44 slides from Teva Pharmaceutical Industries's earnings presentation, Feb 12, 2008
Slide 1: Teva Pharmaceutical Industries Ltd. Investor Lunch Tel-Aviv
Teva Pharmaceutical Industries Ltd. Investor Lunch Tel- Aviv Dan Suesskind, CFO February 12 , 2008 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements TODAY’S PRESENTATION CONTAINS FORWARD LOOKING STATEMENTS WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS ARE BASED ON CURRENT EXPECTATIONS AND INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA’S FUTURE RES
Slide 3: Development of Results (Q4)
Development of Results (Q4) Sales Net Income Earnings per Share $ Millions $ Millions $ 0.69 2,576 570 2,277 433 0.53 Q4/2006 Q4/2007 Q4/2006* Q4/2007 Q4/2006* Q4/2007 3 3 * Non GAAP Figures
Slide 4: 2007 – Strong Performance
2007 – Strong Performance % 2007 2006* Change Sales ($ Millions) 9,408 8,408 12% Net Income ($ Millions) 1,952 1,867 5% Earnings per Share (diluted $) 2.38 2.30 3% Cash Flow from Operations 1,813 2,058 P/E Ratio 2008 (F.C. Consensus $2.69) 17 Market Capitalization (as of Feb. 8, 2008: $46.64) 37 * N
Slide 5: Exchange Rates (Quarterly Average)
Exchange Rates* (Quarterly Average) Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 USD: NIS 93% 98% 96% 99% 100% (3.94) (4.18) (4.08) (4.21) (4.26) USD: EURO 89% 94% 96% 98% 100% (0.69) (0.73) (0.74) (0.76) (0.77) USD: HUF 87% 91% 91% 86% 100% (174.38) (183.10) (183.98) (192.26) (201.55) USD: CAD 86% 92% 96% 103% 10
Slide 6: Q4 2007 – Sales By Region
Q4 2007 – Sales By Region Q4/07: $2,576 Million Q4/06: $2,277 Million North America North America 58% 59% TSP** 7% Int. TSP** Int. 2% 6% 2% LATAM Europe Europe LATAM 6% Israel 25% Israel CEE 24% CEE 9% 4% 5% 4% 2% 17% 17% * Western Europe and Hungary **TSP is included in NA 6
Slide 7: Teva's competitive positioning
Teva’s competitive positioning API Product Vertical Breadth Integration 7
Slide 8: Generic Company ranking
Generic Company ranking 6.000 Acquisition completed in October 2007, , 7 however the combined company is represented here for illustrative purposes. Total annual sales ($m) wow eM SI Ss ; ratiopharm Watson cta Stada Perrigo Ranbaxy Barr Mylan Gedeon Richter KRKA Apotex Cipla Mylan / Merck KGaA @ NB
Slide 9: Generic TRx Continue to Gain Traction
Generic TRx Continue to Gain Traction 12% 9
Slide 10: Q4 2007 – North America Pharmaceutical Sales
Q4 2007 – North America Pharmaceutical Sales ($ Millions) Up 15% 1,435 1,252 769 776 544 Q4/03 Q4/04 Q4/05 Q4/06 Q4/07 10
Slide 11: Generic Industry Consolidation
Generic Industry Consolidation Top 4 have 55% m arket share com bined IMS TRx MAT Jun-97 IMS TRx MAT Jun-07 (Top 4 = 35%) (Top 4 = 55%) All Others Teva 65% All Others 21% 30% Mylan Mylan Actavis 13% 12% 4% Mallinckrodt Watson Teva Barr Zenith Apothecon Sandoz 11% 8% 5% 6% Goldline (Bristol) 10% (Iva
Slide 12: Top U.S. Pharmaceutical Companies
Top U.S. Pharmaceutical Companies Generic companies only All pharmaceutical companies Total Rx’s Total Rx’s TRxs MAT TRxs MAT (000s) Vol Chg* (000s) Vol Chg* 1 Teva USA 437,397 20,753 1 Teva USA 453,860 31,965 2 Mylan 284,387 31,482 2 Mylan 298,049 32,599 3 Watson 224,667 15,459 3 Novartis 266,765 -
