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November 01, 1999 10:34 a.m.
Teva Pharmaceutical Industries Ltd Reports 1999 Third Quarter And Nine Months Financial Results 1999 Third Quarter Net Income Up 43%, In-Market Sales Of Copaxone Increase 68 % vs. Third Quarter 1998 Declares Regular Quarterly Cash Dividend
 Jerusalem, Israel, November 1, 1999 - Teva Pharmaceutical Industries Limited (Nasdaq: TEVA) today reported that net income for the third quarter ended September 30, 1999, rose 43% to $36.1 million, or $0.57 per ADR, as compared to $25.3 million, or $0.41 per ADR, reported for the third quarter of 1998. The 1999 figures are before a one time write off in respect of "acquired R&D" of $17.7 million, $0.28 per ADR, resulting from the Copley acquisition.

Total sales for the 1999 third quarter rose 6% to $321.1 million, as compared to $303.3 million in the third quarter of 1998. An increase in the pharmaceutical sales in Europe and increased sales of Copaxone® were the major contributors to the strong performance.

For the nine months ended September 30, 1999,Net income (before deducting the one-time write-off for "acquired R&D") rose 42% to $95.5 million, or $1.52 per ADR and total sales rose 10% to $902.5 million, as compared to $819.0 million, for the first nine months of 1998. In-market sales of Copaxone® in the 1999 third quarter amounted to $41.4 million, compared to $24.7 million in the corresponding quarter last year, reflecting an increase of 68%. In-market sales for the first nine months of 1999 totaled $111.2 million, compared to $58.1 million in the first nine months of 1998, an increase of 91 %.

Further MRI data on Copaxone® was presented in September 1999 at the Ectrims/Actrims conference in Basel, Switzerland. Study results showed that patients who had received Copaxone® for the extended 18 months period continued to benefit from the drug, as their MRI activity and burden of disease further declined. Patients who switched from placebo to Copaxone® at the 9-month point showed a significant reduction in MRI activity and stabilization in MRI burden, confirming that Copaxone® has sustained beneficial effects over time. During the conference, Copaxone® was formally launched in Switzerland. The following table analyzes total sales by geographical area:

Geographical Areas Q3/99 Total Sales(In US $ Millions) % Change Compared to Q3/98 % of Total Sales
North America 150.5 5.9% 46.9%
Europe 98.2 9.8% 30.6%
Israel 57.8 -9.0% 18.0%
Rest of the World 14.6 77.9% 4.5%
Total 321.1 5.9% 100.0%

Pharmaceutical sales in the third quarter of 1999, which represent about 85% of Teva's total sales, grew 5% from the comparable period last year to $272.8 million.

Pharmaceutical Sales in North America during the third quarter of 1999, were $127.9 million, 4% higher than the comparable quarter of 1998, accounting for 47% of total pharmaceutical sales. Sales increased in spite of the fact that generally prices continued to erode. Teva USA is still awaiting significant final approvals from the FDA which could more than offset this erosion. During the quarter, Teva started to market Ticlopidine, the generic form of Ticlid®, after a long delay due to lengthy legal actions. Biovail, with whom Teva has an exclusive distribution arrangement, received tentative approval recently for its generic version of Adalat CC® and Cardizem CD®.

In mid-September Teva acquired all of the outstanding capital stock of the Boston, Massachusetts-based, Copley Pharmaceutical, Inc. for approximately $220 million. As the acquisition was consummated in mid-September Copley's results will be consolidated into Teva's income statement only as of the fourth quarter of 1999. The assets and liabilities of Copley are however consolidated in Teva's third quarter balance sheet.

The purchase price allocation for Copley is preliminary in nature and the computation of goodwill is subject to change. Purchased R&D in the amount of $17.7 million has been written off as a non recurring item this quarter.

Pharmaceutical sales in Europe, representing 30% of Teva's total pharmaceutical sales in the quarter, grew to $81.4 million, an increase of 14% compared to the third quarter of 1998. Sales in Hungary were lower mainly due to the weakening Hungarian forint. Pharmaceutical sales in Israel declined 11% from the third quarter of 1998 to $54.1 million, representing approximately 20% of total pharmaceutical sales. The decrease represents mainly the increased competitive environment resulting from the budgetary constraints of the major customers as well as a 12% devaluation of the Israeli Shekel between the quarters. This decline was partially offset by price increases and unit growth of certain products.

Active Pharmaceutical Ingredients (API) sales to third parties for the third quarter of 1999 grew 14% over the comparable quarter of 1998, to $42.7 million. In addition, the API division manufactured $22.5 million of raw materials for Teva's pharmaceutical division, which represented 35% of the API division total sales.

The consolidated gross profit margin reached 40% in the third quarter of 1999, as compared to a 38.7% margin achieved in the third quarter of 1998. Increased sales of Copaxone®, which carry higher margins, typical of innovative products, along with improved API margins, as well as increasing cost savings arising from the global rationalization program initiated last year, were the primary contributors to this increase.

Gross R&D expenses in the third quarter of 1999 amounted to $21.6 million, a decrease of 2% compared to the same quarter in 1998. Net R&D expenses totaled $19.6 million, slightly lower (4%) than in the comparable quarter last year.

With reference to our earlier announcement, the company is hoping to conclude negotiations in the near future for establishing a strategic partnership for the development and marketing of certain of its innovative products.

During the quarter, Pharmachemie, Teva's Dutch subsidiary, sold its know-how and marketing rights for Decitabine to the U.S.-based SuperGen Inc. for $4 million worth of SuperGen shares and income from manufacture should this project succeed. In addition, Teva sold its 34% in the French company Prographarm for $ 7.5 million - similar to its original cost.

The Company has declared its regular third quarter cash dividend for 1999 of NIS 0.30 (approximately 0.07 cents) per ADR. (Record date November 8, 1999, payment date November 23, 1999). Tax at the rate of 25% will be deducted at source.

Teva Pharmaceutical Industries Ltd., is Israel's largest pharmaceutical company, with 80% of its sales outside Israel, mainly in the United States and Europe. The Company develops, manufactures, and markets generic and branded human pharmaceuticals, active pharmaceutical ingredients, medical disposables and veterinary products.

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.