Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Merger or Acquisition (July 2008)
39 slides from Teva Pharmaceutical Industries's merger presentation, Jul 23, 2008
Slide 1: Compelling Value Creation
Compelling Value Creation Strong strategic fit Attractive economics Extends global market leadership Exceeds 20/20 strategic target Expands product portfolio and pipeline + Exhibit 99.2
Slide 2: Safe Harbor Statement
Safe Harbor Statement Safe Harbor Statement under the U.S. Private Securities Litigation Reform Act of 1995 The statements, analyses and other information contained herein relating to the proposed merger and anticipated synergies, savings and financial and operating performance, including estimates
Slide 3: Agenda
Agenda Introduction Shlomo Yanai – Strategic rationale and business opportunity Bruce Downey – Barr’s unique contribution to Teva Bill Marth – Contribution to our U.S. business Gerard Van Odijk – Contribution to our global business Eyal Desheh – Financial aspects of the transaction Phil Frost – Mess
Slide 4: Teva's Acquisition of Barr: Extending Leadership and Accelerating Growth
Shlomo Yanai President and CEO, Teva Pharmaceutical Industries Teva’s Acquisition of Barr Extending Leadership and Accelerating Growth July 21, 2008
Slide 5: Compelling Value Creation
Compelling Value Creation Strong strategic fit Attractive economics Enhances U.S. leadership Expands product portfolio and pipeline Augments long-term biologics capabilities Strengthens presence in key global markets Accretive in the fourth quarter after closing Exceeds 20/20 target At least $300 mi
Slide 6: Barr Significantly Accelerates Teva's Growth Strategy
Barr Significantly Accelerates Teva’s Growth Strategy Supports all five pillars Adds new dimensions Key Pillars of Our Strategy Increase Teva’s market share in key markets Double our product portfolio Redefine customer service Biotechnology: Next growth wave in generics Innovative business From Teva
Slide 7: For Each Strategic Pillar, Barr Extends and Accelerates
Innovative business Biologics: the next growth wave in generics Redefine customer service Double our product portfolio Increase Teva’s market share in key markets For Each Strategic Pillar, Barr Extends and Accelerates … Leadership in generics across U.S. and in key global markets Further separation
Slide 8: Growth Through Market Leadership
Growth Through Market Leadership Barr Significantly Accelerates Teva’s Growth Strategy Elevating Teva’s market leadership Watson Mylan $7.0 B Sandoz $2.6 B Teva $2.5 B Barr $2.5 B $9.4 B 2007 Sales of peer group Market Leadership : Market share Gap between #1 and #2 Source: Company reports and analy
Slide 9: Separating from the Pack: Teva's Lead Will Grow Significantly
Separating from the Pack: Teva’s Lead Will Grow Significantly $2.5 B 2007 Global Peer Group Sales $7.2 B Sandoz $4.2 B Mylan* Ratio- pharm $2.3 B $2.5 B Watson $2.5B Stada $11.9 B * Proforma and full year for Merck Source: Company filings and websites +
Slide 10: Unparalleled Leadership in the U.S.
Unparalleled Leadership in the U.S. Teva Barr 2x 596.1 M 295.4 M 236.6 M 202.8 M Sandoz 0.5 M 0.6 M 0.8 M 1.6 M Mylan Watson Pro forma number of TRxs per day
Slide 11: Expands Global Market Presence
Expands Global Market Presence Direct sales in more than 60 countries Before U.K. Italy Netherlands Spain #1 #1 #1 #7 Hungary #3 France #4 Belgium #5 Czech Republic #2 Germany Poland Russia Croatia With Barr #5 #3 #9 #1
Slide 12: For Each Strategic Pillar, Barr Extends and Accelerates
For Each Strategic Pillar, Barr Extends and Accelerates … Increase Teva’s market share in key markets Double our product portfolio Redefine customer service Biologics: the next growth wave in generics Innovative business Leadership in generics across U.S. and in key global markets Further separation
Slide 13: Portfolio Advantage
Portfolio Advantage 500+ marketed products 200+ ANDAs ~70 first-to-file Paragraph IV challenges ~$120 billion in branded sales addressed by combined ANDA pipeline ~3,700 product registrations pending in Europe and worldwide
Slide 14: For Each Strategic Pillar, Barr Extends and Accelerates
For Each Strategic Pillar, Barr Extends and Accelerates … Increase Teva’s market share in key markets Double our product portfolio Redefine customer service Biologics: the next growth wave in generics Innovative business Leadership in generics across U.S. and in key global markets Further separation
Slide 15: Attractive Economics
Attractive Economics Cost synergies Revenue upside Accretive deal Exceeds 20/20 target Strong track record in past acquisitions At least $300 million captured within 3 years of closing Additional cost savings well beyond 2011 Barr’s portfolio + Teva’s commercial engine Further growth of Women’s Heal
Slide 16: Compelling Value Creation
Compelling Value Creation Strong strategic fit Attractive economics Extends global market leadership Exceeds 20/20 strategic target Expands product portfolio and pipeline +
Slide 17: Teva's Acquisition of Barr (Bill Marth)
Teva’s Acquisition of Barr Extending Leadership and Accelerating Growth July 21, 2008 Bill Marth President and CEO, Teva North America
Slide 18: Barr Extends and Accelerates Our 2012 Strategy for North America
