to commercialize the product.
|
Net exposure as of
December 31, 2020
|
||||
Liability/Asset
|
(U.S. $ in millions)
|
|||
USD/CHF
|
438 | |||
USD/EUR
|
395 | |||
USD/JPY
|
345 | |||
BGN/EUR
|
302 | |||
HRK/USD
|
118 | |||
CAD/EUR
|
99 | |||
PLN/EUR
|
96 | |||
USD/MXN
|
93 | |||
INR/USD
|
88 | |||
USD/GBP
|
51 |
Currency (sold)
|
Cross
Currency (bought) |
Net Notional Value
|
Fair Value
|
2020 Weighted
Average Cross Currency Prices or Strike Prices |
||||||||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||||||||||
(U.S. $ in millions)
|
||||||||||||||||||||||||
Forward:
|
||||||||||||||||||||||||
CHF
|
USD | 464 | 384 | (12 | ) | (5 | ) | 0.90 | ||||||||||||||||
EUR
|
USD | 400 | 503 | (16 | ) | (6 | ) | 1.18 | ||||||||||||||||
JPY
|
USD | 326 | 302 | (5 | ) | 2 | 104.57 | |||||||||||||||||
USD
|
INR | 145 | 192 | 2 | — | 75.21 | ||||||||||||||||||
GBP
|
USD | 133 | * | (3 | ) | — | 1.33 | |||||||||||||||||
EUR
|
PLN | 103 | 216 | — | 4 | 4.57 | ||||||||||||||||||
EUR
|
CAD | 101 | 96 | (1 | ) | — | 1.55 | |||||||||||||||||
MXN
|
USD | 91 | 68 | (2 | ) | (2 | ) | 20.52 | ||||||||||||||||
CAD
|
USD | 70 | 101 | (2 | ) | — | 1.31 | |||||||||||||||||
PLN
|
USD | 54 | 105 | — | (2 | ) | 3.74 | |||||||||||||||||
EUR
|
GBP | * | 445 | — | 12 | — | ||||||||||||||||||
USD
|
RUB | * | 205 | — | (5 | ) | — | |||||||||||||||||
NIS
|
USD | * | 131 | — | (1 | ) | — | |||||||||||||||||
RUB
|
EUR | * | 92 | — | (2 | ) | — | |||||||||||||||||
Options:
|
||||||||||||||||||||||||
EUR
|
USD | 167 | 381 | (3 | ) | (2 | ) | 1.16 | ||||||||||||||||
JPY
|
USD | 89 | 139 | — | — | 106.23 | ||||||||||||||||||
CHF
|
USD | 84 | 85 | (2 | ) | (1 | ) | 0.93 | ||||||||||||||||
GBP
|
USD | 53 | 63 | (1 | ) | (1 | ) | 1.28 | ||||||||||||||||
EUR
|
GBP | * | 131 | — | — | — |
* |
Represents Net Notional Value of less than $50 million.
|
Currency
|
Total
Amount |
Interest Rate
Ranges |
2021
|
2022
|
2023
|
2024
|
2025
|
2026 &
thereafter |
||||||||||||||||||||||||||||
(U.S. dollars in millions)
|
||||||||||||||||||||||||||||||||||||
Fixed Rate:
|
||||||||||||||||||||||||||||||||||||
USD
|
16,286 | 2.20 | % | 7.13 | % | 2,674 | 853 | 2,996 | 1,250 | 1,000 | 7,513 | |||||||||||||||||||||||||
Euro
|
8,408 | 0.38 | % | 6.00 | % | — | 861 | 1,595 | 1,839 | 2,337 | 1,776 | |||||||||||||||||||||||||
CHF
|
795 | 0.50 | % | 1.00 | % | — | 397 | — | — | 398 | — | |||||||||||||||||||||||||
USD convertible debentures*
|
514 | 0.25 | % | 0.25 | % | — | — | — | — | — | 514 | |||||||||||||||||||||||||
Floating Rate:
|
||||||||||||||||||||||||||||||||||||
Others
|
1 | 1.00 | % | 2.00 | % | — | — | — | — | — | 1 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total:
|
26,004 | $ | 2,674 | $ | 2,111 | $ | 4,591 | $ | 3,089 | $ | 3,735 | $ | 9,804 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Less debt issuance costs
|
(86 | ) | ||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||
Total:
|
$ | 25,918 | ||||||||||||||||||||||||||||||||||
|
|
* |
Classified under short-term debt.
|
Page
|
||||
86 | ||||
Consolidated Financial Statements:
|
||||
90 | ||||
91 | ||||
92 | ||||
93 | ||||
94 | ||||
96 |
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Net revenues
|
$ | 16,659 | $ | 16,887 | $ | 18,271 | ||||||
Cost of sales
|
8,933 | 9,351 | 9,975 | |||||||||
|
|
|
|
|
|
|||||||
Gross profit
|
7,726 | 7,537 | 8,296 | |||||||||
Research and development expenses
|
997 | 1,010 | 1,213 | |||||||||
Selling and marketing expenses
|
2,498 | 2,614 | 2,916 | |||||||||
General and administrative expenses
|
1,173 | 1,192 | 1,298 | |||||||||
Intangible assets impairments
|
1,502 | 1,639 | 1,991 | |||||||||
Goodwill impairment
|
4,628 | — | 3,027 | |||||||||
Other asset impairments, restructuring and other items
|
479 | 423 | 987 | |||||||||
Legal settlements and loss contingencies
|
60 | 1,178 | (1,208 | ) | ||||||||
Other income
|
(40 | ) | (76 | ) | (291 | ) | ||||||
|
|
|
|
|
|
|||||||
Operating (loss) income
|
(3,572 | ) | (443 | ) | (1,637 | ) | ||||||
Financial expenses
,
net
|
834 | 822 | 959 | |||||||||
|
|
|
|
|
|
|||||||
Income (loss) before income taxes
|
(4,406 | ) | (1,265 | ) | (2,596 | ) | ||||||
Income taxes (benefit)
|
(168 | ) | (278 | ) | (195 | ) | ||||||
Share in (profits) losses of associated companies
,
net
|
(138 | ) | 13 | 71 | ||||||||
|
|
|
|
|
|
|||||||
Net income (loss)
|
(4,099 | ) | (1,000 | ) | (2,472 | ) | ||||||
Net loss attributable to non-controlling interests
|
(109 | ) | (2 | ) | (322 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income (loss) attributable to Teva
|
(3,990 | ) | (999 | ) | (2,150 | ) | ||||||
|
|
|
|
|
|
|||||||
Accrued dividends on preferred shares
|
—
|
— | 249 | |||||||||
|
|
|
|
|
|
|||||||
Net income (loss) attributable to ordinary shareholders
|
$ | (3,990 | ) | $ | (999 | ) | $ | (2,399 | ) | |||
|
|
|
|
|
|
|||||||
Earnings (loss) per share attributable to ordinary shareholders:
|
||||||||||||
Basic
|
$ | (3.64 | ) | $ | (0.91 | ) | $ | (2.35 | ) | |||
|
|
|
|
|
|
|||||||
Diluted
|
$ | (3.64 | ) | $ | (0.91 | ) | $ | (2.35 | ) | |||
|
|
|
|
|
|
|||||||
Weighted average number of shares (in millions):
|
||||||||||||
Basic
|
1,095 | 1,091 | 1,021 | |||||||||
|
|
|
|
|
|
|||||||
Diluted
|
1,095 | 1,091 | 1,021 | |||||||||
|
|
|
|
|
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Net income (loss)
|
$ | (4,099 | ) | $ | (1,000 | ) | $ | (2,472 | ) | |||
Other comprehensive income (loss), net of tax:
|
||||||||||||
Currency translation adjustment
|
(69 | ) | 97 | (713 | ) | |||||||
Unrealized gain (loss) on derivative financial instruments, net
|
57 | 84 | 115 | |||||||||
Unrealized gain (loss) on available-for-sale securities, net
|
— |
(1
|
)
|
— | ||||||||
Unrealized gain (loss) on defined benefit plans, net
|
(18 | ) | (20 | ) | 13 | |||||||
|
|
|
|
|
|
|||||||
Total other comprehensive income (loss)
|
(30 | ) | 160 | (585 | ) | |||||||
|
|
|
|
|
|
|||||||
Total comprehensive income (loss)
|
(4,129 | ) | (840 | ) | (3,057 | ) | ||||||
Comprehensive income (loss) attributable to non-controlling interests
|
(53 | ) | 12 | (296 | ) | |||||||
|
|
|
|
|
|
|||||||
Comprehensive income (loss) attributable to Teva
|
$ | (4,076 | ) | $ | (852 | ) | $ | (2,761 | ) | |||
|
|
|
|
|
|
Teva shareholders’ equity
|
||||||||||||||||||||||||||||||||||||||||
Ordinary shares
|
||||||||||||||||||||||||||||||||||||||||
Number of
shares (in millions) |
Stated
value |
MCPS**
|
Additional
paid-in capital
|
Retained
earnings (accumulated deficit) |
Accumulated
other comprehensive income (loss) |
Treasury
shares |
Total Teva
share-holders’
equity |
Non-
controlling interests |
Total
equity |
|||||||||||||||||||||||||||||||
(U.S. dollars in millions)
|
||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2018
|
|
|
1,124 |
|
|
|
54 |
|
|
|
3,631 |
|
|
|
23,479 |
|
|
|
(3,803 |
)
|
|
|
(1,853 |
)
|
|
|
(4,149 |
)
|
|
|
17,359 |
|
|
|
1,386 |
|
|
|
18,745 |
|
Changes during 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cumulative effect of new accounting standard****
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5 |
)
|
|
|
5 |
|
|
|
|
|
|
|
—
|
|
||||||||
Net income (loss)
|
(2,150 | ) | (2,150 | ) | (322 | ) | (2,472 | ) | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(611
|
)
|
|
|
|
|
|
|
(611 |
)
|
|
|
26
|
|
|
|
(585 |
)
|
|
Issuance of Treasury Shares
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
4 |
|
|
|
|
|
|
|
4 |
|
||
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
155 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
155 |
|
|
|
|
|
|
|
155 |
|
||
Issuance of shares***
|
72 | 2 | (3,880 | ) | 3,826 | (52 | ) | (52 | ) | |||||||||||||||||||||||||||||||
Dividends to preferred shareholders
|
|
|
|
|
|
|
|
|
|
|
249
|
|
|
|
(249 |
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Transactions with
non-controlling
interests
|
2 | 2 | (3 | ) | (1 | ) | ||||||||||||||||||||||||||||||||||
Balance at December 31, 2018
|
|
|
1,196 |
|
|
|
56 |
|
|
|
— |
|
|
|
27,210 |
|
|
|
(5,958 |
)
|
|
|
(2,459 |
)
|
|
|
(4,142 |
)
|
|
|
14,707 |
|
|
|
1,087 |
|
|
|
15,794 |
|
Changes during 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
(999 | ) | (999 | ) | (2 | ) | (1,000 | ) | ||||||||||||||||||||||||||||||||
Other comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
147 |
|
|
|
|
|
|
|
147 |
|
|
|
14 |
|
|
|
160 |
|
|
Issuance of Shares
|
2 |
*
|
* | |||||||||||||||||||||||||||||||||||||
Issuance of Treasury Shares
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
|
(8 |
)
|
|
|
|
|
|
|
|
|
|
|
14
|
|
|
|
6 |
|
|
|
|
|
|
|
6 |
|
Stock-based compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
119 |
|
|
|
|
|
|
|
119 |
|
Transactions with
non-controlling
interests
|
(8 | ) | (8 | ) | ||||||||||||||||||||||||||||||||||||
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8 |
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8 |
)
|
|
|
|
|
|
|
(8 |
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2019
|
|
|
1,198 |
|
|
|
56 |
|
|
|
—
|
|
|
|
27,312 |
|
|
|
(6,956 |
)
|
|
|
(2,312 |
)
|
|
|
(4,128 |
)
|
|
|
13,972 |
|
|
|
1,091 |
|
|
|
15,063 |
|
Changes during 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,990
|
)
|
|
|
|
|
|
|
|
|
|
|
(3,990
|
)
|
|
|
(109
|
)
|
|
|
(4,099
|
)
|
Other comprehensive income (loss)
|
(86 | ) |
(86
|
) | 56 | (30 | ) | |||||||||||||||||||||||||||||||||
Issuance of Shares
|
4 |
*
|
|
* | 1 | 1 | ||||||||||||||||||||||||||||||||||
Stock-based compensation expense
|
129 | 129 | 129 | |||||||||||||||||||||||||||||||||||||
Transactions with
non-controlling
interests
|
(2 | ) | (2 | ) | ||||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balance at December 31, 2020
|
|
|
1,202 |
|
|
$
|
57 |
|
|
|
—
|
|
|
$
|
27,443 |
|
|
$
|
(10,946 |
)
|
|
$
|
(2,399 |
)
|
|
$
|
(4,128 |
)
|
|
$
|
10,026 |
|
|
$
|
1,035 |
|
|
$
|
11,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
Represents an amount less than 0.5 million.
|
** |
Mandatory convertible preferred shares.
|
*** |
Mainly MCPS conversion.
|
**** |
Following the adoption of ASU
2016-01,
the Company recorded a $ 5 million opening balance reclassification from accumulated other comprehensive income to retained earnings.
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Operating activities:
|
||||||||||||
Net income (loss)
|
$ | (4,099 | ) |
$
|
(1,000 | ) |
$
|
(2,472 | ) | |||
Adjustments to reconcile net loss to net cash provided by operations:
|
||||||||||||
Impairment of
goodwill,
|
6,546 | 1,778 | 5,621 | |||||||||
Depreciation and amortization
|
1,557 | 1,722 | 1,842 | |||||||||
Net change in operating assets and liabilities
|
(2,188 | ) | (896 | ) | (1,823 | ) | ||||||
Deferred income taxes
,
net and uncertain tax positions
|
(696 | ) | (985 | ) | (837 | ) | ||||||
Stock-based compensation
|
129 | 119 | 155 | |||||||||
Other items
|
100 | 28 | (135 | ) | ||||||||
Research and development in process
|
80 | — | 114 | |||||||||
Net loss (gain) from investments and from sale of long lived assets
|
(213 | ) | (18 | ) | (19 | ) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by operating activities
|
1,216 | 748 | 2,446 | |||||||||
|
|
|
|
|
|
|||||||
Investing activities:
|
||||||||||||
Beneficial interest collected in exchange for securitized trade receivables
|
1,405 | 1,487 | 1,735 | |||||||||
Proceeds from sales of long-lived assets and investments
|
67 | 343 | 890 | |||||||||
Purchases of property, plant and equipment
|
(578 | ) | (525 | ) | (651 | ) | ||||||
Purchases of investments and other assets
|
(55 | ) | (8 | ) | (119 | ) | ||||||
Other investing activities
|
24 | 58 | 11 | |||||||||
|
|
|
|
|
|
|||||||
Net cash provided by investing activities
|
863 | 1,355 | 1,866 | |||||||||
|
|
|
|
|
|
|||||||
Financing activities:
|
||||||||||||
Repayment of senior notes and loans and other long
|
(1,871 | ) | (3,944 | ) | (7,446 | ) | ||||||
Proceeds from senior notes and loans, net of issuance costs
|
—
|
2,083 | 4,434 | |||||||||
Proceeds from short term debt
|
550 | 500 | — | |||||||||
Repayment of short term debt
|
(559 | ) |
(502
|
) | (260 | ) | ||||||
Other financing activities
|
(5 | ) | (11 | ) | (57 | ) | ||||||
Tax withholding payments made on shares and dividends
|
— | (52 | ) | (22 | ) | |||||||
|
|
|
|
|
|
|||||||
Net cash used in financing activities
|
(1,885 | ) | (1,926 | ) | (3,351 | ) | ||||||
|
|
|
|
|
|
|||||||
Translation adjustment on cash and cash equivalents
|
8 | 16 | (142 | ) | ||||||||
|
|
|
|
|
|
|||||||
Net change in cash and cash equivalents
|
202 | 193 | 819 | |||||||||
Balance of cash and cash equivalents at beginning of year
|
1,975 | 1,782 | 963 | |||||||||
|
|
|
|
|
|
|||||||
Balance of cash and cash equivalents at end of year
|
$
|
2,177
|
|
|
$
|
1,975
|
|
|
$
|
1,782
|
||
|
|
|
|
|
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash financing and investing activities:
|
||||||||||||
Beneficial interest obtained in exchange for securitized trade receivables
|
$ | 1,397 | $ | 1,511 | $ | 1,716 | ||||||
Conversion of mandatory convertible preferred shares into ordinary shares
|
— | $ | — |
3,880
|
||||||||
Cash paid during the year for:
|
||||||||||||
Interest
|
$ | 846 | $ | 840 | $ | 815 | ||||||
Income taxes, net of refunds
|
$ | 709 | $ | 552 | $ | 420 |
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Other current assets
|
$ | (1,473 | ) | $ | (1,416 | ) | $ | (1,437 | ) | |||
Trade payables, accrued expenses, employee-related obligations and other liabilities
|
(463 | ) | 643 | (500 | ) | |||||||
Trade receivables net of sales reserves and allowances
|
(293 | ) | (394 | ) | 88 | |||||||
Inventories
|
41 |
271
|
26 | |||||||||
|
|
|
|
|
|
|||||||
$ | (2,188 | ) | $ | (896 | ) | $ | (1,823 | ) | ||||
|
|
|
|
|
|
a.
|
General:
|
b.
|
New accounting pronouncements
|
c.
|
Acquisitions:
|
d.
|
Collaborative arrangements:
|
e.
|
Equity investments:
|
f.
|
Fair value measurement:
|
g.
|
Investment in debt securities:
|
h.
|
Cash and cash equivalents:
|
i.
|
Accounts receivables:
|
j.
|
Concentration of credit risks:
|
k.
|
Inventories:
|
l.
|
Long-lived assets:
|
1. |
An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
|
2. |
If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying mount, a quantitative fair value test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized.
|
m.
|
Contingencies:
|
n.
|
Treasury shares:
|
o.
|
Stock-based compensation:
|
p.
|
Deferred income taxes:
|
1. |
Taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them. The determination of the amount of related unrecognized deferred tax liability is not practicable.
|
2. |
Amounts of
tax-exempt
income generated from the Company’s current Approved Enterprises and unremitted earnings from foreign subsidiaries retained for reinvestment in the Group. See note 13 f.
|
q.
|
Uncertain tax positions:
|
r.
|
Derivatives and hedging:
|
s.
|
Revenue recognition:
|
t.
|
Research and development:
|
u.
|
Shipping and handling costs:
|
v.
|
Advertising costs:
|
w.
|
Restructuring:
|
x.
|
Segment reporting:
|
(a) |
North America segment, which includes the United States and Canada.
|
(b) |
Europe segment, which includes the European Union and certain other European countries.
|
(c) |
International Markets segment, which includes all countries in which Teva operates other than those in the North America and Europe segments.
|
y.
|
Earnings per share:
|
z.
|
Securitization
|
aa.
|
Divestitures
|
bb.
|
Debt instruments
|
cc.
|
Leases
|
a.
|
Business acquisitions:
|
b.
|
Other significant agreements:
|
c.
|
Assets and Liabilities Held For Sale:
|
December 31,
2020 |
December 31,
2019 |
|||||||
(U.S. $ in millions)
|
||||||||
Inventories
|
$
|
146 |
$
|
— | ||||
Property, plant and equipment, net and others
|
312 | 98 | ||||||
Goodwill
|
27 | — | ||||||
Adjustments of assets held for sale to fair value
|
(296 | ) | (11 | ) | ||||
|
|
|
|
|||||
Total assets of the disposal group classified as held for sale in the consolidated balance sheets
|
$ | 189 | $ | 87 | ||||
|
|
|
|
|
|
Year ended December 31, 2020
|
|
|||||||||||||||||
|
|
North
America
|
|
|
Europe
|
|
|
International
Markets |
|
|
Other
activities
|
|
|
Total
|
|
|||||
|
|
(U.S.$ in millions)
|
|
|||||||||||||||||
Sale of goods
|
|
|
6,902
|
|
|
|
4,736
|
|
|
|
1,946
|
|
|
|
772
|
|
|
|
14,354
|
|
Licensing arrangements
|
|
|
84
|
|
|
|
32
|
|
|
|
9
|
|
|
|
4
|
|
|
|
129
|
|
Distribution
|
|
|
1,462
|
|
|
|
3
|
|
|
|
30
|
|
|
|
—
|
|
|
|
1,495
|
|
Other
|
|
§
|
|
|
|
(14
|
)
|
|
|
169
|
|
|
|
527
|
|
|
|
680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,447
|
|
|
$
|
4,757
|
|
|
$
|
2,154
|
|
|
$
|
1,302
|
|
|
$
|
16,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019
|
||||||||||||||||||||
North
America
|
Europe
|
International
Markets |
Other
activities
|
Total
|
||||||||||||||||
(U.S.$ in millions)
|
||||||||||||||||||||
Sale of goods
|
6,941 | 4,770 | 2,045 | 754 | 14,510 | |||||||||||||||
Licensing arrangements
|
109 | 29 | 4 | 5 | 147 | |||||||||||||||
Distribution
|
1,492 | 2 | 20 | — | 1,514 | |||||||||||||||
Other
|
§
|
(6 | ) | 177 | 545 | 716 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 8,542 | $ | 4,795 | $ | 2,246 | $ | 1,304 | $ | 16,887 | |||||||||||
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018
|
||||||||||||||||||||
North
America
|
Europe
|
International
Markets |
Other
activities
|
Total
|
||||||||||||||||
(U.S.$ in millions)
|
||||||||||||||||||||
Sale of goods
|
7,838 | 5,153 | 2,151 | 739 | 15,881 | |||||||||||||||
Licensing arrangements
|
111 | 23 | 22 | 9 | 165 | |||||||||||||||
Distribution
|
1,347 | 7 | 19 | — | 1,373 | |||||||||||||||
Other
|
1 | 3 | 230 | 618 | 852 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
$ | 9,297 | $ | 5,186 | $ | 2,422 | $ | 1,366 | $ | 18,271 | |||||||||||
|
|
|
|
|
|
|
|
|
|
§ |
Represents an amount less than $1 million.
