Teva Pharmaceutical Industries Limited · TASE:TEVA
Teva Pharmaceutical Industries — Investor Day (January 2010)
72 slides from Teva Pharmaceutical Industries's investor day presentation, Jan 7, 2010
Slide 1: Strategy Review 2010-2015
TEVA PHARMACEUTICAL INDUSTRIES LTD,
Slide 2: Forward looking statements
Forward looking statements 2 TODAY’S PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, INCLUDING, AMONG OTHER THINGS, REGARDING OUR EXPECTED PROFITABLE GROWTH, REVENUES, NET INCOME, THE DRIVERS AND CONTRIBUTORS OF THIS GROWTH, STRATEGY AND COMPETITIVE ADVANTAGES, WHICH EXPRESS THE CURRENT BELIEFS AN
Slide 3: Non-GAAP financial measures
Non-GAAP financial measures 3 TODAY’S PRESENTATIONS REFLECT NON-GAAP FINANCIAL MEASURES, INCLUDING OPERATING PROFIT, NET INCOME, EPS, OPERATING MARGIN, AND NET INCOME MARGIN, AND SHOULD NOT BE CONSIDERED REPLACEMENTS FOR GAAP RESULTS. WE PROVIDE SUCH NON-GAAP DATA BECAUSE MANAGEMENT BELIEVES THAT SU
Slide 4: Strategy Review 2010-2015
4 Strategy Review 2010-2015 Shlomo Yanai President & CEO January 7th 2010
Slide 5: Targets for 2015
Targets for 2015 5 Revenues $31 bn Net income $6.8 bn Net profitability 22%
Slide 6: Growth through market share
Growth through market share 6 2015 sales 2009-2015 targets CAGR North America $15bn 9.5% Europe $9bn 18.6% International $7bn 23.2% Total $31bn 14.3%
Slide 7: Maintaining Teva's mix of generics & branded
Maintaining Teva’s mix of generics & branded 7 $31bn ~30% $13.9bn Branded 30% ~70% Generics 70% 2009E 2015
Slide 8: Two major topics
Two major topics 8 GENERICS GROWTH COPAXONE & TEVA’S BRANDED BUSINESS
Slide 9: 2 fundamental questions/topics
2 fundamental questions/topics 9 GENERICS GROWTH COPAXONE & TEVA’S BRANDED BUSINESS
Slide 10: The external environment
The external environment 10 Demographic shifts and emerging market growth Demand Global generics ~$75b in 2007 to ~$120b in 2012 Decision-making shifting to payors Payors Growing pressure to lower costs Global standards, common products, and global Harmonization economies of scale create a
Slide 11: Is there still room to grow in generics? YES!
Is there still room to grow in generics? YES! 11 $135-150 bn in 2015 GROWTH GROWTH GROWTH GROWTH Increasing People living Healthcare $150bn of opportunities longer and reforms and brands going in emerging consuming cost saving off-patent generics more drugs initiatives in the next markets 5 years
Slide 12: Growing demand for generics
Growing demand for generics 12 Market outlook for global generic sales Source: Exane BNP Paribas, IMS, Espicom, Teva estimates
Slide 13: Governments playing a greater role
Governments playing a greater role 13 Focus on quality US healthcare Increased reform access Higher volume (outpacing potential Initiatives in many Increased pricing pressure) EU/international pace of markets Gx penetration
Slide 14: Consolidation continues and intensifies
Consolidation continues and intensifies 14
Slide 15: Acquisitions – Teva's approach
Acquisitions – Teva’s approach 15 Acquisitions & licensing Strict criteria Strategic fit Market share in attractive geographies Compelling economics Accretive within one year Niche specialty products
Slide 16: Teva's competitive advantages
Teva’s competitive advantages 16 • Broadest portfolio • Commitment to global • Largest pipeline generics leadership • API leadership • Strategic relationships • Global footprint with customers Scale & Competitive • Commercial innovation leadership approach TEVA • R&D, legal, regulatory • Lean & Agil
Slide 17: Biosimilars: the future
Biosimilars: the future 17 2008 worldwide sales of biologics, $bn Strategic Alliances 23 115 Lonza 39 76 14 Teva’s Bio infrastructure Sicor, IBR&D, Patents Patents Patents Biosimilar Biosimilar CoGenesys expired expiring expiring opportunity - opportunity - before 2010 2010-2015 2016-2020 2008 brand
Slide 18: 2 Fundamental questions/topics
2 Fundamental questions/topics 18 GENERICS GROWTH COPAXONE & TEVA’S BRANDED BUSINESS
Slide 19: Copaxone
Copaxone® 19 #1 global MS therapy Complex product – R&D & manufacturing Likely to require comprehensive clinical trials
Slide 20: Teva Branded – multifaceted approach & expertise
Teva Branded – multifaceted approach & expertise 20