Barr Extends and Accelerates Our 2012 Strategy for North America Increase Teva’s market share in key markets Double our Product portfolio Redefine customer service Biotechnology: Next growth wave in generics Innovative business Expands portfolio and pipeline leadership Widens gap versus next largest
Slide 19: Expands Portfolio and Pipeline Leadership
Expands Portfolio and Pipeline Leadership 150 331 2.4x 149 69 2.0x Teva + Barr Sandoz Mylan Watson Teva + Barr Sandoz Mylan Watson U.S. Generic Portfolio Marketed products U.S. Generic Pipeline Pending ANDAs
Slide 20: Strengthens Our Big-to-Big Value Proposition
Strengthens Our Big-to-Big Value Proposition Our scale improves our service Customer mergers since 2006 Production capacity can be rapidly “flexed” to meet the largest orders Capacity increases by ~25% 62 billion dosage forms per year Financial flexibility to invest in joint programs that: Increase
Slide 21: Doubles Our Specialty Products
Doubles Our Specialty Products Teva Barr Leading Brands 2007 U.S. sales ~$400M ~$400M ~$800M
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Slide 25: Advances Our Efforts in Biogenerics
Advances Our Efforts in Biogenerics R&D sites GMP production capacity Products in development Number of scientists R&D sites GMP production capacity Products in development Number of scientists
Slide 26: Key Takeaways
Key Takeaways Extends our portfolio leadership Strengthens our Big-to-Big value proposition Doubles our specialty offerings Advances our efforts in biogenerics +
Slide 27: Teva's Acquisition of Barr (Gerard van Odijk)
July 21, 2008 Gerard W.M. van Odijk President and CEO, Teva Europe Teva’s Acquisition of Barr Extending Leadership and Accelerating Growth
Slide 28: Barr Extends and Accelerates Our 2012 Strategy
Barr Extends and Accelerates Our 2012 Strategy Enhances our geographic footprint in Europe Enters top 5 in Germany Top 3 player in Poland Top 10 in Russia Strengthens our portfolio in key countries Doubles number of products (Germany and Poland) Broadens our portfolio (e.g. OTC, hospital, proprietar
Slide 29: Enhances Our Geographic Footprint
Enhances Our Geographic Footprint Poland • Creates top 3 pharmaceutical player • Strengthens customer relationships • Provides strong OTC portfolio + Germany • Enters into top 5 corporations • Increases customer access: pharmacies, physicians, payers • Creates broader portfolio – doubles our sales +
Slide 30: Strengthens Our Portfolio in Key Countries
Strengthens Our Portfolio in Key Countries +74% +94% Number of products* Germany Poland * Excluding overlapping products
Slide 31: Creates Greater Customer Access
Creates Greater Customer Access Broader portfolio, including important branded products More shelf share and attention from retailers Access to strong OTC portfolio Pharmacists Greater outreach through specialist sales forces Complementary portfolio for hospitals Physicians Broader portfolio offerin
Slide 32: Key Takeaways
Key Takeaways Enhances global footprint Strengthens portfolio in key European countries Creates greater customer access and “Big-to-Big” value +
Slide 33: Teva's Acquisition of Barr (Eyal Desheh)
Eyal Desheh Chief Financial Officer Teva’s Acquisition of Barr Extends Leadership and Accelerates Growth July 21, 2008
Slide 34: Financial Considerations
Financial Considerations Purchase consideration: $66.50 per one Barr share $39.90 in cash plus $26.60 in Teva shares for one Barr share Fixed share exchange rate of 0.6272 (representing $26.60) Purchase price based on Teva closing price on July 16 - $42.41 Total consideration $7.46 billion Plus appr
Slide 35: Structural Considerations
Structural Considerations Anticipated to be a tax free reorganization Structure maintains Teva’s strong balance sheet Rating agencies affirmed our current rating Baa2 BBB+ Transaction is targeted to close in late 2008
Slide 36: Highly Attractive Financial Outcome
Highly Attractive Financial Outcome Projected 2008 combined revenues exceeds $13.7 billion Representing 15% growth over combined 2007 Anticipate strong cash flow from operations Over $3 billon in 2009 Over $5 billion in 2012 Accretive to GAAP earnings Within the fourth quarter following closing Cash
Slide 37: Significant Synergy Opportunity
Significant Synergy Opportunity At least $300 million in cost synergies by 2011 (fast ramp up) Synergies from manufacturing and API capabilities R&D synergies from pipeline reorganization Reduces recruiting requirement to achieve 2X goals SG&A synergies from infrastructure overlap Does not include s
Slide 38: Maintaining Strong Balance Sheet and Credit Profile
Maintaining Strong Balance Sheet and Credit Profile Strong liquidity position Maintain $1 billion post closing cash on hand Balance sheet flexibility provides liquidity for future strategic opportunities $16.5B $14.4B Equity 2.1x 1.7x Debt / 3/31/08 LTM EBITDA 3/31/08 Deal adjusted 3/31/08 27% $5.4B
Slide 39: Key Takeaways
Key Takeaways GAAP EPS accretive in fourth quarter after closing New growth drivers Large synergy opportunities Improves cash flow Maintains strong balance sheet and credit profile +
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