Slide 13: U.S. Generic Industry's Largest Pipeline
U.S. Generic Industry’s Largest Pipeline 160 ANDAs – over $101 billion in total brand sales 92 Paragraph IV Filings 49 First-to-File – over $40 billion in total brand sales As of February 7, 2008 13
Slide 14: In-house Production Volumes
In-house Production Volumes 41B 490M Tablets & Capsules 22B 15B 220M Sterile 3B 85M Units 30M 1995 2000 2005 2007 14
Slide 15: SABA TRx Weekly Market Share
CFCs HFAs 15 Week 18-Jan 4-Jan 21-Dec 7-Dec 23-Nov 9-Nov 26-Oct 12-Oct 28-Sep 14-Sep 31-Aug 17-Aug 3-Aug 20-Jul SABA TRx Weekly Market (Share) 6-Jul 22-Jun 8-Jun 25-May 11-May 27-Apr 13-Apr 30-Mar 16-Mar 2-Mar 16-Feb 2-Feb 19-Jan 5-Jan 22-Dec 8-Dec 24-Nov 10-Nov 27-Oct 13-Oct 29-Sep IMS NPA 1/25/08
Slide 16: SABA-HFA TRx Market Share
Proventil HFA Xopenex HFA Ventolin HFA ProAir HFA 16 Week 18-Jan 4-Jan 21-Dec 7-Dec 23-Nov 9-Nov 26-Oct 12-Oct 28-Sep 14-Sep 31-Aug 17-Aug 3-Aug 20-Jul 6-Jul SABA-HFA TRx Market (Share) 22-Jun 8-Jun 25-May 11-May 27-Apr 13-Apr 30-Mar 16-Mar 2-Mar 16-Feb 2-Feb 19-Jan 5-Jan 22-Dec 8-Dec 24-Nov 10-Nov
Slide 17: Q4 2007 – Europe Pharmaceutical Sales
Q4 2007 – Europe* Pharmaceutical Sales ($ Millions) Up 17 % 601 513 360 319 215 Q4/03 Q4/04 Q4/05 Q4/06 Q4/07 * Western Europe and Hungary 17
Slide 18: Registration Status – Europe
Registration Status – Europe (As of Dec. 31, 2007) 2005 2006 2007 Country Approved Approved Approved Pending Hungary 36 22 27 154 U.K. 19 19 60 146 France 18 30 62 125 Germany 26 16 62 115 Netherlands 15 30 50 139 Others 255 181 899 2,487 TOTAL 369 298 1,160 3,166 18
Slide 19: Q4 2007 – International (ROW) Pharmaceutical Sales
Q4 2007 – International (ROW) Pharmaceutical Sales ($ Millions) Up 11% 400 360 124 121 88 Q4/03 Q4/04 Q4/05 Q4/06 Q4/07 19
Slide 20: Q4 2007 – Copaxone In-Market Global Sales
Q4 2007 – Copaxone® In-Market Global Sales ($ Millions) US Non US CAGR 2004-2007: Up 21% US: 21% Non US:26% 1,713 Up 15% 1,414 24% 1,176 619 436 378 936 498 19% 166 20% 394 139 311 269 238 1094 916 13% 782 625 2004 2005 2006 2007 Q4/06 Q4/07 20
Slide 21: US Market Share Using Days of Therapy
US Market Share Using Days of Therapy 40% Q4/07 FY 07 34.4% 34.8% 34.4% Vs. Q4/06 Vs. FY06 34.2% 35% 34.3% +3% +6% 33.5% 32.4% -10% -11% 33.5% 33.1% 30% 31.7% 25% 20% 16.8% 16.3% 16.7% 17.1% 16.7% +4% 15% -1% 16.0% 13.8% -23% -17% 14.3% 14.0% 14.1% 10% 5% 1.8% NA 1.2% 1.5% +296% 0.7% 2.9% 0% Q4/06 Q
Slide 22: Innovative Products and Growth Opportunities
Innovative Products and Growth Opportunities Chron’s disease (Phase II) Lupus (SLE/LN) Burns (Phase III) (Phase I) ALS (Phase III) CIS Copaxone® ALS (Phase II) Multiple Sclerosis Multiple Sclerosis Copaxone® MS (Oral Phase III) Increased efficacy Parkinson’s Parkinson’s Hemato-Oncological Azilect® D
Slide 23: Investments – Current Portfolio
Investments – Current Portfolio Direct / Indirect Equity in Companies Strategic Rights BMI Curetech Gamida-Cell Bioline MediWound Cellcure D-Pharm Proteologics Vaccinex IDM Biocontrol Compugen Andromeda CBI NST VBL XTL 23
Slide 24: Teva BioGenerics: Key Talking Points