|
Sales Reserves and Allowances
|
||||||||||||||||||||||||||||||||
Reserves
included in Accounts Receivable, net |
Rebates
|
Medicaid and
other governmental allowances |
Chargebacks
|
Returns
|
Other
|
Total
reserves included in Sales Reserves and Allowances |
Total
|
|||||||||||||||||||||||||
(U.S.$ in millions)
|
||||||||||||||||||||||||||||||||
Balance at January 1, 2019
|
$ | 175 | 3,006 | $ | 1,361 | $ | 1,530 | $ | 638 | $ | 176 | $ | 6,711 | $ | 6,886 | |||||||||||||||||
Provisions related to sales made in current year period
|
383 | 5,552 | 976 | 9,565 | 281 | 394 | 16,767 | $ | 17,150 | |||||||||||||||||||||||
Provisions related to sales made in prior periods
|
— | (92 | ) | (151 | ) |
(17
|
) | 77 | (6 | ) | (189 | ) | $ | (189 | ) | |||||||||||||||||
Credits and payments
|
(471 | ) | (5,570 | ) | (1,076 | ) | (9,736 | ) | (360 | ) | (392 | ) | (17,134 | ) | $ | (17,605 | ) | |||||||||||||||
Translation differences
|
— | (1 | ) | (1 | ) | 1 | 1 | 4 | 4 | $ | 4 | |||||||||||||||||||||
Balance at December 31, 2019
|
$ | 87 | 2,895 | $ | 1,109 | $ | 1,342 | $ | 637 | $ | 176 | $ | 6,159 | $ | 6,246 | |||||||||||||||||
Provisions related to sales made in current year period
|
391 | 4,703 | 744 | 8,438 | 459 | 71 | 14,415 | $ | 14,806 | |||||||||||||||||||||||
Provisions related to sales made in prior periods
|
— | (219 | ) | (184 | ) | (65 | ) | (28 | ) | (1 | ) | (497 | ) | $ | (497 | ) | ||||||||||||||||
Credits and payments
|
(398 | ) | (5,360 | ) | (849 | ) | (8,614 | ) | (386 | ) | (100 | ) | (15,309 | ) | $ | (15,707 | ) | |||||||||||||||
Translation differences
|
— | 35 | 8 | 7 | 4 | 2 | 56 | $ | 56 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2020
|
$ | 80 | 2,054 | $ | 828 | $ | 1,108 | $ | 686 | $ | 148 | $ | 4,824 | $ | 4,904 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Finished products
|
$2,378 | $2,504 | ||||||
Raw and packaging materials
|
1,231 | 1,183 | ||||||
Products in process
|
605 | 583 | ||||||
Materials in transit and payments on account
|
189 | 151 | ||||||
|
|
|
|
|||||
$4,403 | $4,422 | |||||||
|
|
|
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Machinery and equipment
|
$ | 5,245 | $ | 5,385 | ||||
Buildings
|
2,720 | 2,839 | ||||||
Computer equipment and other assets
|
2,197 | 2,131 | ||||||
Assets under construction and payments on account
|
933 | 672 | ||||||
Land
|
|
|
292 |
|
|
|
323 | |
|
|
|
|
|
|
|
|
|
|
|
|
11,388 |
|
|
|
11,350 | |
Less—accumulated depreciatio
n
|
(5,092 | ) | (4,914 | ) | ||||
|
|
|
|
|||||
$6,296 | $6,436 | |||||||
|
|
|
|
Gross carrying amount
net of impairment |
Accumulated
amortization |
Net carrying amount
|
||||||||||||||||||||||
|
|
December 31,
|
|
|||||||||||||||||||||
2020
|
2019
|
2020
|
2019
|
2020
|
2019
|
|||||||||||||||||||
|
|
(U.S. $ in millions)
|
|
|||||||||||||||||||||
Product rights
|
|
$
|
19,650 |
|
|
$
|
19,663 |
|
|
$
|
12,094 |
|
|
$
|
10,640 |
|
|
$
|
7,556
|
|
|
$
|
9,023 |
|
Trade names
|
|
|
621 |
|
|
|
600 |
|
|
|
165 |
|
|
|
126 |
|
|
|
456 |
|
|
|
474 |
|
In-process research and development (IPR&D)
|
|
|
911 |
|
|
|
1,735 |
|
|
|
—
|
|
|
|
—
|
|
|
|
911 |
|
|
|
1,735 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
21,182 |
|
|
$
|
21,998 |
|
|
$
|
12,259 |
|
|
$
|
10,766 |
|
|
$
|
8,923 |
|
|
$
|
11,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
IPR&D assets of $797 million, mainly due to: (i) $300 million related to generic pipeline products acquired from Actavis Generics resulting from development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date) in the United States; (ii) $262 million related to lenalidomide (generic equivalent of
Revlimid®),
due to modified competition assumptions as a result of settlements between the innovator and other generic filers; (iii) $211 million related to AUSTEDO for the treatment of Tourette syndrome in pediatric patients in the United States following clinical trial results, received in February 2020, which failed to meet their primary endpoints; and
|
(b) |
Identifiable product rights of
$705
million, mainly due to: (i)
$398
million related to updated market assumptions regarding price and volume of products acquired from Actavis Generics that are primarily marketed in the United States; (ii)
$165
million in Japan in connection with ongoing regulatory pricing reductions and generic competition; and (iii)
$110
million related to a change in the assumptions regarding competition for the expected relaunch of metformin tablets.
|
(a) |
Identifiable product rights of $958 million, mainly due to: (i) $647 million due to updated market assumptions regarding price and volume of certain products acquired from Actavis Generics and primarily marketed in the United States, (ii) $128 million related to a decrease in future expected sales in Japan as a result of generic competition, and (iii) $123 million related to the discontinuation of certain products from Actavis Generics’ portfolio in several international markets; and
|
(b) |
IPR&D assets of $681 million, due to: (i) $497 million related to various generic pipeline products acquired from Actavis Generics due to development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date or discount rate) in the United States (ii) $125 million related to lenalidomide (generic equivalent of REVLIMID
®
), due to modified competition assumptions as a result of settlements between the innovator and other generic filers, and (iii) $59 million related to a change in assumptions concerning the future European market share of a number of pipeline products acquired from Actavis Generics.
|
(a) |
Identifiable product rights of $1,068 million, mainly due to: (i) $412 million in connection with updated market assumptions regarding price and volume of products acquired from Actavis Generics currently marketed in the United States and supply constraints; (ii) $290 million in certain international markets, due to a loss of several tenders and termination of products manufacturing lines; and (iii) $222 million in Japan in connection with ongoing regulatory pricing reductions and generic competition.
|
(b) |
IPR&D assets of $923 million, mainly related to revaluation of generic products acquired from Actavis Generics due to development progress and changes in other key valuation indications (e.g., market size, legal landscape, launch date or discount rate).
|
North
America |
Europe
|
International
Markets |
Other
|
Total
|
||||||||||||||||
(U.S. $ in millions)
|
||||||||||||||||||||
Balance as of December 31, 201
8
(1)
|
|
$
|
11,098 |
|
|
$
|
8,653 |
|
|
$
|
2,479 |
|
|
$
|
2,687 |
|
|
$
|
24,917 |
|
Changes during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwil
l
disposal
|
|
|
(23
|
)
|
|
|
(5
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(28
|
)
|
Translation differences
|
|
|
16 |
|
|
|
(112 |
)
|
|
|
53 |
|
|
|
—
|
|
|
|
(43 |
)
|
Balance as of December 31, 2019 (1)
|
|
$
|
11,091 |
|
|
$
|
8,536 |
|
|
$
|
2,532 |
|
|
$
|
2,687 |
|
|
$
|
24,846 |
|
Changes during the period:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill reclassified as assets held for sale
|
|
|
—
|
|
|
|
(8 |
)
|
|
|
(19 |
)
|
|
|
—
|
|
|
|
(27 |
)
|
Goodwill impairment
|
|
|
(4,628 |
)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(4,628 |
)
|
Translation differences
|
|
|
10 |
|
|
|
574 |
|
|
|
(151 |
)
|
|
|
—
|
|
|
|
433 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December
31
, 2020 (1)
|
|
$
|
6,473 |
|
|
$
|
9,102 |
|
|
$
|
2,362 |
|
|
$
|
2,687 |
|
|
$
|
20,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Accumulated goodwill impairment as of December 31, 2020, December 31, 2019 and December 31, 2018 was approximately $25.6 billion, $21.0 billion and $21.0 billion, respectively.
|
• |
Management noted a portion of the difference can be attributed to sales projections of AJOVY and AUSTEDO in the International Markets reporting unit. Management continues to believe that the majority of analysts do not focus on these brands in preparing their financial models and, as a result, have not attributed value to the launch potential in this reporting unit.
|
• |
Management noted an additional difference can be attributed to sales projections of AUSTEDO in the North America reporting unit, resulting in higher fair value as analyzed by management compared to Teva’s market capitalization. Management continues to believe that it has more accurate information based on its knowledge of the market and its growth and therefore no adjustment was incorporated to the fair value.
|
• |
Management noted that market concerns regarding the uncertainty related to the opioid and price fixing litigation risks are impacting its market capitalization. Management believes that these concerns led to an acute reaction, which resulted in a decline in Teva’s share price. Management believed developments in the opioids case would clarify the outlook with regards to the opioid litigation, when the proposed settlement framework is finalized, which was expected in the near term.
|
• |
The Company noted a 25% reduction in its market capitalization from the second quarter of 2020 to the third quarter of 2020.
|
• |
With respect to the opioids litigation, as discussions continue with the group of Attorneys General regarding the nationwide framework and trial dates are postponed largely due to the
COVID-19
pandemic, a resolution of this matter is taking longer than anticipated. Accordingly, the Company was and is currently unable to predict the timing of any final settlement or whether the settlement will be finalized based upon the current settlement framework.
|
• |
On August 25, 2020, the Company was indicted by the U.S. Department of Justice for alleged violations of the Sherman Act.
|
• |
On August 18, 2020, the Company was sued by the U.S. Department of Justice alleging violations of the federal Anti-Kickback Statute, and asserting causes of action under the federal False Claims Act and state law.
|
Year ended
December 31, 2020 |
Year ended
December 31, 2019 |
|||||||
(U.S. $ in millions)
|
(U.S. $ in millions)
|
|||||||
Operating lease cost:
|
||||||||
Fixed payments and variable payments that depend on an index or rate
|
$
|
148 |
$
|
166 | ||||
Variable lease payments not included in the lease liability
|
4 | 6 | ||||||
Short-term lease cost
|
3 | 6 | ||||||
|
|
|
|
|||||
|
$155 | $178 |
Year ended
December 31, 2020 |
Year ended
December 31, 2019 |
|||||||
(U.S. $ in millions)
|
(U.S. $ in millions)
|
|||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from operating leases
|
$
|
151 |
$
|
169 | ||||
Right-of-use
(non-cash):
|
||||||||
Operating leases
|
$
|
211 |
$
|
142 |
December 31,
2020 |
December 31,
2019 |
|||||||
(U.S. $ in millions)
|
(U.S. $ in millions)
|
|||||||
Operating leases:
|
||||||||
Operating lease ROU assets
|
$
|
559 |
$
|
514 | ||||
Other current liabilities
|
116 | 118 | ||||||
Operating lease liabilities
|
479 | 435 | ||||||
|
|
|
|
|||||
Total operating lease liabilities
|
$ | 595 | $ | 553 | ||||
|
|
|
|
|||||
December 31,
|
December 31,
|
|||||||
2020
|
2019
|
|||||||
Weighted average remaining lease term
|
||||||||
Operating leases
|
7.5 years | 7.5 years | ||||||
Weighted average discount rate
|
||||||||
Operating leases
|
5.2
|
% | 6.0 | % |
December 31,
2020 |
||||
(U.S. $ in millions)
|
||||
2021
|
$ | 137 | ||
2022
|
119 | |||
2023
|
91 | |||
2024
|
73 | |||
2025 and thereafter
|
302 | |||
|
|
|||
Total operating lease payments
|
$ | 722 | ||
|
|
|||
Less: imputed interest
|
127 | |||
|
|
|||
Present value of lease liabilities
|
$ | 595 | ||
|
|
a.
|
Short-term debt:
|
b.
|
Long-term debt:
|
Weighted average
interest rate as of December 31, 2020 |
Maturity
|
December 31,
2020 |
December 31,
2019 |
|||||||||||||
%
|
(U.S. $ in millions)
|
|||||||||||||||
Senior notes EUR 1,010
million (1)
|
|
|
0.38 |
%
|
|
2020 | $ |
—
|
$ | 1,131 | ||||||
Senior notes EUR 1,500 million
|
|
|
1.13 |
%
|
|
2024 | 1,839 | 1,673 | ||||||||
Senior notes EUR 1,300 million
|
|
|
1.25 |
%
|
|
2023 | 1,595 | 1,451 | ||||||||
Senior notes EUR 900 million
|
|
|
4.50 |
%
|
|
2025 | 1,107 | 1,008 | ||||||||
Senior notes EUR 750 million
|
|
|
1.63 |
%
|
|
2028 | 916 | 833 | ||||||||
Senior notes EUR 700 million
|
|
|
3.25 |
%
|
|
2022 | 861 | 784 | ||||||||
Senior notes EUR 700 million
|
|
|
1.88 |
%
|
|
2027 | 860 | 782 | ||||||||
Senior notes EUR 1,000 million
|
|
|
6.00 |
%
|
|
2025 | 1,230 |
1,120
|
||||||||
Senior notes USD 1,000 million
|
|
|
7.13 |
%
|
|
2025 | 1,000 |
1,000
|
||||||||
Senior notes USD 3,500 million
|
|
|
3.15 |
%
|
|
2026 | 3,495 | 3,494 | ||||||||
Senior notes USD 1,475 million
|
|
|
2.20 |
%
|
|
2021 | 1,472 | 1,474 | ||||||||
Senior notes USD 3,000 million
|
|
|
2.80 |
%
|
|
2023 | 2,996 | 2,995 | ||||||||
Senior notes USD 2,000 million
|
|
|
4.10 |
%
|
|
2046 | 1,986 | 1,985 | ||||||||
Senior notes USD 1,250 million
|
|
|
6.00 |
%
|
|
2024 | 1,250 | 1,250 | ||||||||
Senior notes USD 1,250 million
|
|
|
6.75 |
%
|
|
2028 | 1,250 | 1,250 | ||||||||
Senior notes USD 844 million
|
|
|
2.95 |
%
|
|
2022 | 853 | 856 | ||||||||
Senior notes USD 789 million
|
|
|
6.15 |
%
|
|
2036 | 783 | 782 | ||||||||
Senior notes USD 700
million (2)
|
|
|
2.25 |
%
|
|
2020 |
—
|
700 | ||||||||
Senior notes USD 613 million
|
|
|
3.65 |
%
|
|
2021 | 616 | 618 | ||||||||
Senior notes USD 588 million
|
|
|
3.65 |
%
|
|
2021 | 586 | 587 | ||||||||
Senior notes CHF 350 million
|
|
|
0.50 |
%
|
|
2022 | 397 | 361 | ||||||||
Senior notes CHF 350 million
|
|
|
1.00 |
%
|
|
2025 | 398 | 362 | ||||||||
Total senior notes
|
|
|
|
|
25,490 | 26,496 | ||||||||||
Other long-term debt
|
|
|
1.08 |
%
|
|
2026 | 1 | 1 | ||||||||
Less current maturities
|
|
|
|
|
(2,674 | ) | (1,831 | ) | ||||||||
Less debt issuance costs
|
|
|
|
|
(86 | ) | (103 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total senior notes and loans
|
|
|
|
|
$ | 22,731 | $ | 24,562 | ||||||||
|
|
|
|
|
|
|
|
(1) |
In July
2020
, Teva repaid at maturity €
1,010
million of its
0.375%
senior notes.
|
(2) |
In March
2020
, Teva repaid at maturity $
700
million of its
2.25%
senior notes.
|
|
|
December 31,
|
|
|
|
|
2020
|
|
|
|
|
(U.S. $ in millions)
|
|
|
2022
|
$
|
2,111 | ||
2023
|
4,591 | |||
2024
|
3,089 | |||
202
5
|
3,735 | |||
2026 and thereafter *
|
9,804 | |||
|
|
|||
$ | 23,330 | |||
|
|
*
|
Including $514
|
a.
|
Foreign exchange risk management:
|
b.
|
Interest risk management:
|
c.
|
Derivative instrument disclosure:
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Cross-currency swap
,
net investment hedge
|
— | 1,000 |
d.
|
Derivative instrument outstanding:
|
Fair value
|
||||||||||||||||
Designated as hedging
instruments
|
Not designated as hedging
instruments
|
|||||||||||||||
December 31,
2020
|
December 31,
2019
|
December 31,
2020
|
December 31,
2019
|
|||||||||||||
Reported under
|
(U.S. $ in millions)
|
|||||||||||||||
Asset derivatives:
|
||||||||||||||||
Other current assets:
|
||||||||||||||||
Option and forward contracts
|
$ | — | $ | — | $ | 24 | $ | 32 | ||||||||
Liability derivatives:
|
||||||||||||||||
Other current liabilities:
|
||||||||||||||||
Cross-currency swaps
,
net investment
|
— |
(22)
|
||||||||||||||
Option and forward contracts
|
— | — | (79 | ) | (41 | ) |
Financial expenses, net
|
Other comprehensive
income (loss) |
|||||||||||||||||||||||
Year ended December 31,
|
Year ended December 31,
|
|||||||||||||||||||||||
2020
|
2019
|
2018**
|
2020
|
2019
|
2018**
|
|||||||||||||||||||
Reported under
|
(U.S. $ in millions)
|
|||||||||||||||||||||||
Line items in which effects of hedges are recorded
|
$ | 834 | $ | 822 | $ | 959 | $ | (30 | ) | $ | 160 | $ | (585 | ) | ||||||||||
Cross-currency swaps—cash flow hedge (1)
|
— | (2 | ) | (2 | ) | — | (33 | ) | (35 | ) | ||||||||||||||
Cross-currency swaps
,
net investment hedge (2)
|
(2 | ) | (29 | ) | (31 | ) | (21 | ) | (22 | ) | (51 | ) | ||||||||||||
Interest rate swaps—fair value hedge (3)
|
— | 2 | * | — | — | — |
* |
Represents an amount less than $0.5 million.
|
** |
Comparative figures are based on prior hedge accounting standard.
|
Financial expenses, net
|
Net revenues
|
|||||||||||||||||||||||
Year ended December 31,
|
Year ended December 31,
|
|||||||||||||||||||||||
2020
|
2019
|
2018
|
2020
|
2019
|
2018
|
|||||||||||||||||||
Reported under
|
(U.S. $ in millions)
|
|||||||||||||||||||||||
Line items in which effects of hedges are recorded
|
$ | 834 | $ | 822 | $ | 959 | $ | 16,659 | $ | 16,887 | $ | 18,271 | ||||||||||||
Option and forward contracts (4)
|
130 | (51 | ) | (12 | ) | — | — | — | ||||||||||||||||
Option and forward contracts (5)
|
— | — | — |
*
|
14 | (4 | ) |
* |
Represents an amount less than $0.5 million.
|
(1) |
With respect to cross-currency swap agreements, Teva recognized gains which mainly reflect the differences between the fixed interest rate and the floating interest rate. In the fourth quarter of 2019, Teva terminated $588 million in cross-currency swap agreements against its
outstanding 3.65% senior notes maturing in November 2021. The settlement of these transactions resulted in cash proceeds of $95
million. The cash flow hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses, net over the life of the debt as additional interest expense.
|
(2) |
In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $500
million maturing in 2020. These cross currency swaps were designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets, in order to reduce the risk of adverse exchange rate fluctuations. With respect to these cross currency swap agreements, Teva recognized gains which mainly reflect the differences between the
float-for-float
|
(3) |
In the fourth quarter of 2016, Teva entered into an interest rate swap agreement designated as fair value hedge relating to its 2.8% senior notes due 2023 with respect to $500 million notional amount of outstanding debt. With respect to this interest rate swap agreement, Teva recognized a loss which mainly reflects the differences between the fixed interest rate and the floating interest rate. In the third quarter of 2019, Teva terminated this interest rate swap agreement. The settlement of these transactions resulted in a gain position of $10 million. The fair value hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses, net over the life of the debt as additional interest expense.
|
(4) |
Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses, net.
|
(5) |
Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on projected revenues and expenses recorded in euro, the Swiss franc, the Japanese yen, the British pound, the Russian ruble, the Canadian dollar and some other currencies during the period for which such instruments are transacted. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as an economic hedge. These derivative instruments, which may include 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. Changes in the fair value of the derivative instruments are recognized in the same line item in the statements of income as the underlying exposure being hedged. During 2019 and 2020, Teva entered into hedging instruments to hedge part of the projected 2020 operating results. In 2020, Teva recognized a gain of $27 million in relation with the 2020 hedging program. During the second half of 2020, Teva entered into hedging instruments to hedge part of the projected operating results for 2021. As part of the economic hedge treatment, Teva recorded a loss of $27 million in relation to the 2021 hedging instruments in the second half of 2020, while the positive foreign exchange impact on the underlying revenues and expenses, may occur upon their maturity in 2021. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated statements of cash flows.
|
e.
|
Amortizations due to terminated derivative instruments:
|
f.
|
Securitization:
|
As of and for the year ended
December 31, |
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Sold receivables at the beginning of the year
|
$ | 690 | $ | 686 | ||||
Proceeds from sale of receivables
|
4,606 | 4,852 | ||||||
Cash collections (remitted to the owner of the receivables)
|
(4,607 | ) | (4,849 | ) | ||||
Effect of currency exchange rate changes
|
45 | 1 | ||||||
|
|
|
|
|||||
Sold receivables at the end of the year
|
$ | 734 | $ | 690 | ||||
|
|
|
|
a.
|
Commitments:
|
b.
|
Contingencies:
|
a.
|
Income (loss) before income taxes:
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Parent Company and its Israeli subsidiaries
|
$ | 947 | $ | 542 | $ | 1,022 | ||||||
Non-Israeli subsidiaries
|
(5,353 | ) | (1,807 | ) | (3,618 | ) | ||||||
|
|
|
|
|
|
|||||||
$ | (4,406 | ) | $ | (1,265 | ) | $ | (2,596 | ) | ||||
|
|
|
|
|
|
b.
|
Income taxes:
|
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Income (Loss) before income taxes
|
$
|
(4,406 | ) | $ | (1,265 | ) | $ | (2,596 | ) | |||
Statutory tax rate in Israel
|
23.0 | % | 23.0 | % | 23.0 | % | ||||||
|
|
|
|
|
|
|||||||
Theoretical provision for income taxes
|
$ | (1,013 | ) | $ | (291 | ) | $ | (597 | ) | |||
Increase (decrease) in the provision for income taxes due to:
|
||||||||||||
The Parent Company and its Israeli subsidiaries - Mainly tax benefits arising from reduced tax rates under benefit programs
|
(183 | ) | (44 | ) | (134 | ) | ||||||
Non-Israeli subsidiaries, including impairments *
|
1,369 | (115 | ) | 381 | ||||||||
U.S. Tax Cuts and Jobs Act effect
|
97 | |||||||||||
Increase (decrease) in other uncertain tax positions—net
|
(341 | ) | 172 | 58 | ||||||||
|
|
|
|
|
|
|||||||
Effective consolidated income taxes
|
$ | (168 | ) | $ | (278 | ) | $ | (195 | ) | |||
|
|
|
|
|
|
* |
In 2020 and 2018, income before income taxes includes goodwill impairment in
non-Israeli
subsidiaries that did
|
c.
|
Deferred income taxes:
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Long-term deferred tax assets (liabilities), net:
|
||||||||
Inventory related
|
$ | 212 | $ | 144 | ||||
Sales reserves and allowances
|
173 | 198 | ||||||
Provision for legal settlements
|
235 | 260 | ||||||
Intangible assets (*)
|
(1,064 | ) | (1,733 | ) | ||||
Carryforward losses and deductions and credits (**)
|
2,176 | 1,689 | ||||||
Property, plant and equipment
|
(142 | ) | (170 | ) | ||||
Deferred interest
|
527 | 648 | ||||||
Provisions for employee related obligations
|
107 | 106 | ||||||
Other
|
54 | 122 | ||||||
|
|
|
|
|||||
2,278 | 1,264 | |||||||
Valuation allowance—in respect of carryforward losses and deductions that may not be utilized
|
(2,547 | ) | (1,974 | ) | ||||
|
|
|
|
|||||
$ | (269 | ) | $ | (710 | ) | |||
|
|
|
|
(*) |
The decrease in deferred tax liability is mainly due to impairment and amortization.
|
(**) |
The amounts are shown after reduction for unrecognized tax benefits of $ 63 million and $115 million as of December 31,
2020
and
2019
, respectively.
|
This amount represents the tax effect of gross carryforward losses and deductions with the following expirations:
2021
-
2022
—$79 million;
2023
-
2029
—$663 million;
2030
and thereafter—$171 million. The remaining balance—$1,327 million—can be utilized with no expiration date.
