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Teva pharmaceutical industries limited Teva pharmaceutical industries limited Document Transcript

  • COMPANY PROFILE Teva Pharmaceutical Industries Limited REFERENCE CODE: 70912FAE-F66F-4F80-8DB6-426797025AC6 PUBLICATION DATE: 28 Sep 2012 www.marketline.com COPYRIGHT MARKETLINE. THIS CONTENT IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED OR DISTRIBUTED.
  • Teva Pharmaceutical Industries Limited TABLE OF CONTENTS TABLE OF CONTENTS Company Overview..............................................................................................3 Key Facts...............................................................................................................3 Business Description...........................................................................................4 History...................................................................................................................6 Key Employees...................................................................................................10 Key Employee Biographies................................................................................12 Major Products and Services............................................................................22 Revenue Analysis...............................................................................................23 SWOT Analysis...................................................................................................25 Top Competitors.................................................................................................31 Company View.....................................................................................................32 Locations and Subsidiaries...............................................................................34 Teva Pharmaceutical Industries Limited © MarketLine Page 2
  • Teva Pharmaceutical Industries Limited Company Overview COMPANY OVERVIEW Teva Pharmaceutical Industries (Teva or ‘the company’) is the world's leading generic pharmaceutical company. Teva is engaged in the development, production and marketing of generic, proprietary branded pharmaceuticals and active pharmaceutical ingredients (APIs). The company conducts its operations in the Americas, Europe, Asia and other regions of the world. Teva is headquartered in Petach Tikva, Israel, and employed 45,754 people as on December 31, 2011. The company recorded revenues of $18,312 million during the financial year ended December 2011 (FY2011), an increase of 13.6% over FY2010. The operating profit of the company was $3,109 million during FY2011, a decrease of 19.7% compared with FY2010. The net profit was $2,759 million in FY2011, a decrease of 17.2% compared with FY2010. KEY FACTS Head Office Teva Pharmaceutical Industries Limited 5 Basel Street Petach Tikva 49131 ISR Phone 972 3 926 7267 Fax 972 3 923 4050 Web Address http://www.tevapharm.com Revenue / turnover 18,312.0 (USD Mn) Financial Year End December Employees 45,754 New York Ticker TEVA Tel Aviv Ticker TEVA Teva Pharmaceutical Industries Limited © MarketLine Page 3 View slide
  • Teva Pharmaceutical Industries Limited Business Description BUSINESS DESCRIPTION Teva Pharmaceutical Industries (Teva or ‘the company’) is a provider of generic pharmaceuticals. The company also offers proprietary branded pharmaceuticals, biopharmaceuticals and active pharmaceutical ingredients (APIs). It has its operations in Americas, Europe, Asia and other regions of the world. Teva operates through a single business segment: pharmaceutical.The company develops, produces, markets and distributes products in three primary areas: generic products, branded products and over-the-counter (OTC) products. The company offers generic pharmaceutical products in a variety of dosage forms, including tablets, capsules, ointments, creams, liquids, injectables and inhalants. It offers a range of basic chemical entities, as well as specialized product families such as sterile products, hormones, narcotics, high-potency drugs and cytotoxic substances, in both parenteral and solid dosage forms. Teva's generic activities are conducted in the US, Europe and other international markets. The company also manufactures active pharmaceutical ingredients (APIs) at its own manufacturing facilities, which are used by Teva itself and are also sold to third parties. Teva Pharmaceuticals USA, the company's principal subsidiary in the US, markets over 400 generic products in more than 1,300 dosage strengths and packaging sizes, including oral, injectables and inhaled products Through Teva Europe, Teva’s European subsidiary, the company is a leading generic pharmaceutical company in Europe. European pipeline of Teva includes generic versions of branded products. Teva provides professional health care products and services in its domestic market, Israel. In addition to generic, branded and OTC pharmaceutical products, Teva sells and distributes a range of health care products and services, including consumer health care products, hospital supplies, dialysis equipment and disposables, diagnostics and home care services.Teva's distribution company, Salomon, Levin and Elstein, provides logistical support for the selling and distribution activities of Teva in Israel. Teva’s generic activities in other international markets include its operations in Canada. Teva manufactures and markets generic prescription drugs in Canada through Teva Canada (formerly known as Novopharm). Teva Canada’s generic product portfolio includes 300 products in 1,256 dosage forms and packaging sizes. It markets generic products to retail chains, retail buying groups and independent pharmacies. Teva also offers generic pharmaceutical products in other international markets including Japan, Russia, Croatia and Latin America. The company's branded product offerings are grouped into five categories: central nervous system (CNS), respiratory, women’s health, oncology and other. Teva Pharmaceutical Industries Limited © MarketLine Page 4 View slide
  • Teva Pharmaceutical Industries Limited Business Description The company’s CNS product line includes Copaxone, for the treatment of multiple sclerosis; Azilect, for the treatment of Parkinson's disease; Provigil and Nuvigil, for the treatment of wakefulness; Amrix, Actiq and Fentora, for the treatment of pain; and Gabitril, for the treatment of epilepsy. Teva offers two main branded products, ProAir (albuterol HFA) and Qvar (beclomethasone diproprionate HFA) in the respiratory therapy area. ProAir, which is sold only in the US, is a short-acting beta-agonist (SABA) for the treatment of bronchial spasms linked to asthma or chronic obstructive pulmonary disease (COPD) and exercise-induced bronchospasm. Qvar is an inhaled corticosteroid for long-term control of chronic bronchial asthma and is sold in the US and Europe. The company’s women's health product line includes its branded women’s health products. This product line focuses on several therapeutic areas, including oral contraceptives, intrauterine contraception, hormone therapy treatments for menopause/perimenopause and therapies for use in infertility and urinary incontinence. The main women's health product portfolio in the US includes Plan B One-Step OTC/Rx (levonorgestrel), an emergency oral contraceptive; and ParaGard T380 A (intrauterine copper contraceptive), an intrauterine contraceptive. The company’s branded oncology product line includes certain products acquired through the acquisition of Cephalon in October 2011 as well as Teva’s biosimilar products indicated mainly for the treatment of side effects of oncology treatments. Treanda (bendamustine hydrochloride), through the Cephalon acquisition, is used for the treatment of patients with chronic lymphocytic leukemia (CLL) and patients with indolent B-cell non-Hodgkin’s lymphoma (NHL) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. Teva’s Tevagrastim/Ratiograstim (filgrastim) is primarily used to reduce the risk of infections in oncology patients receiving chemotherapy. The company also manufactures Eporatio (erythropoietin), which is indicated for the treatment of renal anemia or chemotherapy-induced anemia. Besides these four product categories, Teva also offers other branded products. • Under the area of OTC products, Teva has formed PGT Healthcare, its joint venture (JV) with The Procter & Gamble Company (P&G) in November 2011.Teva owns a 49% interest in this JV and P&G owns the remaining 51% interest. PGT Healthcare combines the over the counter (OTC) portfolios of Teva and P&G outside of North America. Besides its three primary areas, Teva sells third party products for which it acts as distributor (mostly in Israel and Hungary). The company also sells animal health products, medical products, as well as other miscellaneous items. Teva Pharmaceutical Industries Limited © MarketLine Page 5