Teva BioGenerics: Key Talking Points Biopharmaceuticals – an important and fast-growing segment – will be a major growth engine for Teva in the years to come Teva, as the Generics Leader today, is committed to leadership in the evolving Biogeneric market First/Early to market to capture signif
Slide 25: Teva Will Leverage CoGenesys Platform
Teva Will Leverage CoGenesys Platform (Example) Develop Teva’s Sustained Release GCSF, using CoG’s HSA technology What Teva brings to the table What CoGenesys brings to the table Investment and skills for clinical trials IP in Human Serum Albumin (HSA)- Commercial scale manufacturing fusion
Slide 26: API - Overview
API - Overview ($ Millions) Third Party Up 10% CAGR 2004-2007: Internal Third Party: 4% 1,460 Internal: 21% 1,327 561 1,067 Down 4% 940 587 524 501 Up 65% 899 Up 21% 463 740 543 281 140 439 Down 8% 152 323 129 Up 150% 2004 2005 2006 2007 Q4/06 Q4/07 26
Slide 27: Materials Purchasing Sources
Materials Purchasing Sources Total Materials Total API TAPI Packaging API & Non-active ~80% 3rd Parties 27
Slide 28: One of the largest portfolio in the industry
One of the largest portfolio in the industry 267 250 US DMF’s - 210 220 COS/CTDs – 69/168 JP DMF’s - 70 188 108 90 63 70 43 50 No of Products '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 28
Slide 29: Q4 2007 – Consolidated Statement of Income
Q4 2007 – Consolidated Statement of Income % % of Sales ($ Millions) Q4/07 Q4/06* Change Q4/07 Q4/06 Sales 2,576 2,277 13% 100% 100% Gross profit 1,347 1,103 22% 52.3% 48.4% R&D – net 168 137 23% 6.5% 6.0% S&M expenses 355 321 11% 13.8% 14.1% G&A expenses 163 157 4% 6.3% 6.9% Total SG&A expenses 518
Slide 30: 2007 – Consolidated Statement of Income
2007 – Consolidated Statement of Income % % of Sales ($ Millions) 2007 2006* Change 2007 2006 Sales 9,408 8,408 12% 100% 100% Gross profit 4,877 4,354 12% 51.8% 51.8% R&D – net 581 495 17% 6.2% 5.9% S&M expenses 1,264 1,024 23% 13.4% 12.2% G&A expenses 637 548 16% 6.8% 6.5% Total SG&A expenses 1,901
Slide 31: R&D Expenses ($ Millions)
R&D Expenses ($ Millions) Gross R&D Grants & Participations R&D - Net 587 600 6 550 50 500 6 11 450 383 400 35 14 350 6 18 300 581 250 495 169 200 140 338 369 1 150 3 100 168 50 137 0 2004 2005 2006 2007 Q4/06 Q4/07 31
Slide 32: Q4 2007 - Cash Flow Highlights
Q4 2007 - Cash Flow Highlights ($ Millions) Q407 Q307 Q207 Q107 Q406(*) 2007 2006(*) Net Income 570 525 515 342 433 1,952 1,867 Cash flow from operating activities 545 332 437 499 764 1,813 2,058 Purchase of fixed assets (net of proceeds from sale) 142 104 106 149 129 501 366 Dividends ** 79 73 75 7
Slide 33: Q4 2007 – Consolidated Balance Sheet
Q4 2007 – Consolidated Balance Sheet % $ Currencies ($ Millions) Dec 31, 2007 Sep 30, 2007 Change Change Effect Current Assets 9,859 9,132 8% 727 224 of which: Inventory 2,440 2,298 6% 142 40 of which: A/R Trade 3,546 3,277 8% 269 201 Investments and Other Assets 712 717 (1%) (5) 11 Property, Plant
Slide 34: Dividend Declared 2003-2007
Dividend Declared 2003-2007 (In Million $) Up 33% 328 2007/2006 Q407/Q3 07 Q407/Q406 NIS 16.2% 12.5% 12.5% 246 Cent 30% 24% 31.9% 174 134 101 88 79 2003 2004 2005 2006 2007 Q3/07 Q4/07 34
