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Teva Strategy OverviewFebruary 21, 2008
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Table of Contents
Tevas Growth Strategy 2008-2012 Global Generic Markets
US Europe International
Global Generic Resources Innovative Strategy BioGenerics Modeling Teva Closing Thoughts
-
Tevas Growth Strategy 2008-2012
Shlomo YanaiPresident and CEOTeva Pharmaceutical Industries Ltd.February 21, 2008
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Fundamental Questions
? Can Teva sustain its pace of growth for years to come?
? What will be Tevas key growth drivers?
? What is Tevas value proposition?
1
-
Tevas 20/20 Target
By 2012, we expect to:
Double our business
Reach revenues of $20 billion Exceed net income margins of 20%
2
-
Growth Through Market Leadership
WatsonMylan
$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 analyst estimates3
-
The Leaders Reward
Difference in operating margin
0% 10% 15% 20% 25% 30%5%0%
10%
2%
4%
6%
8%
Difference in market share between no. 1 and no. 2 player
Source: Cross industry analysis of market leadership, McKinsey & Company
Market leaders are typically more profitable than followers
The greater the share gap the greater the profit advantage
Greater absolute market share correlates with greater profitability
4
-
The External Environment
Macro conditions are in Tevas favor
Harmonization& Consolidation
Payors
Demand Demographic shifts and emerging market growth Global generics ~$75b in 2007 to ~$120b in 2012
Decision-making shifting to payors Growing pressure to lower costs
Big-to-big opportunities
Global standards, common products, and global economies of scale create a few global leaders
5
-
Growth Will Create 2 More U.S. Markets
* U.S. and CanadaSource: IMS, Espicom; Teva estimates of local markets
$75B
2007 2012
International
Europe
North America*
$120B
$45B
Global Generics Sales
6
-
Tevas Core Strengths and Competitive Advantages
Broadest product portfolio Largest first-to-file / Paragraph IV pipeline API leadership Large global footprint, leadership in most significant market (U.S.)
Tevas Scale and
Leadership
Tevas Scale and
Leadership
R&D, legal and regulatory excellence Low-cost production and supply chain Backward integration Proven track-record in M&As Service excellence
Execution ExcellenceExecution Excellence
Commitment to global generics leadership Leveraging scale and scope Commercial innovation
Competitive Approach
Competitive Approach
Lean, agile, responsive and fast Proactive, willing to challengeTevas CultureTevas Culture
7
-
Key Pillars of Our Strategy
Increase Tevas market share in key markets
Increase Tevas market share in key markets
Extend leadership in U.S. Establish leadership in key EU and International markets
Double our product portfolioDouble our product portfolio
Double R&D capabilities Focus on first-to-market / Paragraph IVs Double production capacity
Biotechnology: Next growth wave in generics
Biotechnology: Next growth wave in generics
Invest in the next wave of technology and Generics Create affordable Biogenerics: lower cost, greater value
Redefine customer serviceRedefine customer service
Develop big-to-big offerings Create new go-to-market initiatives
Innovative businessInnovative business
Focus on niche specialty areas Leverage unique sourcing, development and go-to-
market approaches
8
-
Tevas Value Proposition
Growth Company
Commitment To Global Generics Leadership
Balanced Business Model
Attractive Financial Returns
Tevas Culture and Brand
9
-
Key Themes
Increase market leadership Double-down on product portfolio Redefine customer service Affordable Biogenerics Differentiated approach to Innovative
Double our business Reach revenues of $20 billion Exceed net profit margins of 20%
Where Teva is going
How we will get there
10
-
Teva North America
Bill MarthPresident and CEOTeva North AmericaFebruary 21, 2008
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Our Goal
