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Teva Pharmaceutical Industries Limited (TEVA) Q1 2019 Earnings Call Transcript

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Teva Pharmaceutical Industries Limited  (NYSE: TEVA)
Q1 2019 Earnings Call
May. 02, 2019, 8:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Good afternoon, ladies and gentlemen, and welcome to the Teva Pharmaceutical Industries First Quarter 2019 Financial Results Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advise you that this conference is being recorded today on Thursday the 2nd of May 2019.

I would now like to hand the conference over to your first speaker today Kevin Mannix, Senior Vice President, Investor Relations. Please go ahead.

Kevin C. Mannix -- Senior Vice President, Investor Relations

Thank you, Jenny, and thank you everyone for joining us today to discuss Teva's First Quarter 2019 Financial Results. We hope you've had an opportunity to review our earnings release which was issued approximately one hour ago. A copy of this release as well as a copy of the slides being presented on this call can be found on our website at www.tevapharm.com, as well as through our Teva Investor Relations app.

Please note that the discussion on today's call includes certain non-GAAP measures as defined by the SEC. Management uses both GAAP financial measures and the disclosed non-GAAP financial measures internally to evaluate and manage the Company's operations to better understand its business. Further, management believes the inclusion of non-GAAP financial measures provides meaningful supplementary information and facilitates analysis by investors in evaluating the Company's financial performance, results of operations and trends. A reconciliation of GAAP to non-GAAP measures is available in our earnings release and in today's presentation.

To begin today's call Kare Schultz, Teva's Chief Executive Officer, will touch on highlights of the quarter. Our Chief Financial Officer, Mike McClellan, will follow by reviewing the first quarter results in more detail. Brendan O'Grady, Teva's Head of North America Commercial will join Kare and Mike for the question-and-answer session that will follow the presentation.

And with that, I'll now turn the call over to Kare Schultz. Kare, if you would please.

Kare Schultz -- President and Chief Executive Officer

Welcome everybody and thanks for dialing in. The short message for the first quarter of 2019 is that everything is on track. Basically, the revenue is on track, the launch is on track, and the cost reduction program is on track, and the debt reduction is also on track. And as a consequence of that, we are reaffirming our financial outlook for the year.

If we look a bit more the details, then revenues came in at $4.3 billion, that was after $200 million of headwind on the currencies. The GAAP diluted loss per share was $0.10 and it was mainly related to writedowns on intangible assets. The non-GAAP diluted EPS was coming in at $0.60 according with our plans. Same thing for EBITDA, coming in at $1,150 million and the free cash flow which came in at $360 million.

We're seeing a stabilization of US generics and European generics, so that in which we're seeing a stabilization of our global generics business. You probably remember a year ago, where we took significant action to stop the declining value of the US generic business by basically going out and saying that we would not be selling products at a loss and streamlining our whole portfolio of generics. When we had the half year results last year, I was indicating that we were seeing signs of stabilization but we couldn't be sure about it. And when we shared the full year results three months ago, we confirmed that now we had seen a stabilization. This is further confirmed by this first quarter. We now have five quarters in a row where the North American generics business is around $1 billion in revenues per quarter and where the European revenue is around $900 million and of course with some exchange rate swings. So that's important that it has worked. We are now having a stable business in our generics, of course helped by ongoing launches, and by strong key products.

In terms of products, we have good success with AJOVY. It's growing nicely. I'll get back to that, and same thing for AUSTEDO. Both products are growing nicely. I'll comment on that. I'll also comment on COPAXONE where we have, of course, see a continued loss of revenue due to the generic competition. And then we are very excited about the launch of AJOVY that's coming off in the EU, following the approval by EU in April of this year.

On the spend base, we will be achieving our two year target of $3 billion reduction, I'll share some more details about that. And that's of course partly due to the site consolidation, closing manufacturing sites all around the world, but it's also due to general savings in the whole P&L. The net debt has been decreasing by $0.5 billion and we are now at $26.7 billion, and we have $1.6 billion scheduled for repayment in the middle of this year.

Let's have a look at the spend base and the restructuring progress we're making. So this is a chart where we compare the starting point, the $16.3 billion we had in total spend in 2017. That was the basis for our restructuring program where we said that during 2018/2019 we would reduce the spend base by $3 billion, getting to a full year spending of 2019 of $13.3 billion. So that's the target, $13.3 billion.

Now in the middle here, you have the MAT, which is of course constantly moving down as we reduce cost. And the MAT for the first quarter looking back four quarters is standing at $13.8 billion, and that indicates that we will hit the restructuring target, but what indicates it even more is that if you check the first quarter total spend then it comes out at $3.3 billion, which basically indicates that we are at the restructuring target level right now and that's of course very satisfying. This has not been an easy exercise. There's been a lot of site consolidation, both manufacturing sites, administration sites and there has been a lot of good people leaving our Company, more than 10,000 people, since we initiated the restructuring plan. More people will leave this year. It's basically all announced, but it's a consequence of delays in winding down factories and doing different changes at different sites. So we'll see further reduction of several thousand employees during this year.

Now we can't succeed by just cutting costs, we also need to grow our revenues, and the two key drivers here AJOVY and AUSTEDO. And if we take a look at AJOVY first, then you can see we have a very steady increase in patients in weekly scripts. The weekly script count is approaching 10,000, which we hope to hit in a couple of months. And you can see that the NBRx shares of the new-to-brand share is hovering just below 30%, between 28% and 30%. That basically means that of course long-term the NBRx share gets translated into -- NRx gets translated into TRx. So right now we're sort of targeting somewhere between you could see 28% and 30%.

If this stays the way it is right now, we have sales of $20 million net sales in the first quarter, that's of course only a fraction of the, you could say, the nominal product sales, and that's -- as you know because we are still supporting patients to get on the brand and for that reason we have a low -- very low niche sales. That's not the consequence of the discounting we're doing. It's a more consequence of the fact that we pay for patients to get on brand, and then if they have insurance, we will on a gradual basis over the year increase the cash that we're collecting for these patients.

8% of the scripts are on quarterly dosing, which roughly translates into some 20%, 25% of all our patients being using the product on a quarterly basis. And we have strong growth in the number of prescribers and we have good access by now. So all-in-all, we are very, very happy about the progress of AJOVY and we do very much look forward to launching this great product which helps people with chronic migraine in Europe. And I can just point to you also that we just released long-term data on AJOVY, long-term clinical data, and it's really phenomenal good data. We still see 60% plus people having more than halving of their migraine days and on episodic migrane we will see two-thirds of people having more than halving of their migraine days. So really good encouraging long-term clinical data also.