Slide 21: Teva Branded – multifaceted approach & expertise
Teva Branded – multifaceted approach & expertise 21
Slide 22: Balance within our branded business
Balance within our branded business 22 Sales 2009E = $4.2 bn Sales 2015 = $9.2 bn BioS, 2% BioS, 9% Women’s Women’s health health 12% 17% Respiratory Innovative 22% Innovative 48% 64% Respiratory 26%
Slide 23: Balance through geographical spread
Balance through geographical spread 23 Sales 2009E = $13.9 bn Sales 2015 = $31 bn International 22% International 14% North North Europe America America 24% 62% 48% Europe 30%
Slide 24: Diversity across business units, products, geographies
Balance between high-growth generics & 24 higher-margin branded business ~30% branded High ~70% Higher GROWTH generic MARGINS Diversity across: BUSINESS UNITS, PRODUCTS, GEOGRAPHIES
Slide 25: Teva 2010-2015: value creation
Teva 2010-2015: value creation 25 9 Growth 9 High profitability Sustainable, 9 balanced business model 9 Financial strength
Slide 26: Strategy Review 2010-2015 – Innovative and Specialty
26 Strategy Review 2010-2015 – Innovative and Specialty William S. Marth President & CEO, Teva North America January 7th 2010
Slide 27: Teva innovative and specialty business
Teva innovative and specialty business 27 We will continue to succeed by keeping focus on therapeutic niches, where we can leverage existing business or create new opportunities We leverage our “lean pharma” operating model, heritage and unique culture whenever possible The innovative and specialty
Slide 28: Growth and balance within our branded business
Growth and balance within our branded business 28 Sales 2009E = $4.2 bn Sales 2015 = $9.2 bn BioS BioS, 2% 9% Women’s Women’s health health 12% 17% Respiratory Innovative 22% Innovative 48% 64% Respiratory 26%
Slide 29: Evolution of Copaxone
Evolution of Copaxone® 29 Commitment to improve Copaxone® through continuous innovation Expanding indication to treat early-stage MS symptoms Thin (29-gauge) needle Phase IIIb trial (“SONG”) of new formulation (20mg/0.5ml) to evaluate improvement in injection pain and tolerability Evaluating less fr
Slide 30: Evolution of Copaxone
Evolution of Copaxone® 30 • Clear RRMS gold standard therapy • Unsurpassed efficacy with superior safety and Continued growth tolerability • Continued expansion of dosage regimen • Multiple patents protecting product until 2014 • Very difficult product to characterize • Proprietary injection device
Slide 31: Teva Branded – multifaceted approach & expertise
Teva Branded – multifaceted approach & expertise 31
Slide 32: Branded products and growth opportunities
Branded products and growth opportunities 32 Marketed End phase III 2009-2012 End phase III 2012-2015 Copaxone® Innovative Multiple Sclerosis Laquinimod – Oral Multiple TV-1101 (OGX-011) Sclerosis (Phase III) Solid Tumors (Phase III) Azilect® StemEx® – Hemato-oncological DiaPep-277 – Type I Parkinso
Slide 33: Strategy Review 2010-2015 – US Generics
33 Strategy Review 2010-2015 – US Generics William S. Marth President & CEO, Teva North America January 7th 2010
Slide 34: #1 by any measure
#1 by any measure 1st in Commitment to Our Customers {st in Rxs Dispensed {st in ANDA Filings 1st in Opening New Markets 1st in Product Launches 1st in Breadth of Product Line 1st in Vertical Integration 1st in Pedigree Technology 1st in Delivering Affordable Medicines by any measure aE LS TEVA PHAR
Slide 35: Market growth still healthy
Market growth still healthy 35 US Generics Market Rx volume, bn 2.8 2.6 2.5 2.3 6.5% Growth 2.0 1.8 1.7 1.6 1.5 1.4 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 H1 Source: IMS Health, National Prescription Audit, Dec. 2008, Branded generics disaggregated
Slide 36: Creating value from a maturing market
Creating value from a maturing market 36 U.S. data % of $ sales % of prescriptions • PIV FTF 28 • Complex delivery • Device combinations 46 • Biologics Significant value remains in the Branded 87 82 pipeline with sustainable value More value from the in-line 72 portfolio 54 • Life cycle management •
Slide 37: Extending U.S. leadership to 35% market share