North American Sales
$5.2 B
2007
$9.5 11.5 B
2012
CAGR:13-17%
Note: Includes all pharmaceutical sales in the U.S. and Canada1
-
Respiratory
Large global market
Key part of our market strategies Potential market of ~$25 Billion by 2012
Teva commercial strengths
Significant share of SABA market (US) Relationships with trade, payors, physicians
Investments in R&D
Numerous pipeline products Leveraging innovative and generic R&D
capabilities
2
-
U.S. Generics Key Themes
Strategy Strong generics growth in a very attractive market
Clear U.S. market leader - we aim to significantly increase our market share leadership
Execution Double down on our generics portfolio
Improve our generics commercial model with even greater focus on customers
Goal Overall, we expect Tevas U.S. generics revenues
to outpace the market while maintaining current EBIT margins
3
-
Source: IMS National Prescription Audit MAT December 2007
Number of TRxs per dayMillions
Teva dispenses nearly 2 out of every 10 generics prescriptions
Tevas daily volume is 50% greater than the next closest competitor
Teva is the Clear U.S. Market Leader
0.40.50.6
0.8
1.2
WatsonMylan BarrTeva Sandoz
4
-
3.6 B
2.4 B
0.4 B
1.1 B
Projected TRx CAGRs Generics
overall: 8%
Teva: 20%
Extending U.S. Leadership to 30% Market Share
* ProjectedSource: IMS Health National Prescription Audit, Teva Estimates
Generic Industry TRxsTeva total generic TRxs
2007A 2012E
Number of TRxs
18% 30%Tevas share*
5
-
Key Elements of the U.S. Strategy
Product portfolio
Significantly greater investment in R&D Expand portfolio - new product launches Heavy emphasis on Para IV filings
Leverage our scale for strategic and competitive advantage
Supply Chain preeminence
Leadership and scale
Innovate our commercial model expand relationships with market leaders
Redefine service
Go-to-market initiatives
6
-
Doubling Down on Generic R&D
Doubling our submissions
Accelerating development to further increase our first-to-file, first-to market and first-to-opportunitypositions
Doubling output without doubling resources through: Capacity Speed Efficiency Parallel development Technology
7
-
Source: IMS, Teva estimates
2007 Pharmaceuticals Market
Total market
$285 B
Products Pending Approval and In Development Cover Most of the Market
$101 B Teva products pending approval
Teva products in development
$101 B
$83 B
Opportunity 65%Of the market
8
-
Source: Investor earnings call transcripts and company statements
1149
160
TevaN/A
>80
Sandoz
12
60
Mylan
16
71
Barr
70
Watson
First-to-file
PipelineNumber of ANDAs pending
Teva has more ANDAs than any two competitors combined
92 current Teva files are Paragraph IV challenges (49 have FTF status)
Teva has the Most Valuable Pipeline
9
-
Source: Investor earnings call transcripts and company statements
and the Broadest Product Portfolio in the Industry
Currently marketed productsNumber of products
Teva has 65% more marketed
products than the next closest competitor
150
150
170
200
331
Mylan
Barr
Sandoz
Watson
Teva
ESTIMATES
10
-
2007: Pantoprazole
Source: Market data from IMS NSP at time of launch
Our Scale Gives Us an Unrivaled Ability to Launch At Risk
Leverages our core capabilities
R&D
Legal/regulatory
Product commercialization: the way we go to market
Supply chain flexibility
Customers value earlier and superior access to products
Enhances profitability
11
-
Advantages of Supply Chain Preeminence
Ability to leverage customer demand information across the Supply Chain
Robust global Supply Chain network
Prompt, seamless coordination of complex supply and distribution network
Supported by 14 manufacturing sites globally
Ability to execute large launches quickly (e.g., Pantoprazole, Simvastatin) Produce at multiple sites simultaneously
Able to deliver multiple product configurations at launch
12
-
Robust Customer Relationships Are Critical to Our Success
Generics are critical to Tevas key customers
By 2012 generics will represent > 75% of all prescriptions in the U.S.