If we look at AUSTEDO. AUSTEDO is growing very, very nicely as well. You can see both the TRx numbers, the patient numbers and the revenue is growing nicely. We do expect to hit our target for the year which is $350 million in sales, and we are having very favorable national formulary coverage both in Commercial and Medicare Part D. So as you know, we've discussed before, in tardive dyskinesia, there's huge unmet need. If you look at these TRx counts per quarter, then you should compare it to that in tardive dyskinesia alone. That's probably 500,000 patients in the US suffering from this condition. It had no real efficacious therapy before. But with this drug, they now have a drug that's indicated 400,000 (ph) and we are very optimistic about the future growth of AUSTEDO both in patient numbers and in revenue.

If we take a look at COPAXONE, then we continue to see generic competition, of course, and we see a steady increase in the volume that goes to generic brands. Right now, we are sort of at the level where we had just below 70% share in the last couple of months. Last year we had around 75% share. So we've lost some share points that typically happens when the managed care contracts reset, which is the 1st of January. So what we saw in the first quarter was that we lost some volume in the market, and then we had a double dip, because then the wholesalers reduced their inventories because they were seeing lower volumes. So probably half the reduction you see here in quarterly sales is due to the ongoing reduction in volume and the other half is related to the blip of the first quarter and we can see that it's more normalized in what we see in the beginning of the second quarter. So all in all we are now expecting to have some $800 million in US revenues for COPAXONE in this year. And of course in the coming years, we will keep on sliding and we maintain the level of reduction of around roughly 45% in revenue per year in reduction of COPAXONE revenues.

With that, I will hand over to Mike, who will give you some more details on the financials.

Michael McClellan -- Executive Vice President, Chief Financial Officer

Thank you, Kare, and good morning everyone. We'll start with the review of our GAAP performance on Slide 10. Teva posted a quarterly GAAP loss of approximately $105 million and the loss per share on a GAAP basis of $0.10 for the first quarter of 2019. As we'll detail on the next slide, the GAAP results were impacted mainly by impairment charges and recurring amortization.

So turning to Slide 11. In the first quarter we experienced non-GAAP adjustments amounting to an impact of $759 million on net income. The adjustments primarily consists of the impairment of intangible assets and product rights amounting to $364 million and amortization charges of $283 million for the quarter, which is the new run rate level for amortization for the year.

Now turning to our non-GAAP performance on Slide 12. Quarterly revenues were $4.3 billion, a decrease of 15% compared to the same period in 2018. The decrease was mainly attributable to generic competition to COPAXONE totaling $310 million; a decline in our respiratory and oncology products totaling $223 million; and a decline in our North American generic sales totaling $122 million. This was partially offset by growth in Anda, AUSTEDO and AJOVY.

Compared to the same period in 2018, we experienced a negative foreign exchange impact of $177 million in revenues. Net of FX revenues for the quarter decreased 12%. Gross margin was 50.1% compared to 51.7% for the same period in 2018. The change in gross margin was driven by the decline in sales which I just highlighted, partially offset by an increase in generic profitability and the discontinuation of our OTC joint venture, as a part of the profit share of the joint venture was previously recorded against cost of goods sold.

Operating profit in the quarter declined by 29% compared to the same period in 2018. The decrease was mainly attributable to the decline in COPAXONE and other specialty brands, which I just mentioned, as well as other -- lower other income. This declined by $104 million this year versus last. The higher other income in the first quarter of 2018 was mainly due to Section 8 recoveries from multiple cases in Canada that did not repeat in 2019. These declines are partially offset by our ongoing cost-reduction program.

Non-GAAP earnings per share in the quarter was $0.60, 36% or $0.34 lower than the same period a year ago. The decrease was mostly due to lower operating profit, partially offset by lower tax provision. We'll talk a bit more about the trends in revenue and cash flow later in the presentation.

So turning to Slide 13, we've been highlighting for several quarters now including our 2019 guidance provided in February. The impact of the stronger US dollar on our results has approximately 49% of our revenues come from sales denominated in non-US dollar currencies. We see that the exchange rate movements during the first quarter of 2019 had a negative impact of $177 million on revenue, while the impact on operating profits was much more modest at $58 million. The main currencies relevant to our operations that decreased the most in value against the US dollar were the euro, Russian ruble, Argentinian peso and Israeli shekel.

So turning to Slide 14, I would like to highlight some of the revenue trends we've been seeing throughout the different segments and regions. Starting with North America, I'd first like to highlight again the performance of our two most recently launched franchises, AJOVY and AUSTEDO. Both are on track to achieve our annual sales guidance of $150 million and $350 million respectively. Despite our North American generics business losing two exclusivities from the fourth quarter of 2018, the business generated $966 million in the sales and averaged approximately $1 billion in sales for the last five quarters.

North American COPAXONE sales experienced their second consecutive significant quarterly decline, dropping by more than 40% compared to the fourth quarter of 2018 to $208 million as the pace of generic erosion picked up leading the share loss and destocking at the wholesale and retail level. In addition, we did see some price pressure in the first quarter compared to the end of 2018. The current annual run rate is now expected to be around $800 million for the US in 2019 versus our previous estimate of approximately $1 billion as we see sales leveling out this year about the first quarter level.

ProAir revenues rebounded in the first quarter compared to the fourth quarter, which had been impacted by higher sales reserves recorded in anticipation of generic competition, including the approved generic versions of Ventolin HFA, and Proventil HFA. We launched our own ProAir HFA authorized generic at the select customers in January 2019, and these sales are captured in North American generics.

Teva recovered nicely in the first quarter to $64 million, a level which we see as a good quarterly run rate for 2019. And sales of Treanda/Bendeka declined versus both one year ago in the fourth quarter, mainly due to the introduction of a competing bendamustine solution or Big Bag in May 2018.

Revenues in Europe grew 5% compared to the fourth quarter on the strength of our generic sales, including OTC products. They're historically strong in the first quarter due to the cough and cold season. Our International Markets are down 10% sequentially from Q4, due to expected weakness in our sales of generics in Japan. We do attribute some of the regions weakness to seasonality. I'd expect the business to pick up from this level later in the year, but still be below our 2018 sales for the full year as we guided in February.

Lastly, other sales were down 16% sequentially. This is primarily -- this line primarily consists of sales of APIs to third parties, certain contract manufacturing services and an outlicensing platform offering portfolio products to other pharmaceutical companies through our affiliate Medis. The decline is primarily due to a reduction of low margin sales in our contract manufacturing business.

