Teva seeks to raise capital for the first time in four years
Teva Pharmaceutical Industries Ltd. recently took a significant step by filing a shelf prospectus with the US Securities and Exchange Commission (SEC), signaling its intention to raise capital for the first time since acquiring Actavis from Allergan in 2016. The prospectus enables Teva to issue various securities like American Depositary Shares (ADSs), debt securities, purchase contracts, and units. While the filing doesn’t mandate the company to proceed with the offering, if it does, the proceeds will be allocated towards general business purposes, working capital, and debt repayments.
By the close of 2024, Teva had managed to trim its debt to $17.8 billion from $19.8 billion in 2023, primarily due to a $1.6 billion debt payment and the favorable impact of exchange rate fluctuations. The net debt stood at $14.5 billion, with Teva enjoying an uptick in its debt ratings, as per major ratings agencies. Teva’s last capital raise occurred during the Actavis acquisition, which heavily relied on debt financing, subsequently plunging the company into a financial quagmire.
Looking ahead, Teva is confronted with imminent debt repayments amounting to $1.8 billion in 2025, denominated in Swiss francs and euros. The years 2026 and 2027 will witness even higher debt repayments, peaking at $3.4 billion and $2.9 billion, respectively. Currently under the leadership of CEO Richard Francis, Teva is dually listed on the Tel Aviv Stock Exchange (TASE) and the New York Stock Exchange (NYSE), commanding a market capitalization of $19.8 billion.
This move by Teva comes against the backdrop of analysts maintaining a positive outlook on the company, despite experiencing a sharp decline following disappointing guidance in 2025. Adding to analyst optimism, Teva’s share price surged to a six-year high subsequent to favorable trial results, attesting to the resilience and potential of the pharmaceutical giant in the market.
The decision to raise capital marks a strategic shift for Teva, aiming to fortify its financial position, address debt obligations, and bolster its operational capabilities for sustained growth in the highly competitive pharmaceutical landscape. As Teva sets its sights on this pivotal fundraising initiative, stakeholders, investors, and industry observers closely monitor the developments unfolding within the company. The success of this capital-raising endeavor holds the promise of injecte new momentum and vitality into Teva, charting a course for forging a robust and sustainable future in the pharmaceutical industry.