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Long-term assets—deferred income taxes
|
695 | 386 | ||||||
Long-term liabilities—deferred income taxes
|
(964 | ) | (1,096 | ) | ||||
|
|
|
|
|||||
$ | (269 | ) | $ | (710 | ) | |||
|
|
|
|
d.
|
Uncertain tax positions:
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Balance at the beginning of the year
|
$ | 1,223 | $ | 1,072 | $ | 1,034 | ||||||
Increase
(decrease)
related to prior year tax positions, net
|
(238 | ) | 23 | 76 | ||||||||
Increase related to current year tax positions
|
10 | 246 | 11 | |||||||||
Decrease related to settlements with tax authorities and lapse of applicable statutes of limitations
|
(105 | ) | (118 | ) | (49 | ) | ||||||
Other
|
(2 | ) | — | — | ||||||||
|
|
|
|
|
|
|||||||
Balance at the end of the year
|
$ | 888 | $ | 1,223 | $ | 1,072 | ||||||
|
|
|
|
|
|
e.
|
Tax assessments:
|
f.
|
Basis of taxation:
|
a. |
Investment of at least 7% of income, or at least NIS 75 million (approximately $22 million) in R&D activities; and
|
b. |
One of the following:
|
a. |
At least 20% of the workforce (or at least 200 employees) are employed in R&D;
|
b. |
A venture capital investment approximately equivalent to at least $2 million was previously made in the company; or
|
c. |
Growth in sales or workforce by an average of 25% over the three years preceding the tax year.
|
a.
|
Ordinary shares and ADSs
|
b.
|
Mandatory convertible preferred shares
|
c.
|
Stock-based compensation plans
|
Year ended December 31,
|
||||||||||||||||||||||||
2020
|
2019
|
2018
|
||||||||||||||||||||||
Number
(in thousands)
|
Weighted
average exercise price |
Number
(in thousands)
|
Weighted
average exercise price |
Number
(in thousands)
|
Weighted
average exercise price |
|||||||||||||||||||
Balance outstanding at beginning of year
|
40,064 | $ | 37.90 | 48,393 | $ | 38.62 | 43,121 | $ | 44.32 | |||||||||||||||
Changes during the year:
|
||||||||||||||||||||||||
Granted
|
— | — | — | — | 12,401 | 19.12 | ||||||||||||||||||
Exercised
|
— | — | (11 | ) | 16.99 | (84 | ) | 17.01 | ||||||||||||||||
Forfeited
|
(3,610 | ) | 40.24 | (8,318 | ) | 42.12 | (7,040 | ) | 39.38 | |||||||||||||||
Expired
|
(1,220 | ) | 49.35 | — | — | (5 | ) | 50.65 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance outstanding at end of year
|
35,234 | 37.27 | 40,064 | 37.90 | 48,393 | 38.62 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance exercisable at end of year
|
28,556 | 40.56 | 26,601 | 43.41 | 24,086 | 46.89 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Weighted average fair value
|
— | — | $ | 7.4 |
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
Expected volatility
|
— | — | 40 | % | ||||||||
Risk-free interest rate
|
— | — | 2.6 | % | ||||||||
Expected term
|
|
|
—
|
|
|
|
—
|
|
|
|
5 years
|
|
Year ended December 31,
|
||||||||||||||||||||||||
2020
|
2019
|
2018
|
||||||||||||||||||||||
Number
(in thousands)
|
Weighted
average grant date fair value |
Number
(in thousands)
|
Weighted
average grant date fair value |
Number
(in thousands)
|
Weighted
average grant date fair value |
|||||||||||||||||||
Balance outstanding at beginning of year
|
15,977 |
$
|
16.49
|
10,403 | $ | 20.93 | 7,468 | $ | 27.95 | |||||||||||||||
Granted
|
10,848 |
11.42
|
9,303 | 15.36 | 5,900 | 18.80 | ||||||||||||||||||
Vested
|
(4,324 | ) |
19.49
|
(2,435 | ) | 30.24 | (1,638 | ) | 37.30 | |||||||||||||||
Forfeited
|
(1,781 | ) |
18.18
|
(1,294 | ) | 18.74 | (1,327 | ) | 32.50 | |||||||||||||||
|
|
|
|
|
|
|||||||||||||||||||
Balance outstanding at end of year
|
20,720 |
13.81
|
15,977 | 16.49 | 10,403 | 20.93 | ||||||||||||||||||
|
|
|
|
|
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Employee stock options
|
$ | 30 | $ | 46 | $ | 74 | ||||||
RSUs and PSUs
|
99 | 73 | 81 | |||||||||
|
|
|
|
|
|
|||||||
Total stock-based compensation expense
|
129 | 119 | 155 | |||||||||
Tax effect on stock-based compensation expense
|
14 | 14 | 18 | |||||||||
|
|
|
|
|
|
|||||||
Net effect
|
$ | 115 | $ | 105 | $ | 137 | ||||||
|
|
|
|
|
|
d.
|
Dividends
|
e.
|
Accumulated other comprehensive los
s
|
Net Unrealized Gains/(Losses)
|
Benefit Plans
|
|||||||||||||||||||
Foreign
currency translation adjustments |
Available-
for-sale
securities |
Derivative
financial instruments |
Actuarial
gains/(losses) and prior service (costs)/credits |
Total
|
||||||||||||||||
(U.S. $ in millions)
|
||||||||||||||||||||
Balance as of January 1, 2018
|
$ | (1,139 | ) | $ | (4 | ) |
$
|
(619 | ) | $ | (91 | ) | $ | (1,853 | ) | |||||
Cumulative effect of new accounting standard**
|
— | 5 | — | — | 5 | |||||||||||||||
Other comprehensive income/(loss) before reclassifications
|
(729 | ) | (1 | ) | 87 | 4 | (639 | ) | ||||||||||||
Amounts reclassified to the statements of income
|
— | 1 | 28 | 13 | 42 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income/(loss) before tax
|
(729
|
)
|
— |
115
|
17 | (597 | ) | |||||||||||||
Corresponding income tax
|
(10
|
)
|
— | — | (4 | ) | (14 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income/(loss) after tax*
|
(739 | ) | — | 115 | 13 | (611 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2018
|
(1,878
|
)
|
1 |
(504
|
)
|
(78
|
)
|
(2,459 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive income/(loss) before reclassifications
|
100 | (1 | ) | 54 | (11 | ) | 142 | |||||||||||||
Amounts reclassified to the statements of income
|
— | — | 30 | (10 | ) | 20 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income/(loss) before tax
|
100 |
(1
|
)
|
84 | (21 | ) | 162 | |||||||||||||
Corresponding income tax
|
(16
|
)
|
—
|
— | 1 | (15 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income/(loss) after tax*
|
84 |
(1
|
)
|
84 | (20 | ) | 147 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2019
|
(1,794 | ) | — | (420 | ) | (98 | ) | (2,312 | ) | |||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive income/(loss) before reclassifications
|
(190 | ) | — | 22 | (7 | ) | (175 | ) | ||||||||||||
Amounts reclassified to the statements of income
|
— | — | 35 | (12 | ) | 23 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income/(loss) before tax
|
(190 | ) | — | 57 | (19 | ) | (152 | ) | ||||||||||||
Corresponding income tax
|
65
|
— | — | 1 | 66 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net other comprehensive income/(loss) after tax*
|
(125 | ) | — | 57 | (18 | ) | (86 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance as of December 31, 2020
|
$ | (1,919 | ) | — | $ | (363 | ) | $ | (117 | ) | $ | (2,399 | ) | |||||||
|
|
|
|
|
|
|
|
|
|
* |
Amounts do not include foreign currency translation adjustments attributable to non-controlling interests of $56 million gain in
2020
, $14 million gain in
2019
and $26
million gain in 2018.
|
** |
Following the adoption of ASU 2016-01, the Company recorded a $5
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Impairment of long-lived tangible assets
(1)
|
$ | 416 | $ | 139 | $ | 500 | ||||||
Contingent consideration (see note 2)
|
(81 | ) | 59 | 57 | ||||||||
Restructuring
|
120 | 199 | 488 | |||||||||
Other
|
24 |
26
|
(58 | ) | ||||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 479 | $ | 423 | $ | 987 | ||||||
|
|
|
|
|
|
(1) |
Including impairments related to exit and disposal activities.
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Restructuring
|
||||||||||||
Employee termination
|
$ | 71 | $ | 159 | $ | 410 | ||||||
Other
|
49 | 40 | 78 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 120 | $ | 199 | $ | 488 | ||||||
|
|
|
|
|
|
Employee
termination costs |
Other
|
Total
|
||||||||||
(U.S. $ in millions )
|
||||||||||||
Balance as of January 1, 2019
|
$ | (204 | ) | $ | (29 | ) | $ | (233 | ) | |||
Provision
|
(159 | ) | (40 | ) | (199 | ) | ||||||
Utilization and other*
|
155 | 62 | 217 | |||||||||
|
|
|
|
|
|
|||||||
Balance as of December 31, 2019
|
$ | (208 | ) | $ | (7 | ) | $ | (215 | ) | |||
Provision
|
|
|
(71
|
)
|
|
|
(49
|
)
|
|
|
(120
|
)
|
Utilization and other
*
|
|
|
164
|
|
|
|
49
|
|
|
|
213
|
|
Balance as of December 31, 2020
|
|
$
|
(115
|
)
|
|
$
|
(7
|
)
|
|
$
|
(122
|
)
|
|
|
|
|
|
|
* |
Includes adjustments for foreign currency translation.
|
(1) |
Mainly related to the divestment of several activities in the International Markets segment.
|
(2) |
Section 8 of the Patented Medicines (Notice of Compliance) Regulation relates to recoveries of lost revenue related to patent infringement proceedings in Canada.
|
Year ended December, 31
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Interest expenses and other bank charges
|
963 | 881 | 920 | |||||||||
Income from investments (1)
|
(104 | ) | (41 | ) | (39 | ) | ||||||
Foreign exchange (gains) losses, net
|
(26 | ) | (15 | ) | 13 | |||||||
Other, net (2)
|
— | (4 | ) | 65 | ||||||||
|
|
|
|
|
|
|||||||
Total finance expense, net
|
$ | 834 | $ | 822 | $ | 959 | ||||||
|
|
|
|
|
|
(1) |
In 2020, Income from investments comprised mainly of revaluation gain of Teva’s investment in American Well Corporation (“American Well”). See note 20.
|
(2) |
In 2018, Other, net comprised mainly of a make-whole payment of $46 million following early redemption of senior notes during 2018.
|
Year ended December, 31
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions, except share data)
|
||||||||||||
Net income (loss) used for the computation of
basic and
diluted
earnings (loss)
per share
|
(3,990 | ) | $ | (999 | ) | $ | (2,399 | ) | ||||
|
|
|
|
|
|
|||||||
Weighted average number of shares used in the computation of basic
earnings (loss)
per share
|
1,095 | 1,091 | 1,021 | |||||||||
|
|
|
|
|
|
|||||||
Weighted average number of shares used in the computation of diluted
earnings (loss)
per share
|
1,095 | 1,091 | 1,021 | |||||||||
|
|
|
|
|
|
(a) |
North America segment, which includes the United States and Canada.
|
(b) |
Europe segment, which includes the European Union and certain other European countries.
|
(c) |
International Markets segment, which includes all countries other than those in the North America and Europe segments.
|
a.
|
Segment information:
|
Year ended December 31,
|
||||||||||||
2020
|
||||||||||||
North America
|
Europe
|
International Markets
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Revenues
|
$ | 8,447 | $ | 4,757 | $ | 2,154 | ||||||
Gross profit
|
4,489 | 2,666 | 1,096 | |||||||||
R&D expenses
|
622 | 247 | 70 | |||||||||
S&M expenses
|
1,013 | 830 | 427 | |||||||||
G&A
expenses
|
443 | 261 | 136 | |||||||||
Other income
|
(10 | ) | (3 | ) | (11 | ) | ||||||
Segment profit
|
$ | 2,421 | $ | 1,331 | $ | 474 | ||||||
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
|||||||||
|
|
2019
|
|
|||||||||
|
|
North America
|
|
|
Europe
|
|
|
International Markets
|
|
|||
|
|
(U.S. $ in millions)
|
|
|||||||||
Revenues
|
|
$
|
8,542
|
|
|
$
|
4,795
|
|
|
$
|
2,246
|
|
Gross profit
|
|
|
4,350
|
|
|
|
2,704
|
|
|
|
1,167
|
|
R&D expenses
|
|
|
652
|
|
|
|
262
|
|
|
|
88
|
|
S&M expenses
|
|
|
1,021
|
|
|
|
890
|
|
|
|
481
|
|
G&A expenses
|
|
|
439
|
|
|
|
239
|
|
|
|
138
|
|
Other income
|
|
|
(14
|
)
|
|
|
(5
|
)
|
|
|
(3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
$
|
2,252
|
|
|
$
|
1,318
|
|
|
$
|
464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
||||||||||||
2018
|
||||||||||||
North America
|
Europe
|
International Markets
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Revenues
|
|
$
|
9,297
|
|
|
$
|
5,186
|
|
|
$
|
2,422
|
|
Gross profit
|
|
|
4,979
|
|
|
|
2,884
|
|
|
|
1,254
|
|
R&D expenses
|
|
|
713
|
|
|
|
283
|
|
|
|
96
|
|
S&M expenses
|
|
|
1,154
|
|
|
|
1,003
|
|
|
|
518
|
|
G&A expenses
|
|
|
484
|
|
|
|
325
|
|
|
|
153
|
|
Other income
|
|
|
(209
|
)
|
|
|
—
|
|
|
|
(11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment profit
|
|
$
|
2,837
|
|
|
$
|
1,273
|
|
|
$
|
498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended
|
||||||||||||
December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S.$ in millions)
|
||||||||||||
North America profit
|
|
$
|
2,421
|
|
|
$
|
2,252
|
|
|
$
|
2,837
|
|
Europe profit
|
|
|
1,331
|
|
|
|
1,318
|
|
|
|
1,273
|
|
International Markets profit
|
|
|
474
|
|
|
|
464
|
|
|
|
498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total reportable segments profit
|
|
|
4,225
|
|
|
|
4,034
|
|
|
|
4,608
|
|
Profit (loss) of other activities
|
|
|
163
|
|
|
|
108
|
|
|
|
115
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segments profit
|
|
|
4,388
|
|
|
|
4,142
|
|
|
|
4,723
|
|
Amounts not allocated to segments:
|
|
|
|
|||||||||
Amortization
|
|
|
1,020
|
|
|
|
1,113
|
|
|
|
1,166
|
|
Other asset impairments, restructuring and other items
|
|
|
479
|
|
|
|
423
|
|
|
|
987
|
|
Goodwill impairment
|
|
|
4,628
|
|
|
|
—
|
|
|
|
3,027
|
|
Intangible asset impairments
|
|
|
1,502
|
|
|
|
1,639
|
|
|
|
1,991
|
|
Gain on divestitures, net of divestitures related costs
|
|
|
(8
|
)
|
|
|
(50
|
)
|
|
|
(66
|
)
|
Other R&D expenses (income)
|
|
|
37
|
|
|
|
(15
|
)
|
|
|
83
|
|
Costs related to regulatory actions taken in facilities
|
|
|
23
|
|
|
|
45
|
|
|
|
14
|
|
Legal settlements and loss contingencies
|
|
|
60
|
|
|
|
1,178
|
|
|
|
(1,208
|
)
|
Other unallocated amounts
|
|
|
219
|
|
|
|
252
|
|
|
|
366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated operating income (loss)
|
|
|
(3,572
|
)
|
|
|
(443
|
)
|
|
|
(1,637
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses, net
|
|
|
834
|
|
|
|
822
|
|
|
|
959
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated income (loss) before income taxes
|
|
$
|
(4,406
|
)
|
|
$
|
(1,265
|
)
|
|
$
|
(2,596
|
)
|
|
|
|
|
|
|
b.
|
Segment revenues by major products and activities:
|
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
|||||||||||
(U.S. $ in millions)
|
|||||||||||||
Generic products
|
$ | 4,010 | $ | 3,963 | $ | 4,056 | |||||||
AJOVY
|
134 | 93 | 3 | ||||||||||
AUSTEDO
|
637 | 412 | 204 | ||||||||||
BENDEKA/TREANDA
|
415 | 496 | 642 | ||||||||||
COPAXONE
|
884 | 1,017 | 1,759 | ||||||||||
ProAir*
|
241 | 274 | 397 | ||||||||||
QVAR
|
179 | 250 | 182 | ||||||||||
Anda
|
1,462 | 1,492 | 1,347 | ||||||||||
Other
|
485 | 546 | 708 | ||||||||||
|
|
|
|
|
|
||||||||
Total
|
$ | 8,447 | $ | 8,542 | $ | 9,297 | |||||||
|
|
|
|
|
|
* |
Does not include revenues from the ProAir authorized generic, which are included under generic products.
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Generic products
|
$ | 3,513 | $ | 3,470 | $ | 3,593 | ||||||
AJOVY
|
|
|
31
|
|
|
|
3
|
|
|
|
—
|
|
COPAXONE
|
400 | 432 | 535 | |||||||||
Respiratory products
|
353 | 354 | 402 | |||||||||
Other
|
459 | 536 | 656 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 4,757 | $ | 4,795 | $ | 5,186 | ||||||
|
|
|
|
|
|
Year ended December 31,
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
(U.S. $ in millions)
|
||||||||||||
Generic products
|
$ | 1,792 | $ | 1,893 | $ | 2,022 | ||||||
COPAXONE
|
53 | 63 | 72 | |||||||||
Other
|
309 | 291 | 328 | |||||||||
|
|
|
|
|
|
|||||||
Total
|
$ | 2,154 | $ | 2,246 | $ | 2,422 | ||||||
|
|
|
|
|
|
c.
|
Supplemental data—major customers:
|
Percentage of Third Party Net Sales
|
||||||||||||
2020
|
2019
|
2018
|
||||||||||
McKesson Corporation
|
12 |
%
|
13 | % | 12 | % | ||||||
AmerisourceBergen Corporation
|
12 |
%
|
12 | % | 14 | % |
d.
|
Property, plant and equipment—by geographical location were as follows:
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Israel
|
$ | 1,611 | $ | 1,670 | ||||
United States
|
790 | 864 | ||||||
Croatia
|
539 | 517 | ||||||
Germany
|
933 | 665 | ||||||
Czech republic
|
330 | 343 | ||||||
Hungary
|
325 | 330 | ||||||
Ireland
|
267 | 271 | ||||||
Other
|
1,501 | 1,776 | ||||||
|
|
|
|
|||||
Total property, plant and equipment
|
$ | 6,296 | $ | 6,436 | ||||
|
|
|
|
December 31, 2020
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(U.S. $ in millions)
|
||||||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
Money markets
|
$ | 367 | $ |
—
|
$ |
—
|
$ | 367 | ||||||||
Cash, deposits and other
|
1,810 |
—
|
—
|
1,810 | ||||||||||||
Investment in securities:
|
||||||||||||||||
Equity securities*
|
25 |
259
|
—
|
284 | ||||||||||||
Other, mainly debt securities
|
5 |
—
|
10 | 15 | ||||||||||||
Derivatives:
|
||||||||||||||||
Asset derivatives—options and forward contracts
|
—
|
24 |
—
|
24 | ||||||||||||
Liabilities derivatives—options and forward contracts
|
—
|
(79 | ) |
—
|
(79 | ) | ||||||||||
Contingent consideration**
|
—
|
—
|
(268 | ) | (268 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 2,207 | $ | 204 | $ | (258 | ) | $ | 2,153 | |||||||
|
|
|
|
|
|
|
|
December 31, 2019
|
||||||||||||||||
Level 1
|
Level 2
|
Level 3
|
Total
|
|||||||||||||
(U.S. $ in millions)
|
||||||||||||||||
Cash and cash equivalents:
|
||||||||||||||||
Money markets
|
$ | 577 | $ | — | $ | — | $ | 577 | ||||||||
Cash, deposits and other
|
1,398 | — | — | 1,398 | ||||||||||||
Investment in securities:
|
||||||||||||||||
Equity securities
|
42 | — | — | 42 | ||||||||||||
Other, mainly debt securities
|
2 | — | 12 | 14 | ||||||||||||
Derivatives:
|
||||||||||||||||
Asset derivatives—options and forward contracts
|
— | 32 | — | 32 | ||||||||||||
Liability derivatives—options and forward contracts
|
— | (41 | ) | — | (41 | ) | ||||||||||
Liabilities derivatives—interest rate and cross-currency swaps
|
— | (22 | ) | — | (22 | ) | ||||||||||
Contingent consideration**
|
— | — | (460 | ) | (460 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total
|
$ | 2,019 | $ |
(31
|
)
|
$ | (448 | ) | $ | 1,540 | ||||||
|
|
|
|
|
|
|
|
* |
During the third quarter of 2020, Teva recorded a gain of $134 million under share in profits of associated companies, net, reflecting the difference between the book value of Teva’s investment in American Well and its fair value as of the date it completed its initial public offering in September 2020. The investment was reclassified from “investment in associated companies” to “investment in marketable securities,” since Teva no longer ha
d
significant influence in American Well.