  • Teva Pharmaceutical Industries Limited History HISTORY Teva‘s history can be traced back to the establishment of Salomon, Levin and Elstein Ltd in Jerusalem in 1901. Salomon, Levin and Elstein began its business as a small drug wholesaler that distributed imported medicines. During the 1930s, the Israel-based drug importers faced problems in importing drugs from Germany. To overcome the drug shortage, Salomon, Levin and Elstein opened a small drug factory named "Assia" in Petach Tikva, Israel, in 1935. Further in the same year, other drug factories were established including Zori in Tel Aviv, and Teva, founded by Dr. Gunter Friedlander, in Jerusalem. Mass immigration followed with the founding of Israel in 1948, resulted in rapid growth of the local drug market. In 1951, Salomon, Levin and Elstein went public through an initial public offering on the Tel Aviv Stock Exchange. This was followed by consolidation in the industry. Assia and Zori merged and later acquired a controlling interest in Teva in 1964. The three firms merged together to form Teva Pharmaceutical Industries (Teva or ‘the company’) in 1976. During the late 1970s, the company began exporting to overseas market by forming joint ventures (JVs). Teva acquired a major Israeli drug manufacturer, Ikapharm (later dissolved in 1982 and merged into Teva), along with its manufacturing plant in Kfar Saba in 1980. The acquisition enabled Teva to separate penicillin production and non-penicillin drugs, an essential requirement of international health authorities, paving the way for Teva's entry to the US market. Teva was granted FDA approval for its Kfar Saba manufacturing plant in 1982. Also during the year, it established a marketing company in the US. In 1984, Teva acquired a 50% interest in Migada, a manufacturer of disposable medical equipment. Through this acquisition, Teva significantly expanded its activity in the field of medical devices. A year later, a joint company was set up between Teva and the US company, WR Grace. In 1988, Teva bought Abic, a major Israeli pharmaceutical company. Over the 1990s, Teva continued to expand in the global generic market by adopting an aggressive M&A strategy in the US. The 1990s commenced with the buyout of WR Grace's interest in the JV followed by the acquisition of Biocraft. Later on in the decade, this strategy was also implemented in Europe with the acquisitions of APS/Berk, Biogal, Pharmachemie and others. Teva launched Copaxone, a treatment for multiple sclerosis (MS), during the 1990s. Copaxone entered the UK market in 2000. Teva forged a strategic alliance agreement for 12 controlled release generic pharmaceutical products with Impax in 2001. Later in the same year, 15 European countries agreed to approve Copaxone Teva Pharmaceutical Industries Limited © MarketLine Page 6
  • Teva Pharmaceutical Industries Limited History for the reduction in frequency of relapses in patients with relapsing-remitting MS. Teva also signed an exclusive agreement with Oxford GlycoSciences (OGS) for the marketing and distribution of OGS' Vevesca (OGT-918) in Israel (2001). Teva acquired Bayer Classics, the French generic pharmaceutical marketing company of Bayer Pharma, in 2002. Later in the same year, the company acquired Honeywell Pharmaceutical Fine Chemicals. Teva entered into a long-term strategic alliance with Eisai Company, for the global co-development of rasagiline for several indications and its co-promotion in the US market in 2003. Around the same time, Teva managed to expand its drug portfolio still further through an agreement with Acorda Therapeutics to co-develop and co-promote valrocemide for several indications. Teva suffered a blow in 2003, when a US appeals court confirmed the validity of Merck & Co's patent for its osteoporosis drug, Fosamax. In the same period, Teva acquired injectable drug maker, Sicor. The company settled its pending patent litigation with Bristol-Myers Squibb, relating to carboplatin injection, the generic version of cancer treatment Paraplatin in 2004. Later in the same year, Teva acquired Pfizer's Italian generic pharmaceutical marketing company, Dorom. In 2006, Teva acquired Ivax for $7.4 billion in cash and stock. The acquisition of Ivax gave Teva a respiratory disease business, including inhalers, strengthened its push into branded prescription drugs, and expand its pipeline and global reach in generics. Teva bolstered its presence in China in 2006 by increasing its equity ownership in Tianjin Hualida Biotechnology from 45% to 60%. Later in the same year, Teva received FDA approval for marketing generic version of Bristol-Myers Squibb's Pravachol tablets. In 2007, Teva launched 25 generic versions of branded products including Mavik (trandolapril), Omnicef (cefdinir) capsules and suspension, Focalin (dexmethylphenidate HCl), Zofran (ondansetron) and Protonix (pantoprazole sodium). During 2008, Teva made significant acquisitions including CoGensys, a privately-held biopharmaceutical company; Bentely Pharmaceuticals (Bentely), a company with a portfolio of 130 pharmaceutical products in various dosages and strengths, as both branded generic and generic products; and the rival Barr Pharmaceuticals (Barr) for approximately $7.5 billion. The acquisition of Barr, in particular, further bolstered Teva's position as the leading generic pharmaceuticals company in the world. Teva consolidated its businesses by selling its Israel-based veterinary business unit to Phibro Animal Health for approximately $47 million. Teva and OncoGenex Pharmaceuticals entered into a global license and collaboration agreement in 2009 to develop and commercialize OGX-011, a Phase III cancer therapy designed to inhibit cancer treatment resistance, as well as an agreement to purchase shares in OncoGenex. Teva Pharmaceutical Industries Limited © MarketLine Page 7
  • Teva Pharmaceutical Industries Limited History Teva completed the acquisition of ratiopharm, Germany's second largest generic producer and the sixth largest generic drug company worldwide, for an enterprise value of E3.625 billion (approximately $5 billion ) in 2010. Teva completed the acquisition of Laboratoire Theramex and related companies from Merck Serono in January 2011. Laboratoire Theramex, a Europe-based women's health business, brought to Teva a portfolio of women's health and gynecology products sold in more than 50 countries. Further in January 2011, Teva acquired Corporacion Infarmasa, a leading pharmaceutical company in Peru, from The Rohatyn Group and Altra Investments for an undisclosed sum. The Procter & Gamble Company (P&G) and Teva signed a master agreement in March 2011 to create a partnership in consumer health care by bringing together both companies' existing over-the-counter (OTC) medicines. In July 2011, Teva acquired Taiyo Pharmaceutical Industry Co., the third largest generic pharmaceutical company in Japan, for $934 million in cash. In the following month, Zoely (NOMAC/E2 -nomegestrol acetate 2.5 mg/17B-estradiol 1.5 mg), Teva’s new oral contraceptive, received a marketing authorisation in the European Union (EU) for the prevention of pregnancy. Further in August 2011, the FDA accepted Teva’s filing of new drug application (NDA) for beclomethasone dipropionate hydrofluoroalkane (BDP Nasal HFA), a nasal aerosol corticosteroid in development for the treatment of seasonal allergic rhinitis (SAR) and perennial allergic rhinitis (PAR). In the following month, Teva acquired the remaining 50% of Teva-Kowa Pharma, its Japanese JV, from Kowa Company for $150 million in cash. Teva completed its acquisition of Cephalon, a US-based global biopharmaceutical company, for $6.8 billion including assumed debt, in October 2011. In the same month, Teva and Dr. Reddy's Laboratories, an India-based integrated pharmaceutical company, launched Olanzapine Tablets, the generic version of Eli Lilly's Zyprexa, an atypical antipsychotic for the treatment of schizophrenia and bipolar disorder. In November 2011, P&G and Teva created PGT Healthcare, a JV between the two companies in consumer health care. The FDA granted US marketing approval for Teva’s QNASL nasal aerosol, a new nasal aerosol corticosteroid to treat seasonal nasal and year-round nasal allergy symptoms in adults and adolescents, in March 2012. Further in the same month, Teva launched progesterone capsules (100 mg and 200 mg), the AB-rated generic equivalent of Abbott Laboratories’ Prometrium capsules; and escitalopram oxalate tablets, a generic version of Forest Laboratories ’Lexapro tablets, indicated for depression and generalized anxiety disorder treatment. Teva launched irbesartan and irbesartan-hydrochlorothiazide tablets, generic versions of Sanofi’s high blood pressure treatments, Avapro and Avalide tablets in April 2012. In the following month, Teva Pharmaceutical Industries Limited © MarketLine Page 8
  • Teva Pharmaceutical Industries Limited History Teva’s American Depositary Shares began trading on the New York Stock Exchange (NYSE) under its existing ticker symbol ‘TEVA’. During June 2012, Teva launched Olanzapine and Fluoxetine capsules USP 6 mg/25 mg, 12 mg/25 mg, 6 mg/50 mg, and 12 mg/50 mg, a generic equivalent of Lilly’s Symbyax, the acute treatment of treatment-resistant depression and bipolar I depression in adults. Teva announced progress of lipegfilgrastim and balugrastimof, both being biologic investigational drugs which are being evaluated to treat neutropenia in breast cancer patients undergoing chemotherapy. Both product candidates had completed phase III clinical trials. Teva launched an authorized generic of ACTOplus met (pioglitazone /metformin tablets) 15 mg/500 mg and 15 mg/850 mg in August 2012. Later in the same month, Teva launched an authorized generic of Actos (pioglitazone-hydrochloride tablets) 15 mg, 30 mg and 45 mg. The FDA granted US marketing approval for Teva's Tbo-filgrastim for the treatment of chemotherapy-induced neutropenia in the US. In September 2012, Teva announced that Bayer HealthCare would acquire Teva's animal health business in the US. The transaction is to be completed in 2013. Further in September 2012, Teva expanded its central nervous system (CNS) development pipeline with the acquisition of Huntexil development program rights from NeuroSearch. Teva Pharmaceutical Industries Limited © MarketLine Page 9
  • Teva Pharmaceutical Industries Limited Key Employees KEY EMPLOYEES Name Job Title Board Phillip Frost Chairman of the Board of Directors Non Executive Board Moshe Many Vice Chairman of the Board of Directors Non Executive Board Roger Abravanel Director Non Executive Board Abraham E. Cohen Director Non Executive Board Amir Elstein Director Non Executive Board Chaim Hurvitz Director Non Executive Board Elon Kohlberg Director Non Executive Board Roger D. Kornberg Director Non Executive Board Richard Alan Lerner Director Non Executive Board Joseph Nitzani Director Non Executive Board Yitzhak Peterburg Director Non Executive Board Dan Propper Director Non Executive Board Dafna Schwartz Director Non Executive Board Ory Slonim Director Non Executive Board Erez Vigodman Director Non Executive Board Dan S. Suesskind Director Non Executive Board Jeremy M. Levin President and Chief Executive Officer Senior Management Carlo De Notaristefani President and Chief Executive Officer, Global Operations Senior Management Richard S. Egosi Group Executive Vice President, Chief Legal Officer and Company Secretary Senior Management Eyal Desheh Group Executive Vice President, Chief Financial Senior Management Officer Moshe Manor President and Chief Executive Officer, Teva Asia Senior Management and the Pacific Isaac Abravanel Group Executive Vice President, Human Resources; Chief Integration Officer Senior Management Michael Hayden President of Global R&D and Chief Scientific Officer Senior Management Robert Koremans President and Chief Executive Officer, Teva Europe Senior Management Itzhak Krinsky Group Executive Vice President; Head, Business Senior Management Development William S. Marth President and Chief Executive Officer, Americas Senior Management Teva Pharmaceutical Industries Limited © MarketLine Page 10
  • Teva Pharmaceutical Industries Limited Key Employees Name Job Title Board Frances M. Zipp Group Executive Vice President; Global Head, Quality Senior Management Judith Vardi President and Chief Executive Officer, Teva EMIA Senior Management Arik Yaari Group Executive Vice President, Institutional and Senior Management Community Affairs Ron Grupel Chief Internal Auditor Senior Management Hadar Vismunski-Weinberg Vice President, Corporate Communications Senior Management Teva Pharmaceutical Industries Limited © MarketLine Page 11
  • Teva Pharmaceutical Industries Limited Key Employee Biographies KEY EMPLOYEE BIOGRAPHIES Phillip Frost Board: Non Executive Board Job Title: Chairman of the Board of Directors Since: 2010 Age: 75 Dr. Frost has been the Chairman of the Board of Directors at Teva Pharmaceutical Industries (Teva or ‘the company’) since 2010. Previously, he served as Vice Chairman of Teva since 2006 and as Chairman and Chief Executive Officer of Ivax from 1987 until 2006. Dr. Frost was also President of Ivax from 1991 to 1995. He presently serves as the Chairman and Chief Executive Officer of OPKO Health, and Chairman of the Board of PROLOR Biotech and of Ladenburg Thalmann Financial Services. He is a Director of Castle Brands. He is also a member of the Board of Trustees of The Scripps Research Institute and of the Board of Trustees of the University of Miami. Moshe Many Board: Non Executive Board Job Title: Vice Chairman of the Board of Directors Since: 2010 Age: 83 Dr. Many has been the Vice Chairman of the Board of Directors at Teva since 2010. He has been a Director at Teva since 1987. Dr. Many has been the President of the Ashkelon Academic College since 2002 and was previously President of Tel Aviv University. He served as the Chief of Urology from 1976 until 1987 and Chairman of Surgery from 1983 until 1987 at Sheba Medical Center. He serves as the Chairman of the Board of Real Imaging, and as a Director of BiondVax Pharmaceuticals. Roger Abravanel Board: Non Executive Board Job Title: Director Since: 2007 Age: 65 Mr. Abravanel has been a Non Executive Director at Teva since 2007. In 2006, he retired from McKinsey & Company, which he joined in 1972 and where he had become a principal in 1979 and a Director in 1984. He serves as a Director of Admiral Group, Banca Nazionale del Lavoro (a subsidiary of BNP Paribas), Luxottica Group, and COFIDE - Gruppo De Benedetti. Teva Pharmaceutical Industries Limited © MarketLine Page 12