So turning to Slide 15. Free cash flow for the quarter was $360 million, a decrease of $162 million versus the fourth quarter of 2018, primarily due to the annual incentive payments. Looking to the remainder of the year, we expect free cash flow generation to be stronger in the second half versus the first half as we move through the current working capital drag on receivables and bonus payments that I highlighted in February.

Turning to Slide 16. We ended the first quarter with a net debt of $26.7 billion, and a net debt-to-EBITDA ratio of 5.45. We did use some excess cash in the first quarter to repurchase approximately $100 million of bonds due later in 2019. During April, we also entered into a new $2.3 billion unsecured syndicated revolving credit facility, which replaced the previous $3 billion revolving credit facility that we have.

So now turning to our financial outlook for 2019 on Slide 17. Today we are reaffirming our annual guidance that was presented in February, including an earnings per share in the range of $2.20 to $2.50.

This now concludes my remarks on the quarter. We will open it up for Q& A. So operator, if you would please?

Questions and Answers:

Operator

Absolutely. Thank you very much. Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) And our first question today is from the line of Ken Cacciatore from Cowen and Co.

Ken Cacciatore -- Cowen and Company -- Analyst

Thank you so much and good morning. Just my question is on the cash flow. Mike, you alluded to some of the puts and the takes, but just wondering as we are working through all the cost reduction, we do seem to be pretty tight on operating cash flow and what we're yielding. Just wondering, can you start giving us a sense to what degree this may drive deeper cost reductions? Any urgency to continue to go beyond the $3 billion, and can you give us any road map to how you would achieve that? Thank you.

Michael McClellan -- Executive Vice President, Chief Financial Officer

Yeah, so let me start and say, the first quarter is affected by of course a few items that you don't see in the third and fourth quarter of last year. We have the annual incentive payments that are coming out, that's about $300 million. You're also seeing as normal in the first quarter a little bit of an inventory increase as the factories get back to full capacity after the Q4 holiday shutdown. We also continue to see a little bit of a drag on accounts receivable that I mentioned in the February guidance that we received this year. So all in all, I think we'll see better cash flow in the second half than the first half. Now of course we monitor this very closely. As we go into next year, we'll continue to look to make efficiencies in terms of our cost of goods and other places. But at this point, it's a little early to tell you that we're going to have net savings beyond the $3 billion.

Maybe I'll let Kare give you a little bit of his perspective on that as well.

Kare Schultz -- President and Chief Executive Officer

Yeah, of course, we have the aim to become as effective as any of our competitors, which means that longer-term we need to improve our margins which is why we have a long-term financial target of an operating margin of 27%, which is higher than where we are right now. So, of course, in order to achieve that, we need to set plans in place so that this happens. Our plan right now is to communicate more broadly on this once we finish this year. So once we finish the restructuring of '18 and '19, we will communicate to you what is our strategy for manufacturing and for that part of the cost base.

Ken Cacciatore -- Cowen and Company -- Analyst

Thank you.

Kare Schultz -- President and Chief Executive Officer

Thank you.

Operator

Thank you. Our next question is from the line of Navin Jacob from UBS. Please go ahead.

Navin Jacob -- UBS -- Analyst

Hi. Thanks for taking the question. Just on AUSTEDO, if you could. Previously you were highlighting patient, now you're highlighting prescriptions, just wondering if you could give us a similar metric that you've done in the past with regards to patients?

Kare Schultz -- President and Chief Executive Officer

Yeah, I'm sure we can do that, at least give you a feel for it. There is of course a very close correlation between the two. So I don't think there is a big difference. But I'll just hand it over to Brendan to see what we think about the patient number.

Brendan O'Grady -- Executive Vice President, North America Commercial

So thanks for the question. We see the patient number continue to grow. We're very happy with where we're with AUSTEDO currently, and the growth in AUSTEDO from Q4 and Q1 continues. We've seen very strong demand so far in Q2 as well. So from a patient numbers perspective, I think the numbers continue to grow as well as the revenue, and we're heading toward achieving our goal of $350 million for the year.

Navin Jacob -- UBS -- Analyst

And just a follow-up, on US generic pricing, are you seeing any acceleration in price erosion in Q1 relative to Q4, and just some commentary on the overall landscape for 2019?

Kare Schultz -- President and Chief Executive Officer

Yeah I can give you the overall and then Brendan can comment on. If you take a macro view on it, and that's confirmed by various external sources, then it is quite clear that we don't see any deterioration from Q4 to Q1. If anything, we see a continued stabilization of the US generic pricing levels.

Brendan O'Grady -- Executive Vice President, North America Commercial

Yeah, the only thing that I would add to that Kare is that our assumptions for pricing are exactly where we thought they would be and so we continue to march along that path.

Navin Jacob -- UBS -- Analyst

And as you just annualized out of the portfolio optimization in the US, I know you're still doing optimization ex US, but in the US, it sounds like you're close to completing optimization here. Will there be a rebound in price erosion after that's annualized?

Kare Schultz -- President and Chief Executive Officer

So yeah, we've completed the exercise here in the US and we've gone through that. I don't expect there to be a rebound. We continue to have a competitive marketplace and we respond, but I think we've seen most of that work its way to the system.

Navin Jacob -- UBS -- Analyst

Thank you very much.

Operator

Thank you. Our next question is from the line of Gary Nachman from BMO Capital Markets. Please go ahead.

Gary Nachman -- BMO Capital Markets -- Analyst

Hi, good morning. Kare, after 1Q results, you remain confident you could return to growth in 2020 both with revenue and EBITDA even with a lower COPAXONE level that you highlighted? And then just on AJOVY, how is this market shaking out relative to your expectations? Lilly has stepped up efforts recently with Emgality. Just talk about the resources you're putting behind AJOVY to compete effectively with both Lilly and Amgen? Thanks.

Kare Schultz -- President and Chief Executive Officer

Thanks, Gary. I'll give you the shot at both questions and I'm sure Brendan can give you some more color on AJOVY. If we look at the earnings and the revenue, then you could say if COPAXONE comes in lower than we expected for this year, it's actually a benefit for next year, because then there is less to lose. So this is kind of like a negative scenario. Moving faster you get out of it in a way it's easier to get away from it. So in that sense, it's not bad that we hit the earnings and revenue that we're projecting in the first quarter with less COPAXONE. That's actually good for us.

So I still expect this year to be the trough year, which basically means that we expect to see better earnings in 2020 than 2019. Whether we will exactly see the revenue, it could depend on what happens to for instantly orphan drug designation for BENDEKA. Right now we have it, and looks good for TREANDA and BENDEKA. We hope to keep it. But of course there can be swing factors. But I don't think there will be swing factors on the revenue that we cannot offset on the earnings.