This represented a transfer into Level 3 measurement within fair value hierarchy. By
December 31, 2020, Teva recorded an additional gain of $80
million under financial expenses, net, reflecting the revaluation gain of this security as of December 31, 2020 and transferred it to Level 2 measurement within fair value hierarchy due to a change in discount rate.
|
|
Due to management’s intention and ability to sell this security in the next twelve months, the balance as of December 31, 2020 was reclassified to short term investments.
|
**
|
Contingent consideration represents liabilities recorded at fair value in connection with acquisitions.
|
December 31,
2020 |
December 31,
2019 |
|||||||
(U.S. $ in millions)
|
||||||||
Fair value at the beginning of the period
|
$ | (448 | ) | $ | (497 | ) | ||
Transfer into Level 3- equity securities
|
179 | |||||||
Revaluation of equity securities
|
80
|
|||||||
Revaluation of debt securities
|
(2 | ) |
2
|
|||||
Reclassification to Level 2- equity securities
|
|
|
(259
|
) |
|
|
|
|
Adjustments to provisions for contingent consideration:
|
||||||||
Actavis Generics transaction
|
156 | 92 | ||||||
Eagle transactio
n
|
(75
|
)
|
(151
|
) | ||||
Settlement of contingent consideration:
|
||||||||
Eagle transaction
|
111 | 106 | ||||||
|
|
|
|
|||||
Fair value at the end of the period
|
$ | (258 | ) | $ | (448 | ) | ||
|
|
|
|
Estimated fair value*
|
||||||||
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Senior notes included under long-term liabilities
|
$ | 22,684 | $ | 22,686 | ||||
Senior notes and convertible senior debentures included under short-term liabilities
|
3,207 | 2,318 | ||||||
|
|
|
|
|||||
Fair value at the end of the period
|
$ | 25,891 | $ | 25,004 | ||||
|
|
|
|
* |
The fair value was estimated based on quoted market prices.
|
a.
|
Long-term employee-related obligations consisted of the following:
|
December 31,
|
||||||||
2020
|
2019
|
|||||||
(U.S. $ in millions)
|
||||||||
Accrued severance obligations
|
$ | 82 | $ | 76 | ||||
Defined benefit plans
|
192 | 165 | ||||||
|
|
|
|
|||||
Total
|
$ | 275 | $ | 241 | ||||
|
|
|
|
b.
|
Terms of arrangements:
|
2020
|
||||||||||||||||
4th quarter
|
|
|
3rd quarter
|
|
|
2nd quarter
|
|
|
1st quarter
|
|||||||
U.S $ in millions (except per share amounts)
|
||||||||||||||||
Net revenues
|
4,454 | 3,978 | 3,870 | 4,357 | ||||||||||||
Gross profit
|
2,048 | 1,852 | 1,763 | 2,063 | ||||||||||||
Net income (loss)
|
162 | (4,340 | ) | 53 | 25 | |||||||||||
Net income (loss) attributable to Teva
|
150 | (4,349 | ) | 140 | 69 | |||||||||||
Net income (loss) attributable to ordinary shareholders
|
150 | (4,349 | ) | 140 | 69 | |||||||||||
Earnings per share attributable to ordinary shareholders:
|
||||||||||||||||
Basic
|
0.14 | (3.97 | ) | 0.13 | 0.06 | |||||||||||
Diluted
|
0.14 | (3.97 | ) | 0.13 | 0.06 | |||||||||||
2019
|
|
|||||||||||||||
4th quarter
|
|
|
3rd quarter
|
|
|
2nd quarter
|
|
|
1st quarter
|
|
||||||
U.S $ in millions (except per share amounts)
|
||||||||||||||||
Net revenues
|
4,468 | 4,093 | 4,177 | 4,149 | ||||||||||||
Gross profit
|
1,958 | 1,830 | 1,893 | 1,856 | ||||||||||||
Net income (loss)
|
75 | (307 | ) | (671 | ) | (97 | ) | |||||||||
Net income (loss) attributable to Teva
|
110 | (314 | ) | (689 | ) | (105 | ) | |||||||||
Net income (loss) attributable to ordinary shareholders
|
110 | (314 | ) | (689 | ) | (105 | ) | |||||||||
Earnings per share attributable to ordinary shareholders:
|
||||||||||||||||
Basic
|
0.10 | (0.29 | ) | (0.63 | ) | (0.10 | ) | |||||||||
Diluted
|
0.10 | (0.29 | ) | (0.63 | ) | (0.10 | ) |
Column A
|
Column B
|
Column C
|
Column D
|
Column E
|
||||||||||||||||
Balance at
beginning of period |
Charged to costs
and expenses |
Charged to other
accounts |
Deductions
|
Balance at end
of period |
||||||||||||||||
Allowance for doubtful accounts:
|
||||||||||||||||||||
Year ended December 31, 2020
|
$ | 209 | $ | (11 | ) | $ | 2 | $ | $ | 200 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2019
|
$ | 232 | $ | (16 | ) | $ | — | $ | (7 | ) | $ | 209 | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2018
|
$ | 232 | $ | 13 | $ | (9 | ) | $ | (4 | ) | $ | 232 | ||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Allowance in respect of carryforward tax losses and deductions that may not be utilized:
|
||||||||||||||||||||
Year ended December 31, 2020
|
$ | 1,974 | $ | 670 | $ | — | $ | (97 | ) | $ | 2,547 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2019
|
$ | 1,633 | $ | 555 | $ | — | $ | (214 | ) | $ | 1,974 | |||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Year ended December 31, 2018
|
$ | 1,504 | $ | 407 | $ | 5 | $ | (283 | ) | $ | 1,633 | |||||||||
|
|
|
|
|
|
|
|
|
|
(a) |
The following financial statements are filed as part of this Annual Report on Form
10-K:
|
page
|
||||
86 | ||||
Consolidated Financial Statements:
|
||||
90 | ||||
91 | ||||
92 | ||||
93 | ||||
94 | ||||
96 | ||||
Financial Statement Schedule:
|
||||
168 |
101.SCH | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document | |
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* |
Filed herewith
|
1. |
English translation or summary from Hebrew original, which is the official version.
|
2. |
Incorporated by reference to Exhibit 3.1 to Registration Statement on Form
F-1(Reg.
No. 33-15736).
|
3. |
Incorporated by reference to Exhibit 3.1 to Current Report on Form
8-K
filed on December 14, 2018.
|
4. |
Incorporated by reference to Exhibit 3.1 to Current Report on Form
8-K
filed on June 9, 2020.
|
5. |
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K
filed on December 4, 2018.
|
6. |
Incorporated by reference to Exhibit 4.1 to Form
6-K
filed on January 31, 2006.
|
7. |
Incorporated by reference to Exhibit 4.2 to Form
6-K
filed on January 31, 2006.
|
8. |
Incorporated by reference to Exhibit 4.3 to Form
6-K
filed on January 31, 2006.
|
9. |
Incorporated by reference to Exhibit 4.1 to Form
6-K
filed on May 4, 2010.
|
10. |
Incorporated by reference to Exhibit 4.1 to Form
6-K
filed on November 10, 2011.
|
11. |
Incorporated by reference to Exhibit 4.2 to Form
6-K
filed on December 18, 2012.
|
12. |
Incorporated by reference to Exhibit 4.3 to Form
6-K
filed on November 10, 2011.
|
13. |
Incorporated by reference to Exhibit 4.4 to Form
6-K
filed on November 10, 2011.
|
14. |
Incorporated by reference to Exhibit 4.4 to Form
6-K
filed on December 18, 2012.
|
15. |
Incorporated by reference to Exhibit 4.5 to Form
6-K
filed on November 10, 2011.
|
16. |
Incorporated by reference to Exhibit 4.6 to Form
6-K
filed on November 10, 2011.
|
17. |
Incorporated by reference to Exhibit 4.1 to Form
6-K
filed on March 31, 2015.
|
18. |
Incorporated by reference to Exhibit 4.2 to Form
6-K
filed on March 31, 2015.
|
19. |
Incorporated by reference to Exhibit 4.2 to Form
6-K
filed on July 25, 2016.
|
20. |
Incorporated by reference to Exhibit 4.1 to Form
6-K
filed on July 21, 2016.
|
21. |
Incorporated by reference to Exhibit 4.2 to Form
6-K
filed on July 21, 2016.
|
22. |
Incorporated by reference to Exhibit 4.2 to Form
6-K
filed on July 28, 2016.
|
23. |
Incorporated by reference to Exhibit 4.3 to Form
6-K
filed on July 28, 2016.
|
24. |
Incorporated by reference to Exhibit 4.5 to Form
6-K
filed on July 28, 2016.
|
25. |
Incorporated by reference to Exhibit 4.6 to Form
6-K
filed on July 28, 2016.
|
26. |
Incorporated by reference to Exhibit 4.1 to Current Report on Form
8-K
filed on March 14, 2018.
|
27. |
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K
filed on March 14, 2018.
|
28. |
Incorporated by reference to Exhibit 4.5 to Current Report on Form
8-K
filed on March 14, 2018.
|
29. |
Incorporated by reference to Exhibit 4.6 to Current Report on Form
8-K
filed on March 14, 2018.
|
30. |
Incorporated by reference to Exhibit 4.2 to Current Report on Form
8-K
filed on November 25, 2019.
|
31. |
Incorporated by reference to Exhibit 4.6 to Current Report on Form
8-K
filed on November 25, 2019.
|
32. |
Incorporated by reference to Exhibit 4.33 to Annual Report on Form
10-K
filed on February 21, 2020.
|
33. |
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K
filed on April 10, 2019.
|
34. |
Incorporated by reference to Exhibit 10.20 to Annual Report on Form
10-K
filed on February 12, 2018.
|
35. |
Incorporated by reference to Exhibit 10.1 to Current Report on Form
8-K
filed on June 9, 2020.
|
36. |
Incorporated by reference to Exhibit 10.32 to Annual Report on Form
10-K
filed on February 12, 2018.
|
37. |
Incorporated by reference to Exhibit 10.26 to Annual Report on Form
10-K
filed on February 19, 2019.
|
38. |
Incorporated by reference to Exhibit 10.10 to Annual Report on Form
10-K
filed on February 21, 2020.
|
39. |
Incorporated by reference to Exhibit 10.13 to Annual Report on Form
10-K
filed on February 21, 2020.
|
40. |
Incorporated by reference to Exhibit 10.32 to Annual Report on Form
10-K
filed on February 21, 2020.
|
41. |
Incorporated by reference to Exhibit A to Proxy Statement filed on June 8, 2017.
|
42. |
Incorporated by reference to Exhibit 10.49 to Annual Report on Form
10-K
filed on February 12, 2018.
|
43. |
Incorporated by reference to Exhibit 10.50 to Annual Report on Form
10-K
filed on February 12, 2018.
|
44. |
Incorporated by reference to Exhibit 10.51 to Annual Report on Form
10-K
filed on February 12, 2018.
|
45. |
Incorporated by reference to Exhibit 10.52 to Annual Report on Form
10-K
filed on February 12, 2018.
|
46. |
Incorporated by reference to Exhibit 10.53 to Annual Report on Form
10-K
filed on February 12, 2018.
|
47. |
Incorporated by reference to Exhibit 10.54 to Annual Report on Form
10-K
filed on February 12, 2018.
|
48. |
Incorporated by reference to Exhibit 10.56 to Annual Report on Form
10-K
filed on February 12, 2018.
|
49. |
Incorporated by reference to Exhibit 10.61 to Annual Report on Form
10-K
filed on February 12, 2018.
|
50. |
Incorporated by reference to Exhibit 10.60 to Annual Report on Form
10-K
filed on February 12, 2018.
|
51. |
Incorporated by reference to Exhibit Appendix A to our Definitive Proxy Statement filed on April 22, 2020.
|
52. |
Incorporated by reference to Exhibit 10.63 to Annual Report on Form
10-K
filed on February 12, 2018.
|
53. |
Incorporated by reference to Exhibit 10.64 to Annual Report on Form
10-K
filed on February 12, 2018.
|
54. |
Incorporated by reference to Exhibit 10.2 to Quarterly Report on Form
10-Q
filed on November 5, 2020.
|
55. |
Incorporated by reference to Exhibit 10.30 to Annual Report on Form
10-K
filed on February 21, 2020.
|
56. |
Incorporated by reference to Exhibit 10.31 to Annual Report on Form
10-K
filed on February 21, 2020.
|
57. |
Incorporated by reference to Exhibit 10.3 to Quarterly Report on Form
10-Q
filed on November 5, 2020.
|
58. |
Incorporated by reference to Exhibit 18 to Quarterly Report on Form
10-Q
filed on August 5, 2020.
|
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
|
||
By: |
/s/ Kåre Schultz
|
|
Name: | Kåre Schultz | |
Title: | President and Chief Executive Officer | |
Dated: | February 10, 2021 |
Name
|
Title
|
Date
|
||||
By: |
/s/ Dr. Sol J. Barer
Dr. Sol J. Barer
|
Chairman of the Board of Directors | February 10, 2021 | |||
By: |
/s/ Kåre Schultz
Kåre Schultz
|
President and Chief Executive Officer and Director | February 10, 2021 | |||
By: |
/s/ Eli Kalif
Eli Kalif
|
Executive Vice President, Chief Financial Officer
(Principal Financial Officer) |
February 10, 2021 | |||
By: |
/s/ Deborah A. Griffin
Deborah A. Griffin
|
Senior Vice President, Chief Accounting Officer
(Principal Accounting Officer) |
February 10, 2021 | |||
By: |
/s/ Rosemary A. Crane
Rosemary A. Crane
|
Director | February 10, 2021 | |||
By: |
/s/ Amir Elstein
Amir Elstein
|
Director | February 10, 2021 |
Name
|
Title
|
Date
|
||||
By: |
/s/ Jean-Michel Halfon
Jean-Michel Halfon
|
Director | February 10, 2021 | |||
By: |
/s/ Abbas Hussain
Abbas Hussain
|
Director | February 10, 2021 | |||
By: |
/s/ Gerald M. Lieberman
Gerald M. Lieberman
|
Director | February 10, 2021 | |||
By: |
/s/ Roberto A. Mignone
Roberto A. Mignone
|
Director | February 10, 2021 | |||
By: |
/s/ Dr. Perry D. Nisen
Dr. Perry D. Nisen
|
Director | February 10, 2021 | |||
By: |
/s/ Nechemia (Chemi) J. Peres
Nechemia (Chemi) J. Peres
|
Director | February 10, 2021 | |||
By: |
/s/ Prof. Ronit Satchi-Fainaro
Prof. Ronit Satchi-Fainaro
|
Director | February 10, 2021 | |||
By: |
/s/ Janet Vergis
Janet Vergis
|
Director | February 10, 2021 |
Exhibit 10.7
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This Employment Agreement (this Agreement) is entered on March 12, 2020, and is made by and between TEVA PHARMACEUTICAL INDUSTRIES LTD., an Israeli corporation located at 5 Basel Street, Petach Tikva, Israel, Company No. 52-001395-4 (the Company, Teva), and Eric Drapé (Executive).
WHEREAS, the Company wishes to employ Executive as Executive Vice President Teva Global Operations (EVP TGO), and Executive wishes to be so employed; and
WHEREAS, the parties have agreed on the terms pursuant to which Executive shall serve as EVP TGO, and wish to set forth such terms in this Agreement.
NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:
1. |
Term; Positions and Duties; Location |
1.1 |
The Company agrees to employ Executive, and Executive agrees to serve the Company and its affiliates, subject to the terms and conditions of this Agreement, for the period commencing on March 1,2020 (the Effective Date) and until the termination of this Agreement pursuant to Section 7 of this Agreement (the Term). |
1.2 |
Executive shall report directly to the President and Chief Executive Officer of Teva (CEO). Executive shall have all of the duties, authorities and responsibilities customarily exercised by an individual serving as the Executive Vice President Global Operations of a company the size and nature of the Company. In addition, the Executive shall have such additional executive duties and responsibilities as may be assigned to him by the CEO. |
1.3 |
The Executive shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during the Term, including, without limitation, any activity that (a) conflicts with the interests of the Company or its affiliates, (b) interferes with the proper and efficient performance of his duties for the Company or (c) interferes with the exercise of his judgment in the Companys or its affiliates best interests. Notwithstanding the foregoing, nothing herein shall preclude the Executive from: (i) serving, with the prior written consent of the CEO, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations; (ii) engaging in charitable activities and community affairs; (iii) speaking at meetings of business, charitable and civic organizations; or (iv) managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by the Executive so as not to be in contradiction to any Company policy and/or materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder or create a potential business or fiduciary conflict. |
1.4 |
During the Term, and as part of Executives position, Executive may be required to serve as a director, officer or committee member of the Company and its subsidiaries and affiliates (collectively, the Company Group), and the fulfillment of such position shall not constitute an employer-employee relationship between Executive and any such entity (other than the Company), and notwithstanding any such position, Executive shall only be considered to be an employee of the Company and shall not be entitled to receive any additional compensation for serving in such additional position. |
1.5 |
Executives principal place of employment shall be at the Companys principal offices in Israel. However, Executive acknowledges and agrees that he shall be required to travel abroad extensively on Company business. |
1.6 |
Executive acknowledges and agrees that no collective and/or special bargaining agreement that might apply to the Companys employees shall apply to Executive in his capacity as an employee of the Company, unless required by applicable Law. |
1.7 |
This Agreement and all compensation and benefits payable hereunder are subject to the Companys compensation plans and policies applicable to senior officers or any successor compensation plans or policies, including the Companys Compensation Policy for Executive Officers and Directors adopted by the shareholders at the 2019 annual general meeting of shareholders (the Compensation Policy) and nothing herein shall derogate in any way from the Companys rights thereunder. |
2. |
Base Salary |
2.1 |
The Executives gross annual base salary shall be 620,500 EUR (the Annual Salary). The Annual Salary shall be divided by 12 and converted to local currency in accordance with Company practice, and each such 1/12 shall constitute Executives monthly salary (the Monthly Salary). The Annual Salary shall be reviewed, from time to time, by the Human Resources & Compensation Committee of the Companys Board of Directors (the Compensation Committee) and/or the Board of Directors. |
2.2 |
Executive hereby acknowledges and agrees that in light of his position and areas of responsibility, which require a special degree of trust, and since he is part of the Companys senior management, the provisions of the Hours of Work and Rest Law, 5711-1951, shall not apply to his employment. |
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2.3 |
It is hereby agreed that only the Monthly Salary payable to Executive pursuant to Section 2.1 shall constitute the basis for the calculation of all social benefits granted to Executive pursuant to this Agreement (including Pension Contributions and Severance Contributions (as such terms are defined in Sections 6.1 and 6.5) and for any other purpose or benefit plan for which deductions are calculated based on a percentage of Executives salary. |
2.4 |
The parties hereby acknowledge and agree that the compensation terms set forth in this Agreement constitute fair consideration to Executive, given, inter alia, his managerial responsibilities and obligations towards the Company and that the Executive shall not be entitled to receive any other payment or compensation of any kind beyond the Monthly Salary and the other payments and benefits specified in this Agreement unless otherwise agreed between the Company and the Executive in writing and approved as required by applicable Law. |
2.5 |
The Company shall pay or reimburse Executive for all reasonable out-of-pocket business expenses incurred by Executive in performing his duties under this Agreement, subject to presentation of appropriate supporting documentation and in accordance with the expense reimbursement policy of the Company. |
3. |
Annual Bonus |
3.1 |
For each fiscal year that ends during the Term, the Executive shall be eligible to be considered for an annual bonus under the Companys annual cash bonus plan in accordance with the Compensation Policy (the Annual Bonus) and subject to the sole discretion of the CEO, the Compensation Committee and the Board of Directors, with a target amount equal to 100% of Executives Annual Salary. If payable, the Annual Bonus shall be paid to the Executive at the same time as annual bonuses are generally payable to other similarly situated senior executives of the Company, subject to the Executives continuous employment through the payment date. . |
4. |
Equity Awards |
4.1 |
Annual Equity-based Awards. During the Term, the Executive shall be considered for equity-based compensation awards under the terms of Tevas 2015 Long Term Equity-Based Incentive Plan (the 2015 Plan), or any successor equity compensation plan(s), at the sole discretion of the CEO, the Compensation Committee and the Board of Directors. Any such awards shall be granted on such terms and conditions as may be determined by the Compensation Committee and the Board of Directors. |
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5. |
Executive Benefits |
5.1 |
General. During the Term, Executive (and, to the extent eligible, his dependents) shall be entitled to participate in any and all health, medical, dental, group insurance, welfare, fringe benefits, perquisites and other employee benefit plans, programs and arrangements, and for the avoidance of doubt excluding study fund, that are generally available from time to time to similarly situated senior executives of the Company and their dependents (the Executive Benefits). Nothing contained herein shall be construed to limit the Companys ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing the Executive notice, and the right to do so is expressly reserved. |
5.2 |
Relocation. From January 1, 2020 until the third anniversary thereafter, Executive shall be provided relocation benefits as set forth in the Companys Long Term International Assignment Policy (the Relocation Policy), as shall be amended from time to time. |
5.3 |
Changes to Relocation Policy. The Executive acknowledges, agrees and understands that the Relocation Policy does not form part of this Agreement and the Company reserves the right to amend, suspend, or terminate the Relocation Policy at any time without providing the Executive notice, and the right to do so is expressly reserved. Notwithstanding the foregoing, in the event of any conflict between the Relocation Policy and this Agreement, the terms of this Agreement shall prevail. |
5.4 |
Vacation. Executive shall be entitled to twenty three and a half (23.5) paid vacation working days per calendar year during the Term, which shall accrue in accordance with Company policy. Executive shall be required to utilize at least five (5) consecutive vacation days every calendar year, and may accumulate the remaining vacation days up to 47 days in total and in accordance with Company policy which may be revised from time to time. Any accumulated vacation days above 47 days shall be forfeited by the Company with no consideration. The dates of Executives annual vacation shall be coordinated in advance with the CEO. |
5.5 |
Sick Leave. Executive shall be entitled to twenty two (22) paid sick working days per calendar year during the Term (without any reduction in the compensation or benefits payable hereunder), which may accumulate during the Term in accordance with the Companys practice or policy, as in effect from time to time but in no event shall exceed twelve (12) months. The sick pay shall include the Monthly Salary and all other amounts and benefits to which Executive is entitled under this Agreement, as if Executive worked at the Company during the period of his illness (in respect of period for which he is entitled to receive payment as aforesaid), less any amount that Executive is entitled to receive with respect to the aforementioned period of his illness, including from any Israeli pension fund; provided that Executive provides the Company with medical confirmation of his illness. |
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5.6 |
Recreation Pay. Executive shall be entitled to fifteen (15) paid recreation days per calendar year during the Term. The amount of recreation pay per recreation day, the payment conditions and any other conditions governing recreation pay shall be in accordance with applicable Law and the Companys policy in effect at the applicable time with respect to its employees generally. |
5.7 |
Car. The Company shall furnish the Executive with a car owned or leased by Teva, and which the Executive shall use during the Term. Subject to the provisions of any applicable Law, and the Companys policy on the matter, the Company shall bear all costs relating to the use and maintenance of the car. The Executive undertakes to use the car in a reasonable manner. |
6. |
Pension Insurance |
6.1 |
Subject to approval of the Compensation Committee and the Board (if applicable), the Company shall reimburse Executive on a monthly basis an amount equal to the required monthly French contribution, to be paid by the Executive to French social security, to enable Executives continued social security coverage (the Pension Contribution). By signing this Agreement Executive declares that he is covered by a sufficient loss of ability to work insurance in France. In no event shall the Pension Contribution be less than 7.5% of the Executive Monthly Salary. |
6.2 |
Executive declares and warrants that the Pension Contribution pursuant to Section 6.1 is in lieu of the Companys obligation under applicable Law to insure the Executive under a pension plan. |
6.3 |
Since the Pension Contribution payment as aforementioned is done pursuant to Executives request, and for his benefit, neither Executive nor his successors, heirs and assigns shall have a cause of action with respect to any matter regarding the Companys obligation to insure Executive under a pension plan. |
6.4 |
It is hereby acknowledged and agreed that the Pension Contribution payment shall not be deemed part of the Executives Monthly Salary for any purpose, including without derogating from the foregoing, for the purpose of payment of severance and any other entitlement calculated as a percentage of Executives Monthly Salary, and this Section 6 shall not impose on the Company any additional current or future cost or expense, directly or indirectly. |
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6.5 |
In addition, the Company shall contribute and deposit, on a monthly basis, 8.33% of the Monthly Salary on account of severance contribution to an interest-bearing bank account in Israel that shall be opened for such purpose, in accordance with applicable Law (such contributions and all earnings thereon, the Severance Contribution). The Severance Contribution is to be paid out along with the last salary payment. For the avoidance of doubt, the Severance Payment and any severance entitlements payable under applicable Law (whether arising during or after the Term) shall be reduced (but not below $0) by the amount of the Severance Contribution. |
7. |
Termination of Employment |
7.1 |
General. Executives employment with the Company shall terminate upon the earliest to occur of (a) Executives death, (b) a termination by reason of a Disability (as defined in Section 7.8.5), (c) a termination by the Company with or without Cause (as defined in Section 7.8.3), and (d) a termination by Executive with or without Good Reason (as defined in Section 7.8.6). The date on which employee-employer relations cease to exist between the parties shall be referred to in this Agreement as the Date of Termination. Upon any termination of Executives employment for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by Executive, Executive shall be deemed to have resigned, effective immediately, from any and all directorships, committee memberships, and any other positions Executive holds with any member of the Company Group. If for any reason this Section 7.1 is deemed to be insufficient to effectuate the resignations contemplated by the immediately preceding sentence, then Executive shall without incurring any costs on him, upon the Companys request, execute any documents or instruments that the Company may deem necessary or desirable to effectuate such resignations. In addition, Executive hereby designates the Secretary or any Assistant Secretary of the Company to execute any such documents or instruments as Executives attorney-in-fact to effectuate such resignations if execution by the Secretary or any Assistant Secretary of the Company is deemed by the Company to be a more expedient means to effectuate such resignation or resignations. In addition, Executive undertakes to cooperate with the Company to ensure the orderly transition of position and provide any other assistance that may be required by the Company in connection with the Executives duties and responsibilities. |
7.2 |
Termination Due to Death or Disability. Executives employment shall terminate automatically upon his death. The Company may terminate Executives employment immediately upon the occurrence of a Disability, such termination to be effective upon Executives receipt of written notice of such termination and subject to applicable proceedings pursuant to applicable Law. Upon Executives death or in the event that Executives employment is terminated due to his Disability, Executive or his estate or his Beneficiaries (as defined in Section 7.8.2), as the case may be, shall be entitled to: |
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7.2.1 |
The Accrued Obligations (as defined in Section 7.8.1); and |
7.2.2 |
Any portion of the severance payment required to be paid pursuant to applicable Law, which shall be paid in accordance with the requirements of applicable Law; provided, however, that such payment shall be reduced (but not below $0) by the amount of the Severance Contribution. |
Notwithstanding the foregoing provisions of this Section 7.2, the payments and benefits described in this Section 7.2 (other than the components of the Accrued Obligations and any portion of the Severance Payment required to be paid pursuant to applicable Law) (a) are subject to Executives or his estate or his Beneficiaries, as the case may be, execution and non-revocation of the Release of Claims in accordance with Section 7.6 and (b) shall immediately terminate, and the Company shall have no further obligations to Executive with respect thereto, in the event that Executive breaches any provision of Sections 9, 10, 11, 12 and/or 13. In addition, in the event Executive breaches any provision of Sections 9, 10, 11, 12 and/or 13, Executive shall repay to the Company all payments and benefits which were made and/or paid by the Company pursuant to Section 7.2 (other than the components of the Accrued Obligations and the portion of the Severance Payment required to be paid pursuant to applicable Law).