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Abraham E. Cohen Board: Non Executive Board Job Title: Director Since: 1992 Age: 75 Mr. Cohen has been a Non Executive Director at Teva since 1992. He served as a Senior Vice President of Merck from 1982 to 1992 and from 1977 to 1988 as President of the Merck Sharp & Dohme International Division. Since his retirement in 1992, Mr. Cohen has been active as an international business consultant. He served as a Director of Akzo Nobel until 2007. Mr. Cohen is also a Director at Chugai Pharmaceutical, BioTime, and Mannkind Corporation. Amir Elstein Board: Non Executive Board Job Title: Director Since: 2009 Age: 56 Mr. Elstein has been a Non Executive Director at Teva since 2009. From 2004 to 2008, he was the Executive Vice President of Global Pharmaceutical Resources at Teva. From 1995 to 2004, Mr. Elstein served on the company’s Board of Directors. Prior to joining Teva in 2004, Mr. Elstein held a number of executive positions at Intel Corporation, most recently as General Manager of Intel Electronics, an Israeli subsidiary of Intel Corporation. He serves as the Chairman of the Boards of Israel Corporation, and Tower Semiconductor. He also serves as the Chairman of the Board of Governors of the Jerusalem College of Engineering. He also serves as the Chairman and or a member of the board of several academic, scientific, educational, social and cultural institutions. Chaim Hurvitz Board: Non Executive Board Job Title: Director Since: 2010 Age: 51 Mr. Hurvitz has been a Non Executive Director at Teva since 2010. Previously, he was President of Teva International Group from 2002 until 2010, as President and Chief Executive Officer of Teva Pharmaceuticals Europe from 1992 to 1999 and as Vice President of Israeli Pharmaceutical Sales from 1999 until 2002. He currently serves as the Chief Executive Officer of CHealth, a private venture capital firm, since 2011. Teva Pharmaceutical Industries Limited © MarketLine Page 13
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Elon Kohlberg Board: Non Executive Board Job Title: Director Since: 2009 Age: 66 Dr. Kohlberg has been a Non Executive Director at Teva since 2009. He is the Royal Little Professor of Business Administration at the Harvard Business School, where he has taught since 1973. Dr. Kohlberg previously served on Teva's Board from 1987 to 2000. Between 2005 and 2007, he served as Director of Ormat Technologies. Roger D. Kornberg Board: Non Executive Board Job Title: Director Since: 2007 Age: 64 Dr. Kornberg has been a Non Executive Director at Teva since 2007. He is the Winzer Professor in Medicine in the Department of structural biology at Stanford University, where he has taught since 1978. He is a member of the National Academy of Sciences and an honorary member of other academies and professional societies in the US, Europe and Japan. He serves as a Director of Protalix BioTherapeutics and OpththaliX. Richard Alan Lerner Board: Non Executive Board Job Title: Director Since: 2012 Age: 73 Mr. Lerner has been a Non Executive Director at Teva since 2012. Prior to joining Teva, he served as the President of The Scripps Research Institute from 1987 until 2012, and is currently a member of its Skaggs Institute for Chemical Biology and Institute Professor. He is the Lita Annenberg Hazen Professor of Immunochemistry. He is a Director of Kraft Foods, OPKO Health, and Sequenom. He is a member of the Royal Swedish Academy of Sciences and the United States National Academy of Sciences. Joseph Nitzani Board: Non Executive Board Teva Pharmaceutical Industries Limited © MarketLine Page 14
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Job Title: Director Since: 2008 Age: 65 Mr. Nitzani has been a Non Executive Director at Teva since 2008. Serving as a Statutory Independent Director between 2001 and 2007, Mr. Nitzani held various management positions at Mizrahi-Tefachot Bank, most recently as Head of the Capital Markets Division. Previously, he served as Managing Director of The Government Companies Authority from 1991 to 1995, and Chief Executive Oficer of The Tel-Aviv Stock Exchange from 1980 to 1991. He has served as a Director in three subsidiaries of Migdal Capital Markets Group since 2009 (and as the Chairman of one of them since 2010). He also served as a Director of Adanim Mortgage Bank from 2006 to 2008, and of Hadassah Medical Center from 1996 (as Chairman since 2008) to 2010. Yitzhak Peterburg Board: Non Executive Board Job Title: Director Since: 2012 Age: 60 Dr. Peterburg has been a Non Executive Director at Teva since 2012. Before that, he was the Group Vice President of Global Branded Products at Teva from 2010 to 2011. Previously, he served as President and Chief Executive Officer of Cellcom Israel from 2003 to 2005 and Director General of Clalit Health Services from 1997 to 2002. He is a professor at the School of Business, Ben-Gurion University and served as member of the Board of Applisonix from 2007 until 2010. Dan Propper Board: Non Executive Board Job Title: Director Since: 2012 Mr. Propper has been a Non Executive Director at Teva since 2012. Previously, he was a Director of Teva from 2007 until 2011. He is the Chairman of the Board of Osem Investments. Mr. Propper served as the Chief Executive Officer of Osem Investments for 25 years until 2006. In addition to his role at Osem Investments, from 1993 until 1999, Mr. Propper served as President of the Manufacturers Association of Israel, and as the Chairman of the Federation of Economic Organizations in Israel. He serves as the Chairman of the Supervisory Council of the Bank of Israel. He is a Director of Check Point Software Technologies, and a member of the boards of trustees of the Technion, Ben-Gurion University and Weizmann Institute of Science. Teva Pharmaceutical Industries Limited © MarketLine Page 15
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Dafna Schwartz Board: Non Executive Board Job Title: Director Since: 2011 Age: 61 Ms. Schwartz has been a Non Executive Director at Teva since 2011. She has been a faculty member at Ben Gurion University since 1999, where she is the Head of the MBA track (Magama) in Entrepreneurship and High-Tech Management at the Department of Business Administration and the Director of the Bengis Center for Entrepreneurship and Hi-Tech Management, Faculty of Business and Management. She is an economic consultant in Israel and abroad. She currently serves as a member of the boards of Strauss Group, Oil Refineries, and Rotem Industries. Previously, she served as a member of the boards of Al-Bad Massuot Yitzhak, Israel Discount Bank, Giron Development and Building, The Phoenix Insurance Company, and others. She is a member of the Israel National Council for Research and Development and of the EU Expert Group on Policy Relevant Research on Entrepreneurship and SMEs. Ory Slonim Board: Non Executive Board Job Title: Director Since: 2008 Age: 69 Mr. Slonim has been a Non Executive Director at Teva since 2008. He is an attorney in private practice since 1970. Previously, he served on Teva's Board from 1998 to 2003 as a Statutory Independent Director. Between 1987 and 2007, Mr. Slonim was a Director at Migdal Insurance Company, serving as Deputy Chairman from 2000 until 2007 and as Chairman of that company’s audit committee from 2001 until 2007. Between 1993 and 2011, he served as a Director of U. Dori Group, and between 2007 and 2012, he served as a Director in Oil Refineries. Presently, he serves as the Vice Chairman of Harel Insurance Investments & Financial Services. He has served as the Chairman of the Variety Club in Israel since 2006. Erez Vigodman Board: Non Executive Board Job Title: Director Since: 2009 Age: 52 Teva Pharmaceutical Industries Limited © MarketLine Page 16
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Mr. Vigodman has been a Non Executive Director at Teva since 2009. He has been the President and Chief Executive Officer of Makhteshim Agan since 2010. Mr. Vigodman served as President and Chief Executive Officer of Strauss Group from 2001 to 2009. He is a member of the Advisory Committee to the Israel National Economic Council. He is a certified public accountant. Dan S. Suesskind Board: Non Executive Board Job Title: Director Since: 2010 Age: 68 Mr. Suesskind has been a Non Executive Director at Teva since 2010. He was Teva's Chief Financial Officer from 1977 until 2008. From 2004 to 2011, he was a Director of Ness Technologies. Currently, Mr. Suesskind serves as a Director of several companies, including Israel Corporation, Migdal Insurance Company, and Syneron Medica. He is a member of the board (and finance and investment committee) of the Jerusalem Foundation, a member of the Investment Committee of the Israel Academy of Science and Humanities and the Board of Trustees of the Hebrew University. He is one of the founders and a member of the steering committee of the Israeli Forum of Chief Financial Officers. Jeremy M. Levin Board: Senior Management Job Title: President and Chief Executive Officer Since: 2012 Age: 58 Dr. Levin has been President and Chief Executive Officer at Teva since 2012. Prior to joining Teva, Dr. Levin was with Bristol-Myers Squibb (BMS) as Senior Vice President of Strategy, Alliances and Transactions. At the same time, Dr. Levin served as President and Director of two wholly-owned BMS subsidiaries. Before joining BMS, Dr. Levin served as the Global Head of Strategic Alliances at Novartis Institutes of Biomedical Research. In addition, Dr. Levin has served on the executive committees and boards of numerous internationally renowned bioscience, biotechnology, venture fund and research organizations. Carlo De Notaristefani Board: Senior Management Job Title: President and Chief Executive Officer, Global Operations Since: 2012 Teva Pharmaceutical Industries Limited © MarketLine Page 17
