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July 25, 2001 11:33 a.m.
Teva Reports a 41% Increase in Second Quarter Net Income on an Increase in Sales of 16% EPS Reached $0.47, Up 38%

Consolidated Statements of Income
Balance Sheet Data
Sales for the Quarter April - June 2001

Jerusalem, Israel, July 25, 2001 - Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA) today reported net income for the second quarter ended June 30, 2001 of $64 million or $0.47 per share fully diluted, an increase over last year of 41% and 38%, respectively*.

North American sales accounted for 63% of total second quarter sales of $ 514 million, Europe for 21%, Israel for 12%, with sales in the rest of the world accounting for 4%.

Net income for the six months ended June 30, 2001 reached $ 119 million or $ 0.87 per ADR, fully diluted, an increase of 47% and 38%, respectively*. Total sales for the six months amounted to $ 1 billion, up 29%.

Israel Makov, Teva's Chief Operating Officer stated: "We are very pleased to report results that marked another period of robust growth at Teva. These results validate our strategy of pursuing leadership in the generic industry through the introduction and execution of well-planned activities that are having a positive impact on our sales and overall profitability."

Mr. Makov added, "We are especially proud of developments in our revenue mix, which saw this quarter's 16% increase in sales driven not only by Copaxone® but also by increased sales of our existing generic products."

At the end of the quarter Teva entered into a strategic alliance with Impax Laboratories, Inc. for the development and marketing of 12 controlled release generic products. As a result, Teva's generic pipeline currently includes 56 products (including 5 from Impax) of which 14 are tentative approvals. Total annual branded sales of this pipeline are estimated at approximately $ 20 billion.

Pharmaceutical sales in North America continue to be the main revenue driver, totaling $287 million in the second quarter. During the quarter Teva launched 2 products and received tentative and final approvals from the FDA for five products. 6 internally-developed ANDA's were submitted during the quarter.

In-market global sales of Copaxone® continued to grow at more than twice the market rate and amounted to a record $91 million, up 54% from the comparable quarter in 2000 and up 24% from Q1/2001. North America accounted for 84% of Copaxone® sales.

Subsequent to the end of the quarter Teva announced FDA approval of enhanced labelling for Copaxone® to reflect the positive results of a large multicenter double-blind, placebo-controlled MRI study that showed a significant reduction in MRI monitored activity and burden of disease in patients with Relapsing Remitting Multiple Sclerosis. Meanwhile, the registration of Copaxone® in Europe, under the Mutual Recognition Procedure, is expected to be completed later this year.

Teva's overall gross margin for the quarter at 39.9% grew from 37.9% in the comparable quarter, an improvement also over the average of calendar 2000 (39.5%).
Cash flow generated from operations in the reported quarter, amounted to $70 million compared with $166 million generated during all of calendar 2000.

Subsequent to the end of the quarter, Teva reached an agreement with Mayne Nickless Limited, one of Australia's largest healthcare companies, regarding Mayne's offer for F.H. Faulding & Co. Ltd., an Australian healthcare and pharmaceutical company. Under this agreement, if Mayne is successful in its pending tender offer for Faulding shares, Teva will have an exclusive opportunity to purchase Faulding's global injectables business for $365 million.

"We are excited about our very strategic agreement to acquire Faulding's injectable business which will expand our generic business into additional areas. We expect the acquisition to contribute to our long term growth by firmly establishing Teva as a leader in generic injectables as well as positively impacting our existing generic lines." concluded Eli Hurvitz, President and Chief Executive Officer.

It has been recommended that the Board of Directors at their meeting on August 13, 2001 declare a regular cash dividend of NIS 0.27 (approx. 6.4¢) per ADR with respect to the second quarter of 2001.

Teva Pharmaceutical Industries Ltd., headquartered in Israel, is among the top 40 pharmaceutical companies and among the largest generic pharmaceutical companies in the world. Over 85% of Teva's sales are outside Israel, mainly in North America and Europe. The Company develops, manufactures and markets generic branded human pharmaceuticals and active pharmaceutical ingredients.

* Excluding one time charges in 2000 of $35.7 million with respect to in-process R&D.