7.3 |
Termination by the Company for Cause. |
7.3.1 |
The Company may terminate Executives employment at any time and without any advance notice, in the event of Cause, subject to applicable proceedings pursuant to applicable Law. |
7.3.2 |
In the event that the Company terminates Executives employment for Cause, he shall be entitled only to those components of the Accrued Obligations required to be paid by applicable Law, and subject to applicable Law. |
7.3.3 |
Following such termination of Executives employment by the Company for Cause, except as set forth in this Section 7.3, Executive shall have no further rights to any compensation or any benefits under this Agreement. |
7.4 |
Termination by the Company without Cause. The Company may terminate Executives employment at any time without Cause, effective six (6) months following the date of Executives receipt of notice of such termination (the Company Notice Period); provided, however, that the Company may, in its sole and absolute discretion and by written notice, waive the services of the Executive during the Company Notice Period or in respect of any part of such period, and at the Companys sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date), all on the condition that the Company pay the Executive the Monthly Salary and all additional compensation and benefits to which the Executive is entitled in respect of the Notice Period without regard to any such Company waiver. |
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In the event that Executives employment is terminated by the Company without Cause (other than due to death or Disability), Executive shall be entitled to:
7.4.1 |
The Accrued Obligations; |
7.4.2 |
The Severance Payment (as defined in Section 7.8.10); |
7.4.3 |
The Non-Compete Payment (as defined in Section 7.8.7); and |
7.4.4 |
If Executives employment is terminated by the Company without Cause within one (1) year following a Change in Control event (as defined in the Compensation Policy as in effect on the date hereof), the CIC Amount (as defined in Section 7.8.4). |
Notwithstanding the foregoing, the payments and benefits described in this Section 7.4 (other than the components of the Accrued Obligations and the portion of the Severance Payment required to be paid pursuant to applicable Law) (a) are subject to Executives execution and non-revocation of the Release of Claims in accordance with Section 7.6 and (b) shall immediately terminate, and the Company shall have no further obligations to Executive with respect thereto, in the event that Executive breaches any provision of Sections 9, 10, 11, 12 and/or 13. In addition, in the event Executive breaches any provision of Sections 9, 10, 11, 12 and/or 13, Executive shall repay to the Company all payments and benefits which were made and/or paid by the Company pursuant to this Section 7.4 (other than the components of the Accrued Obligations and the portion of the Severance Payment required to be paid pursuant to applicable Law).
7.5 |
Termination by Executive with or without Good Reason. Executive may terminate his employment with or without Good Reason by providing the Company six (6) months prior written notice of such termination (the Executive Notice Period); provided, however, that the Company may, in its sole and absolute discretion, by written notice, waive the services of the Executive during the Executive Notice Period or in respect of any part of such period, and at Companys sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date) and still have it treated as a termination without Good Reason. |
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In the event of a termination of employment by Executive for Good Reason, Executive shall be entitled to the same payments and benefits as provided in Sections 7.4.1, 7.4.2 and 7.4.3, subject to the same conditions on payment and benefits as described in Section 7.4 (including execution and non-revocation of the Release of Claims in accordance with Section 7.6 and compliance with Sections 9, 10, 11, 12 and 13). Notwithstanding the above, the Company may terminate the employment of Executive without Cause in accordance with Section 7.4 after receipt of the Good Reason Notice (as defined in Section 7.8.6).
In the event of a termination of employment by Executive without Good Reason, Executive shall only be entitled to the (i) Accrued Obligations; (ii) Severance Contributions accumulated in the bank; and (iii) the Non-Compete Payment, subject to the same conditions on payment and benefits as described in Section 7.4 (including execution and non-revocation of the Release of Claims in accordance with Section 7.6 and compliance with Sections 9, 10, 11, 12 and 13).
7.6 |
Release. Notwithstanding any provision in this Agreement to the contrary, the payment of any amount or provision of any benefit pursuant to Section 7 (other than the components of the Accrued Obligations and those components of the Severance Payment required to be paid pursuant to applicable Law) (collectively, the Severance Benefits) shall be conditioned upon Executives execution, delivery to the Company, and non-revocation of the Release of Claims (as defined in Section 7.8.9) within thirty (30) days following the Date of Termination. If Executive fails to execute the Release of Claims in such a timely manner, Executive shall not be entitled to any of the Severance Benefits. For the avoidance of doubt, in the event of a termination due to Executives death or Disability or Executives death or Disability following a notice of termination of employment without Cause or for Good Reason, Executives obligations herein to execute the Release of Claims may be satisfied on his behalf by his estate or a person having legal power of attorney over his affairs. |
7.7 |
Full Settlement. The payments and benefits provided under this Section 7 shall be in full satisfaction of all obligations of the Company Group to Executive under this Agreement or any other agreement, plan, arrangement or policy of the Company Group in connection with his termination of employment. For the avoidance of doubt, Executives sole and exclusive remedy upon a termination of employment shall be receipt of the payments and benefits specified in this Section 7. |
7.8 |
Definitions. For purposes of this Agreement, the following terms have the following meanings: |
7.8.1 |
Accrued Obligations means (a) any unpaid Monthly Salary earned through the Date of Termination, and any unused vacation days and recreation days accrued in accordance with Company policy and this Agreement through the Date of Termination, which amounts shall be paid on the next regular payroll date immediately following the Date of Termination, (b) any other payment to which Executive is entitled under the applicable terms of any applicable plan, program, agreement, corporate governance document or arrangement of the Company, including Company reimbursement of any unreimbursed business expenses and rights to any Company indemnification as set forth in Section 8. |
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7.8.2 |
Beneficiaries means, subject to applicable Law, the executors of Executives estate, the Executives legal heirs and with respect to the Pension Contributions those beneficiaries whom the Executive stipulated in a written notice to any applicable pension providers. |
7.8.3 |
Cause means (A) the Executives indictment for, conviction of or pleading of guilty or nolo contendere to, (i) a felony or (ii) any crime involving moral turpitude; (B) the Executives embezzlement, dishonesty, misappropriation of Company property, breach of fiduciary duty or fraud with regard to the Company or any of its assets or businesses; (C) the Executives willful misconduct or gross negligence in the performance of the Executives duties or continual failure to perform the material duties of his position; (D) the Executives material violation of a Company rule or regulation; (E) the Executives breach of a material provision of this Agreement; or (F) circumstances entitling the Company under any applicable law to terminate the employment of the Executive without payment of severance pay. |
7.8.4 |
CIC Amount means one and a half (1.5) million USD converted into local currency at the Date of Termination and in accordance with the Companys practice and polices. |
7.8.5 |
Disability means that Executive, due to a physical or mental disability, has been substantially unable to perform his duties under this Agreement for a continuous period of ninety (90) days or longer, as determined by a physician selected by the Company and reasonably acceptable to Executive. |
7.8.6 |
Good Reason means a termination by Executive if (a) any of the following events occurs without Executives express prior written consent, (b) Executive notifies the Company in writing that such event has occurred, describing such event in reasonable detail and demanding cure, within ninety (90) days after Executive learns of the occurrence of such event (the Good Reason Notice), (c) such event is not substantially cured within thirty (30) days after Executive delivers the Good Reason Notice to the Company, and (d) the Date of Termination occurs within one hundred twenty (120) days after the failure of the Company to so cure: (A) the Companys breach of a material provision of this Agreement, (B) a material diminution in the Executives duties or responsibilities that is inconsistent with the Executives position as described herein, or (C) a material reduction in the Executives Annual Salary. |
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7.8.7 |
Non-Compete Payment means the payment defined in Section 14. |
7.8.8 |
Law means any Israeli law, rule or regulation, and the regulations of any securities exchange on which the Companys securities are listed, or any applicable judgment, order, writ, decree, permit or license of any governmental authority. |
7.8.9 |
Release of Claims means the release of claims in favor of the Company Group substantially in the form attached hereto as Exhibit A. |
7.8.10 |
Severance Payment means an amount equal to fifteen (15) times of the then-current Monthly Salary deduced by the amounts accumulated pursuant to Section 6.5 as a result of the Severance Contributions. |
8. |
Indemnification |
In accordance with and subject to the provisions of Israeli law and the applicable provisions of the Companys Articles of Association and the Compensation Policy, the Indemnification and Release Agreement between Executive and the Company, dated October 2, 2019, shall continue to apply in full force and effect in accordance with its terms, and is incorporated by reference to this Agreement.
9. |
Confidentiality and Disclosure of Information |
Executive shall execute the Confidentiality, Disclosure of Information and Assignment of Inventions Agreement attached hereto as Exhibit B concurrently with the execution of this Agreement and agrees to abide by the terms thereof, which shall be deemed incorporated into this Section 9.
10. |
Non-Competition |
By signing this Agreement, the Executive hereby acknowledges and agrees that, in his capacity as Executive Vice President - Teva Global Operations the Executive will have a great deal of exposure and access to a broad variety of commercially valuable proprietary information of the Company Group, including, by way of illustration, confidential information regarding the Company Groups current and future products and strategies, costs and other financial information, R&D and marketing plans and strategies, etc. As a result of the Executives knowledge of the above information and in consideration for the benefits offered by the Company under this Agreement, including, but not limited to, the Non-Compete Payment, the Executive affirms and recognizes his continuing obligations with respect to the use and disclosure of confidential and proprietary information of the Company Group pursuant to the Company Groups policies and the terms and conditions of this Agreement, and hereby agrees that, during the Term and for the six (6) months following the Date of Termination, the Executive shall not, directly or indirectly (whether as an officer, director, owner, employee, partner, consultant or other direct or indirect service provider) engage, directly or indirectly, anywhere in the world, in any activity, business or any other engagement in the pharmaceutical industry, which competes with the business of any member of the Company Group as of the Date of Termination (including any business that any member of the Company Group is actively planning to enter as of the Date of Termination), except with the Companys prior written approval. Notwithstanding anything to the contrary contained in this Section 10, the foregoing shall not prevent Executive from acquiring for his own personal investment not more than 1% of the outstanding voting securities of any publicly-traded corporation.
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11. |
Non-Solicitation |
Executive herby agrees that during the Term and for the six (6) months following the Date of Termination, the Executive shall not, directly or indirectly, (i) solicit or induce, or in any manner attempt to solicit or induce, any person employed by, or as agent of, the Company Group to terminate such persons contract of employment or agency, as the case may be, with the Company Group, or (ii) divert, or attempt to divert, any person, concern or entity from doing business with the Company Group, or attempt to induce any such person, concern or entity to cease being a customer or supplier of the Company Group.
It is hereby agreed and clarified that, when determining the above non-solicitation undertaking, the parties took into account the entire consideration provided to Executive pursuant to this Agreement, which is being made in consideration, inter alia, for such undertaking.
12. |
No Disparagement |
During the Term and at all times thereafter, the Executive agrees not to (i) make any disparaging or defamatory comments regarding any member of the Company Group or any of its current or former directors, officers, employees or products or (ii) make any negative or disparaging comments concerning any aspect of the Executives relationship with any member of the Teva Group or any conduct or events relating to any termination of the Executives employment with the Company.
Nothing herein shall prevent Executive from testifying truthfully in any legal proceeding, to any governmental or regulatory body or as may otherwise be required by applicable Law.
It is hereby agreed and clarified that, when determining the above non-disparagement undertaking, the parties took into account the entire consideration provided to Executive pursuant to this Agreement, which is being made in consideration, inter alia, for such undertaking.
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13. |
Cooperation. |
During the Term and at all times thereafter, Executive agrees to cooperate with the Company and its attorneys in connection with any matter related to the period he was employed by the Company and/or his services to any other member of the Company Group, including but not limited to any threatened, pending, and/or subsequent litigation, government investigation, or other formal inquiry against any member of the Company Group, and shall make himself available upon reasonable notice to prepare for and appear at deposition, hearing, arbitration, mediation, or trial in connection with any such matters. Such cooperation will include willingness to be interviewed by representatives of the Company and to participate in legal proceedings by deposition or testimony. To the extent reasonably practicable, the Company shall coordinate with Executive to minimize scheduling conflicts with Executives business and personal commitments. The Company shall reimburse Executive for any reasonable pre-approved out-of-pocket expenses (including travel expenses) incurred in connection with providing such assistance and subject to any terms and limitation in the Indemnification and Release Agreement.
14. |
Non-Compete, Non-Solicitation and No Disparagement Payments. |
In consideration for Executives undertaking set forth in Sections 9, 10, 11, 12 and 13, and subject to compliance therewith, following the Date of Termination and subject to the provisions of Section 7, Executive shall receive an amount equal to three (3) times the Monthly Salary in effect immediately prior to the Date of Termination, to be paid in six (6) equal monthly installments (the Non-Compete Payment).
Notwithstanding the foregoing, in the event that Executives employment is terminated by the Company for Cause, Executive shall remain subject to Sections 9, 10, 11, 12 and 13, and any other non-compete obligations, but the Company shall not be required to pay the Non-Compete Payment and the entire compensation paid to the Executive pursuant to this Agreement shall constitute as consideration for the Executives undertaking set forth in Sections 9, 10, 11, 12 and 13.
15. |
No-Hedging Policy; No-Pledging Policy; Stock Ownership Guidelines. |
Executive acknowledges and agrees to adhere to the Companys No-Hedging Policy, No-Pledging Policy and Stock Ownership Guidelines applicable to executive officers of the Company, as each may be amended from time to time in the Companys sole discretion
16. |
Return of Car, Equipment and Documents |
As of no later than the Date of Termination, or earlier than that if required by the Company, Executive shall return to the Company the car, cell phone (or other hand-held device), laptop, credit card(s) and any other company equipment, if any, provided to Executive, and any other confidential or proprietary information of the Company that is in Executives possession; provided, however, that nothing in this Agreement or elsewhere shall prevent Executive from retaining and utilizing documents relating to his personal benefits, personal contact list, and the like; and such other records and documents as may reasonably be approved by the CEO (such approval not to be unreasonably withheld or delayed). Executive shall confirm such return in writing to the Company promptly upon Companys written request, together with confirmation that Executive no longer has any Company property or confidential or proprietary information of the Company in his possession or control.
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17. |
Assignability; Binding Nature |
This Agreement shall inure to the benefit of, and be binding on, the parties and each of their respective successors, heirs (in Executives case) and assigns. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights and obligations may be assigned or transferred pursuant to a merger or consolidation, or the sale or liquidation of all or substantially all of the business and assets of the Company; provided that the assignee or transferee is the successor to all or substantially all of the business and assets of the Company and such assignee or transferee contractually assumes the liabilities, obligations and duties of the Company, as contained in this Agreement.
18. |
Tax Payments; Clawback |
18.1 |
Tax and Social Security Payments. Executive hereby acknowledges and agrees that the payments and benefits granted to him under this Agreement shall be subject to income tax deductions and other mandatory tax deductions which the Company is required to deduct and/or withhold by applicable Law, and further represents that, except as specifically set forth in this Agreement, nothing in this Agreement shall be construed as imposing on the Company the obligation to pay taxes or any other obligatory payment imposed on Executive due to any payment or benefit, except that the Company shall pay taxes related to the use of car pursuant to Section 5.7. |
18.2 |
Clawback. All payments made pursuant to this Agreement are subject to the clawback provisions in the Compensation Policy as may be amended from time to time. By signing this Agreement, Executive grants the Company a power of attorney to deduct from the Monthly Salary and/or any other payments due to Executive by the Company, any amounts owed by him, in accordance with applicable Law and any Company clawback provisions in the Compensation Policy. |
19. |
Representations |
Executive represents that (a) he has provided to the Company complete and accurate information regarding the terms of all contracts, arrangements, agreements, policies or understandings applicable to Executive, with prior employers or otherwise, which include post-employment covenants including those relating to competition or solicitation of third parties and (b) he is not subject to (or has been released from all restrictive covenants under) any contract, arrangement, agreement, policy or understanding that in any way impacts his ability to enter into or fully perform his obligations under this Agreement. Executive and the Company each represent and warrant (i) that such party is not otherwise unable to enter into and fully perform such partys obligations under this Agreement; and (ii) that, upon the execution and delivery of this Agreement by both parties, this Agreement shall be such partys valid and binding obligation, enforceable against such party in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors rights generally, or otherwise as may be limited by applicable Laws. Notwithstanding any portion of this Agreement to the contrary, if any of Executives representations under this Section 19 prove to be inaccurate, the Company may immediately declare this Agreement null and void and Executives employment with the Company shall terminate immediately without obligation of any sort by the Company, including pursuant to any equity or other award previously issued to Executive.
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20. |
Notices |
Any notice or other communication required or permitted to be delivered under this Agreement shall be (a) in writing; (b) delivered personally, by email received by the intended receiver of such email, by facsimile, by courier service or by certified or registered mail, first class postage prepaid and return receipt requested; (c) deemed to have been received on the date of delivery or, if so mailed, on the third business day after the mailing thereof; and (d) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):
If to the Company: to the Companys headquarters, Attn: CEO;
If to Executive: to the last address on file with the Company.