Generics represent >50% of the drug profits of key U.S. customers
We have developed a customer-centric business model
Core elements: Superior service Collaborative planning Early access to new product launches
Future plans: Tighter collaboration Enhanced packaging Game changing moves
Big-to-Big
13
-
Example: Game ChangingCustomer Service Innovation
Our goal within 3 years, is to reach 50,000 pharmacies nationwide the day after launch
Significant investment planned to expanding our Supply Chain in combination with a new Direct-to-Store delivery capability
Benefits across the value chain: Faster patient access to generics More pharmacies immediately benefit from new product launches More efficient inventory management across the distribution system
Reach All Pharmacies In a Day . . .
14
-
Tevas U.S. Generics Financial Goal
U.S. Net Sales Projected GrowthCAGR 2007 2012
10%
Market
>14%
Teva
Key Paragraph IVs and other new products
Big-to-big customer relationships
Additional upside in specialty and innovative products
Source: IMS; Teva estimates15
-
Extending our Lead
0
50
100
150
200
0 50 100 150 200 250 300 350 400
Teva
Sandoz
Mylan
Barr
Watson
Current portfolioMarketed products
Future portfolioANDAs Pending
Note: Bubble size is proportional to IMS reports of 2007 TRx; Teva = 437 Million16
-
European Generics Market
Gerard W.M. van OdijkPresident and CEOTeva Europe
February 21, 2008
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Key Themes
European generics market is large and growing
Teva has a proven track record of growth
Growth strategy focuses on:- Increasing our share - Securing leadership- Investing in our core functions
By 2012, we expect to more than double our sales and grow EBIT even faster
11
-
Our Goal
European* Sales
$5.1 5.7 B
$2.2 B
20122007
18-21%
* Refers throughout to Western Europe and Hungary2
-
The Western European Generics Market is Large and Growing
CAGR, 2007-12
Europe overall is a large market with steady growth (7% CAGR)
20.2
2012
+7%
14.7
2007
Net sales retail and hospitalUSD Billions
Growth is particularly strong in the EUs Latin countries
Italy
+20%
Spain
+15%
France
+14%
3
-
High Growth in Latin European Countries, Driven by New Reforms
7%12%
17%
50%54%
63% 65%
U.K.U.S.GermanyNetherlandsFranceSpainItaly
Emerging Generics MarketsLatin Europe
Mature Generics Markets
Increased Generics penetrationIncreased Generics penetration
Generics Market ShareVolume
Source: EGA 2007 Market Survey; US based on IMS estimates June 20074
-
7%12%
17%
50%54%
63% 65%
U.K.U.S.GermanyNetherlandsFranceSpainItaly
In Germany, Tenders Create New Opportunities
Emerging Generics MarketsLatin Europe
Mature Generics Markets
Tenders are entry ticket to the worlds 2nd largest generics market (~ $5 billion)
Shift from Branded-Generics to Generic-Generics
Tenders are entry ticket to the worlds 2nd largest generics market (~ $5 billion)
Shift from Branded-Generics to Generic-Generics
Generics Market ShareVolume
Source: EGA 2007 Market Survey; US based on IMS estimates June 20075
-
Across the Region, Pharmacies and Chains Gaining Importance
Branded Generics
model
Branded Generics
model
Pharmacist/ payor influence
Physicianinfluence Hungary
Italy
France
U.K.
Netherlands
Germany
Spain Markets undergoing
change
Generics penetration
Substitution Generics
model
Substitution Generics
model
Selective portfolioSelective portfolio
BroadportfolioBroad
portfolio
Market transition
6
-
Core Elements of Our Strategy
Build leadership in Latin markets Capture generics tender opportunity in Germany Leverage scale where competition is fragmented
Secure leadership market by marketSecure leadership market by market
Invest to enhance our core functionsInvest to enhance our core functions
Not just First to Market but Broad to Market Build out manufacturing capacity and flexibility Expand Supply Chain
Extend lead in U.K., Italy, and Netherlands
Extend lead in U.K., Italy, and Netherlands
Expand big-to-big relationships Further broaden product portfolio Drive profitability through scale
7
-
Unparalleled service levelUnparalleled service level
Up scaling1. Improved flexibility & responsiveness2. Reduce costs
Up scaling1. Improved flexibility & responsiveness2. Reduce costs
Our Continued Back-End Investment Creates a Foundation for our Growth
Doubling our European GR&D investment next 5 years
Doubling our European GR&D investment next 5 years
Doubling Manufacturing Capacity next 5 years
Doubling Manufacturing Capacity next 5 years
170247
381 472612
7631,019
> 1500 (+50%)
Plan2008
2007200620052004200320022001
10 X UP
1. 2.