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Dr. Notaristefani has been President and Chief Executive Officer of Teva's Global Operations since 2012. Prior to joining Teva, he was a member of the senior management team at BMS since 2004. Before joining that company, he held several senior positions of increasing responsibility in the global operations and supply chain management areas with Aventis, Hoechst Marion Roussell and Marion Merrell Dow, based in Italy, Spain, France and the US. Richard S. Egosi Board: Senior Management Job Title: Group Executive Vice President, Chief Legal Officer and Company Secretary Age: 49 Mr. Egosi is currently Group Executive Vice President, Chief Legal Officer and Company Secretary at Teva. He has been with Teva since 1995, previously serving as the company's Deputy Chief Legal Officer and as Senior Vice President and General Counsel of Teva Americas. Eyal Desheh Board: Senior Management Job Title: Group Executive Vice President, Chief Financial Officer Age: 59 Mr. Desheh is currently a Group Executive Vice President at Teva, and has been its Chief Financial Officer since 2008. He had previously served as Deputy Chief Financial Officer at Teva from 1989 to 1996. Before that, he served as the Executive Vice President and Chief Financial Officer of Check Point Software Technologies from 2000 to 2008. served as the Executive Vice President and Chief Financial Officer of Check Point Software Technologies from 2000 to 2008. Moshe Manor Board: Senior Management Job Title: President and Chief Executive Officer, Teva Asia and the Pacific Since: 2009 Age: 55 Mr. Manor has been President and Chief Executive Officer of Teva Asia and the Pacific since 2010. Previously, he was the Group Vice President of Global Branded Products at Teva from 2009 until 2010. Prior to this, he served as the Group Vice President of Global Innovative Resources from 2006 to 2009. Mr. Manor served as Vice President of Global Products Division from 2002 to 2006. Isaac Abravanel Board: Senior Management Teva Pharmaceutical Industries Limited © MarketLine Page 18
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Job Title: Group Executive Vice President, Human Resources; Chief Integration Officer Age: 57 Mr. Abravanel is currently the Group Executive Vice President of Human Resources at Teva, and has been its its Chief Integration Officer since 2009. Hejoined the company as Corporate Vice President of Human Resources. Prior to Teva, he was the Deputy Chief Executive Officer at Bezeq Israel Telecommunications (2005-2007). Before that, Mr. Abravanel was Senior Vice President of Operations and Customer Service at Pelephone (2001-2005). Michael Hayden Board: Senior Management Job Title: President of Global R&D and Chief Scientific Officer Since: 2012 Dr. Hayden has been President of Global R&D and Chief Scientific Officer at Teva since 2012. Currently, he is Killam Professor of Medical Genetics at the University of British Columbia, and Canada Research Chair in Human Genetics and Molecular Medicine. He is also the founder and Director/Senior Scientist of the Centre for Molecular Medicine and Therapeutics at the University of British Columbia. Dr. Hayden has founded three biotechnology companies, namely, NeuroVir, Aspreva Pharmaceuticals, and Xenon Pharmaceuticals, where he is currently the Chief Scientific Director. Robert Koremans Board: Senior Management Job Title: President and Chief Executive Officer, Teva Europe Since: 2012 Age: 49 Dr. Koremans has been President and Chief Executive Officer of Teva Europe at Teva since 2012. Previously, he served as the Senior Vice President of Generics, Strategy and Development at Sanofi, and as President and Chief Executive Officer of Zentiva from 2009 until 2011. Dr. Koremans has held a variety of senior positions in Europe at the Serono Group from 1993 to 2000; Gruenenthal from 2000 to 2007; and Cryo-Save (Europe’s leading stem cell storage company) from 2007 to 2009. Itzhak Krinsky Board: Senior Management Job Title: Group Executive Vice President; Head, Business Development Age: 59 Teva Pharmaceutical Industries Limited © MarketLine Page 19
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Dr. Krinsky is currently a Group Executive Vice President at Teva, and has been the Head of the company's Business Development since 2005. Prior to joining Teva, he was a Managing Director with Deutsche Bank (Bankers Trust) from 1998 to 2001; The Silverfern Group from 2003 to 2005; and Trenwith Securities in 2005. He was previously a Professor of Finance and Business Economics at Michael G. DeGroote School of Business, McMaster University, from 1993 to 2000. William S. Marth Board: Senior Management Job Title: President and Chief Executive Officer, Americas Since: 2008 Age: 57 Mr. Marth has been President and Chief Executive Officer of Teva Americas since 2010. Previously, he was the President and Chief Executive Officer of North America from 2008 to 2010, and President and Chief Executive Officer of Teva USA from 2005 to 2008. He was previously Executive Vice President and Vice President of Sales and Marketing at Teva USA. Prior to joining Teva USA, Mr. Marth held various positions with the Apothecon division of Bristol-Myers Squibb. He is a licensed pharmacist and serves on various boards and committees, including The University of the Sciences in Philadelphia and the Board of Ambassadors for John 'Hopkins' Project RESTORE. Frances M. Zipp Board: Senior Management Job Title: Group Executive Vice President; Global Head, Quality Ms. Zipp is currently Group Executive Vice President and Global Head of Quality at Teva. Before joining Teva in 2008, she was Senior Vice President of Quality at Barr Pharmaceuticals, and prior to that was Senior Vice President of Quality for Wyeth Pharmaceuticals. She has held various roles in drug development, quality, operations and regulatory at Wyeth and Novartis (Ciba). Judith Vardi Board: Senior Management Job Title: President and Chief Executive Officer, Teva EMIA Since: 2012 Ms. Vardi has been President and Chief Executive Officer of Teva EMIA (Eastern Europe, Middle East, Israel, and Africa) at Teva since 2012. Previously, she served as Vice President and General Manager of Latin America in the company from 2010 until 2012. She has held a variety of other senior positions in Teva including Vice President for the IMAT region (Israel, Middle East, Africa, Turkey), General Manager of Teva Israel, and as Senior Director of multiple sclerosis products in the Global Products Division. Teva Pharmaceutical Industries Limited © MarketLine Page 20