Extending U.S. leadership to 35% market share 37 Number of GGx prescriptions, bn 3.2 3.0 2.8 2.5 Total 4% market CAGR 1.1 0.9 0.6 14% Teva 0.4 CAGR 2007 2009E 2012 2015 Teva market 18% 22% 30% 35% share
Slide 38: How we will get there: pipeline
How we will get there: pipeline 38 Teva’s scale provides unparalleled leverage • $500m R&D investment $114bn $55bn • 1,000+ R&D staff brand sales brand sales • Breadth of plants and technology
Slide 39: Teva has the broadest product portfolio
Teva has the broadest product portfolio 39 Number of products, U.S. Teva 405 Sandoz 204 Mylan 200 Watson 150 Source: Investor earnings call transcripts and company statements
Slide 40: How we will get there: in-line products
How we will get there: in-line products 40 Increase market share Increase margins Acquisitions New Product Life Cycle Launches Management 35% Flawless Low Cost Execution Manufacturing Capacity leverage
Slide 41: How we will get there: in-line products
How we will get there: in-line products 41 Market share, %, all launches included AFTER 12 MONTHS AFTER 24 MONTHS 45 41 36 36 32 33 31 2006 2007 2008 2009 2006 2007 2008* * 2008 reflects 21 months
Slide 42: Our North America goal
Our North America goal 42 Sales targets, $bn AGR 15.0 C .5 % 9 8.6 2009E 2015 * includes all business Teva has in North America
Slide 43: Strategy Review 2010-2015 – Europe
43 Strategy Review 2010-2015 – Europe Gerard van Odijk President & CEO, Teva Europe January 7th 2010
Slide 44: Why Europe?
Why Europe? 44 0.5 bn people Aging population Low generics penetration, but rapid generics penetration growth Governments and payors are driving generics growth
Slide 45: Pharmacies and chains gaining importance
Pharmacies and chains gaining importance 45 Pharmacist / UK Substitution Broad payer Nether- lands generics model portfolio influence Germany France Italy Transition Spain Poland Physician Branded Selective Hungary influence generics model portfolio Low High generics generics penetration penetration
Slide 46: With pockets of high growth
With pockets of high growth 46 CAGR, %, 2009-2015 Latin Europe 10% CEE 9% Germany ‐3% Europe excl. Germany 6% Europe average 4%
Slide 47: Germany: the 2nd largest generics market in the world
Germany: the 2nd largest generics market in the world 47 % of net sales, 2009 #1 in Europe, #2 in the world Mature market 35% Germany 65% Rest of Europe Tenders But… Non-tender segment still larger than the #2 market, France
Slide 48: On track to deliver our strategic targets
On track to deliver our strategic targets 48 2007 2008 2009 UK No.1 No.1 No.1 Extended leadership Mature markets Netherlands No.1 No.1 No.1 Germany Top 5 Italy No.1 No.1 No.1 Emerging markets France Top 10 Top 10 Top 3 “Latin Europe” Spain Top 10 Top 3 Hungary Top 10 Top 10 Top 3 Emerging markets Po
Slide 49: Market highlights
Market highlights 49 €m Generic Market sizing Key trends 10% CAGR €4.3Bn • Population 64M €2.5Bn • Teva no.3 with 10-11% share France • Teva grows its share 2009 2015 organically 12-15% CAGR • Population 46M €2.0Bn • Teva no.3 with 10% share Spain €0.9Bn • Combined organic and acquisitive growth – B
Slide 50: Core elements of Teva's European strategy
Core elements of Teva’s European strategy 50 Extend lead in UK, Italy and Netherlands 1 • Expand ‘big-to-big’ relations • Drive profitability through scale Secure leadership market by market 2 • Build leadership in “Latin” and CEE markets • Leverage Teva’s assets in the largest EU market - Germany I
Slide 51: Our European goal
Our European goal 51 Sales targets, $bn 9.2 GR CA .6% 1 8 3.3 2009E 2015 * includes all business Teva has in Europe
Slide 52: Strategy Review 2010-2015 – International Markets
52 Strategy Review 2010-2015 – International Markets Chaim Hurvitz President, Teva International Group January 7th 2010
Slide 53: Strong International market growth
Strong International market growth 53 Pharma Market (CAGRs 2009-2015) CIS: Eastern 14% Europe: 10% Asia: Japan: 16% 3% Latin America: 12% International markets: 2009 : $ 241bn 2015: $ 473bn Source: 2009 – 2013 IMS Market Prognosis – Constant fx, Teva
Slide 54: International markets - a main growth driver
International markets - a main growth driver 54 World-wide generics sales, $bn
Slide 55: The Teva Advantage crosses all models