8
-
Tevas Proven Go-to-Market Approach
Tevas European Presence
Big-to-BigPortfolio breadth and
geographical presence position Teva as unique partner
for EU wholesale & retail players
Big-to-BigPortfolio breadth and
geographical presence position Teva as unique partner
for EU wholesale & retail players
Sell-outDistinctive commercial offers and lean & agile go-to-market models
match evolving market needs
Sell-outDistinctive commercial offers and lean & agile go-to-market models
match evolving market needs
New products / loyalty program
PullPull
1. 2.
9
-
Closing Remarks
European generics market is attractive
Teva is uniquely positioned to succeed in Europe
Tevas European growth strategy is focused on achieving market leadership
By 2012, Teva will more than double sales and grow EBIT even faster
10
-
Chaim HurvitzGroup VP InternationalTeva Pharmaceutical Industries Ltd.February 21, 2008
International Generic Markets
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Key Themes
Huge potential in the International markets
Strong starting point - market positions, global capabilities
1
-
Our Goal
2012
$3.2 4.0 B
2007
International Sales
18-23%
$1.4 B
2
-
Strong International Market Growth
Source: IMS, ex-factory prices 07/07
Pharma Market (CAGRs 2007-2011)
International markets:2007 : $ 188 B2011: $ 257 B
LatinAmerica:
10%
Japan: 4%
Asia:11%
Eastern Europe:
18%
3
-
Broad Teva Presence in International Markets
PolandCzech
Lithuania
ChinaHungary
Mexico
Venezuela
Chile
Argentina
Israel
19 Manufacturing sites
3 Partnerships 24 National
companies
Peru
Uruguay
Brazil S. Africa
KenyaSingapore
Japan
Taiwan
RomaniaBulgariaTurkey
RussiaLatvia
Ukraine
Presence
India
4
-
International Generic Markets Growing Rapidly
Source: IMS; Espicom; Teva estimates
2007 ($B) Generics 2012 ($B) GenericsCAGR 2007-12 Percent
1.5
2.5
3.2
3.3
3.4
3.5
6.6
12.7China
India
Mexico
Japan
Turkey
Russia
Brazil
S. Korea
4.6
5.2
4.3
8.9
6.6
4.9
9.3
22.4
7
7
6
25
16
22
14
12
5
-
Strategic Considerations For Prioritizing Markets
Market size
Growth rate
Readiness / Maturity
- Political and economy stability
- Government accountability to health care
- Regulatory & Legal environment
6
-
Two Types of Markets on our Priority List
Early Generic marketsEmerging Economies
Large, or rapidly growing overall pharmamarket
Low generic share
Favorable trends e.g., demographic growth, cost pressure
Strong economic growth and rising personal wealth
Consolidated group of retailers and distributors
Rising patient demand for quality products
Example: JapanExample: Brazil, Mexico
7
-
Brazil Emerging Economy; Quality Is Growing in Importance
Source: Espicom, IMS, Expert Interviews, Teva analysis
$ Billions$ Billions
BioequivalentGenerics
Branded Generics and Similares
Patentedmolecules
CAGR 2007-12 Percent
-1
8
25
9.4
8.8
17.4
13.6
+5%
2012
4.6
4.0
20071.5
2.7
Rising personal wealth drives Bioequivalent growth at the expense of Similares
Customers are consolidating enabling big-to-big strategies
8
-
Mexico Emerging Economy; Quality Is Growing in Importance
Source: Team analysis, RMBC, experts interviews, Teva analysis
$ Billions$ Billions
3.4
CAGR 2007-12 Percent
14
12
Generics
10.3
18.5
2012
6.6
2007
13.7
25.1
3.4
+13%
Innovative& Branded Generics
Already # 1 in Public Sector
Government is: Enforcing
