Teva's 3 Key Branded Drugs Grew Sales 33% Last Quarter. Is This Turnaround Stock a Buy Right Now?

Combined sales across its three main innovative growth drivers, including tardive dyskinesia treatment Austedo, migraine therapy Ajovy, and schizophrenia treatment Uzedy, rose 33%, year over year, to $1.1 billion for the quarter. That helped offset the company's generics sales of $2.16 billion, down 16% from the same quarter a year ago.

The new drugs helped Teva improve gross profit margin from 51.4% in the same period a year ago to 55.5%, while non-GAAP gross profit rose by 345 basis points to 58.7%, the highest it has been in a decade.

The company is in the process of launching another promising branded therapy, Weltruza, a once-monthly subcutaneous injectable for adults with schizophrenia. It was approved on Oct. 9 by the Food and Drug Administration (FDA). The company estimates there are roughly 2.2 million people in the U.S. with undiagnosed schizophrenia, with an annual sales potential of $1.5 billion to 2 billion.

Ecopipam, a treatment for pediatric Tourette syndrome, is expected to be approved in the first half of 2027. It affects nearly 100,000 worldwide. The company is also hoping to launch the DARI asthma inhaler as early as next year.

Getting listed on the NYSE could be a game changer

Teva completed a major equity milestone by terminating its legacy American Depositary Shares (ADS) program and transitioning to direct trading of ordinary shares on the NYSE on Sept. 14. This conversion removed extra depositary fees for investors and streamlined foreign tax handling, bringing Teva into line with standard U.S. corporate equity structures.

Teva is dual-listed on the Tel Aviv Stock Exchange, but the NYSE serves as its primary market liquidity engine. The NYSE listing gives U.S. institutional funds, active asset managers, and retail investors direct, frictionless access to trade the equity in U.S. dollars.

Maintaining high visibility on the world's largest stock exchange reinforces the company's identity as a global biopharmaceutical leader rather than just a regional domestic player.

Biosimilars are growing faster than anticipated

Teva reached its original 2027 target of $800 million in annual biosimilar revenue a year early, in 2026. Expanded partnerships, including its recently announced commercialization agreement with Samsung Bioepis for biosimilars to Remicade and Enbrel, are establishing a durable secondary pipeline to backstop generic erosion.

The company spent $297 million on research and development in the third quarter, up 16% year over year, with the payoff being a more robust pipeline of biosimilars, as well as immunology and neuroscience therapies.

The company has 15 biosimilars in its pipeline and says it has the potential to develop more than 31 by 2030.

It has improved its balance sheet

Since 2019, Teva has paid down roughly $12 billion in total debt, a hangover from legacy acquisitions and legal settlements, driving toward its target leverage ratio of 2.0x net debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) by the end of 2027.

Over the past decade, it has decreased quarterly net debt by 61%.

Major rating agencies (Moody's, S&P, and Fitch) upgraded Teva back to investment-grade status, enabling the company to successfully refinance $4.9 billion of debt on more favorable terms.

However, challenges remain

The turnaround is not without headwinds. U.S. generic revenues dropped 39% year-over-year to $718 million in the quarter due to intense market competition.

The company is on track to see a slight decline in revenue this year. It also saw earnings per share (EPS) fall 47% year-over-year to $0.20 in the third quarter.

Maintaining growth depends entirely on the continued commercial ramp of its innovative portfolio, supplemented by recent product approvals such as Weltruza to offset the natural drag of legacy commoditized generics.

However, the company appears headed in the right direction and, despite its rise this year, remains a bargain, trading at less than 21 times forward earnings.