Miscellaneous |
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20.1 |
Entire Agreement. As of the Effective Date, this Agreement shall constitute the entire agreement between the parties with respect to the subject matter hereof, and this Agreement (including the agreements attached hereto as Exhibits) shall supersede all prior representations, agreements and understandings (including any prior course of dealings), both written and oral, between the parties with respect to the subject matter hereof, except that any confidentiality and/or assignment of invention agreements by and between Executive and a company member of the Company Group shall continue to apply and in the event of a conflict between this Agreement and such agreement(s), the stricter arrangement shall apply. |
20.2 |
Amendment or Waiver. No provision in this Agreement may be amended unless such amendment is set forth in writing that expressly refers to the provision of this Agreement that is being amended and that is signed by Executive and by an authorized officer of the Company. No waiver by either party of any breach of any condition or provision contained in this Agreement shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any prior or subsequent time. To be effective, any waiver must be set forth in writing signed by the waiving party and must specifically refer to the condition(s) or provision(s) of this Agreement being waived. |
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20.3 |
Inconsistencies. Subject to applicable Law, in the event of any inconsistency between any provision of this Agreement and any provision of any applicable plan, program, agreement, corporate governance document or arrangement of the Company or its affiliates, the provisions of this Agreement shall control unless Executive and the Company otherwise agree in a writing that expressly refers to the provision of this Agreement whose control they are waiving. |
20.4 |
Headings; Construction. The headings of the sections and sub-sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement. For purposes of this Agreement, the term including shall mean including, without limitation. |
20.5 |
Survivorship. The provisions of this Agreement that by their terms call for performance subsequent to the termination of either Executives employment or this Agreement (including the terms of Sections 7 through 14, 18 and Section 20) shall survive such termination in accordance with their applicable terms. |
20.6 |
Governing Law; Severability. This Agreement shall be governed by the laws of the State of Israel, without regard to its conflict of laws rules. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under Law but the invalidity or unenforceability of any provision or portion of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision or portion of any provision, in any other jurisdiction. In addition, should a court or arbitrator determine that any provision or portion of any provision of this Agreement, is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties agree that such provision should be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable or valid. |
20.7 |
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. Signatures delivered by facsimile shall be effective for all purposes. |
20.8 |
Board Approvals. Any reference made in this Agreement to an approval required of the Board or a committee of the Board shall also include any approval of the Board or any committee of the Board as may be required by Law, the Compensation Policy or the Companys corporate documents. |
Signature page follows
16
IN WITNESS WHEREOF, the parties have executed this Agreement in one or more counterparts as of the Effective Date.
TEVA PHARMACEUTICAL INDUSTRIES LTD. | ||
/s/ Mark Sabag |
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By: | Mark Sabag | |
Title: | ||
/s/ |
Kåre Schultz |
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By: | Kåre Schultz | |
Title: | President & CEO | |
EXECUTIVE | ||
/s/ Eric Drapé |
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Name: Eric Drapé | ||
Dated: March 12, 2020 |
[Signature Page to Employment Agreement]
Exhibit A
Form of Release Agreement
This Release Agreement (this Release Agreement) is dated as of [_____________] and is entered into by Eric Drapé (Executive, Me or I) and TEVA PHARMACEUTICAL INDUSTRIES LTD. (the Company) in connection with the termination of Executives employment with the Company.
1. General Release.
(a) In consideration for the receipt of those payments that are in excess of the amounts required to be paid to Me by Law (as detailed in the settlement of account attached hereto), I, on behalf of myself and my family, agents, representatives, heirs, executors, trustees, administrators, attorneys, successors and assigns (the Releasors), hereby irrevocably and unconditionally (i) represent and warrant that I have received in a timely manner full and complete payment of all amounts due to Me under my employment agreement with the Company or under any applicable law and/or in connection with the termination of my employment, both at law and pursuant to the terms of the employment agreement, and (ii) release, settle, cancel, acquit, discharge and acknowledge to be fully satisfied, and covenant not to sue the Company and each of its respective past and/or present subsidiaries, affiliates, successors and assigns, and each of their respective predecessors, and past and/or present stockholders, partners, members, directors, managers, officers, employees, agents or other representatives, and employee benefit plans of the Company or its affiliates, including, but not limited to, trustees and administrators of these plans, in each case, in their individual and/or representative capacities (collectively, the Releasees) from any and all claims, contractual or otherwise, demands, costs, rights, causes of action, charges, debts, liens, promises, obligations, complaints, losses, damages and all liability of whatever kind and nature, whether known or unknown, and hereby waive any and all rights that I, he, she or it may have, from the beginning of time up to and including the time of signing this Release Agreement, in respect of my employment or separation from employment with the Company, or is in any way connected with or related to any applicable compensatory or benefit plan, program, policy or arrangement, including, but not limited to, any claims relating to salaries, benefits, bonuses, compensation, fringe benefits, social benefits according to any law or agreement, amounts of pension fund, overtime, severance pay, sick pay, recreation payments, vacation payments, prior notice payments, options or other securities, reimbursement of expenses and/or any other payments or benefits due to Me by any of the Releasees, or claims under any policy, agreement, understanding or promise, written or oral, formal or informal, between the Company and any of its affiliates and myself, now or hereafter recognized, including claims for wrongful discharge, slander and defamation, as well as all claims for counsel fees and costs; provided that such released claims shall not include any claims to enforce my rights under, or with respect to, any post-termination obligations of the Company expressly undertaken by the Company under my employment agreement with the Company (including vested accrued benefits and compensation under the Companys employee benefit plans and arrangements as set forth in Section 7 to the Employment Agreement), rights as a shareholder of the Company and rights to indemnification and liability insurance coverage.
A-1
(b) The Releasors agree not to bring any action, suit or proceeding whatsoever (including the initiation of governmental proceedings or investigations of any type) against any of the Releasees hereto for any matter or circumstance concerning which the Releasors have released the Releasees under this Release Agreement. Further, the Releasors agree not to encourage any other person or suggest to any other person that he, she or it institute any legal action against the Releasees, and I hereby declare, confirm and undertake that, if the Releasors or anyone else in their name should deliver a claim as mentioned above, I shall reimburse the Releasees and anyone else on their behalf to the full extent of the sum of the legal expenses and legal fees incurred by them as a result of any such claim; and in the event that Releasors prevail in such legal action, then the Releasees shall reimburse such sum to Me or the Releasors. The Releasors hereby agree to waive the right to any relief (monetary or otherwise) in any action, suit or proceeding I may bring in violation of this Release Agreement.
(c) This Release Agreement shall constitute a dismissal and compromise notice for the purposes of Section 29 of the Severance Pay Law 5713-1963.
2. Legal Advice, Reliance. I represent and acknowledge that (a) I have been given adequate time to consider this Release Agreement and have been advised to discuss all aspects of this Release Agreement with my private attorney, (b) I have carefully read and fully understand all the provisions of this Release Agreement, (c) I have voluntarily entered into this Release Agreement, without duress or coercion, and (d) I have not heretofore assigned or transferred or purported to assign or transfer, to any person or entity, any of the claims described in Section 1(a), any portion thereof or any interest therein. I understand that if I request additional time to review the terms of this Release Agreement, a reasonable extension of time shall be granted.
3. Miscellaneous.
(a) No Violation of Law. I agree and acknowledge that this Release Agreement is not and shall not be construed to be an admission by the Company of any violation of any applicable laws of Israel, or of any duty owed by the Company to Me.
(b) Governing Law; Severability. This Release Agreement shall be governed by the laws of the State of Israel, without regard to its conflict of laws rules. In the event that any one or more of the provisions of this Release Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
(c) Counterparts. This Release Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
* * * * *
A-2
Very truly yours, | ||
EXECUTIVE | ||
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Name: |
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Dated: |
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ACCEPTED AND AGREED: | ||
TEVA PHARMACEUTICAL INDUSTRIES LTD | ||
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By: | ||
Title: | ||
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By: | ||
Title: |
A-3
Exhibit B
Confidentiality, Disclosure of Information and
Assignment of Inventions Agreement
To: Teva Pharmaceutical Industries Ltd. and its subsidiaries and affiliates (the Company)
Re: Proprietary Information, Non-Disclosure and Assignment of Inventions Agreement
The undersigned (Executive) hereby acknowledges that he has had and will have access to, certain proprietary information, inventions, commercial secrets and other confidential information of the Company and may participate in the development, planning or marketing of the Companys products, in connection with Executives employment under the Employment Agreement entered into between the Company and Executive dated March 12, 2020 (hereinafter, the Employment Agreement) and any other confidentiality and/or assignment of inventions obligations and agreements by and between Executive and a company member of the Company Group. In relation to such confidential information Executive hereby undertakes as follows, in full knowledge that the force of this undertaking is in no way dependent upon the force of the Employment Agreement, is entirely independent from said agreement, does not in any way constitute a concurrent obligation with the obligations defined in the Employment Agreement and has been a material part of the consideration of his engagement by the Company:
1. |
Proprietary Information and Non-Disclosure |
1.1. |
Executive acknowledges and agrees that he has had and will have access to or be involved in the planning, making or development of, confidential and proprietary information concerning the business and financial activities of the Company or its property, business, dealings, clients, suppliers, people or entities that come into contact with them, their operational methods, research or manufacturing process, plans and strategies, business plans, research projects, employees, marketing plans, supplier lists, customers, data, trade secrets, test results, formulas, processes, data and know-how, improvements, inventions, patents, application for patents, copyrights, trademarks, engineering specifications, product designs, technical information discoveries, studies, techniques, specifications, computer programs (in source and object code), databases, products (actual or planned) and information contained in computers, preservation of information methods, disks, diskettes, drawings, plans, communications, prospectuses, reports, prices, calculations, fees, work conditions in the Company or other agreement conditions which relate to the Company and documents of the Company. All such information, whether in documentary, written, oral or digital format, and whether received by Executive as a result of his employment with the Company or brought to his attention in any other manner, shall be deemed to be and referred to as Proprietary Information. For purposes of this Confidentiality, Disclosure of Information and Assignment of Inventions Agreement, the term Company shall include all entities within the Company Group (as defined in the Employment Agreement). |
B-1
Proprietary Information shall be deemed to include any and all proprietary information disclosed by or on behalf of the Company irrespective of form, but excluding information that (i) was known to Executive prior to his association with the Company and can be so proven by Executive by documentary evidence; (ii) shall have appeared in any printed publication or patent of a third party or shall have become a part of the public knowledge except as a result of a breach of this Agreement by Executive; or (iii) shall have been received by Executive from a third party having no obligation to the Company.
In addition, the term Proprietary Information shall include information regarding salaries, bonuses and benefits paid or granted to Executive by the Company under the Agreement to which this Exhibit B is attached.
1.2. |
Executive agrees and declares that all Proprietary Information and rights in connection therewith are, and shall be, the sole property of the Company and its assignees. At all times, both during the term of his engagement with the Company and thereafter Executive will keep in strict confidence and trust all Proprietary Information, and Executive will not copy, transmit, reproduce, summarize, quote, publish and/or make any commercial or other use or disclose directly or indirectly any Proprietary Information or anything relating to it without the prior written consent of the Company, except as may be necessary in the ordinary course of performing Executives duties in his engagement with the Company and in the best interests of the Company. |
1.3. |
Executive recognizes that the Company received and will receive confidential or proprietary information from third parties subject to a duty on the Companys part to maintain the confidentiality of such information and to use it only for certain limited purposes. At all times, both during the term of his engagement with the Company and thereafter, Executive undertakes to hold and maintain all such information in strict confidence, and not to use or disclose any of such information without the prior written consent of the Company, except as may be necessary to perform his duties as an Executive of the Company and consistent with the Companys agreement with such third party. |
2. |
Assignment of Inventions |
2.1. |
Executive understands that the Company has been and is engaged, involved or associated in a continuous program of investment, research, development, production or marketing in connection with its business and that, as an essential part of his engagement with the Company, he may make new contributions to and create know-how of value for the Company. |
2.2. |
During the term of his engagement, Executive undertakes and covenants that he will promptly disclose in confidence to the Company all inventions, improvements, ideas, themes, designs, original works of authorship, formulas, concepts, techniques, forecasts, test results and documentation, discoveries, models, drawings, tooling, schematics and other diagrams, instructional material, notes, records, algorithms, operating procedures methods, systems, processes, compositions of matter, computer software programs, databases, mask works, and trade secrets, whether or not patentable, copyrightable or protectable as trade secrets or under any other intellectual property right, that are made or conceived or first reduced to practice or created by him, either alone or jointly with others, in the course of his engagement with the Company and due to his engagement with the Company (Inventions). |
B-2
2.3. |
Executive agrees and represents, that all Inventions will be the sole and exclusive property of the Company and/or its assignees and undertakes to act with respect to such Inventions in accordance with the Companys applicable corporate policy. |
2.4. |
To the extent relevant, Executive agrees to keep and maintain adequate and current written records of all Inventions made by him (solely or jointly with others) during the term of his engagement. The records will be in the form of notes, sketches, drawings and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times and will be returned to the Company upon the termination of Executives employment or earlier at the request of the Company. |
2.5. |
Executive hereby irrevocably transfers and assigns to the Company and/or its assignees and shall in the future take all reasonable steps (including by way of illustration only, signing all appropriate documents) to assign to Company and/or its assignees without additional consideration to Executive (other than Executives salary and other benefits to which he is entitled to as an employee of the Company (including without limitation, without any compensation or royalties in accordance with Sections 132 or 134 of the Patent Law of 1967 (the Patent Law)): (a) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights, titles and interests, in any Invention, including, without limitation, service inventions under Section 134 of the Patent Law, and hereby further acknowledges and shall in the future acknowledge Companys full and exclusive ownership in all such Inventions; and (b) any and all Moral Rights (as defined below) that he may have in or with respect to any Invention. Executive also hereby forever waives and agrees never to assert any and all Moral Rights he may have in or with respect to any Invention, even after termination of his engagement with the Company. Moral Rights mean any rights of paternity or integrity, any right to claim authorship of an invention, to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, any Invention, whether or not such would be prejudicial to his honor or reputation, and any similar right, existing under judicial or statutory law of any jurisdiction whatsoever, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a moral right. |
2.6. |
Executive expressly waives all economic rights in the Inventions including without limitation any rights to royalties from any intellectual property right (specifically including patent rights under Section 134 of the Patent Law) and any right to receive any payment or other consideration whatsoever. |
B-3
2.7. |
Executive agrees to assist the Company in every reasonable way to obtain and enforce, for the benefit of the Company and/or its assignees exclusive and absolute title, right, interest, patents, copyrights, mask work rights, and other legal protections for the Inventions in any and all countries. Executive will execute any documents that may be reasonably requested of him for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Executives obligations under this Section 2.7 will survive the termination of his engagement with the Company; provided that the Company will compensate him at a reasonable rate after such termination for time or expenses actually spent by him at the Companys request on such assistance. After the termination of Executives engagement with the Company, any assistance requested by the Company or any of its assignees pursuant to this Section 2.7 shall take into account Executives obligations towards third parties. Executive hereby irrevocably appoints the Company and/or its duly authorized officers and agents (including, without limitation, the chairman of the Board) as his attorney-in-fact to execute documents on his behalf for this purpose and agrees that, if the Company is unable because of Executives unavailability, mental or physical incapacity, or for any other reason, to secure Executives signature for the purpose of applying for or pursuing any application for any Israeli or foreign patents or mask work or copyright registrations covering the Inventions assigned to the Company in this Section 2, to act for and on Executives behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Executive. |
2.8. |
Executive hereby acknowledge and agrees that the salary and other benefits provided to him under his Employment Agreement constitute appropriate, full and fair consideration in connection with his employment with the Company, including, without limitation, with respect to this Agreement and including with respect to Executives undertakings under this Section 2, and with respect to any Inventions created, conceived or reduced to practice or that may be created, conceived or reduced to practice by Executive, either alone or jointly with others, in the course of his employment with the Company, all of which are assigned to the Company in accordance with this Agreement, and Executive hereby unconditionally and irrevocably waives any right that he may have to receive any additional payment or other consideration whatsoever to which Executive may be entitled with respect to any Invention pursuant to any applicable law, in any jurisdiction, including (but not limited to) pursuant to Section 134 of the Patent Law, or any provision that may supersede it. In the event that for any reason such right cannot be waived, Executive hereby assigns and transfers to the Company any such right Executive may have to receive any additional payment or other consideration whatsoever with respect to any Invention pursuant to any applicable law, including the Patent Law, in any jurisdiction. |
2.9. |
Executive acknowledges that the Company has entered into the Employment Agreement in reliance on his undertaking set forth in this Section 2, and that given his access to information regarding the Company, the provisions of this Section 2 are reasonable and necessary to protect the Companys business and rights. |
2.10. |
If any one or more of the terms contained in this Proprietary Information, Assignment of Inventions and Non-Disclosure Agreement shall for any reason be held to be excessively broad with regard to time, geographic scope or activity, the term shall be construed in a manner to enable it to be enforced to the extent compatible with applicable law. |
B-4
3. |
Miscellaneous |
3.1. |
Survivorship. The provisions of Sections 1 and 2 shall survive termination or expiration of the Employment Agreement and shall be and remain in full force and effect at all times thereafter. |
3.2. |
Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Israel. Any dispute arising under or relating to this Agreement or any transactions contemplated herein shall be resolved in accordance with Section 20.6 of the Employment Agreement. |
3.3. |
Injunctive Relief. Any breach of this Agreement may cause irreparable harm to the Company, for which damages would not be an adequate remedy, and therefore, the Company will be entitled to injunctive relief from any court of competent jurisdiction as such court so determines, restraining any violation or further violation of this Agreement by Executive. The Companys right to injunctive relief shall be cumulative and in addition to any other remedies provided by law or equity and without any requirement to post bond. |
B-5
IN WITNESS WHEREOF, Executive has signed this Proprietary Information, Non-Disclosure and Assignment of Inventions Agreement as of March 1, 2020.
EMPLOYEE | ||
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ACCEPTED AND AGREED: | ||
TEVA PHARMACEUTICAL INDUSTRIES LTD | ||
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Name: | ||
Title: | ||
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Name: | ||
Title: |
B-6
Exhibit 10.8
CONTRAT DE TRAVAIL
A DUREE INDETERMINEE
ENTRE LES SOUSSIGNES :
La société TEVA SANTE, société par actions simplifiée au capital de 109.599.592 Euros dont le siège social est sis 110 Esplanade du Général de Gaulle, Paris La Défense Cedex (92931), France, immatriculée sous le numéro 401 972 476 au RCS de Nanterre, représentée par Sima de Cayron, agissant en sa qualité de Directeur des Ressources Humaines, dûment habilité à cet effet,
Ci-après dénommée « la Société »,
Dune part,
ET
Monsieur Eric Drapé,
Né le Mai 30,1961
Demeurant 4 Place de lEglise, 92210 Saint-Cloud, France
de nationalité française
N° de sécurité sociale : 1610569384234 11
Ci-après dénommée le « Salarié »,
Dautre part,
Ensemble dénommées les « Parties ».
A titre purement informatif, la convention collective applicable actuellement appliquée aux cadres de la Société est, sous réserve de modification ultérieure, la Convention Collective Nationale de lIndustrie Pharmaceutique (la « Convention Collective »).
INDEFINITE TERM EMPLOYMENT AGREEMENT
Translation for Information Purposes Only
BETWEEN THE UNDERSIGNED:
TEVA SANTE, a simplified joint stock company (SAS) with a share capital of 109,599,592 Euros and registered office located in 110 Esplanade du Général de Gaulle, Paris La Défense Cedex (92931), France, registered under the number 401 972 476 RCS Nanterre, represented by Sima de Cayron, in his capacity as HR Director, duly authorized thereto,
Hereafter referred to as the Company,
Of the first part,
AND
Mr Eric Drapé,
Born on May 30,1961
Residing at 4 Place de lEglise, 92210 Saint-Cloud, France
French national,
Social security number 1610569384234 11
hereafter referred to as the Employee,
Of the other part,
Together hereafter referred to as the Parties.
For purely information purposes, it is reminded that the collective bargaining agreement which is currently applied to the Executives unless future modification - is the Convention Collective Nationale de lindustrie pharmaceutique (the CBA or the Collective Bargaining Agreement).
Teva Santé SAS
Siège Social : Cur Défense 110 Esplanade du Général de Gaulle 92931 La Défense Cedex
Tèl. 01.55.91.78.00 | Fax. 01.55.91.78.01
Société par actions simplifiée au capital de 109 599 592
RCS Nanterre 401 972 476 | APE 2120Z | TVA intracommunautaire FR 54 401 972 476
La Société remettra un exemplaire du règlement intérieur le cas échéant, et met à la disposition de la Salariée la Convention Collective ainsi que les accords collectifs applicables dans lentreprise.
ARTICLE 1 ENGAGEMENT
Le Salarié est engagé en qualité de Senior Vice President & Head of Sterile and Respiratory Operations (Europe and Israel).
Le présent contrat prend effet le 26th Août 2013 au plus tard, sous réserve des résultats de la visite médicale dembauche décidant de laptitude du Salarié à tenir cet emploi.
Le présent contrat est conclu sans période dessai.
Le Salarié accepte cet engagement et déclare formellement nêtre lié à aucune autre entreprise et être libre de tout engagement en vigueur.
ARTICLE 2 FONCTION
larié est engagé en qualité de Senior Vice President & Head of Sterile and Respiratory Operations (Europe et Israel) avec le statut de Cadre, Groupe XI de la Convention Collective.
A ce titre, le Salarié aura notamment les fonctions décrites en Annexe A.
Compte tenu de la nature de ses fonctions, les attributions du Salarié sont susceptibles dévoluer. Ainsi, le Salarié peut également, sur demande de la Société, se voir confier des tâches supplémentaires ou complémentaires, conformément à ses fonctions et qualifications, sans que cela ne conduise à une augmentation de la rémunération prévue dans le contrat.
Le Salarié rendra compte au Président et CEO Teva Global Opérations ou à toute autre personne qui pourrait leur être substituée par la Société.
The Company will provide the Employee with a copy of the internal rules and regulations, if applicable. The CBA and collective agreements applicable to the Company will be at the Employees disposal.
ARTICLE 1 HIRING
The Employee is hired in the position of Senior Vice President & Head of Sterile and Respiratory Operations (Europe and Israel).
The present contract shall start on 26th August 2013 at the latest. However, it shall be confirmed only after the Employees mandatory medical exam, stating that he is physically able to perform his role.
The present contract is not subject to any probationary period.
The Employee accepts this appointment and expressly declares that he is not bound by any other agreement with any other company.
ARTICLE 2 POSITION
The Employee is employed as Senior Vice President & Head of Sterile and Respiratory Operations (Europe and Israel) with executive status, Group XI of the Collective Bargaining Agreement currently applied by the Company.
In this respect, the Employee will perform the duties described in the attached Appendix A.
Given the scope of his functions, the duties of the Employee may change. The Employee may be required to perform additional or complementary tasks, according to his function and qualification, without any corresponding increase in the level of remuneration set out in the contract.
The Employee reports to the President and CEO Teva Global Operations or to any other person that the Company may substitute in their place.
ARTICLE 3 LIEU DE TRAVAIL ET MOBILITÉ
A titre informatif, il est indiqué que le Salarié est rattaché au siège social de la Société actuellemment situé 110 Esplanade du Général de Gaulle, Paris La Défense Cedex (92931), France.
Dans le cadre de ses fonctions, le Salarié sera amené à effectuer de fréquents déplacements de plus ou moins longue durée en Europe, notamment aux Pays-Bas, au Royaume Uni, en Croatie, en Hongrie, en Irlande, et dans dautres pays, notamment en Russie, en Israël et aux Etats Unis, ce que le Salarié accepte expressément.
Les conditions des déplacements du Salarié se feront conformément à la politique des déplacements professionnels en vigueur dans la Société au moment des déplacements.
ARTICLE 4 REMUNERATION
4.1 Rémunération fixe
Le Salarié perçoit un salaire annuel brut forfaitaire de 420.000 euros (quatre cent vingt mille euros) payable en 12 échéances mensuelles égales.