bioequivalence laws
Increasing public health spending
A broad portfolio is important in tenders
9
-
Japanese Generics Market Poised To Grow
Worlds 2nd largest pharma market
- 2007: $67B - 2012 projection: $83B
Attractive fundamentals:
- Aging population
- Rising healthcare costs
- Government encouraging generics penetration
10
-
Significant Opportunity To Increase Generics Penetration In Japan
Generics share of total prescription drug marketIn percentage
Source: IMS; MHLW; Espicom; Teva analysis
Government targeting 30% volume share by 2012
Government could save ~$25B annually
Volume Value
5
17
11
-
Closing Remarks
Huge potential
Strong starting point - markets positions, global capabilities
Growth by:
Extending existing presence
Entering new markets
Our goal: $3.24.0 Billion in profitable revenues in 2012
12
-
NJE-1410.1305-20080207-dineHR2
Global Generic Resources
Amir ElsteinExecutive VP, Global ResourcesTeva Pharmaceutical Industries Ltd.February 21, 2008
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Key Themes
Enable Teva to win in all markets
where we compete
Enable Teva to win in all markets
where we compete
Goal of Global Generic Resources
Goal of Global Generic Resources
1
-
Pharma operations
Supply chain
GR&D TAPI
Key Success Factors For Our Growth Strategy
Greatest rate of first-to-market products
Redefine customer service
Competitive cost position
Shift from unifocal to multifocal
Leverage our scale
2
-
Global Generic Resources: Driving Market Leadership
Service leadership
Portfolio value
Double capacity
Unmatchedcombined capabilities
2xperformance
3
-
TAPI Global Advantage Size and Service
195238245274303357360
500550
1,460
Competitors
TevaWesternIndianChinese
CompanyEstimated 2007 Sales$ Millions Huge portfolio (250+ products)
Highly responsive Strong patent position Top talent scientific
and management
Huge portfolio (250+ products)
Highly responsive Strong patent position Top talent scientific
and management
4
-
Global Portfolio Uses U.S. as Springboard
2007 2010
P IV / First-to-file >50% >50%
High Portfolio Value: Total Value and Value per File
# Global files 126 More than double
Rapid cost-effective
entry into Europe and International
markets
Rapid cost-effective
entry into Europe and International
markets
Leveraged investment Bioequivalence studies API development Formulation technology Manufacturing process
5
-
Service Leadership at the Next Level
Teva service: Big-to-Bigsupply system
Teva service: Big-to-Bigsupply system
Just-in-time/pull delivery
Customized shipping
Global supply chain
Broad portfolio and rapid targeted distribution
Customer needsCustomer needs
Inventory reduction
Lower labor costs
Multi-region/multi-country supply reliability
Pharmacy profitability/product availability
6
-
Substantially Expanding our Supply Chain to Support Growth
Solid oral drugsBillions of tablets
Moving to separate from the pack
Enhancing our already powerful launch capability
Moving to separate from the pack
Enhancing our already powerful launch capability
2007 2008 2009 2010 2011 2012
40
60
80
100
120
>2x in on-timecapacity
>2x in on-timecapacity
7
-
Selecting the Best Site to Maximize Value
MissouriNetherlands
Hungary
Italy India
Israel (5)Mexico
SwitzerlandNJ
Puerto Rico
Czech Republic
China SpeedSpeed
EBITEBIT
Vertical Vertical integrationintegration
