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|May 04, 2000 3:23 p.m.|
|Teva Pharmaceutical Industries Ltd. Reports first Quarter 2000 Financial Results; first Quarter Earnings per ADR up 30%|
|Balance Sheet Data|
Consolidated Statements of Income
Jerusalem, Israel, May 4, 2000 - Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA) today reported that net income for the quarter ended March 31, 2000, reached $37.9 million compared with $28.3 million reported in the first quarter of 1999 (up 34%) and earnings per ADR were $0.30 (up 30%). Total sales for the first quarter of 2000 rose 17% to $337.3 million.
Eli Hurvitz, President and Chief Executive Officer, commented: "We are pleased with the first quarter results which developed at the planned pace and reflect the impact of the various steps we have put into place over the last years, and the successful implementation of our strategy".
Total pharmaceutical sales that comprised approximately 86% of Teva's total revenue rose 19% and reached $289.2 million. Copley results, which were consolidated for the first time in Q4 of 1999, are included in the reported quarter but are not included in the comparable quarter of 1999.
North America Pharmaceutical Sales reached $152.2 million, up 43% compared to the first quarter of 1999. This increase is due to significantly higher sales of new products which were approved both during the reported quarter and late in 1999 as well as the consolidation of Copley's results. Among the newly launched products are the generic versions of Voltaren XR®, Adalat CC® (both are supplied by Biovail) and Hytrin®. Subsequent to the end of the quarter, Teva received approvals for the generic versions of Nizoral® 2% Cream and Betapace® which were immediately launched.
At the end of the quarter, 52 applications were awaiting approval from the FDA (3 of which are Biovail's) including 13 tentative approvals awaiting expiration of either patents or pediatric exclusivity. About half were submitted under paragraph IV, thus, in some of these products, where Teva was the first to submit an application to the FDA, Teva may be granted a 6 month exclusivity period.
Total annual sales for these 52 products, in terms of branded drugs, exceed $14 billion.
Pharmaceuticals sales in Europe which comprised 24% of total pharmaceutical sales in the reported quarter, reached $69.3 million, a similar dollar level to that of the first quarter of 1999. In terms of European currency, sales rose approximately 14%. This sales level remained the same in spite of the difficult market conditions in Hungary, increasing competition in The Netherlands, and shifting of sales to the end of 1999, which would have normally been shipped in the current quarter, due in large part to Y2K.
Eli Hurvitz further commented: " We see the initial fruits of our global generic R&D effort with first approved products in Europe based on filings originating in Israel and the U.S."
At the end of the quarter, 99 product applications were awaiting approval from the Regulatory Authorities in various countries in Europe, mainly in Hungary, the U.K. and the Netherlands. During the first quarter of 2000, Teva launched the generic versions of Prozac® and Innovace® (or Vasotec®, as known in the U.S) in Europe.
Sales in Israel in the reported quarter amounted to $58.9 million, remaining constant as compared to the comparable period. Israeli sales reflect 20% of Teva's total pharmaceutical sales. The stable macro-economic conditions in Israel have allowed for long-term agreements to be signed with a few of Teva's larger customers. This in turn will contribute to sales, commencing in the second quarter of 2000.
During the first quarter of 2000, Copaxone® global in-market sales reached $49.2 million, up 55% as compared with the first quarter of 1999.
According to IMS data, sales in the reported quarter boosted Copaxone®, in the U.S., to the second place among the 3 existing MS therapies, with market share exceeding 25% of new prescriptions. Rapid growth pace of Copaxone® sales continued and it is the only product in the MS market that is growing at a rate faster than that of the entire market.
The first global phase III clinical trial of Copaxone® oral formulation - CORAL began during the first quarter. This formulation is designated for the treatment of the Relapsing Remitting stage of MS. To date, this is the largest clinical trial to be performed with MS patients. The trial will take place in 18 countries on 5 continents with the participation of approximately 1,300 patients. In parallel, the recruitment of patients to PROMISE, the clinical study for broadening the indication of Copaxone® to patients defined as Primary Progressive, is continuing.
Active Pharmaceutical Ingredients (API) sales were 9% higher than those of the comparable period, and reached $42.8 million, accounting for 13% of Teva's consolidated sales. This is in addition to the API Division sales to Teva's pharmaceutical units, which reached $29.2 million, up 21% as compared with the first quarter of 1999.
Gross profit totaled $137.6 million and the gross profit margin reached 40.8% this quarter as compared to the 39.2% margin in the first quarter of 1999.
Gross Research and Development (R&D) expenses amounted to $22.3 million, an increase of 8% compared to the same period last year. Net R&D expenses (after participations) totaled $19.9.
Selling, General and Administration (SG&A) expenses totaled $61.7 million in the reported quarter compared to $52.7 million in the comparable quarter last year. This increase is mainly due to the inclusion of Copley's SG&A expenses (including amortization of goodwill resulting from the acquisition).
Operating Profit totaled $56.0 million this quarter, an increase of 37% over the same quarter last year. The operating profit margin for this quarter reached 16.6% compared to 14.2% in the first quarter of 1999.
Financial Expenses-net, increased by $3.7 million as compared to the same period last year. This increase mainly reflects interest costs arising from the acquisition of Copley.
The rate of tax for the first quarter of 2000 decreased to 23% compared to 25% in the first quarter of 1999. This decrease reflects the generation of increased amounts of income in lower tax rate jurisdictions, as a result of various changes in the Company's product mix.
Net profit for the first quarter of 2000 reached $37.9 million, $0.30 per ADR. This represents 11.2% of total sales compared to 9.8% in the same quarter last year.
Cash flow from current operations, in the reported quarter, amounted to $26.2 million.
The Rationalization process continued during the first quarter of 2000 by initiating product transfers from Copley's main factory in Boston, to other Teva production sites. This plant will be closed down at the end of this process. Integration and rationalization of Novopharm's production lines with that of Teva is in an advanced planning stage.
Teva's Finance Committee, recommended to the Board of Directors to declare a regular quarterly cash dividend of NIS 0.225 (approx. $ 0.055) per ADR. The final declaration of the dividend and the record and payment date will be announced subsequent to the Board meeting to be held on May 14, 2000.
Teva Pharmaceutical Industries Ltd. is Israel's largest pharmaceutical company, with over 80% of its sales outside Israel, mainly in the United States and Europe. The Company develops, manufactures and markets generic and branded human pharmaceuticals and active pharmaceutical ingredients.