Richard Francis: Then on the second question you asked, Chris, around international, pleased to see you’re seeing the good growth there in 2023 and the continued ambitions for 2024. That’s primarily driven by prioritization, continued market expansion, but really making sure we focus on the markets that can deliver. Our team there has done a tremendous job in doing that, and so we’re making sure the prioritization of our resources goes to the markets that drive top line and also bottom line, which is a sub-component of our Pivot to Growth strategy. Hopefully that answers both of your questions, Chris, and thank you for them.
Operator: Thank you. Our next question comes from Balaji Prasad of Barclays. Your line is now open, please go ahead.
Balaji Prasad: Hi, good morning everyone, and thank you for the questions. A couple, just firstly on both your Q4 performance and the 2024 outlook, which is very strong, midpoint higher than the highest Bloomberg estimate I see. It looks like this has been drowned in the aftermath of the restatement, going by the stock reaction, so can you please provide more color on how this happened and the implications for this after this one-time restatement? Secondly on your partnership with Alvo, considering that Teva is having greater involvement in the biosimilars facility inspection, looking at the FDA letter that Alvotech has received, the 483 is related to FDA observing frequent sanitation of operators, so help us understand how easy or difficult it is to address this issue and in general, what is a normal resolution which the FDA can accept for such observation? Thank you.
Richard Francis: Thanks Balaji, I appreciate the question. I’ll start with the second question and then I’ll hand the first question over to Eli. With regard to the Alvotech partnership, correct, we have been heavily involved in helping them. I think I’ve said in the past, I think we have around about 30 FDA inspections a year across our 54 sites, so we’re very proficient at dealing with this and we’ve given that guidance and help to Alvotech. I think with regard to the observations that you’ve seen, the one observation, I think for us, that is considered a relatively small observation. What I’d caution is with the FDA, it’s entirely up to them to give their view on whether that allow us or allows Alvotech to have that site cleared, but we think that is a good inspection which show the huge amount of work that’s being done at that site to make it approvable by the FDA.
But I must caution, the FDA have to approve the site first, so what I’d say, I think Alvotech have put themselves in a very good position, but we’ll have to see how that plays out. Then to answer the first question, I’ll hand it back to Eli.
Eli Kalif: Thanks Balaji for the question. Yes, so as part of our preparation for the consolidation statement for ’23, we determined that there were errors in a single contingent consideration liability and related expenses, which connected to the estimated future of royalty payments, and those errors resulted from exclusions of some payments related to royalties, and in that way the fair value and the revision, we need to recalculate. We assessed the materiality of those errors and determined that those errors were not material to each one of those periods, ’22 and ’23. About the revisions of the numbers, which is not a restatement, we actually implemented them in those financials. I would like to mention that those errors did not impact at all our non-GAAP results, as well as not impacting at all our total cash flow from operating activities from financing activities, investing activities.
As we speak, we are in progress and process to implement a remediation plan to address this internal control.
Balaji Prasad: Thank you.
Richard Francis: Thank you Balaji.
Operator: Thank you. Our next question comes from Nathan Rich of Goldman Sachs. Your line is now open, please go ahead.
Nathan Rich: Great, good morning, and thanks for the questions. I wanted to follow up on the North America generics business. I think Richard, in response to an earlier question, you had talked about stabilization in the North American generics business in ’24. I guess, does that mean we should be annualizing the 4Q revenue run rate, or is that more of a flat year-over-year relative to 2023 comment? Then maybe a longer term question on pricing. Some of the PBMs have talked about moving to cost-plus drug reimbursement. Just curious if you would expect that to have any longer term impact on generic pricing for the industry.
Richard Francis: Hi Nathan, thank you for your question. I think when it comes to North America, one thing–what we talk about is, and I think we talked about this early on in the Pivot to Growth, we want to stabilize the U.S. generic business in particular and then get it back to growth. I think what you see here is with the number of launches we’ve had, that we have an opportunity to do that. Now, whether that tips into growth or whether it tips back into flat stabilization, we’ll have to see how it plays out. The reason for the hesitation in being absolutely definitive is because of what you talked about around pricing and what the erosion will be next week–not next week, next year, and also with the number of launches we have, how many competitors come in and how they play out, so there’s a lot of variables within that.