Peru
Chile Argentina
Venezuela
Toronto
CA PA
UK
Brazil
Operating in 20 countriesTAPI: 16 plants & 8 R&D sitesPharma: 33 plants & 16 R&D sites
Operating in 20 countriesTAPI: 16 plants & 8 R&D sitesPharma: 33 plants & 16 R&D sites
8
-
Global Leadership
Enable Teva to win in all markets
where we compete
Enable Teva to win in all markets
where we compete
Double portfolio value and capacity of global core functions
Maintain and enhance service leadership
Separate from the pack unmatched global generic resources
9
-
Moshe ManorGroup VP - Global Innovative ResourcesTeva Pharmaceutical Industries Ltd.February 21, 2008
Tevas Innovative Strategy
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Key Themes
$3 billion in risk-adjusted revenues expected by 2012
Growth in Innovative contributes to Teva brand and balanced business model
Investing to create long-term value
1
-
Proven Capabilities Across the Value Chain
Sourcing innovation, products and companies, focusing on Israeli science
Executing trials at low cost, with competitive recruitment rates
Experience in working with regulators
First-class capabilities Synergies: Leveraging expertise of Generic R&D
Proven messages that drive market share Highly-productive sales force
Sourcing
Development
Regulatory
Manufacturing
Marketingand
Sales
2
-
Our Differentiated Approach to Innovative
Focus on niche therapeutic areas
Products with: Differentiated clinical attributes Real economic value for patients and payors
Tevas unique advantages Sourcing Development Go-to-market approach
Strategies to mitigate risk Upfront investment Methodologies (Biomarkers)
3
-
Three-Pronged Strategy
Unique sourcing value proposition
Source products globally in focused TAs Rapid evaluation and investment in opportunities
(New Ventures) Unique value proposition (IP)
Next-generationdevelopment
Streamline decision-making; shorten time, kill early Flexibility by outsourcing non-strategic functions Trials in emerging markets Early investment to mitigate risk
Focus on niche specialty areas Small, specialty sales forces Payor and trade relationships
Go-to-market model
4
-
Phase III/IIIB
S
u
b
m
i
s
s
i
o
n
Phase IVPhase II
Copaxone40mg(MS)
Copaxone(MS)
Copaxone(CIS/MS )
Laquinimod(MS)
Azilect(PD)
Azilect(PD/DM)
Copaxone40mg (ALS)
Phase I
StemEx(Cancer)
CT-011(Hematol. Cancer )
CT-011(Solid
Cancers)
Laquinimod(CD)
Talampanel(ALS )
Laquinimod(SLE/LN)
Debrase(burns)
AutoImmune:SLE/LN LupusCD Crohns Disease
MS Other IndicationsNeurology:PD Parkinsons Disease
Clinical Development Pipeline
Oncology
5
-
Time-to-Market for Potential Products
Copaxone 40 mg (MS)
Azilect(PD - DM)
StemEx(Cancer)
Laquinimod(MS)
Copaxone 40mg(ALS)
CT-011(Hematological Cancer)
2009-2011 2012-2014 2015 and beyond
Copaxone 20mg (CIS)
CT-011(Solid Cancer)
Debrase(burns)
Laquinimod(SLE/LN)
Other IndicationsAuto-Immune:SLE/LN LupusCD Crohns Disease
MS Neurology:PD Parkinsons Disease
Potential revenue(risk adjusted)2015: $4-5B
Oncology
Laquinimod(CD)
Talampanel(ALS)
6
-
5%
Copaxone Is On-Track to Become Global #1 (in Value)
21%
2004
30%
21%
25%
23%
2005
29%
21%
32%
22%
25%Copaxone
25%24%
2006
26%
20%
25%
30%
0%
35%
24%
2007
Avonex
Betaseron
Rebif
20%
Tysabri
Note: Based on the last release of all companies (Q3)
1%5%
25%
7
-
What Will Fuel Copaxones Growth?