So definitely 2019, I still expect that to be the trough year for earnings, and then revenue we'll just have to wait and see the details. But of course the lower COPAXONE comes out of this year, the bigger a chance that we also have this year as a trough year for revenue, because COPAXONE then will lose less in 2020. And we will have AJOVY and AUSTEDO growing. As we've explained many times, this year we expect to hit the $150 million for AJOVY, $350 million for AUSTEDO, and of course substantially more in 2020.

In terms of the dynamics, I won't really comment on the competitive products, because they should ask competition, but I can at least share with you that the dynamics are in a way very much as we expected for our product, AJOVY, but it's a little different from the whole market, because the number one to launch normally holds a good grip on the market. That's not the case right now. The neutral brand for the first launch is actually going down very fast, and the last to launch is actually doing very well. So that's not the normal situation.

There is a slight difference in the mechanism of action between the first to launch and the two next ones. So AJOVY and the last one's launch. We have the same basic mechanism of action, which is by the way why we think that there's a Company that has to pay royalty to us, not just in Europe where they have agreed to do it, but also in the US, but that's a site issue. So we're basically seeing that the product that we have in Lilly has -- seems to have some clinical benefits which are helping us in the marketplace. So we're very happy with this 28% to 30% we are holding right now, and I think that's the kind of level you should expect and we will be holding going forward maybe with some bigger dynamics between Amgen and Lilly.

But on what we are doing, maybe Brendan you can say a bit more about that.

Brendan O'Grady -- Executive Vice President, North America Commercial

Yes. Thanks Kare. So as Kare mentioned, we're very happy with where we are relative to the CGRP market. The product has been well accepted by physicians. We're doing very well in headache centers and with neurologists, which is a big focus. Of course we have the prefilled syringe, the other two have the autoinjectors. So while that isn't a significant issue in a once-a-month injection, I think that is a little bit of a drag on our new-to-brand share. We hope to introduce the autoinjector later this year so that I think will give us another catalyst.

And as Kare mentioned, we're very happy with our overall product offering. Once we get the autoinjector into the market, I think that we will have a profile that is, we will be very competitive with our quarterly dosing, two different versions in a prefilled syringe and an autoinjector.

And from a commercial perspective, we have the rightsized sales force out there focusing both on neurologists, as well as high decile so called non-neurology writers. And so we've got a competitive share of voice, we continue to monitor that very closely. And we think that we're effectively resourced right now to compete and we'll continue to do so. So we're very bullish as you know on AJOVY and happy with where we are.

Gary Nachman -- BMO Capital Markets -- Analyst

Okay. Thanks for that color.

Operator

Thank you. Our next question is from the line of Liav Abraham from Citi. Please go ahead.

Liav Abraham -- Citi -- Analyst

Good morning. You noted $800 million of US COPAXONE revenue this year. Are your expectations for ex-US COPAXONE revenues the same as when you provided guidance in February? So basically are you saying, are you now assuming full year COPAXONE revenues of $1.3 billion, if you can just confirm that. And then, as it relates to the gross margin. I'm interested in any comments on gross margin developments in 2019 or is that your prior expectations given slightly lower expectations for US COPAXONE revenues? Thank you.

Kare Schultz -- President and Chief Executive Officer

Thank you. I'll answer the first question on COPAXONE revenues, Liav, and then Mike will explain what we expect for the gross margin. So you're absolutely right that we have an expectation of around $500 million for the rest of the world on COPAXONE. That is completely unchanged. So that of course adds up to $1.3 billion. There is a little color on it which is only very positive, and that is as you might have noticed, the European patent authorities have had a look at our COPAXONE patents and have upheld the patents.

Now it's a little complicated structure in Europe because, once the European authorities they upheld the -- they uphold the patent, then of course you need to go out and enforce that in each of the countries. And we're in the process of doing that, but this actually has the potential of securing our COPAXONE revenues at a higher level going forward in Europe than we were predicting a year ago. So we're quite optimistic about the, let's say, the stickiness of the COPAXONE revenues outside of the US.

Michael McClellan -- Executive Vice President, Chief Financial Officer

Yeah, so in terms of gross margin, Liav, I think if you look at the full year, you're probably going to see something very similar to the first quarter, maybe some little swings in up and down, but we do expect to cover the slight downside in COPAXONE with some other products. And we're seeing a slightly better margin in our generics business. So overall, I think you're going to see us be somewhere in the range for the full year that you saw in the first quarter.

Liav Abraham -- Citi -- Analyst

Thank you.

Operator

Thank you. Our next question is from the line of Esther Rajavelu from Oppenheimer. Please go ahead.

Esther Rajavelu -- Oppenheimer -- Analyst

Thank you for taking my question. On AUSTEDO, can you share any prescriber feedback on potentially switching patients over to AUSTEDO in the second of the year? And then more broadly, can you comment on the pricing environment for AUSTEDO and how you see that trending as the year progresses?

Kare Schultz -- President and Chief Executive Officer

Sure, I would be happy to comment on both. As far as the switching from -- either from Ingrezza to AUSTEDO, which I'm guessing is the essence of the question. I think that both of the products are competing in a very early market. Tardive dyskinesia is a highly unserved -- unmet -- there is a high unmet need in that population and there's a lot of market growth for both products. I don't have any specific data to share with you about failures of one going and the other, and I would be just speculating if I did. So I will just reserve my comments to say that AUSTEDO is first-line therapy in doing well in competing with Ingrezza.

As far as the pricing environment, the pricing environment is relatively stable. We have been proactively working with payers both in the Commercial side and the Part D side since launch, and I think that goes to show when you look at our access coverage, I think 89% in Part D and 85% in commercial or maybe vice versa. But certainly high in both and we do enjoy some advantages and access that our competitors does not. As far as their contracting strategy, I can't really say, but pricing is not really a concern as far as rapid continued erosion.

Esther Rajavelu -- Oppenheimer -- Analyst

Got you. And then on AJOVY, maybe taking a step back on the larger migraine market. Can you share your thoughts on potential impact on MAT usage if and when oral CGRPs get to market for prevention. How does that affect the access environment and your messaging to prescribers?

Kare Schultz -- President and Chief Executive Officer

So I think that this is still a rapidly forming market. There are still -- there is 36 million migraine patients, potential patients out there. So there's still a huge unmet need and we continue to see volume and demand grow for all three of these agents. There is a potential infusion on the horizon as well as oral. We'll wait and see what the oral profile looks like. We will then have the same efficacy profile, the same side effect profile, I don't know. We've to wait and see when that happens, but I think that a monthly injection, and in our case, a quarterly regimen is an extremely convenient way to address this problem. And remember, we competed with a daily injection amassing in an oral world or even against weekly injections and now 3 times a week.

