Teva Pays $750M to Resolve Israeli Tax Issues Going Back More Than a Decade
26 Jun 2024
Pictured: Teva's site in Canada/iStock, JHVEPhoto
Teva Pharmaceuticals on Tuesday announced that it has agreed to pay $750 million to put an end to what it calls a “historical income tax issue” in Israel.
Under an agreement with the Israel Tax Authority, Teva will make its settlement payment in yearly installments, from 2024 to 2029. According to an SEC filing, the Tel Aviv-based company will also pay around $250 million in corporate taxes “relating to additional disputed tax issues.”
Teva has also agreed that in case it pays dividends on or repurchases equity interests, it will pay an additional 5% to 7% of these dividends or repurchases in corporate taxes. Tuesday’s announcement will not affect Teva’s 2024 financial outlook, the company said.
Teva’s case with the Israel Tax Authority involves payable taxes between 2008 and 2020, which the company had assumed it was exempt from.
In its first-quarter 2024 financial report, Teva revealed that it received tax assessment decrees from the Israel Tax Authority for 2008 to 2011, 2012 and 2013 to 2016. The pharma said it filed appeals to various courts in Israel but verdicts were still pending as of the time of the report’s publishing.
With Tuesday’s resolution of its tax litigation, Teva can now focus on its “Pivot to Growth” strategy, which CEO Richard Francis unveiled in May 2023. The strategy is designed to help Teva regain its footing in the industry and plot its path toward short- and long-term growth after years of declining sales.
The Pivot to Growth strategy features four pillars: deliver on growth engines by accelerating its portfolio and biosimilars pipeline, step up innovation in neuroscience, immunology and immuno-oncology, maintain its core generics business and increase its focus on its business, while optimizing its operations and deepening its portfolio.
Since launching the strategy, Teva has notched victories for its generics and biosimilars business. In February 2024, the company won FDA approval for its Alvotech-partnered biosimilar to AbbVie’s Humira (adalimumab). Branded as Simlandi, the biosimilar is a high-concentration, citrate-free and interchangeable product to Humira.
In April 2024, Teva and Alvotech also secured regulatory approval for Selarsdi, their biosimilar to Johnson & Johnson’s blockbuster therapy Stelara (ustekinumab).
Earlier this week, Teva announced that it launched the first-ever generic version of a GLP-1 therapy, copying Novo Nordisk’s Victoza (liraglutide). Like the branded reference product, Teva’s generic is indicated for type 2 diabetes.
Tristan Manalac is an independent science writer based in Metro Manila, Philippines. Reach out to him on LinkedIn or email him at tristan@tristanmanalac.com or tristan.manalac@biospace.com.
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