Slide 35: Financial Strength
Financial Strength ($ Billions) Dec 31, 2007 Sep 30, 2007 Total Equity 13.72 B 12.92 B Total Debt 5.19 B 5.31 B of which: short-term 1.84 B 1.95 B long-term * 3.35 B 3.36 B Leverage ** 27% 29% * Includes both converts of $1.4 bn and straight debt of $1.5 mn issued on Q1/06 35 ** [DEBT/(Debt+Equity)]
Slide 36: NASDAQ Top 20 Companies
NASDAQ Top 20 Companies As of Feb. 11, 2008 1 MSFT Microsoft Corporation $ 265,807,348,800 2 CSCO Cisco Systems, Inc. $ 142,816,403,180 3 GOOG Google Inc. $ 121,676,878,170 4 INTC Intel Corporation $ 118,518,690,000 5 AAPL Apple Inc. $ 110,271,196,600 6 ORCL Oracle Corporation $ 98,571,123,720 7 QCO
Slide 37: Teva Vs. Dow Jones 1984-2007
Teva Vs. Dow Jones 1984-2007 $1,000 invested in DJ in 1984 would be worth $10,300 today $1,000 invested in Teva in 1984 would be worth $597,000 today 70000% Teva DJ Teva vs DJ Teva high 9.1.08 $ 49.65 19/11/84 - 8/2/08 60000% 50000% 40000% 8.02.08 Teva 46.64 $ DJ 12,182 30000% 21.11.84 Teva $ 0.0781
Slide 38: Teva Vs. Generic Index and NASDAQ 2005-2007
Teva Vs. Generic Index and NASDAQ 2005-2007 TEVA PHARM Teva, GI and NASDAQ Teva 175% $46.64 GI 3.1.05 - 8.2.08 165% NASDAQ 155% ALO 7% BRL 24% IPXL 2% 145% MYL 38% PRX 8% 135% WPI 20% Teva 125% $29.2 115% 105% 95% 85% 05 05 05 05 05 05 06 06 06 06 06 06 07 07 07 07 07 07 08 1/ 3/ 5/ 7/ 9/ 1/ 1/ 3/ 5
Slide 39: Driving Growth, Expanding Leadership
Driving Growth, Expanding Leadership Teva’s growth is fueled by: • Increasing demand globally for generics • Expanding global market reach • The generic industry’s leading product offering • Unmatched vertical integration • The industry’s most robust generic pipeline • Growing specialty pharmaceutic
Slide 40: Teva Pharmaceutical Industries Ltd. Investor Lunch Tel-Aviv
Teva Pharmaceutical Industries Ltd. Investor Lunch Tel- Aviv Dan Suesskind, CFO February 12 , 2008 40
Slide 41: Competitive Generic TRX share
Competitive Generic TRX share* Oxycodone # of ANDA’s: 4 Simvastatin # of ANDA’s: 12 Teva 44.3% Teva 86.6% Dr. Reddy – AG 24.0% Dava 7.6% Aurobindo 13.4% Watson 4.8% Ranbaxy 8.1% Endo 1.0% Lupin 5.2% Zydus 2.5% Other 2.5% Amlodipine Benazepril # of ANDA’s: 2 Budeprion XL 300mg # of ANDA’s: 3 Teva 68.
Slide 42: Q4 2007 – Consolidated Statement of Income
Q4 2007 – Consolidated Statement of Income % % of Sales ($ Millions) Q4/07 Q3/07 Change Q4/07 Q3/07 Sales 2,576 2,366 9% 100% 100% Gross profit 1,347 1,250 8% 52.3% 52.8% R&D – net 168 141 19% 6.5% 6.0% S&M expenses 355 304 17% 13.8% 12.8% G&A expenses 163 154 6% 6.3% 6.5% Total SG&A expenses 518 45
Slide 43: Net Income ($ Millions)
Net Income ($ Millions) 650 570 600 550 515 525 500 450 433 400 342 350 300 250 200 150 100 50 0 Q4/06* Q1/07 Q2/07 Q3/07 Q4/07 43 * Before non-recurring items, after tax : Q4/2006-$(27M)
Slide 44: Earnings per Share (diluted, in $)
Earnings per Share (diluted, in $) 0.8 0.69 0.7 0.64 0.63 0.6 0.53 0.5 0.42 0.4 0.3 0.2 0.1 0 Q4/06 * Q1/07 Q2/07 Q3/07 Q4/07 44 * Before non-recurring items, after tax : Q4/2006-$(27M)