  • Teva Pharmaceutical Industries Limited Key Employee Biographies Arik Yaari Board: Senior Management Job Title: Group Executive Vice President, Institutional and Community Affairs Since: 2012 Mr. Yaari has been the Group Executive Vice President for Institutional and Community Affairs at Teva since 2012. Before that, he served as Group Vice President of Teva Generics System since 2009 and as Group Vice President of Global API division since 2006. Previously, he was the Vice President of Global API Division from 2002 until 2006. Mr. Yaari joined Teva in 1981. Ron Grupel Board: Senior Management Job Title: Chief Internal Auditor Since: 1993 Age: 61 Mr. Grupel has been the Chief Internal Auditor of Teva since 1993. Prior to joining Teva, he was a Partner at Strauss Lazer & Co, Certified Public Accounting and before that, a partner at Kesselman & Kesselman Certified Public Accountants. Teva Pharmaceutical Industries Limited © MarketLine Page 21
  • Teva Pharmaceutical Industries Limited Major Products and Services MAJOR PRODUCTS AND SERVICES Teva Pharmaceutical Industries (Teva or ‘the company’) is a pharmaceutical company, specializing in the development, production and marketing of generic and innovative pharmaceuticals and other products. The company’s key products and brands include the following: Generic products: Generic pharmaceuticals Active pharmaceutical ingredients (APIs) Branded products: Central nervous system (CNS) drugs Respiratory drugs Women’s health products Oncology products Over the counter (OTC) products Brands: Actiq Amrix Azilect Comtan Copaxone Eporatio Fentora Maxair Mirapex Neupro Nuvigil ParaGard Plan B One-Step ProAir Provigil Qvar Ratiograstim Requip Sifrol Tevagrastim Treanda Xopenex Teva Pharmaceutical Industries Limited © MarketLine Page 22
  • Teva Pharmaceutical Industries Limited Revenue Analysis REVENUE ANALYSIS Overview Teva Pharmaceutical Industries (Teva or ‘the company’) recorded revenues of $18,312 million during FY2011, an increase of 13.6% over FY2010. For FY2011, North America, the company's largest geographic market, accounted for 48.1% of the total revenues. The company operates in one business segment: pharmaceuticals. Hence, sales by product line are provided below. Sales by product line During FY2011, Teva’s generics products recorded sales of $10,196 million, an increase of 2.9% over FY2010. The CNS products recorded sales of $4,412 million in FY2011, an increase of 37.8% over FY2010. The respiratory products recorded sales of $878 million in FY2011, an increase of 17.5% over FY2010. The OTC products recorded sales of $765 million in FY2011, an increase of 54.2% over FY2010. The women's health products recorded sales of $438 million in FY2011, an increase of 17.1% over FY2010. The oncology products recorded sales of $268 million in FY2011, as compared to sales of $74 million in FY2010. Other branded products recorded sales of $497 million in FY2011, an increase of 8.5% over FY2010. Other products recorded sales of $858 million in FY2011, a decrease of 0.6% compared with FY2010. Revenues by geography North America, Teva's largest geographic market, accounted for 48.1% of the total revenues in FY2011. Revenues from North America reached $8,800 million in FY2011, a decrease of 6.3% compared with FY2010. Europe accounted for 30.9% of the total revenues in FY2011. Revenues from Europe reached $5,660 million in FY2011, an increase of 43.4% over FY2010. Teva Pharmaceutical Industries Limited © MarketLine Page 23
  • Teva Pharmaceutical Industries Limited Revenue Analysis International markets accounted for 21% of the total revenues in FY2011. Revenues from international markets reached $3,852 million in FY2011, an increase of 38.6% over FY2010. Teva Pharmaceutical Industries Limited © MarketLine Page 24
  • Teva Pharmaceutical Industries Limited SWOT Analysis SWOT ANALYSIS Teva Pharmaceutical Industries (Teva or ‘thecompany’) is the world's largest generic pharmaceutical companies. It is engaged in the development, production and marketing of generic, proprietary branded pharmaceuticals and active APIs.The company’s pharmaceutical manufacturing infrastructure enables it to have a broad product line and an extensive generic pipeline globally. However, continuing consolidation of the company’s customer base could affect its business and results of operations. Strengths Weaknesses Aggressive acquisition strategy helps Teva build size and scale Size and scale advantages providing leadership position in global generics market Strong R&D capabilities keeping product pipeline robust Patent expiry and increasing competition could affect Copaxone sales Significant level of indebtedness could limit Teva’s growth and development plans Opportunities Threats Joint venture with P&G in the consumer health care industry Acquisition of Japanese generic manufacturers likely to boost the company’s revenues Positive outlook for global generics market Decreasing opportunities for new generic products in the US Intense competition in the generic drugs market could lead to pricing war Continuing consolidation of Teva’s customer base in the US Strengths Aggressive acquisition strategy helps Teva build size and scale Teva has gained significant scale and size in the global pharmaceutical market through executing acquisition deals. Since its creation in 1976, Teva has been actively pursuing acquisition targets and has been successful in integrating them as well. The company further strengthened its position in its domestic market by acquiring a major Israeli drug manufacturer, Ikapharm. During the 1990s, Teva continued to expand in the global generic market by adopting an aggressive M&A strategy in the US. Between 2002 and 2008, Teva made several acquisitions including Ivax and Barr Pharmaceuticals (Barr). The acquisition of rival Barr, in particular, further bolstered Teva's position as the leading generic pharmaceuticals company in the world. Teva Pharmaceutical Industries Limited © MarketLine Page 25
  • Teva Pharmaceutical Industries Limited SWOT Analysis Teva’s acquisition spree continued in 2010 and 2011 as well. In 2010, the company acquired ratiopharm, Germany's second largest generic producer and the sixth largest generic drug company worldwide. During 2011, the $6.8-billion acquisition of Cephalon, a US-based global biopharmaceutical major, helped Teva accelerate its presence in the branded biopharmaceutical and growing biosimilar markets. The acquisition also triggered therapeutic diversification, as Cephalon's pipeline was heavily focused on oncology, an area in which Teva had no major branded presence. The combination of Teva and Cephalon has created a major branded company in the CNS market. Size and scale advantages providing leadership position in global generics market Teva has the leading market position in the global generic drug market worldwide. In the US, the world’s largest pharmaceutical market, it is a leading generic drug company. In 2011, the company led the US generic market in total prescriptions and new prescriptions, with total prescriptions amounting to approximately 524 million in 2011, representing 17.1% of total US generic prescriptions. In Canada, Teva is one of the two leading generic pharmaceutical companies. In Europe, Teva is the leading generic pharmaceutical company overall, and the generic market leader in 11 European countries, including the UK, Italy, Spain, the Netherlands, Portugal and Switzerland. In Germany, the largest European generic market, Teva is the second largest generic pharmaceutical company. The company is one of the top three companies in a number of other European countries, including France, Poland and the Czech Republic. The company also has leading market position in Japan, where it is one of the top three generic pharmaceutical companies. In Russia, Teva is the second largest generic company. Leading market position in the global generic drug market enhances Teva’s pricing and bargaining power. Strong R&D capabilities keeping product pipeline robust Teva continues to invest significantly in its R&D activities. Its R&D spend has increased at a five-year CAGR of 17% during 2007–11, from $581 million to $1,095 million. Particularly, in 2011, the company spent about 6% of its total revenues in R&D. Significant R&D investment in its focused areas has helped Teva build one of the largest generic product portfolios with approximately 180 abbreviated new drug applications (ANDAs), of which approximately 75 are first-to-file applications, pending for marketing approvals at the FDA and more than 2,500 marketing authorisation applications (MAAs) pending in Europe. In addition, Teva has significantly enhanced its global branded R&D through the acquisition of Cephalon in October 2011. Its integrated pipeline includes product candidates in a variety of therapeutic areas, such as CNS, oncology, respiratory and women’s health. Weaknesses Teva Pharmaceutical Industries Limited © MarketLine Page 26