So I don't think -- I think that the market will continue to expand and certainly if more competitors come into the market, those are potential threats. But I think we're happy with the profile that we have with AJOVY and we have plans for a significant future growth.

Esther Rajavelu -- Oppenheimer -- Analyst

Great. Thank you very much.

Operator

Thank you very much. Our next question is from the line of David Maris from Wells Fargo. Please go ahead.

David Maris -- Wells Fargo -- Analyst

Good morning. First, you previously provided guidance for revenue EPS and the EBITDA in the press release. You say that you are reaffirming your revenue and EPS guidance. I just wanted to confirm whether or not the previous EBITDA guidance of $4.4 billion to $4.8 billion still stands?

Secondly, if you could detail what the impairment were specifically just -- since you took impairments, large impairments on the Actavis business previously?

And then lastly, there is a lot of drama this quarter especially related to the start on opioid liability. I know there is disclosure in the filings, but is there any context that you can provide or commentary that you can provide to give us some context around this issue? Thank you.

Kare Schultz -- President and Chief Executive Officer

Thank you, David, for those questions. I'll do the first answer, because that's easy, and then the impairments Mike will comment on that and I'll comment on the opioids. So we're confirming the whole financial -- reaffirming the whole financial outlook including the EBITDA, and it's of course like you said between $4.4 billion and $4.8 billion. So it's a whole thing that we're confirming and that's also what you have on the slide that we just showed. So that's a very straightforward answer. Mike on the impairments?

Michael McClellan -- Executive Vice President, Chief Financial Officer

Yeah, so there was probably about an even split of that $350 million in the US between IPR&D and assets on the market. We have a large amount of intangibles and every quarter we look to see if there's changes in the market or changes in the development profile of the IP and R&D assets and we make the determination for those who no longer consist saying their carrying value that we're writing down. So we had like you said $350 million. Of course the majority of that toward assets that were purchased in Actavis acquisition, but as we have a large balance sheet, we will see this occasionally and we've been seeing them almost on a quarterly basis as there's always fluctuations in timing and the impact of these kind of products in the market.

Kare Schultz -- President and Chief Executive Officer

And then on the opioids, of course, we can't say very much about the ongoing legal proceedings. But I can share with you that of course we share the assessment that the misuse of opioids, both you would say prescription based but also illegal opioids is a significant healthcare problem and a significant problem for the US. And this problem has been created over a long period of time and is very difficult to tackle.

It is -- from our point of view, sad to be accused of being a part of creating this problem, given the fact that what we do is we manufacture and provide generic products where we do not do any promotion whatsoever and where we have exact labeling that came from the originator products. So we are not involved in any kind of promotion of our generic products. And a few specialty products we had, they are actually for thermally ill cancer patients who are already on opioid therapy and who get breakthrough pains. So these are people in a very, very tough and sad situation. The products are covered by very significant rims. So a risk litigation mandated by FDA. They are distributed under very, very strict control, and we have always lived up to all the requirement, both at the rims and on the restriction in how we sell the products reporting everything to FDA and relevant authorities.

So really from my point of view, I can't see anything which we've done which is wrong given the law and the rules of pharmaceutical manufacturing and sales in the US. But however, it is a political issue and I would say it's a very politically sensitive legal situation on the opioids. I would not be surprised if these proceedings go all the way to the Supreme Court eventually, because it is a principal thing whether you can -- in anyway be sort of being responsible for something you are doing following all the laws and regulations of the land, but that remains to be seen.

David Maris -- Wells Fargo -- Analyst

Thank you very much.

Operator

Thank you. Our next question comes from the line of Randall Stanicky from RBC Capital Markets. Please go ahead.

Randall Stanicky -- RBC Capital Markets. -- Analyst

Great. Thanks guys. Brendan, last quarter you called out Restasis and NuvaRing as potentially attractive opportunities, and I think some of your competitors are probably thinking about that as well. Any update on those products or any other potential big launches in the generic segment for the remainder of this year? And then I have one follow-up for Kare.

Brendan O'Grady -- Executive Vice President, North America Commercial

Yeah, so let me just -- I'll answer your question in a macro way and then I'll boil down into some of the more specific launches. We have potential for 80 some launches this year of which we will probably do about half. So I think that we've got a nice opportunity in front of us this year. If we look at some of the bigger launches, NuvaRing is still in our plan for the second half of 2019 as -- and Restasis is also still in our plan.

We should know on Restasis, I would think by early to mid summer as to where we are. So that's an attractive launch. And I also mentioned that we have the potential for Forteo in the second half of the year, generic Forteo teriparatide in the second half of the year as well. So those would be the kind of the three remaining as you would phrase the bigger opportunities. But all of the others are good opportunities as well. So that's kind of what the launch looks like through the rest of 2019.

Randall Stanicky -- RBC Capital Markets. -- Analyst

That's helpful. And then Kare, last quarter you talked about in the context of some additional cost savings opportunities. You talked about the ongoing COGs opportunity to take out cost there, and you said 50 to 100 basis point opportunity on a go-forward basis. Can you just provide some context to that? Is that 50 basis points to 100 basis points of the overall business on an annual basis and where is that coming from, because it's still -- that's a pretty meaningful EPS tailwind? Thanks.

Kare Schultz -- President and Chief Executive Officer

Thanks for that question Randel. Yeah, it is from the overall business. So it's based on my experience of optimizing total manufacturing systems in other companies. And it's given the level we are at right now. We have a roughly gross margin around the 50%, which means there's a big cost base we have to work on. And it's not something that comes easy. It takes a long time to do it. It's not something you do just by a few lucky moves. It's something you do by optimizing thousands of processes and many, many factors. But my experience is that, when you do that in a structured way and you have a clear long-term strategy, then you can improve your gross margin for your entire business with some 50 to 100 basis points per year over a longer period. So that I can just confirm.

Randall Stanicky -- RBC Capital Markets. -- Analyst

So just to be clear, we should be thinking -- as we think about the next several years and we look at Teva's consolidated gross margin, we should be thinking about that gross margin moving higher by perhaps 50 to 100 basis points annually?

Kare Schultz -- President and Chief Executive Officer

You can see that, we have a long-term target of the operating profit of 27%, that's higher than where we are now. Part of that improvement of course has to come from the COGS, because if we don't improve the gross margin, then it's going to be very difficult to get a significant improvement of the total margin. So yes, we will be targeting something like that. We will give you some more details on what we are planning to do once we finish the restructuring, that means once we report on the full year of 2019. Next February, we'll give you an outline of how we see the ongoing optimization of our manufacturing system.