Consolidated Statements of Income
(in thousands, except earnings per ADR)
(unaudited) 

 

April - June

January - June
  2001 2000 2001 2000
  U.S. Dollars 
SALES  513,590 443,997 1,004,518 781,331
COST OF SALES 308,845 275,721 602,810 475,472
GROSS PROFIT 204,745 168,276 401,708 305,859
R & D EXPENSES: 39,668 30,130 78,254 52,387
Less grants & participations 12,550 3,838 23,138 6,172
R & D EXPENSES - net 27,118 26,292 55,116 46,215
SELLING, GENERAL AND ADMINISTRATION EXPENSES 90,777 73,145 180,838 134,807
  86,850 68,839 165,754 124,837
ACQUISITION OF R&D IN PROCESS - 35,697 - 35,697
OPERATING INCOME 86,850 33,142 165,754 89,140
FINANCIAL EXPENSES - net 7,837 13,771 16,593 25,136
OTHER INCOME - net 2,013 3,181 4,077 7,351
INCOME BEFORE TAXES 81,026 22,552 153,238 71,355
PROVISION FOR INCOME TAXES 16,466 12,349 33,321 26,217
  64,560 10,203 119,917 45,138
PROFITS (LOSSES) ON EQUITY INVESTMENTS 192 418 (41) 659
MINORITY INTERESTS (304) (547) (676) (647)
NET INCOME 64,448 10,074 119,200 45,150
EARNINGS PER ADR:
  Basic ($) 0.49 0.08 0.90 0.36
  Diluted ($) 0.47 0.08 0.87 0.35
NET ADJUSTED INCOME BEFORE DEDUCTING NON-RECURRING EXPENSES:
NET INCOME 64,448 45,771 119,200 80,847
EARNINGS PER ADR:
  Basic ($) 0.49 0.35 0.90 0.64
  Diluted ($) 0.47 0.34 0.87 0.63
WEIGHTED AVERAGE NUMBER OF ADRs:
  Basic ($) 132,198 130,902 132,179 126,987
  Diluted ($) 140,296 132,790 140,312 128,081





Balance Sheet Data  (in thousands) 
(unaudited)

  June 30 2001 December 31 2000
  U.S. Dollars in thousands
ASSETS    
CURRENT ASSETS  1,608,136 1,608,846
INVESTMENTS & OTHER ASSETS 101,972 100,054
FIXED ASSETS  - net 535,272 534,140
INTANGIBLE ASSETS  - net  599,364 612,578
TOTAL  ASSETS 2,844,744 2,855,618
     
LIABILITIES AND SHAREHOLDERS' EQUITY     
CURRENT LIABILITIES 702,721 783,755
LONG-TERM LIABILITIES:  339,409 368,880
MINORITY INTEREST 2,267 1,637
CONVERTIBLE SENIOR DEBENTURES 550,000 550,000
SHAREHOLDERS' EQUITY 1,250,347 1,151,346
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY 2,844,744 2,855,618







Sales for the Quarter April - June 2001 (US $ thousands)

Sales by Geographical Areas        
Sales for the Period  2001 2000 % Change  % of Total
Israel  59,028 60,180 -1.9% 11.5%
North America 322,488 263,092 22.6% 62.8%
Europe  108,740 105,786 2.8% 21.2%
Rest of the World  23,334 14,939 56.2% 4.5%
Total Outside Israel  454,562 383,817 18.4% 88.5%
Total 513,590 443,997 15.7% 100.0%
 
Sales by Business Segments        
Sales for the Period  2001  2000 % Change % of Total
Pharmaceuticals  453,303 397,441 14.1% 88.3%
A.P.I  55,012 41,204 33.5% 10.7%
Veterinary and other  5,275 5,352 -1.4% 1.0%
Total 513,590 443,997 15.7% 100.0%
 
Pharmaceutical Sales        
Sales for the Period  2001  2000  % Change % of Total
Israel 56,095 56,447 -0.6% 12.4%
North America  287,261 239,521 19.9% 63.4%
Europe 89,513 93,449 -4.2% 19.7%
Rest of the World  20,434 8,024 154.7% 4.5%
Total Outside Israel 397,208 340,994 16.5% 87.6%
Total 453,303 397,441 14.1% 100.0%








Safe Harbor Statement - under the U.S. Private Securities Litigation Reform Act of 1995: This release contains forward-looking statements, which express the beliefs and expectations of management. Such statements are based on current plans, estimates and 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 a strategy of acquiring companies and on strategic alliances, exposure to product liability claims, dependence on patent and other protections for our innovative products, fluctuations in currency, exchange and interest rates, operating results, 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. Forward-looking statements speak only as of the date on which they are made, and the Company undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.