  • Teva Pharmaceutical Industries Limited SWOT Analysis Patent expiry and increasing competition could affect Copaxone sales Copaxone (glatiramer acetate injection) is Teva’s largest and first major branded product. It is the leading multiple sclerosis (MS) therapy, and is approved in more than 50 countries worldwide, including the US, Russia, Canada, major Latin American markets, Australia, Israel, and all European countries. In 2011, Copaxone sales increased by $507 million, primarily due to price increases. Copaxone was responsible for 19.5% of the company’s total revenues, and was a significant contributor to Teva’s profits and cash flow from operations in 2011. However, it faces competition from new orally-administered therapies and potential generic versions developed by other companies. Copaxone faces competition from existing injectable products, such as Avonex, Tysabri (both being products of Biogen Idec), Betaseron (a product of Bayer HealthCare), Rebif (a product of Pfizer), and Extavia (a product of Novartis). In addition, competition from the rapidly developing market segment of oral treatments, such as Gilenya (which was introduced in 2010 by Novartis) and Biogen Idec’s BG-12 (for which Biogen Idec submitted application to the FDA for marketing approval in February 2012) is expected to be especially intense in light of the substantial convenience afforded by oral products in comparison to injectables such as Copaxone. Furthermore, Teva’s patents on Copaxone have been challenged, and it may face generic competition when the US Orange Book patents covering Copaxone would expire in May 2014. Such a competition faced by Copaxone may decrease Teva’s revenues derived from its innovative products, which can have a negative impact on its profits. Significant level of indebtedness could limit Teva’s growth and development plans At the end of the year 2011, Teva’s total debt more than doubled over the previous year to reach $14.5 billion. This was mainly due to the approximately $6.5 billion of indebtedness in connection with the acquisition of Cephalon in October 2011. On a year-to-year basis, the company’s debt-to-equity ratio also more than doubled at 0.65 in 2011. The increased indebtedness could affect Teva’s ability to obtain additional financing for working capital, acquisitions or other purposes and could make it more vulnerable to industry downturns and competitive pressures. In addition, due to the continuing effects of the worldwide financial crisis, capital markets have been more volatile in recent times. Such volatility may adversely affect Teva’s ability to obtain financing on favorable terms, which could constrain its growth and development plans. Opportunities Joint venture with P&G in the consumer health care industry In November 2011, Teva and P&G created PGT Healthcare, a JV in consumer health care. PGT Healthcare would develop new brands for the North American market and would also operate in essentially all markets outside North America. Teva Pharmaceutical Industries Limited © MarketLine Page 27
  • Teva Pharmaceutical Industries Limited SWOT Analysis PGT Healthcare would focus on the development and commercialization of branded over-the-counter (OTC) medicines. It would also bring together each company's complementary capabilities and existing OTC medicines. As a result, PGT Healthcare expects to accelerate growth for its parent companies and compete for leadership in the $200 billion consumer healthcare industry. The JV would start from a base of approximately $1.3 billion in annual sales with the potential to grow to $4 billion in annual sales by 2020. Hence, the partnership with P&G would help Teva expand its presence in the global consumer healthcare industry. Acquisition of Japanese generic manufacturers likely to boost the company’s revenues Teva has made further inroads into the Japanese generics market. Japan is the second largest pharmaceutical market in the world, valued at $96 billion in 2010 with only a 23% rate of generic penetration. The Japanese government has also expressed its intention to increase generic penetration to 30% by the end of 2012. Keeping this in view, in July 2011, Teva acquired Taiyo Pharmaceutical Industry (Taiyo), the third largest generics manufacturer in Japan with sales of approximately $530 million in 2010. Taiyo has a portfolio of over 550 products and a strong presence in all major channels in the Japanese pharmaceutical market. Teva also gained access to Taiyo's R&D team, local regulatory expertise and a production facility. Further, in September 2011, Teva acquired Kowa Company’s entire interest in Teva-Kowa Pharma, the JV between Teva and Kowa in Japan. Teva and Kowa established Teva-Kowa Pharma in 2008, and the JV grew to become one of the top five generic players in Japan with the sales of approximately $200 million in 2010. With the acquisitions of Taiyo and Teva-Kowa Pharma, Teva expects its operations in Japan to generate annual revenues of more than $800 million. Positive outlook for global generics market According to a MarketLine report published in July 2012, the global generics market posted a good rate of growth in 2011. The global generics market had total revenues of $187,244 million in 2011, representing a CAGR of 9.1% between 2007 and 2011. Market consumption volumes increased with a CAGR of 3.3% between 2007 and 2011, to reach 75% of total pharma market volume in 2011. The global generics market is expected to continue to post strong growth through to the end of the forecast period in 2016. The market's volume is expected to rise to 85.1% of total pharma market volume by the end of 2016, representing a CAGR of 2.6% for the 2011–16 period. Further, MarketLine forecasts that the global generics market is expected to have a value of $273,600 million by the end of 2016. Teva, as the leading company in the global generics markets, is likely to benefit from the positive outlook for the market. Teva Pharmaceutical Industries Limited © MarketLine Page 28
  • Teva Pharmaceutical Industries Limited SWOT Analysis Threats Decreasing opportunities for new generic products in the US Teva’s ability to achieve continued growth and profitability through sales of generic pharmaceuticals is dependent on its success in challenging patents, developing non-infringing products or developing products with increased complexity to provide launch opportunities with US market exclusivity or limited competition. The number of significant opportunities for new generic products is expected to decrease over the next several years in comparison to those available in the past. Hence, Teva’s generic business in the US could face significant challenges in the longer term. Intense competition in the generic drugs market could lead to pricing war Teva’s generic drugs face intense competition. Prices of generic drugs typically decline, often dramatically, especially as additional generic pharmaceutical companies (including low-cost generic producers based in China and India) receive approvals and enter the market for a given product and competition intensifies. Consequently, Teva’s ability to sustain its sales and profitability on any given product over time is affected by the number of new companies selling such product and the timing of their approvals. Furthermore, brand pharmaceutical companies continue to defend their products vigorously. For example, brand companies often sell or license their own generic versions of their products, either directly or through other generic pharmaceutical companies (also known as authorized generics). No significant regulatory approvals are required for authorized generics, and brand