Randall Stanicky -- RBC Capital Markets. -- Analyst

Okay. That's great. Thank you so much.

Operator

Thank you. Our next question is from the line of David Amsellem from Piper Jaffray. Please go ahead.

David Amsellem -- Piper Jaffray -- Analyst

Thanks. So just on AJOVY. You've commented in the past that steady-state growth to that potentially would be in the 20s, and maybe 30%. And I was wondering if you could revisit or you're willing to revisit those assumptions? And when do you think that spread will normalize given all the moving parts, in particularly, the heavy subsidization of out-of-pocket cost?

And then secondly, and I apologize if I missed this, but just on Forteo. What's your view on the competitive dynamics, not necessarily during the initial launch in generic market formation, but over the long term in terms of the -- how significant the competitive landscape will be and what are your thoughts on number of entrants next year and beyond? Thanks.

Kare Schultz -- President and Chief Executive Officer

Sure. So let me just comment on AJOVY first, around the growth in that. So if you look at this market I think that everybody would see now that the demand has been significantly higher than expected and the growth in that has been more challenging I guess or deeper than one would expect. I mentioned 20% to 30% before, that was early on. The market has been quite volatile and I think it's going to be probably north of 40% from any of the players if probably where we are headed, but I do think that things will start to stabilize.

As we had conversations with many of the payers, many of them have said that the value now and the net price of these medication is to the point where as we get to a 2020 marketplace that it will be probably not uncommon to see all three products available on the formulary. So we continue to work through that. We have about two-thirds, about 67% of our patients currently covered with some form of insurance reimbursement. We ended last year with about 20% of our scripts getting reimbursement and that number is now up to 50%, and that continues decline and should converge as we get further along in the year with what our overall coverage is. So I think that's probably where we're headed on the growth and that's probably going to settle out north of 40% somewhere, I don't really want to comment any more than that, but we'll see where it goes.

As far as Forteo goes and how that products will form. I think that there are -- there is us and there is at least one other that we are aware of. We don't have exclusivity on it but we believe from our own intelligence that we will probably be first in market. How long we'll maintain that first in market position, I'm not quite sure, but it's not an easy -- it's not an easy product. So it's one of the more difficult and challenging one. So hopefully we'll have a decent runway with it where we're either alone or with one maybe just two other entrants for a while.

David Amsellem -- Piper Jaffray -- Analyst

Okay. Thank you.

Operator

Thank you. Our next question is from the line of Gregg Gilbert from SunTrust. Please go ahead.

Gregg Gilbert -- SunTrust Robinson Humphry -- Analyst

Thanks. Brendan, another AJOVY question. You've talked a lot about pricing and reimbursement, et cetera, and gross to net. But on the SG&A front, are you confident that your SG&A footprint that is reps and marketing spend and DTC is adequate in light of some of your competitors being primary care focused about how they attack this market?

And then, sorry Kare back to the opioid, the unfortunate opioid subject. I hear you on your views on who's to blame. But in the real world of the parties trying to come up with some numbers, I was curious if you think the people on the other side of the table have an understanding, and in some ways, I agree with you on the different levels of blame per se a branded versus a generic bucket or even the distributor since you own one of those, as well as the Company's relative ability to pay. So maybe you could comment on some of those concepts recognizing that you don't think Teva did anything wrong? Thanks.

Kare Schultz -- President and Chief Executive Officer

So I think we will go first with the AJOVY question and Brendan will handle that. And then Brendan and I will share the answer to the opioids.

Brendan O'Grady -- Executive Vice President, North America Commercial

Okay. So as far as the SG&A expenses and being competitive, look I'm a commercial guy, so I would always like to spend more money in the marketplace, but I think that we have to balance our spend with our goals. And I think the way that we've moved expenses off of older less priority products to focus on AJOVY and AUSTEDO is appropriate. I think we are satisfied with the market growth that we're seeing with where we are. We're confident that we will be able to hit our number by the end of the year and we continue to look at creative ways to get to our share of voice out there.

So from a sales rep standpoint, I think we are competitive. Right now, I think we are very competitive in the neurology and headache centers. I think we are competitive as I mentioned with those high decile non-neurology writers. Things will continue to evolve. We'll continue to look at it. We have not done significant DTC advertising to-date. We will -- we are evaluating that of course. The DTC advertising, it is going on benefit to some degree all of the parties out there, and certainly we're looking at different ways for multi-channel marketing, which is a little bit more cost-effective to get your message out.

So the bottom line and to answer your question is that, yeah, we would always like to spend more, but I think if we are appropriately resourced to achieve our goals.

Gregg Gilbert -- SunTrust Robinson Humphry -- Analyst

Okay. Thanks.

Kare Schultz -- President and Chief Executive Officer

And with regards to the opioids. It can be difficult of course to say what the other side of the table thinks. There is more than 1,500 court cases and plaintiffs. And I guess in most of those cases, the real plaintiffs of the court (ph) is states and so on. They are really not paying anything for starting the court cases. It's probably been done by the plenty of lawyers who are financing this on a no cure no pay basis. So it's a very serious societal issue which is kind of the common legal game for large group of lawyers.

And to me somehow, it reminds me what about alcohol? I mean, imagine we would say that all the alcohol-related traffic accidents, all the broken families, all the things that have in due to alcohol misuse in US, that be also really be picked up by everybody selling alcohol, everybody manufacturing alcohol or the microbreweries or the big distilleries. They should really be explaining for the misuse of alcohol call. This is a bit like what you're seeing here. If you follow all the laws and the rules of the land, how can you at the end of the day be held liable for misuse of products in an illegal and incorrect way. That's -- but of course what you're getting at it that the plenty of lawyers who really sort of run the game, how do they see this. I think they look at where they can get some money, that's what they are looking at.

And as you know, we have a lot of debts, so we don't have that much money. So I think they'll help -- to find somebody else if they want big settlements. It won't be with us.

Gregg Gilbert -- SunTrust Robinson Humphry -- Analyst

Thanks.

Operator

Thank you. Our next question is from the line of Umer Raffat from Evercore. Please go ahead.

Umer Raffat -- Evercore -- Analyst

Hi. Thanks very much for taking my question, and Kare I love your quotes now on the last question. I just wanted to focus on two specific things. First was on accounts receivable. And I guess my question is, it's clear that less is being recovered in the first half on accounts receivable side, but I also noticed you're securitizing accounts receivables. So I'm just trying to understand exactly what's happening there? Is that a net cash positive or negative on a free cash flow basis?