The Teva Advantage crosses all models 55 Multiple Generics Models Teva’s Advantage GGx • >1,000 molecules • Local market knowledge • Government Hospitals relationships BGx • Speed and agility • High quality products Tenders • Low cost manufacturing
Slide 56: Teva continues to focus on high priority markets
Teva continues to focus on high priority markets 56 ~75% of growth Priority Growth Markets 8 countries Established 52 countries Growth Markets
Slide 57: Government health initiatives supporting growth
Government health initiatives supporting growth 57 Russia Pharmaceutical 2020 Japan Enhancing generics – 30% MS by 2012 China Healthcare reform
Slide 58: Continued growth through partnerships/M&A
Continued growth through partnerships/M&A 58 Japan September 2008 December 2009 More to come… Teva-Kowa Taisho Achieving leadership JV formed acquisition position in Japan Market Position #5 #1-3
Slide 59: Acquisition of a majority stake in Taisho
Acquisition of a majority stake in Taisho 59 • Portfolio >200 products Portfolio • Broad generics pipeline Presence and know-how • 50 years of Japanese operating history • Local R&D capacity and know-how Infrastructure • Sales & distribution network • Production capabilities
Slide 60: March to generics market leadership in Russia
March to generics market leadership in Russia 60 Russia 2004 2007 2009 Market Position < #20 #5 #2 #5
Slide 61: Our International markets goal
Our International markets goal 61 International sales, $bn 7.0 CAGR = 23% CAGR = 22% 2.0 1.0 0.3 2003 2006 2009E 2015 * includes all business Teva has in International markets
Slide 62: Strategy Review 2010-2015 – Financial Model
62 Strategy Review 2010-2015 – Financial Model Eyal Desheh Chief Financial Officer January 7th 2010
Slide 63: Assumptions behind the model
Assumptions behind the model 63 2009: $13.9bn sales, $3bn net income, $3.37 EPS Base year (2009 Data are First Call consensus or based on analyst models) Accounting All figures are non-GAAP Tax rate 2012 and 2015 – ~20-21% (non-GAAP rate) Major FX rates Euro/$ 1.38; Pound/$ 1.60; $/NIS 3.89; $/Ruble
Slide 64: Strategy update: financial highlights
Strategy update: financial highlights 64 Sales and profits Sales CAGR – 14.3%; EPS CAGR – 13.4% more than double Financial $22 billion in cumulative cash flow strength Controlling Expense growth kept in check costs External FX environment – volatile and unpredictable factors
Slide 65: Financial model highlights
Financial model highlights 65 All figures $bn, except EPS in $ CAGR 2009E* 2012 2012 2015 2009-2015 Sales 13.9 19.0 - 21.5 21.0 - 23.2 29.5 - 32.6 14.3% Operating profit 3.9 6.4 - 7.0 8.2 - 9.0 14.1% Net income 3.0 4.0 - 5.1 4.9 - 5.5 6.5 - 7.1 14.6% EPS 3.37 4.59 - 5.86 5.30 - 5.86 6.80 - 7.52 13.4
Slide 66: Net income to reach ~$6.8bn by 2015
Net income to reach ~$6.8bn by 2015 66 2008 2009E 2012 2015 CAGR ‘09-’15 Sales 11.1 13.9 21.0 - 23.2 29.5 - 32.6 14.3% R&D 0.8 0.8 1.7 - 1.9 2.2 - 2.4 18.5% $bn Operating profit 2.9 3.9 6.4 - 7.0 8.2 - 9.0 14.1% Net income 2.5 3.0 4.9 - 5.5 6.5 - 7.1 14.6% EPS 3.03 3.37 5.30 - 5.86 6.80 - 7.52 13.4%
Slide 67: Mix of generics and branded remains constant
Mix of generics and branded remains constant 67 Sales $bn CAGR % of total 31.0 14.3% 14.0% 30 30 9.2 13.9 Branded 4.2 70 70 21.8 14.4% Generics 9.7 2009E 2015 2009E 2015
Slide 68: Geographic diversification of sales mix
Geographic diversification of sales mix 68 Sales by geography $bn CAGR % %ofoftotal total 31.0 14.3% 14 7.0 23.2% 22 24 18.6% 30 9.2 13.9 International 2.0 Europe 3.3 62 14.8 9.5% 48 North America 8.6 2009E 2015 2009E 2015
Slide 69: Closing remarks
Closing remarks 69 Continued strong and profitable sales and EPS growth Solid financials with strong cash generation Teva in 2015 will be more diversified and less dependent on a single product or geography
Slide 70: Strategy Review 2010-2015 – Q&A
70 Strategy Review 2010-2015 – Q&A
Slide 71: Teva 2010-2015: value creation
Teva 2010-2015: value creation 71 9 Growth 9 High profitability Sustainable, 9 balanced business model 9 Financial strength
Slide 72: Thank you
N KR Thank you TEVA PHARMACEUTICAL INDUSTRIES LTD,
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