Compte tenu de sa qualité de cadre dirigeant au sens de larticle L. 3111-2 du code du travail, il est expressément précisé que cette rémunération forfaitaire de base couvrira lintégralité du temps consacré par le Salarié à lexercice de sa fonction sans limitation de durée.
La rémunération fixe sera revue pour la première fois au cours du premier trimestre 2015.
4.2 Rémunération variable
En supplément de son salaire fixe, le Salarié pourra percevoir une rémunération variable.
Les objectifs et les conditions de versement de la rémunération variable sont définis unilatéralement par la Société et peuvent être modifiés à sa seule discrétion, étant précisé que ces modifications seront portées à la connaissance du Salarié au début de la période ouvrant droit à rémunération variable.
ARTICLE 3 PLACE OF WORK AND MOBILITY
For information purposes only, it is indicated that the Employee will be attached to the Companys registered office currently located in 110 Esplanade du Général de Gaulle, Paris La Défense Cedex (92931), France.
Within the scope of his duties, the Employee will be required to undertake travel of variable duration in Europe, notably the Netherlands, UK, Croatia, Hungary, Ireland, , and other countries, in particular to Russia, Israel and the USA, which the Employee expressly agrees to.
Travel conditions and arrangements shall be made in accordance with the Companys policy in force at the time of the travel.
ARTICLE 4 REMUNERATION
4.1 Base salary
The Employee shall receive a yearly gross remuneration of 420,000 Euros (four hundred twenty thousand Euros), paid in 12 equal installments.
Given the Employees cadre dirigeant status (article L. 3111-2 French Labour Code), this basic remuneration is a lump sum compensation, set in consideration of the Employees total working time without any limit.
The base salary will be reviewed for the first time during the first quarter of 2015.
4.2 Variable remuneration
In addition to his fixed salary, the Employee may be eligible to variable remuneration.
The targets and the conditions of payment of of the variable remuneration are determined solely by the Company and may change at its sole discretion. Such amendments shall be communicated to the Employee upon the start of period giving rise to the right to variable remuneration.
Sous réserve de latteinte des objectifs fixés, le Salarié pourra bénéficier dune rémunération annuelle sur objectifs laquelle pourra atteindre 50% du salaire de base lorsque le Salarié aura atteint 100% des objectifs. Si le Salarié réalise plus de 100% des objectifs, le montant du bonus annuel pourra dépasser 50% du salaire de base, à la discrétion de la Société.
4.3 Bonus exceptionnel
Le Salarié pourra également percevoir un bonus exceptionnel dun montant total de 425.000 euros bruts réparti entre trois échéances égales dun montant de 141.667 euros bruts en décembre 2013, décembre 2014 et décembre 2015.
Le droit à chacune de ces sommes est soumis à une condition de présence du Salarié dans la Société au moment de son versement.
ARTICLE 5 DUREE DU TRAVAIL
Compte tenu de la nature de sa fonction, de son degré dautonomie, de létendue de ses responsabilités dont limportance implique une grande indépendance dans lorganisation de son emploi du temps ainsi que de son niveau de rémunération se situant dans les niveaux les plus élevés des systèmes de rémunération de la société, le Salarié est considéré comme un cadre dirigeant au sens de larticle L. 3111-2 du code du travail.
En conséquence, la réglementation relative à la durée du travail et aux temps de repos ne lui sera pas applicable.
ARTICLE 6 FRAIS PROFESSIONNELS
Les frais professionnels et notamment les frais de déplacements raisonnablement engagés par le Salarié lui seront remboursés sur présentation de justificatifs et conformément aux règles en vigueur au sein de la Société.
ARTICLE 7 VEHICULE
La Société met un véhicule à la disposition du Salarié à des fins professionnelles, conformément aux usages en vigueur au sein de la Société.
Subject to the achievement of the objectives set out, the Employee may be entitled to an annual variable remuneration of 50% of base salary at the maximum when 100% of targets are reached. Above 100% of targets reached by the Employee, the amount of the annual bonus could be higher than 50% of base salary at the Companys discretion.
4.3 Exceptional bonus
The Employee will also be entitled to an exceptional bonus of 425,000 Euros gross split over three equal installments of 141,667 Euros gross in December 2013, December 2014 and December 2015.
The right to each of these sums is subject to the presence of the Employee within the Company at the time it is due to be paid.
ARTICLE 5 WORKING TIME
Given the nature of his position, his level of autonomy, the importance of his duties which implies a large independence in the organization of his work schedule, as well as the level of his remuneration, which is one of the highest in the Company, the Employee is considered as a top executive (cadre dirigeant) according to the article L.3111-2 of the French Labor Code.
As a consequence, the Employee is not subject to working hours or mandatory time-off provisions.
ARTICLE 6 PROFESSIONAL EXPENSES
Reasonable professional expenses, such as travel expenses, incurred by the Employee are reimbursed upon presentation of supporting documents and according to the procedures in force within the Company.
ARTICLE 7 VEHICLE
The Company provides the Employee with a car for professional use, in accordance with the Companys car policy in force.
La Société se réserve le droit dattribuer le véhicule de son choix au Salarié.
Le Salarié est autorisé à utiliser à des fins personnelles le véhicule qui lui est confié. Lutilisation personnelle du véhicule constitue un avantage en nature dont il est tenu compte tant sur le plan fiscal que sur le plan social, et qui donne lieu au paiement de cotisations sociales. Cet avantage en nature figure sur le bulletin de paie du Salarié.
Les frais dentretien de la voiture sont à la charge de la Société.
En cas daccident, le Salarié doit informer dans les 48 heures la Société ainsi que la compagnie dassurance en précisant les circonstances de laccident.
Cette mise à disposition du véhicule peut être remise en cause à tout moment par la Société en fonction des nécessités du service sous réserve du respect dun préavis raisonnable et sans que cela ne constitue une modification du contrat.
ARTICLE 8 AVANTAGES SOCIAUX ET SITUATION AU REGARD DE LA CCN DE RETRAITE ET DE PREVOYANCE DES CADRES
Le Salarié sera affilié aux régimes sociaux (retraite, mutuelle et prévoyance) en vigueur au sein de la Société en faveur des salariés de sa catégorie.
Toutes variations des taux de cotisations imposées par les Caisses, dans le cadre de lévolution des dispositions légales, réglementaires et conventionnelles, seront dapplication obligatoire, le Salarié ne pouvant sy opposer.
Le Salarié relèvera de larticle 4 de la Convention Collective Nationale de retraite et de prévoyance des cadres du 14 mars 1947.
The Company reserves the right to provide the Employee with the car it may choose.
The Employee is authorized to use the car provided to his for private purpose. The personal use of the car constitutes a benefit-in-kind, which generates tax issues and gives place to the payment of social security contributions. This benefit-in-kind is mentioned on the Employees pay statement.
Expenses of servicing of the car are the responsibility of the Company.
In the event of accident, the Employee has to inform in the 48 hours the Company as well as the insurance company by specifying the circumstances of the accident.
This provision of the car could be called into question at any time by the Company according to the business interests, subject to the respect of a reasonable notice. This shall not constitute a modification of the contract.
ARTICLE 8 SOCIAL BENEFITS AND SITUATION REGARDING THE CBA FOR PENSION AND WELFARE BENEFITS FOR EXECUTIVES
The Employee shall be registered with the social schemes (retirement, health and welfare scheme) entered into by the Company in favour of employees of the same category.
All changes of rates imposed by the Social security entity, in the context of changing legal provisions, regulations and agreements, will become mandatory, the Employee cannot oppose them.
The Employee shall benefit from Article 4 of the national collective bargaining agreement regarding pension and welfare benefits for executives dated March 14,1947.
ARTICLE 9 CONGES PAYES
Le Salarié bénéficiera du nombre de jours de congés payés déterminé en application des dispositions légales et conventionnelles en vigueur.
Les dates des congés sont fixées conformément aux dispositions légales en tenant compte des exigences et nécessités de service et souhaits du Salarié.
Sauf accord écrit de la Société, aucun report de congés payés ne sera autorisé dune année sur lautre.
ARTICLE 10 OBLIGATIONS GENERALES
Le Salarié sengage à accomplir ses fonctions avec loyauté et soin, et à protéger au mieux les intérêts de la Société, à tout moment.
Il sengage, pendant toute la durée du présent contrat, à se conformer aux règles régissant le fonctionnement interne de celle-ci, y compris aux règles édictées au niveau du groupe, à condition que ces instructions et règles ne soient pas en opposition avec les lois applicables.
ARTICLE 11 EXCLUSIVITE
Pendant la durée du Contrat, le Salarié sengage à consacrer lintégralité de son activité professionnelle à lexécution de ses fonctions au sein de la Société.
Plus précisément, le Salarié sinterdit, pour son propre compte ou pour le compte dune autre personne physique ou morale, à quelque titre que ce soit (notamment, sans, que cette liste soit limitative, en tant quadministrateur, gérant, salarié, consultant, actionnaire ou associé), dêtre directement ou indirectement engagé, concerné ou intéressé dans aucun autre commerce, industrie, activité professionnelle ou emploi quel quil soit sans lautorisation préalable expresse écrite de la Société.
De même, le Salarié sinterdit de sintéresser directement ou indirectement, de quelque manière que ce soit, à toute société ou entreprise ayant une activité concurrente ou complémentaire à celle de la Société, et ce pendant toute la durée de son contrat de travail.
ARTICLE 9 PAID HOLIDAY
The Employee shall be entitled to the number of days holiday provided by French law and the provisions of the applicable collective bargaining agreement.
The period of leave is determined in accordance with statutory provisions, taking into account both the Employees obligation to ensure the effective performance of his duties and wishes.
Except for with the written consent of the Company, the Employees holiday entitlement shall not be carried forward from one year to the next.
ARTICLE 10 GENERAL OBLIGATIONS
The Employee undertakes to carry out employment duties with loyalty and care, and to protect the Companys interests, as best as possible, at any and all times.
The Employee undertakes, during the term of this contract, to comply with the internal rules of the Company, including the rules implemented at the group level, provided that these instructions and rules do not conflict with the applicable law.
ARTICLE 11 EXCLUSIVITY
For the duration of the Contract, the Employee shall devote all of the Employees working time to the performance of employment duties within the Company.
More specifically, the Employee undertakes that he will not, either individually, or on behalf of any other individual or corporate entity, in any capacity whatsoever (particularly, but without limitation, as director, manager, employee, consultant, shareholder or partner) become directly or indirectly involved, concerned or interested in any other business, industry, professional activity or employment of any kind without the prior written consent of the Company.
The Employee also agrees not to have any direct or indirect interest, in whatever way, in any company or firm whose activity is in competition or complementary to the Companys activity, while he is employed by the Company.
ARTICLE 12 DISCRETION ET CONFIDENTIALITE
Sous réserve de ce qui sera strictement nécessaire pour les besoins des missions qui lui sont confiées au sein de la Société, le Salarié sengage à ne pas divulguer, communiquer, ni utiliser directement ou indirectement les informations confidentielles de toute nature dont il aura eu connaissance dans le cadre ou à loccasion de ses fonctions concernant les affaires et activités de la Société, de leurs actionnaires, clients, fournisseurs, salariés ou mandataires sociaux, et ce aussi bien pendant la durée du présent contrat quaprès la rupture de celui-ci, sans limitation de durée.
On entend par information confidentielle, sans que cette liste soit limitative, inventions, savoir-faire, secrets commerciaux, cahiers de laboratoire, matériaux biologiques, dessins et concepts (dingénierie), listes de prix, données financières, budgets, clients, ventes aux clients, propositions des clients, prévisions des ventes, méthodes opérationnelles, vendeurs, fournisseurs, sous-traitants et partenaires (ainsi que leurs conditions de vente), acheteurs, toute proposition liée à lacquisition ou à la vente de toute société ou entreprise gérée par Teva, toute proposition liée à lexpansion ou à la réduction des activités (affaires-, recherche et développement-, construction-,technique-,ventes-et production-), projets et processus, appareils, concepts, compositions, formules, développements, recherches, techniques, améliorations, procédures, idées, matériel informatique, logiciels, méthodes de comptabilité, approches commerciales, projets marketing, informations sur le personnel et lemploi (y compris les détails sur les salariés et les directeurs, le niveau de rémunération et les avantages qui leur sont attribués) ; obtenus, développés, modifiés, utilisés, générés et/ou employés par ou pour le compte de Teva.
Toute violation de la présente clause rendra le Salarié automatiquement redevable dune pénalité fixe égale aux salaires bruts perçus effectivement pendant les six (6) mois précédant le départ de la personne sollicitée, sans que cela ne porte préjudice aux droits que se réserve la Société de poursuivre le Salarié en réparation du préjudice matériel et moral.
ARTICLE 12 DISCRETION AND CONFIDENTIALITY
Unless strictly necessary to the carrying out of the Employees duties assigned within the Company, the Employee undertakes not to communicate, disclose or use directly or indirectly confidential information of any kind which he would have gained in the course of, or due to, his position relating to the businesses or activities of the Company; of their shareholders, clients, retailers, employees, corporate officers, and so during the execution and upon the termination of the contract, under the conditions defined below, unless he is obliged to do so by the law.
For the purpose of this clause, confidential information includes, but will not be limited to, any inventions, know-how, trade secrets, laboratory notebooks, biological materials, (engineering) designs and drawings, price lists, pricing methodologies, pricing policies, licenses, contract information, financial forecasts, financial data, budgets, customers, customer sales, customer proposals, sale forecasts, methods of operation, vendors, suppliers & contractors & Partners (and their terms of business), purchasers, any proposals relating to the acquisition or disposal of any company owned or business operated by Teva, any proposals relating to the expansion or contracting of activities, (business-research & development-, construction-, technical-, sales-and production-) plans & processes, apparatus, designs, compositions, formula, developments, research, techniques, improvements, procedures, ideas, computer hardware, computer software, methods of accounting, manners of doing business, marketing plans, personnel and employment matters (including details of employees and directors, the level of remuneration and benefits paid to them); all as acquired, developed, amended, used, generated and/or utilised by or on behalf of Teva.
In the event that this clause is breached the Employee will automatically be liable to the payment of a fixed penalty equal to the gross salary received for the six (6) months preceding the departure of the solicited person, without prejudice to the Companys right to file an action against the Employee to obtain full remedy of the prejudice suffered.
ARTICLE 13 PROPRIETE INTELLECTUELLE
L Salarié devra informer sans délai la Société de toute idée ou invention quil aurait pu créer ou développer et qui pourrait être effectivement ou potentiellement intéressante pour lactivité de la Société.
Sous réserve des droits détenus et qui seront développés par les partenaires de la Société, le Salarié reconnaît que toute marque, dessins, droits, brevets, bases de données ou tout autre élément de propriété intellectuelle, quils soient existants ou futurs, qui pourraient être crées pendant lexécution normale du contrat de travail ou en utilisant les outils, équipement ou savoir-faire mis à la disposition du Salarié pendant la relation contractuelle, demeureront la propriété exclusive de la Société ou de toute autre entité quelle désignera à cet effet, et si cela lui était demandé (soit pendant lexécution du contrat de travail, soit après) il effectuera toutes les formalités nécessaires afin de transférer les droits susmentionnés auprès de la Société qui en serait le propriétaire et utilisateur unique.
ARTICLE 14 MATERIELS ET DOCUMENTS
Tous documents, biens, matériels et supports dinformation de toute nature que la Société confíe au Salarié demeurent la propriété exclusive de la Société.
La Société met notamment à la disposition du Salarié un ordinateur portable et un téléphone portable.
Le Salarié sinterdit den faire un usage autre que professionnel ainsi que den faire des copies sur tout support de quelque nature que ce soit pour son usage personnel, sauf autorisation expresse et préalable de la Société.
Le Salarié sengage à restituer à tout moment à la demande de la Société ou lors de la rupture du Contrat, les éléments susvisés, et plus généralement tout écrit ou tout enregistrement réalisé par lui sur tout support de quelque nature que ce soit relatifs à lactivité de la Société ou dont il aurait eu connaissance dans le cadre de lexécution du Contrat et qui proviendrait de la Société.
ARTICLE 13 INTELLECTUAL PROPERTY
The Employee shall promptly disclose to the Company any idea or invention created or developed by him which is actually or potentially relevant to the business of the Company.
Subject to the rights held and developed by the Companys partners, the Employee acknowledges that all trade marks, registered designs, design rights, copyright, database rights and all other intellectual property rights, whether in existence now or coming into existence at any time in the future, will, on creation either during the normal course of employment or by using materials, tools or knowledge made available through his employment, vest in and be the exclusive property of the Company which the Company shall nominate and if required to do so (whether during or after the termination of his employment), he will execute all instruments and do all things necessary to vest ownership in the above rights in the Company as sole beneficial owner.
ARTICLE 14 MATERIAL AND DOCUMENTS
All documents, goods, materials and equipment of any kind provided by the Company to the Employee remain the property of the Company and must be returned upon request.
The Company notably provides the Employee with a laptop and mobile phone.
The Employee agrees not to make use of such items for any purpose other than that of the business and not to make copies of any description for personal use without the prior express authorisation of the Company.
The Employee undertakes at any time, upon request by the Company or upon termination of the Contract, to return to the Company any of the above mentioned items and, more generally, any written document or recording by him of any nature relating to the business of the Company, or of which he would have had knowledge of during the course of the Contract and whose author would be the Company.
ARTICLE 15 LOYAUTE
Il est rappelé aux Parties que les relations contractuelles sont basées sur une confiance réciproque. La confiance par essence implique la bonne foi, laquelle sexprime au travers de la loyauté. A ce titre, les Parties sont tenues lune envers lautre par cette obligation de loyauté, qui perdure au-delà de la rupture du contrat de travail.
ARTICLE 16 NON-SOLLICITATION DES SALARIES
Pendant toute la durée du contrat et pendant six (6) mois à lissue du départ effectif du Salarié, ce dernier devra sabstenir dembaucher ou de solliciter - directement ou indirectement - dencourager ou de faciliter le débauchage de tout salarié de la Société pour son propre compte ou pour le compte de son nouvel employeur ou de toute autre société.
Toute violation de la présente clause rendra le Salarié automatiquement redevable dune pénalité fixe égale aux salaires bruts perçus effectivement pendant les six (6) mois précédant le départ de la personne sollicitée, sans que cela ne porte préjudice aux droits que se réserve la Société de poursuivre le Salarié en réparation du préjudice matériel et moral.
ARTICLE 17 CLAUSE DE NON-CONCURRENCE ET DE NON-SOLLICITATION DE CLIENTELE
Compte tenu du caractère extrêment sensible du savoir-faire et des informations techniques et commerciales auxquels le Salarié a accès dans lexercice de ses fonctions, de la nature particulièrement concurrentielle des activités de la Société, des fonctions du Salarié ainsi que des responsabilités qui lui sont confiées, les Parties conviennent dune obligation de non-concurrence et de non-sollicitation de clientèle qui a vocation à prendre effet à lissue de la relation de travail, cest-à-dire à la date du départ effectif du Salarié.
Passée la présente relation contractuelle de travail, les Parties conviennent, dans le seul but de protéger les intérêts légitimes de la Société, que le Salarié sinterdit dexercer, directement ou indirectement, une activité concurrente à celle de la Société et plus particulièrement toute activité dans le secteur de la fabrication, du développement, du marketing, de la promotion et de la commercialisation de tous produits et dispositifs pharmaceutiques, médicaux et vétérinaires.
ARTICLE 15 LOYALTY
The Parties are aware that contractual relationships are based on mutual trust. Trust includes by nature good faith, which is expressed by loyalty. The parties have to respect this loyalty obligation which continues to exist even after the termination of the employment contract.
ARTICLE 16 NON-SOLICITATION OF EMPLOYEES
During the whole duration of the contract and for six (6) months after effective departure of the Employee, the Employee shall not hire or solicit - directly or indirectly - encourage or facilitate the poaching of any employee of the Company on his behalf or on the behalf of his new employer or any other company.
In the event that this clause is breached, the Employee will automatically be liable to the payment of a fixed penalty equal to the gross salary received for the six (6) months preceding the departure of the solicited person, without prejudice to the Companys right to file an action against the Employee to obtain full remedy of the prejudice suffered.
ARTICLE 17 NON-COMPETE AND NON-POACHING OF CLIENTS CLAUSE
Considering the extreme sensitiveness of the know-how and technical and commercial information to which the Employee has access in the framework of his functions, the extremely competitive nature of the activities of the Company, the functions and responsibilities of the Employee, the Parties agree that a non-competition obligation and a non-poaching obligation regarding clients will take effect at the end of the employment relationship, i.e. on the date of the effective departure of the Employee.
After this employment contract has terminated, in order to protect the legitimate interests of the Company, the Parties agree that the Employee undertakes not to directly or indirectly carry out any activity that would compete with that of the Company and, in particular, any activity which is related to manufacturing, development, marketing, promoting and distributing of any pharmaceutical, medical and veterinary products and devices.
Le Salarié sengage à sabstenir de solliciter, de démarcher les clients de la Société, de les détourner ou tenter de les détourner, ni directement ni indirectement, à son profit ou à celui dun tiers, et de leur apporter son concours sous quelque forme que ce soit, pour son propre compte ou pour le compte dun tiers, ni directement, ni indirectement.
Par client de la Société, la présente clause vise toute personne physique ou morale en contact avec la Société ou pour lesquelles le Salarié a été amené à travailler à titre permanent ou occasionnel dans le cadre de ses fonctions en France et en Europe au sein de la Société. La qualité de client est étendue aux filiales et sous-filiales des personnes morales directement clientes.
Cette interdiction est limitée à une durée de six (6) mois à compter de la date du départ effectif du Salarié.
Cette interdiction porte sur le territoire suivant : France, Pays-Bas, Royaume-Uni, lIrlande, la Croatie, la Hongrie, et lAllemagne
Le Salarié reconnaît que les conditions dapplication de lobligation de non concurrence telles quelles sont exposées ci- dessus ne lempêchent pas dexercer une activité conforme à son expérience et à sa formation et ne portent pas atteinte à sa liberté de travail.
En cas dapplication de la clause de non- concurrence, il sera versé au Salarié pendant toute la durée dapplication de la clause, une indemnité mensuelle dun montant brut correspondant à 50% de la rémunération moyenne mensuelle brute de base perçue au titre des douze derniers mois de présence du Salarié au sein de la Société.
The Employee undertakes to refrain from solliciting, approaching the clients of the Company, poaching or tempting to poach clients, either directly or indirectly - either individually or on behalf of any third party, and from bring them his support in any way, on his behalf or behalf of any third party, either directly or indirectly.
Client of the Company mentioned in the present clause refers to any individual or corporate entity in contact with the Company or for which the Employee has worked permanently or occasionally in relation to his functions in France and in Europe within the Company. Client also refers to subsidiaries and subsubsidiaries of corporate entities which are direct clients.