And the second one is, one of the slide say you've taken an impairment charge on Revlimid. Can you lay out for us why that was, because presumably you have a settlement in place, so is it because you don't think there is an approval coming on time or something else? Thank you.

Kare Schultz -- President and Chief Executive Officer

Yeah, so thanks Umer. I'll take both of those. So there is a securitization program. This is something that's been in place since 2011. It's securing some European receivables which were notoriously tricky to collect on. So this is, you can see in the footnotes of our 10-Q or 10-K, it's a program about a size of $700 million which turns over several times a year. The reason you see it in operating cash flow and you see another piece in investing cash flow is, about two years ago the accounting rules changed and the retained portion of these receivable sales which is the piece that you collect later not upfront is now technically considered an investing cash flow. So you see an exact reflecting mirror of reduction in operating cash flow and a positive investing cash flow. Its $362 million for this quarter, but it's a minus in operating and a plus in investing and no real change net. There hasn't been really a net change in this program over the last couple of years. So if you need more, we can always take that offline and describe that to you a little bit better.

So in terms of the Revlimid, there is no change in our settlements. But the initial assumptions when we valuate this asset at the time of the Actavis acquisition as it's a file that came in from that side. Is that we would have a longer runway as a single agreement with Celgene. It appears now that they are starting to settle with some other players. So we've taken a relook at that and there is an impairment on that. It is partially offset by a profit share and the agreement that we also have. So you're not seeing a huge net number, but that's the basis for that charge.

Umer Raffat -- Evercore -- Analyst

Got it. But just to be clear, they haven't settled with anyone else in US?

Kare Schultz -- President and Chief Executive Officer

No, but our expectations now are that they will. So it's just an expectation change.

Umer Raffat -- Evercore -- Analyst

Okay. Thank you very much.

Operator

Thank you. Our next question is from the line of Elliot Wilbur from Raymond James. Please go ahead.

Elliot Wilbur -- Raymond James -- Analyst

Thanks. Good morning. First question for Kare or Brendan. Just update us in terms of supply situation around generic EpiPen still expecting basically return to full capacity sometime over the course of the second quarter or any change in sort of your prior expectations of what you will ultimately capture at peak?

And then I want to ask a question around the Fasinumab development program. It looks like there has been a fairly significant change to the long-term safety study. I just want to get a sense of what drove that? Was it something you saw -- that we're seeing with the asset itself or is it something that's coming out with respect to some of the other NGFs in development? And maybe just give us a sense of what the time line looks like for the product at this point? Thanks.

Kare Schultz -- President and Chief Executive Officer

Thanks, Elliot. I think I'll do both of those. EpiPen is pretty straightforward. We are ramping up the volumes and providing EpiPen to anybody who needs to buy one. We have the adult version on the shelves. We're distributing it to Anda. So any pharmacy who needs EpiPen can just call Anda and they will get it within 24 hours. And we're seeing a nice revenue coming in from that. We will have the junior pen ready for the school start in August. So we'll be able to supply EpiPen fully to the marketplace. Right now we are probably approaching some 20% share of the market that will be increasing. And of course we never know what competition will do it. But if there is no real change in the competitive situation, we could be approaching 50% share as we exit this year. So that's a very nice story for us.

On Fasinumab, I don't know exactly what change you alluding to. There was a change but that's sometime ago where we took out the high doses. So we are now testing one milligram, every four weeks of one milligram every eight weeks. And the reason why we took out the high doses was that we were seeing some safety issues which is all about the joints as you know, the narrowing of the joints, and we were seeing that on the high doses. We have since then had data come out on the low doses in terms of the short-term efficacy which looked really good.

And we've also had some safety data coming out which also looked acceptable on the short-term for the low doses that we're continuing in our clinical development together with Regeneron and we will expect to continue those safety studies that are of a longer duration. And then in due time we will get the data from those and then we will just have to wait and see. It's anybody case, whether this data will confirm that it is a product that can be approved based on its very good safety and clinical efficacy or whether there will be some challenges on the safety. And that will of course be up to both us and the regulators to assist that once we have the long-term safety data, but we don't have that yet.

Operator

Okay. Thank you. The next question is from the line of Ronny Gal from Bernstein. Please go ahead.

Ronny Gal -- Sanford C. Bernstein -- Analyst

Hi, good morning everybody and thank you very much for taking my questions. A couple for Brendan. I've got a follow-on for Kare. Brendan, first on AJOVY, the scripts which you currently position are currently providing, is this on the buying bill? Does it essentially goes into pharmacy benefit and will that change? And do you expect that segment to continue to be strong because you kind of like a lone bear or essentially disappears as you get the autoinjector?

And then on AUSTEDO, I was going to spook (ph) a little bit by ESI beginning to manage the category. In your thinking, is this category going to begin to get managed longer-term between you guys and Neurocrine. Do you expect prices to flat not and more broadly, you know initially the thought was this might go to like the $2 billion range. Is this more realistic kind of like between $500 billion for peak sales?

(inaudible) at the follow-on right away, Kare, your R&D is about 5% of your revenue which is fine for generic company, but it looks like you need something more in the branded size like three to five year horizon to be able to grow. And I was wondering, should we expect to see R&D at some point beginning to go higher as a percent of sales to accommodate that?

Brendan O'Grady -- Executive Vice President, North America Commercial

Okay. So hi, Ronny. I will go first and I will answer the AJOVY question as far as the quarterly dosing and is it buy and bill or is it going to the retail channel. The vast majority is going to the retail channel to the normal adjudication process. And I don't expect that to change. I think the fact that a physician can administer the quarterly dose in the office gives us an option and gives the physician or the patient an option for a buy and bill option. But I don't expect that to become the norm and I don't expect that to significantly go over time.

As I mentioned, this is -- I think the original assumption if you're going back two years ago before these products launched, we've got this category, it would be more of a specialty category but with the land pricing and with where the net is, this has really moved to retail and I think the access will vastly call for just kind of a regular pharmacy reimbursement. So definitely a possibility and an advantage I guess that we have with the quarterly dosing but not one that I expect will be real prevalent.

In regards to AUSTEDO, again, I don't want to speculate on our competitors contracting strategy. But I don't think this is a sense where payers are trying to pick two products against each other. This is a population that has a significant unmet need and really two products in the marketplace that have similar but important differences to the product. So I don't think this is where you'll see, one be exclusive and the other be exclusive, and then pivot back and forth. My guess is that this is just part of Neurocrine's strategy and that they didn't reach an agreement with ESI and that's why they were excluded. So we will see where this goes, but I don't expect the type of price erosion as categories. I think the original assumption is around AUSTEDO stay intact.