companies do not face any other significant barriers to entry into such market. Brand companies may also seek to delay introductions of generic equivalents by obtaining and enforcing new patents on drugs whose original patent protection is about to expire, and questioning the quality and bioequivalence of generic pharmaceuticals, among others. These actions may increase the costs and risks of Teva’s efforts to introduce generic products and may delay or prevent such introduction altogether. This in turn may have a negative impact on Teva’s revenues and profits. Continuing consolidation of Teva’s customer base in the US A significant proportion of Teva’s sales are made to relatively few US retail drug chains, wholesalers, managed care purchasing organizations, mail order distributors and hospitals. These customers are continuing to undergo significant consolidation. Net sales to one such customer in FY2011 accounted for 14% of Teva’s total consolidated sales. Such consolidation has provided and may continue to provide them with additional purchasing leverage, and consequently may increase the pricing pressures that Teva faces. Additionally, the emergence of large buying groups representing independent retail pharmacies, and the prevalence and influence of managed care organizations and similar institutions, enable those groups to extract price discounts on Teva’s products. Teva Pharmaceutical Industries Limited © MarketLine Page 29
  • Teva Pharmaceutical Industries Limited SWOT Analysis Teva’s net sales and quarterly growth comparisons may also be affected by fluctuations in the buying patterns of retail chains, major distributors and other trade buyers, whether resulting from seasonality, pricing, wholesaler buying decisions or other factors. In addition, since such a significant portion of Teva’s US revenues is derived from relatively few customers, any financial difficulties experienced by a single customer, or any delay in receiving payments from a single customer, could have a material adverse effect on its business and results of operations. Teva Pharmaceutical Industries Limited © MarketLine Page 30
  • Teva Pharmaceutical Industries Limited Top Competitors TOP COMPETITORS The following companies are the major competitors of Teva Pharmaceutical Industries Limited Abbott Laboratories Bristol-Myers Squibb Company Johnson & Johnson Merck & Co., Inc. Novartis AG Pfizer Inc GlaxoSmithKline Plc Watson Pharmaceuticals, Inc. Sandoz International GmbH Lupin Limited Natco Pharma Limited Momenta Pharmaceuticals, Inc. Mylan Inc. Teva Pharmaceutical Industries Limited © MarketLine Page 31
  • Teva Pharmaceutical Industries Limited Company View COMPANY VIEW An excerpt from the statement by Shlomo Yanai, former President and Chief Executive Officer of Teva Pharmaceutical Industries, is given below. The statement has been taken from the company’s press release on its financial results for FY2011. I am pleased to report that Teva ended 2011 on a strong note, despite the challenges we faced during the year. Our results demonstrate the strength of our balanced business model, with its focus on growth and increasing diversity across geographies and business lines. Teva’s strategy is focused on growth and on reducing dependence on any one particular market or product, and during 2011 we made important progress in reaching our strategic goals with the acquisitions of Cephalon and Taiyo, and the creation of a unique joint venture with Procter & Gamble. Our strategic achievements in 2011 provide a strong foundation for Teva’s sustainable long term growth. 2011 Highlights Net revenues of $18.3 billion, compared to $16.1 billion in 2010, an increase of 14%. Non-GAAP net income and Non-GAAP EPS of $4.4 billion and $4.97 diluted earnings per share, an increase of 7% and 9%, respectively, compared to $4.1 billion and $4.54 diluted earnings per share in 2010. Cash flow from operations of $4.1 billion. Revenues by Geographies for Full Year 2011 Net revenues in the United States were $8.8 billion (representing 48% of total revenues), a decrease of 6% compared to 2010, primarily as a result of fewer significant new generic launches and decreases in revenues of key generic products compared to 2010, which was partially offset by higher revenues of branded products. Net revenues in Europe were $5.7 billion (representing 31% of total revenues), an increase of 43% compared with 2010, or 37% in local currency terms. The growth in revenues resulted primarily from the inclusion for a full year of revenues from ratiopharm, the inclusion of Cephalon and Theramex, stronger revenues of our branded products, as well as organic growth of the business. Net revenues in ROW totaled $3.9 billion (representing 21% of total revenues), an increase of 39% compared to 2010, or 34% in local currency terms. The growth in revenues resulted primarily from higher revenues in Russia, Israel and major markets in Latin America, and from the inclusion of Taiyo in Japan, which was acquired in July 2011, and of Teva-Kowa. Teva Pharmaceutical Industries Limited © MarketLine Page 32
  • Teva Pharmaceutical Industries Limited Company View Revenues by Business Lines for Full Year 2011 Generic product net revenues were $10.2 billion, an increase of 3% compared to $9.9 billion for 2010. The rapid growth in our generic revenues in the European and ROW markets compensated for a decrease in U.S. generics revenues. Generic revenues consist of U.S. revenues of $4.0 billion, a decrease of 32% compared to 2010, European revenues of $3.8 billion, an increase of 44%, and ROW revenues of $2.4 billion, an increase of 64%. The decrease in U.S. generic revenues was due primarily to fewer significant new launches and decreases in revenues from key products compared to 2010 (most notably the generic equivalent of Effexor XR, as well as generic equivalents of Cozaar and Hyzaar), and was affected by quality and supply issues, primarily from our Irvine and Jerusalem plants, particularly in the first three quarters. However, the fourth quarter of 2011 demonstrates a change in this trend in the U.S. generic business. Branded products net revenues were $6.5 billion, an increase of 34% compared to the $4.9 billion for 2010. Branded revenues consist of U.S. revenues of $4.8 billion, an increase of 33%, European revenues of $1.1 billion, an increase of 48%, and ROW revenues of $588 million, an increase of 16%. The increase in branded revenues was primarily due to the inclusion of Cephalon products as well as increases in revenues across almost all of Teva’s branded products, particularly Copaxone, which increased 21% to $3.6 billion. The new diversity of our branded business has decreased our dependency on any single product. OTC net revenues were $765 million, an increase of 54% compared to $496 million for 2010. The increase was primarily attributable to the inclusion for a full year of revenues from ratiopharm and our increased focus on this business on the background of the creation of our joint venture PGT Healthcare. Other net revenues, mostly distribution of third party products in Israel and Hungary, were $858 million compared to $863 million for 2010. Teva Pharmaceutical Industries Limited © MarketLine Page 33
  • Teva Pharmaceutical Industries Limited Locations and Subsidiaries LOCATIONS AND SUBSIDIARIES Head Office Teva Pharmaceutical Industries Limited 5 Basel Street Petach Tikva 49131 ISR P:972 3 926 7267 F:972 3 923 4050 http://www.tevapharm.com Other Locations and Subsidiaries Teva North America 1090 Horsham Road North Wales Pennsylvania 19454 USA Teva Netherlands Swensweg 5 2031 GA Haarlem NLD ratiopharm GmbH Graf-Arco-Str. 3 D-89079 Ulm DEU Teva UK Limited Ridings Point Whistler Drive Castleford WF10 5HX GBR Cephalon, Inc. 4745 Wiley Post Way Salt Lake City Utah 84116 USA Assia Pharmaceuticals Funzi Road Nairobi KEN Teva Group Germany Kandelstrasse 10 D-79199 Kirchzarten DEU Regent Drugs Plot No. 2G, 2H, 2I Udyog Vihar Greater Noida 201308 IND Teva Pharmaceutical Industries Limited © MarketLine Page 34
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