The prohibition on competition will remain binding for a period of six (6) months, starting on the date of effective departure of the Employee.
This prohibition applies to the following territories: France, Netherlands, UK, Ireland, Croatia, Hungary, and Germany
The Employee acknowledges that the conditions in which the above non-compete provision applies will not prevent him from carrying out an activity that corresponds to his training and experience, and will not impact his freedom to work.
In the event that the non-competition clause is implemented, the Employee will receive a gross monthly indemnity for a gross amount which corresponds to 50% of the average monthly gross base salary paid to the Employee for the 12 last months of presence of the Employee within the Company.
La présente clause de non-concurrence pourra être levée dans le cadre de la rupture du contrat de travail, que celle-ci soit à linitiative de la Société ou du Salarié, conformément aux dispositions de la Convention Collective.
Toute violation des dispositions de la présente clause libère la Société du versement de lindemnité de non-concurrence et rend le Salarié redevable des sommes reçues à ce titre ainsi que des cotisations sociales acquittées par la Société et qui ne lui seraient pas remboursées.
Par ailleurs, en cas de violation de cette interdiction, le Salarié sexpose au paiement, par manquement constaté, dune indemnité forfaitaire égale à la rémunération de ses six (6) derniers mois dactivité sans préjudice du droit pour la Société de faire cesser ladite violation par tout moyen et de demander réparation de lentier préjudice subi.
ARTICLE 18 PREAVIS
Chacune des Parties pourra rompre le présent contrat de travail en respectant une période de préavis de 12 mois.
Cependant, cette période de préavis ne sera pas due en cas de licenciement pour faute grave ou lourde du Salarié.
ARTICLE 19 PROTECTION DES DONNEES
La Société traite les données personnelles du Salarié pour les finalités liées à lexécution de son contrat de travail et le fonctionnement de la Société.
Conformément à la législation française en vigueur, le Salarié pourra exercer son droit daccès et de rectification de ses données personnelles collectées par la Société, en application des dispositions de la loi n° 78-17 du 6 janvier 1978 modifiée.
ARTICLE 20 DROIT APPLICABLE
Le contrat est soumis au Droit français.
Si lune des dispositions du contrat devait être déclarée invalide, la validité des autres clauses ne serait pas pour autant affectée
Fait à Paris
Le 30 Mai 2013
It will be possible to renounce to the present clause upon termination of the contract, either at the Companys initiative or at the Employees, in compliance with the provisions of the CBA.
In the event that this clause is breached, the Company will be released from paying the non-compete indemnity and the Employee will be liable for any sums paid in this respect and which have not been reimbursed.
Moreover, the Employee will be liable for the payment, in the case of each breach, of an all-inclusive contractual indemnity equal to the remuneration of his last six (6) months of activity, without prejudice to the Companys right to obtain the cessation of the breach by all available means, and to fully remedy any loss suffered.
ARTICLE 18 NOTICE PERIOD
Each party shall have the right to terminate this employment contract by giving a 12-month notice period.
However, this notice period will not be due in case of dismissal for gross or serious misconduct.
ARTICLE 19 DATA PROTECTION
The Company shall process personal data relating to the Employee for the purpose of performance of this contract and the business of the Company.
In line with French legislation currently in force, the Employee may exercise all rights to access and modify his personal data held by the Company in compliance with the law n° 78-17 of January 6, 1978, as modified.
ARTICLE 20 GOVERNING LAW
The contract is governed by French Law.
Should any provision of the contract become invalid, the validity of the other provisions shall not be affected thereby.
Signed in Paris
On May 30th, 2013
Fait á Paris, le 30 Mai 2013 En deux (2) exemplaires originaux dont un pour chaque partie |
Signed in Paris, On May 30th, 2013 In two (2) originals, one for each party |
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Le Salarié Monsieur Eric Drapé |
The Employee Mr Eric Drapé |
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«Bon pour accord» /s/ Eric Drapé |
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« Read and Approved » /s/ Eric Drapé |
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TEVA SANTE (*) Représentée par Sima de Cayron, agissant en sa qualité de Directeur des Ressources Humaines |
TEVA SANTE (*) Represented by Sima de Cayron, in his capacity as HR Director |
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«Bon pour accord» /s/ Sima de Cayron |
Read and Approved /s/ Sima de Cayron |
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(*) Parapher le bas de chaque page et, sur la dernière page, faire précéder la siganture de la mention manuscrite «Bon pour accord» |
(*) Initial the bottom of each page and, on the last page, write by hand Read and Approved before the signature |
Exhibit 10.9
CONVENTION DE TRANSFERT DU CONTRAT DE TRAVAIL (Ci-après la Convention) |
TRANSFER AGREEMENT OF THE EMPLOYMENT CONTRACT (Hereinafter the Agreement) |
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ENTRE LES SOUSIGNEES : | BETWEEN THE UNDERSIGNED: | |
La société TEVA SANTE, société par actions simplifiée dont le siège social est sis 110 Esplanade du General de Gaulle, Paris La Défense Cedex (92931), France, immatriculée sous le numéro 401 972 476 au RCS de Nanterre,
Représentée par Karima ZERHOUNI agissant en sa qualité de Directeur des Ressources Humaines, dûment habilité aux fins des présentes. |
The company TEVA SANTE, a simplified joint stock company (SAS) and registered office located 110 Esplanade du General de Gaulle, Paris La Défense Cedex (92931), France, registered with the Nanterre register of companies under number 401 972 476,
Represented by Karima ZERHOUNI as Human Resources Director, duly appointed for the purpose hereof. |
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Ci-après dénommée TEVA SANTE; | Hereinafter referred to as TEVA SANTE; | |
ET
La société TEVA PHARMACEUTICAL INDUSTRIES LTD, société de droit Israélien, dont le siège social est 5 Basel Street, Petach Tikwa, Israel, société enregistrée sous le numéro 52-001395-4, représentée par Mark Sabag et Ephie Nissenfeld. |
AND
The company TEVA PHARMACEUTICAL INDUSTRIES LTD, with registered address located at 5 Basel Street, Petach Tikwa, Israel, Company No. 52-001395-4, represented by Mark Sabag and Ephie Nissenfeld. |
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Ci-après dénommée TEVA PHARMACEUTICAL; | Hereinafter referred to as TEVA PHARMACEUTICAL; | |
ET
Monsieur Eric Drapé, né le 30 mai 1961 à Lyon (France), demeurant 4 Place de lEglise à Saint-Cloud (92210) en France, de nationalité française. N° de sécurité sociale : 1610569384234 11 |
AND
Mr. Eric Drapé, born on 30 May 1961 in Lyon (France), residing at 4 Place de lEglise, Saint-Cloud (92210) in France, French national. Social security number: 1610569384234 11 |
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Ci-après dénommé Monsieur Drapé ou le Salarié; | Hereinafter referred to as Mr. Drapé or the Employee; | |
Ci-après désignées collectivement les Parties et individuellement une Partie. | Hereinafter collectively referred as to the Parties and individually one Party. | |
IL EST PREALABLEMENT RAPPELE CE QUI SUIT: | THE FOLLOWING PROVISIONS ARE HEREBY REMINDED : | |
Le Salarié a été embauché à compter du 26 août 2013 par contrat à durée indéterminée conclu le 30 mai 2013, en qualité de Senior Vice President & Head of Sterile and Respiratory Operations (Europe and Israel) (le Contrat de travail). | The Employee has been hired as from 26 August 2013 under an indefinite term employment contract concluded on 30 May 2013, as Senior Vice President & Head of Sterile and Respiratory Operations (Europe and Israel) (the Employment contract). |
Il a été proposé au Salarié doccuper le poste de Executive Vice President Global Operations au sein de TEVA PHARMACEUTICAL. Le Salarié sest ainsi vu proposer un transfert volontaire de son Contrat de travail à TEVA PHARMACEUTICAL. | The Employee has been offered to hold the position of Executive Vice President Global Operations within TEVA PHARMACEUTICAL. A voluntary transfer of his Employment contract within TEVA PHARMACEUTICAL has therefore been offered to the Employee. | |
La présente Convention emporte ainsi novation du Contrat de travail et fixe les termes et conditions de la poursuite du Contrat de travail au sein de TEVA PHARMACEUTICAL et, par suite, la disparition des relations contractuelles entre TEVA SANTE et le Salarié. | This Agreement thus entails the novation of the Employment contract and lays down the terms and conditions for the continuation of the Employment contract with TEVA PHARMACEUTICAL and, consequently, the termination of any contractual relationship between TEVA SANTE and the Employee. | |
Cest dans ce contexte quintervient la signature de la présente Convention tripartite de transfert. | The signing of this tripartite transfer Agreement is made in this context. | |
Le Contrat de travail transféré est annexé à la présente Convention. | The transferred Employment contract is attached to this Agreement. | |
IL A ETE CONVENU CE QUI SUIT : | THE FOLLOWING PROVISIONS ARE HEREBY AGREED UPON: | |
Article 1 : Cessation des relations contractuelles entre TEVA SANTE et le Salarié | Article 1 : Ending of the contractual relationships between TEVA SANTE and the Employee | |
TEVA SANTE et le Salarié sont convenus de la fin des relations contractuelles les unissant. | TEVA SANTE and the Employee agreed on the ending of any contractual relationship between them. | |
En conséquence, le Salarié cessera définitivement de faire partie des effectifs de TEVA SANTE, à compter du 1 Mars 2020 (ci-après dénommée la Date de Transfert, sans aucune période de préavis. Il cessera donc dêtre rémunéré par TEVA SANTE à compter de cette Date. | Consequently, as from March 1, 2020 (hereinafter referred to as the Date of Transfer), the Employee will no longer be part of the headcount of TEVA SANTE, without any notice period. He will therefore no longer be paid by TEVA SANTE as from this Date. | |
Dans la mesure où il sagit dun transfert de contrat de travail, les Parties conviennent quaucune somme ne sera versée au Salarié au titre de la cessation de ses relations contractuelles avec TEVA SANTE, qui ne saurait être assimilée ni à une démission du Salarié de TEVA SANTE, ni à un licenciement par celle-ci, ni à une rupture conventionnelle. | As it is a transfer of employment contract, the Parties expressly agree that there will be no payment made to the Employee as for the termination of his contractual relationships with TEVA SANTE, which does not amount to resignation from the Employee with TEVA SANTE, nor to a dismissal or a termination by mutual agreement. | |
La présente Convention tripartite de transfert est en conséquence exclusive de toute indemnité de rupture et de tout préavis à la charge aussi bien de TEVA SANTE que du Salarié. | Consequently, this tripartite transfer Agreement does not entail the payment of any severance payment and does not give rise to any notice period from either TEVA SANTE or the Employee. |
Elle a uniquement pour effet de permettre dun commun accord la poursuite du Contrat de travail entre le Salarié et TEVA PHARMACEUTICAL, la société TEVA PHARMACEUTICAL devenant à compter de la Date de Transfert son nouvel employeur. | It only has the effect of allowing, by mutual agreement, the continuation of the Employment contract between the Employee and TEVA PHARMACEUTICAL, which becomes his new employer as of the Transfer Date. | |
TEVA SANTE versera au Salarié son salaire ainsi que lensemble des droits acquis et échus jusquà la Date de Transfert. | TEVA SANTE will pay the Employee his salary as well as all the rights acquired and expired until the Transfer Date. | |
A compter de la Date de Transfert, TEVA PHARMACEUTICAL sera seule responsable du versement des salaires et autres droits acquis par le Salarié postérieurement à la Date de Transfert. | As from the Transfer Date, TEVA PHARMACEUTICAL will be solely responsible and liable for the payment of wages and other rights acquired by the Employee after the Transfer Date. | |
Il est précisé que les droits à congés payés acquis et non pris par le Salarié auprès de TEVA SANTE à la Date de Transfert, dans la limite de 47 jours de congés payés, seront transférés à TEVA PHARMACEUTICAL et pourront être pris suivant les modalités en vigueur au sein de TEVA PHARMACEUTICAL. Au-delà de la limite de ces 47 jours, les congés payés acquis et non pris par le Salarié seront payés au Salarié par TEVA SANTE. | It is specified that the entitlement to 47 days paid holidays acquired and not taken by the Employee within TEVA PHARMACEUTICAL on the Transfer Date, will be transferred to TEVA PHARMACEUTICAL and may be taken according to the procedures in force within TEVA PHARMACEUTICAL. To the extent the Employee acquired more than 47 days of paid holidays, such acquired paid holidays in excess of the 47 days will be paid to the Employee by TEVA SANTE. | |
Article 2 : Transfert du Contrat de travail du Salarié au sein de TEVA PHARMACEUTICAL | Article 2 : Transfer of the Employment contract of the Employee within TEVA PHARMACEUTICAL | |
Par la présente Convention, les Parties décident dun commun accord du transfert définitif du Contrat de travail du Salarié au sein de TEVA PHARMACEUTICAL. | By this Agreement, the Parties agree by mutual agreement of the definitive transfer of the Employment contract of the Employee within TEVA PHARMACEUTICAL. | |
Ce transfert définitif du Contrat de travail opère ainsi une novation de Contrat de travail du Salarié par substitution de la société TEVA PHARMACEUTICAL à TEVA SANTE en sa qualité demployeur et conclusion dun nouveau contrat de travail entre les parties. | The definitive transfer of this Employment contract entails the novation of the Employment contract of the Employee by substituting TEVA PHARMACEUTICAL to TEVA SANTE as an employer and entering into a new employment contract. | |
A la Date de Transfert, TEVA PHARMACEUTICAL deviendra lunique employeur du Salarié. | At the Transfer Date, TEVA PHARMACEUTICAL will become the sole employer of the Employee. | |
Article 3 : Nouvelles clauses contractuelles | Article 3 : New contractual clauses | |
A compter de la Date de transfert, le Contrat de travail du Salarié sera modifié, lensemble de ses clauses étant remplacé par les termes de laccord signé entre Monsieur Drapé et TEVA PHARMACEUTICAL le Mars 20, 2020, annexé à la présente Convention. | As from the Transfer date, the Employment contract shall be modified, with all of its clauses being replaced by the terms of the agreement signed between Mr. Drapé and TEVA PHARMACEUTICAL on March 12, 2020, which will be attached to this Agreement. |
Le Contrat de travail sera ainsi soumis à compter du 1 Mars 2020, au droit israélien, applicable à laccord précité. | As from March 1, 2020, the Employment contract shall thus be subject to Israelite law, applicable to the aforementioned agreement. | |
Article 4 : Levée de la clause de non-concurrence et non-sollicitation de clientèle applicable au sein de TEVA SANTE | Article 4: Waiving of the non-compete and non-poaching of clients commitment applicable within TEVA SANTE | |
Dans le cadre de la présente Convention, TEVA SANTE libère le Salarié de linterdiction de non-sollicitation de clientèle prévue à larticle 17 de son Contrat de travail conclu avec TEVA SANTE.
La présente renonciation décharge TEVA SANTE de tout paiement de la contrepartie financière qui dépendait de lapplication de clause. |
In the framework of this Agreement, TEVA SANTE releases the Employee from his non-compete and non-poaching commitment provided for by Article 17 of his Employment contract concluded with TEVA SANTE.
This waiver releases TEVA SANTE from paying any financial indemnity relating to the application of this Article. |
|
Article 5 : Transfert de données | Article 5 : Data transfer | |
En signant cette Convention de transfert de son Contrat de travail, le Salarié accepte que les éléments de son dossier soient transmis par la société TEVA SANTE à la TEVA PHARMACEUTICAL afin de permettre la poursuite de son emploi au sein de cette dernière. | By signing this transfer Agreement of his Employment contract, the Employee agrees that his file will be provided by TEVA SANTE to TEVA PHARMACEUTICAL in order to enable the continuation of his employment within TEVA PHARMACEUTICAL. | |
En tant que nouvel employeur, et en conséquence du transfert du Contrat de travail, TEVA PHARMACEUTICAL aura accès à certaines des données personnelles du Salarié (pouvant inclure des données personnelles « sensibles ») afin de respecter ses diverses obligations. Les catégories de données personnelles peuvent notamment inclure : les coordonnées du Salarié, le détail de sa rémunération et toute autre information liée à la poursuite de son emploi. | As a new employer, and as a result of the transfer of the Employment contract, TEVA PHARMACEUTICAL will have access to some of the Employees personal data (which may include sensitive personal data) in order to meet its various obligations. Personal data may in particular include: contact details of the Employee, information regarding his remuneration and any other information related to the continuation of his employment. | |
Concernant les données personnelles qui pourraient être transférées et traitées par TEVA PHARMACEUTICAL pendant toute la durée de lemploi du Salarié, conformément à la loi Informatique et Libertés n° 78-17 du 6 janvier 1978, modifiée en 2018, et le Règlement général sur la protection des données (UE) 679/2016, le Salarié bénéficie dun droit daccès et de rectification aux informations qui le concernent. | Regarding the personal data that could be transferred and processed by TEVA PHARMACEUTICAL during the performance of the employment of the Employee, in accordance with the Data Protection Act No. 78-17 of 6 January 1978, amended in 2018, and the General Data Protection Regulation (EU) 679/2016, the Employee has the right to access and rectify the information concerning him. |
En paraphant la présente page, le Salarié marque son accord explicite aux transferts et traitements des données personnelles sensibles le concernant. | By initiating this page, the Employee expressly agrees to the transfer and processing of sensitive personal data concerning him. | |
Article 6 : Information du salarié | Article 6 : Employee information | |
Le Salarié reconnaît avoir reçu toute linformation nécessaire et avoir bénéficié dun temps de réflexion suffisant pour prendre sa décision en connaissance de cause avant de signer la présente Convention. | The Employee acknowledges having received all the necessary information and has had sufficient time to make an informed decision before signing this Agreement. | |
Article 7 : Langue | Article 7 : Language | |
La version définitive de la présente Convention qui lie les Parties est la version française, la version anglaise de laccord nétant fournie quà titre dinformation. En cas de contradiction entre les versions françaises et anglaises, la version française prévaudra. | The definitive version of this Agreement that binds the Parties is the French language version, the English version being provided for information purposes only. In the event of a contradiction between the two versions, the French version shall prevail. | |
Article 8 : Loi applicable Tribunaux compétents | Article 8 : Governing law Competent Courts | |
La présente Convention est soumise à la loi française et tout litige sy rapportant sera de la compétence exclusive des tribunaux français. | This Agreement is governed by French law and any dispute relating hereto shall be subject to the exclusive jurisdiction of the French courts. | |
Annexe Contrat de travail du Salarié conclu avec TEVA PHARMACEUTICAL | Annex Employment contract of the Employee concluded with TEVA PHARMACEUTICAL | |
Fait en trois exemplaires originaux | In three originals, | |
A Paris, le Mars 20, 2020 | In Paris, on March 20, 2020 | |
Pour la société TEVA SANTE | ||
/s/ Karima ZERHOUNI | /s/ Karima ZERHOUNI | |
Directeur des Ressources Humaines | Director of Human Resources | |
Pour la société TEVA PHARMACEUTICAL INDUSTRIES | ||
/s/ Eric Drapé |
/s/ Eric Drapé Eric Drapé |
|
M. Eric Drapé |
(Chaque page doit être paraphée et les signatures ci-dessus doivent être précédées de la mention manuscrite suivante :« Lu et approuvé » )
(Each page must be initialed and the signatures are to be preceded by the handwritten comment: READ AND AGREED)
Annexe Contrat de travail du Salarié au sein de TEVA PHARMACEUTICAL INDUSTRIES
[Employment contract of Mr. Drapé concluded within TEVA PHARMACEUTICAL INDUSTRIES TO BE ATTACHED]
Exhibit 21
The following is a list of subsidiaries of the Company as of December 31, 2020, omitting some subsidiaries which, considered in the aggregate, would not constitute a significant subsidiary.
Name of Subsidiary |
Jurisdiction of Organization |
|
Actavis Group PTC ehf | Iceland | |
Actavis Pharma Holding ehf | Iceland | |
IVAX UK Limited | United Kingdom | |
Mepha Schweiz AG | Switzerland | |
Merckle GmbH | Germany | |
Norton (Waterford) Limited | Ireland | |
Orvet UK | United Kingdom | |
PLIVA HRVATSKA d.o.o. | Croatia | |
Plus Chemicals, branch of Teva Pharmaceuticals International GmbH | Switzerland | |
Ratiopharm GmbH | Germany | |
Teva API B.V. | Netherlands | |
Teva Canada Limited | Canada | |
Teva Capital Services Switzerland GmbH | Switzerland | |
Teva Czech Industries s.r.o | Czech Republic | |
Teva Finance Services II B.V. | Curacao | |
Teva Italia S.r.l | Italy | |
Teva Limited Liability Company | Russia | |
Teva Pharma S.L.U | Spain | |
Teva Pharmaceuticals Europe B.V. | Netherlands | |
Teva Pharmaceutical Finance Netherlands III B.V | Netherlands | |
Teva Pharmaceuticals International GmbH | Switzerland | |
Teva Pharmaceuticals USA, Inc. | United States | |
Teva Pharm. Works Private Ltd. Company | Hungary | |
Teva Santé SAS | France | |
Teva Takeda Pharma Ltd. | Japan | |
Teva UK Limited | United Kingdom |
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-168331, 333-206753, 333-212851, 333-214077, 333-220382 and 333-241003) and Form S-3 (No. 333-222767) of Teva Pharmaceutical Industries Limited of our report dated February 10, 2021 relating to the financial statements and financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ Kesselman & Kesselman |
Kesselman & Kesselman |
Certified Public Accountants (Isr.) A member of PricewaterhouseCoopers International Limited Tel-Aviv, Israel February 10, 2021 |
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
I, Kåre Schultz, certify that:
1. |
I have reviewed this annual report on Form 10-K of Teva Pharmaceutical Industries Limited; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. |
The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. |
evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. |
disclosed in this report any change in the companys internal control over financial reporting that occurred during the companys most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. |
The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. |
any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: February 10, 2021
/s/ Kåre Schultz |
||
Kåre Schultz | ||
President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
I, Eli Kalif, certify that:
1. |
I have reviewed this annual report on Form 10-K of Teva Pharmaceutical Industries Limited; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. |
The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. |
evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. |
disclosed in this report any change in the companys internal control over financial reporting that occurred during the companys most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. |
The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. |
any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: February 10, 2021
/s/ Eli Kalif |
||
Eli Kalif | ||
Chief Financial Officer |
Exhibit 32
CERTIFICATION OF THE CEO AND CFO PURSUANT TO SECTION 906
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Teva Pharmaceutical Industries Limited (the Company) on Form 10-K for the period ended December 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the Report), we, Kåre Schultz, President and Chief Executive Officer of the Company, and Eli Kalif, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: February 10, 2021
/s/ Kåre Schultz |
||
Kåre Schultz | ||
President and Chief Executive Officer | ||
/s/ Eli Kalif |
||
Eli Kalif | ||
Chief Financial Officer |