Efficacy in CIS
Short Term
Efficacy and
Safety in RRMS
Efficacy on
damage and
repair
Long Term
Efficacy and
Safety in RRMS
Level of Differentiation
Low
Medium
High
In addition: Copaxone 40mg with increased efficacy Oral Laquinimod
Product features and benefits
8
-
Innovative Long Term Growth
Risk-Adjusted Revenues
2007 2012 2015
$1.8 B*
$3 B
$4 5 B
* In-Market Sales9
-
$3 Billion in risk-adjusted revenues by 2012
Strong growth of Copaxone and Azilect
Building a portfolio that drives growth past 2012
Leveraging Tevas expertise, capabilities, synergies
Extending our capabilities into additional focused therapeutic areas
The Future of Tevas Innovative Business
10
-
Biogenerics
Amir ElsteinExecutive VP, Global ResourcesTeva Pharmaceutical Industries Ltd.February 21, 2008
-
TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
-
Key Themes
Biopharmaceuticals huge potential
Biogenerics next wave of growth for generics
Our strategy same for less
Investing for leadership
1
-
Biopharmaceuticals Predicted Growth
474
2007
165
450
615
2012
Biologics
Small molecule
485
89
1990
94
380
Market size, worldwide$ Billions
Source: Evaluate Pharma
Total 5
3
CAGR2007-12Percent
12
2
-
Biogenerics: Next Generation of Growth for Teva
Over $40 billion in current biopharmaceutical sales exposed to generic competition over the next 10 years
Higher barriers to entry and attractive returns
Aligned with market and social forces through our generic value proposition
3
-
Biogenerics: Teva Approach and Key Principles
Reduce cost of development and production to provide affordable Biopharmaceuticals and competitive market position
Invest in technologies, infrastructure and capabilities to develop and produce at low cost
Leverage existing bioformulation and manufacturing expertise
Pursue early entry and/or more for less strategies as opportunities to boost value to our shareholders
Investing for the long-term
4
-
Our Biogenerics Strategy
Substitution Identical product
Equivalentbut notsubstitutable
Development focus Commercial approach
Same for less
Opportunistic: more for less
Same clinicalattributes --Early entry IP
5
-
Investing for Biogenerics Leadership
Key success factors Technology platforms Market presencePortfolioLow cost position
Teva capabilities
Clinical/development Manufacturing Commercialization Payor relationships IP
CoGenesys value-add
Product IP HSA-fusion technology Product in development CMC process and
technology
6
-
Biogenerics Strategy Guiding Principles
Leadership Industry-shaping role
Generic value proposition Same for less
Invest wisely and patiently
Organic and inorganic
7
-
Modeling TevaDan SuesskindCFOTeva Pharmaceutical Industries Ltd.February 21, 2008
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TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
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2012 Projected Sales
$1.4 BEurope $9.5 11.5 B
$0.9 B
North AmericaTAPI
$19.0 21.5 B
$5.1 5.7 B
$2.2 BInternational
$5.2 B
$0.6 B
$9.4 B
$3.2 4.0 B 18 23%
18 21%
13 17%
CAGR -2
CAGR15-18%
Note: 2012 totals do not sum; reflect companys projected overall range1
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Balanced Business Model Geographies
20072007
20122012
North America55%
API6%
International15%
Europe23%
API4%
North America51%
International18%
Europe27%
2
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Balanced Business Model Businesses
20072007
20122012
Generics75%
API6%
Branded19%
Generics74%
Branded22%API
4%3
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Proforma P&L
2007$ Billions
Sales
Gross Margin
R&D
SG&A
Operating Profit
Finance Expenses/Income
Tax
Net Income
9.4
4.9
0.6
1.9
2.4
0.4
2.0
Percent2012$ Billions Percent
100
51.8
6.2
20.2
25.5
17.0
20.8
19.0 21.5
3.8 4.9
100
>50%
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Closing ThoughtsShlomo YanaiPresident and CEOTeva Pharmaceutical Industries Ltd.February 21, 2008
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TODAYS PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA, NEURONTIN, LOTREL, FAMVIR, AND PROTONIX, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS, THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
Forward-Looking Statements
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What You Can Expect From Teva
Continuous profitable growth
Long-term perspective: product portfolio, capacity and service
Balanced business model & attractive financial returns
Expanding leadership in key markets
2