Kare Schultz -- President and Chief Executive Officer

And just a little bit on those numbers. I mean, we did $200 million last year. We expect to do $350 million this year. So if it -- it should stop at $500 million in growth, just stop at end of 2020, which I think with the population not being treated out there that's not realistic. So we expect AUSTEDO to keep on growing nicely.

On the R&D side, we spent roughly $1 billion on R&D, and you could see the -- a big chunk of that is for innovative specialty products. We have about 30 development projects ongoing, about two-thirds of those are biopharmaceuticals. And we don't really want to share that with anybody right now. The reason is that, we are in the restructuring right now this year and last year, but our plan is to share more with you once we finish this year. So once we get to February of next year, we will share a bit more with you on what is our pipeline, what are the different projects we have.

We have some really exciting projects. There is some overlap in the actual biopharmaceutical R&D machine in terms of pilot plans, clinical development, the early phases. So we think we can do very efficient R&D and we can keep supporting the specialty business at the size that we have it now. Of course, it's only a part of our business that's a specialty business and that's where we need to renew and keep on supporting and we think we can do that with a total spend of around $1 billion.

Ronny Gal -- Sanford C. Bernstein -- Analyst

Thank you.

Operator

Thank you. Our final question today is from the line of Chris Schott from JP Morgan. Please go ahead.

Chris Schott -- JP Morgan -- Analyst

Great. Thanks very much for the question. I just had two on AJOVY. The first is, talking a little bit more about the EU opportunity for the drug. I think historically ex-US has been a smaller opportunity for some of the legacy migraine products. I was wondering if you see the CGRP dynamics being different and how large of an opportunity could that be?

My second question on AJOVY was just on formulary. It sounds like you are expecting broader coverage as we look up to 2020. But was there anything about the current environment -- has your current coverage been a hurdle at all for physicians in your view and are you thinking about broader kind of national formulary coverage is further helping with uptake of AJOVY? Thanks very much.

Kare Schultz -- President and Chief Executive Officer

Thanks for those two questions, Chris. I'll take the first one and Brendan will take the second one. So when it comes to AJOVY and EU, then of course the unmet medical need is identical and the prevalence of migraine is identical to the US. So there is an enormous unmet medical need.

So the next question is reimbursement pricing. And in the EU, there is an interesting dynamic, which is that biopharmaceutical injectables tends to have a significant higher pricing more close to US level than we see for (inaudible) therapies. Now this might sound kind of ironic, but that's actually how it's been for the last 20 years. So biopharmaceuticals relatively do better on pricing in Europe than tablets do. And since AJOVY is a biopharmaceutical sophisticated injectable product, we see now that the prices for the competitive launches in Europe are right now at about the same list price level as in the US, which means that actually slightly higher. And of course since a number of European markets have a net price which is very close to the list price, this would indicate that the European market could actually end up having a net revenue per patient which will be higher than the United States which is something that (inaudible) haven't met that often.

So in terms of the pricing, I think there is a good outlook in terms of unmet medical need, there is good outlook. Of course, there are certain hurdles to overcome in order to get access in some of the markets. So what we expect is to see a gradual roll out with easier markets to get started in which -- like -- places like Germany, Scandinavia, and so on, where we will see the early launches, and then Southern Europe coming on later. Once we work our way through the different authorities that are gatekeepers for launches. But definitely a very exciting and good opportunity for us.

Brendan on AJOVY?

Brendan O'Grady -- Executive Vice President, North America Commercial

Yeah, so as far as coverage in US and formulary coverage, I think If you look across the three CGRP agents, Emgality is in the lead and I think those part of the strategy was to get access quickly. And we're pretty comparable to Aimovig across the spectrum. So we're on it. Caremark with Emgality, Aimovig is not. We're not on UnitedHealthcare. We just gained access to Express Scripts National Preferred Formulary on April 1st. Cigna is also reimbursing AJOVY.

So our coverage continue to expand. And as I mentioned in previous calls, it's going to be a continued discussion with payers throughout '19 and probably even into the first quarter of 2020, but I think this eventually settles. So where we don't have coverage we continue to have those discussions and try to improve our position. As I mentioned, I think the 67% that we do have is adequate for us to achieve our goals this year and continue to keep AJOVY going.

But getting to your question, has it been a hinderance for physicians? I don't think it has been. The way that we designed our program has been really to make it easy for physicians to write the product and easy for patients to access the product, and that's somewhat of the lagging growth to net that you saw as we came out of the fourth quarter and into the first quarter is that we designed it so that patients had basically a co-pay card that would take insurance out of the equation. So we had time to build the formulary coverage. And you're seeing that now transition as I mentioned.

We exited the year with 20% of patients getting a reimbursed script, that's now up to 50% and it continues to decline. So access will continue to be a goal. We'll continue to improve the access as we go through the year, but the problems that physicians are having, it really isn't that we designed the program to be very efficient for them and hopefully we will be able to treat patients for AJOVY.

Kare Schultz -- President and Chief Executive Officer

Okay. Well thank you everybody for joining us today in participating on the call. All the materials are on our website and will be available throughout the day and tomorrow to speak to you if you have questions. So take care. Thank you.

Operator

Thank you ladies and gentlemen. That concludes the conference for today. There will be a replay available for you to listen to. The telephone numbers to access this replay are as follows. From the US, 1-917-677-7532, and from anywhere else in the world +44-3-333-009-785. You will then need to enter the conference ID. Once again ladies and gentlemen, thank you for your participation. You may now disconnect.

Duration: 67 minutes

Call participants:

Kevin C. Mannix -- Senior Vice President, Investor Relations

Kare Schultz -- President and Chief Executive Officer

Michael McClellan -- Executive Vice President, Chief Financial Officer

Ken Cacciatore -- Cowen and Company -- Analyst

Navin Jacob -- UBS -- Analyst

Brendan O'Grady -- Executive Vice President, North America Commercial

Gary Nachman -- BMO Capital Markets -- Analyst

Liav Abraham -- Citi -- Analyst

Esther Rajavelu -- Oppenheimer -- Analyst

David Maris -- Wells Fargo -- Analyst

Randall Stanicky -- RBC Capital Markets. -- Analyst

David Amsellem -- Piper Jaffray -- Analyst

Gregg Gilbert -- SunTrust Robinson Humphry -- Analyst

Umer Raffat -- Evercore -- Analyst

Elliot Wilbur -- Raymond James -- Analyst

Ronny Gal -- Sanford C. Bernstein -- Analyst

Chris Schott -- JP Morgan -- Analyst

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