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|May 06, 1999 10:20 a.m.|
|Teva Pharmaceutical Industries Ltd. announces first quarter 1999 results|
| Declares Regular Quarterly Cash Dividend |
Jerusalem, Israel, May 6, 1999 - Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVIY) today reported financial results for the first quarter ended March 31, 1999
Reported net income for the 1999 first quarter, amounted to $28.3 million, or $0.46 per ADR, as compared to $25.1 million or $0.41 per ADR, reported for the first quarter of 1998. Total sales for the first quarter ended March 31, 1999 were $287.6 million, as compared to $268.6 million in the first quarter of 1998.
Eli Hurvitz, President and Chief Executive Officer, commented, "We are very pleased to report our positive first quarter results. During the first quarter of 1999, Copaxone® contributed significantly to both Teva's top and bottom lines. The Copaxone® sales index, (based on the average monthly sales to the market of Copaxone® by HMR in the last quarter of 1997 = 100), reached 304 in March 1999, while the interim months of January and February recorded indices of 192 and 252, respectively. The index was 279 in April 1999."
Mr. Hurvitz continued, "For the first time, new evidence has shown that treatment with Copaxone® significantly reduces MRI measured disease activity and burden of disease in patients with relapsing -remitting Multiple Sclerosis (RRMS). In the relatively short trial of only 9 months, these effects already mirrored the significant reduction seen in relapse rate. The results of the MRI study were presented during the American Academy of Neurology (AAN) meeting in Toronto, Canada, last month. The presentation by Prof. Comi, the principal investigator, was chosen by the Chairman of the AAN meeting as the "best of the best abstract" for inclusion in the Scientific Topics Highlights Plenary Session."
Total pharmaceutical sales, which comprise about 85% of Teva's total sales, were $243.5 million in the first quarter of 1999, 12% higher than in the comparable period in 1998. Contributing to the increase in total pharmaceutical sales is the inclusion of sales generated by Pharmachemie, which was consolidated as of the third quarter 1998, and the increase of Copaxone® sales in North America. Total pharmaceutical sales include sales of hospital supplies of $14.3 million, as compared with $15.9 million in the first quarter of 1998.
Sales in North America were $127.5 million during the first quarter of 1999, similar, as expected, to those of the comparable quarter of 1998. Increase in Copaxone® sales offset, in large measure, substantially lower generic drug sales during the first quarter.
Generic sales declined due to a number of factors, including: a mild winter, which resulted in lower antibiotic sales; Clonazepam sales fell by $12 million, reflecting the unprecedented continued price erosion since the first quarter of 1998; and the absence of new product introductions during the quarter. Although no new generic approvals were obtained during the quarter, the Company believes that its ANDA pipeline pending with the FDA is the strongest it has ever been.
Sales in Europe were $83.8 million or 29% of Teva's total sales. This amount, is $30 million, or 54%, higher than the first quarter last year. The inclusion of Pharmachemie accounts for substantially all of this increase
Sales in Israel, consisting almost entirely of pharmaceutical and hospital supplies, amounted to $63.9 million. Although this was $7.2 million lower than in the comparable quarter of 1998, ($71.1 million), first quarter 1999 sales were higher than the average quarterly sales of 1998. The divestiture of Paca in March 1998, as well as the mild winter this year in Israel, are the major contributors to this decrease. The revaluation of the NIS against the US$ in the first quarter of 1999, as well as the signing of a new supply agreement with the General Health Fund, contributed to the increase in sales as compared with the last quarter of 1998.
Active Pharmaceutical Ingredients (API) sales reflect a slight decrease from the comparative quarter; however, due to an improved gross margin their contribution to the bottom line increased.
The consolidated gross profit margin improved to 39.2% in the first quarter of 1999, a substantial increase over the 36.5% margin of first quarter of 1998. Increased sales of Copaxone® and improved API margins were the main contributing factors to this increase.
Net R&D expenses in the quarter amounted to $19.1 million, compared to $15.7 million (net of purchased R&D of $5.5 million) in the first quarter of 1998. While this reflects a 22% increase over the first quarter of 1999, these expenses are only slightly higher than the average for 1998, excluding purchased R&D.
SG&A expenses totaled $52.7 million, as compared with $46.8 million in first quarter 1999. This increase reflects the inclusion of Pharmachemie (including the amortization of goodwill arising from the acquisition).
The tax rate for the first quarter was 25%, as compared with 24% in first quarter of 1998.
The Company's global rationalization project continues to proceed according to plan. During the quarter, the Patterson, New Jersey, production facility acquired at the time of the Biocraft acquisition in 1996, was consolidated into Teva USA's, Sellersville, Pennsylvania and Teva Israel's, Kfar Saba plants. Production at APS/BERK's Eastbourne (UK) facility ceased and was moved to Biogal (Hungary). The Zaandam plant (in Holland) was transferred to its new owners after most of its production was consolidated into the Haarlem plant of Pharmachemie. The Company expects that cost savings and lower head count resulting from these actions will be reflected mainly as of the second quarter of 1999.
The Company has declared its regular first quarter cash dividend for 1999 of NIS 0.30 (approximately 7.4 cents) per ADR. The record date for this dividend will be May 25, 1999 and the payment date June 9, 1999. Tax at the rate of 25% will be deducted at source.
Safe Harbor Statement: This release contains forward-looking statements which express the beliefs and expectations of management. Such statements are based on current expectations and involve a number of known and unknown risks and uncertainties that could cause the Company'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 the impact of pharmaceutical industry regulation, the difficulty of predicting FDA and other regulatory authority approvals, the regulatory environment and changes in the health policies and structure of various countries, acceptance and demand for new pharmaceutical products and new therapies, the impact of competitive products and pricing, the availability and pricing of ingredients used in the manufacture of pharmaceutical products, uncertainties regarding market acceptance of innovative products newly launched , currently being sold or in development , the impact of restructuring of clients , reliance on strategic alliances , fluctuations in currency, exchange and interest rates , operating results , the impact of the year 2000 issue and other factors that are discussed in the Company's Annual Report on Form 20-F and the Company's other filings with the U.S. Securities and Exchange Commission.