View printer-friendly version
« Back
November 07, 2000 3:33 p.m.
Teva Earnings per share for Q3 2000 rise 26% Copaxone sales rise 59%

Consolidated Statements of Income
Balance Sheet Data
Sales for the Quarter ended September 30

Jerusalem, Israel, November 7, 2000 - Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA) today reported that Net income for the third quarter 2000 reached $46.6 million or $0.36 per share, up 29% and 26% respectively as compared with the third quarter of 1999 (before a one-time charge in respect of acquired in-process R&D in the comparable quarter). The geographic breakdown of third quarter Total sales of $450.1 million (+40%) is: North America 59%, Europe 22%, Israel 14% and others 5%.

Eli Hurvitz, President and CEO, commented: "We are pleased to be reporting another record quarter. In this quarter we have proven again the benefits of globalization as we have compensated for our eroded European top line with increased sales in North America to achieve a balanced growth".

The consolidation of Copley and Novopharm accounted for about two thirds of the increase in North American pharmaceutical sales with the balance coming from internal growth and new products.

During the quarter, Teva received final approvals and launched Etodolac ER 500 & 600 mg, the generic version of Lodine XL ® and Enalapril Maleate, the generic version of Vasotec ® . In addition Teva received final approvals for Nifedipine XL 60mg, the generic version of Procardia XL ® 60mg, which was launched subsequent to the end of the quarter and for Amoxicillin 500 & 875mg, the generic version of Amoxil ® . Further, Teva received 3 tentative approvals, all of which are Paragraph IV filings (Nifedipine XL 30mg, Etodolac ER 400mg and Loratadine 10mg, the generic version of Claritin ® ). Subsequent to the end of the quarter Teva received final approval for Doxazosin, the generic version of Cardura ® . Teva currently has 49 generic products pending FDA approval (including 13 tentative approvals) about half of which are Pharagraph IV filings. Branded annual sales of this pipeline total over $ 14 billion.

Third quarter Pharmaceutical sales in Europe increased in Euro terms by 10%; however, due to the 14% quarter-to-quarter devaluation of the Euro, sales decreased in U.S. dollar terms by 2%. While sales in Europe were fully exposed to the weakening Euro, the impact on net income was mitigated by the fact that most of the sales in Europe were produced in Europe, where costs in dollar terms also declined. Additional natural hedging is achieved by purchases of European raw materials for use in non-European production. Sales in the U.K. and Hungary were subject to severe governmental price constraints, which were partially offset by the consolidation of Human, the Hungarian subsidiary of Novopharm.

At the end of the quarter, 138 product applications were awaiting approval from the Regulatory Authorities in various countries in Europe, mainly in Hungary, the U.K., Germany and the Netherlands.

Global in-market sales of Copaxone ® , Teva's leading product, increased as compared with the third quarter of 1999 by 59% to $66 million. Copaxone ® continues to be the fastest growing multiple sclerosis therapy in the U.S. outpacing the overall MS drug market in percentage increase of both new and total prescriptions. In August of this year, Teva received marketing approval for Copaxone ® in the U.K. and is currently preparing the filing under the European Mutual Recognition Procedure to make Copaxone ® available in the other European Union countries.
The patient enrollment of two major Copaxone ® phase III clinical studies has been completed: CORAL – a multinational trial evaluating the efficacy of an oral form of Copaxone ® , and PROMISE – the largest ever study in primary progressive MS.

Higher gross profit margins in Teva USA due to new product launches and synergies resulting from prior acquisitions, compensated both for lower margins in the UK (due to the governmental price constraints) and the impact of the consolidation of Human which has relatively low gross profit margins.

Generic R&D expenses accounted for $17 million, up 79% from the 1999 third quarter. The advanced development stage of our two Copaxone ® projects, and of the two Parkinsons' projects demand substantial resources, thus Innovative R&D expenses grew by 65% to a total of $16.4 million. Net R&D expenses increased at a lower rate than total R&D expenses due to significantly higher third party participation in Innovative R&D, reflecting Teva's strategy of limiting the burden of innovative R&D on our P&L.

During the quarter Teva raised $135 million from a syndicate of European Banks in a five-year multi-currency term loan facility and subsequent to the end of the quarter, raised $550 million by the issuance of five-year Senior Convertible Debentures with an interest rate of 1.5% and a conversion price of $86.23. These funds partially replace short term credit lines.

It has been recommended that the Board of Directors at their meeting on November 13, 2000 declare a regular cash dividend of NIS 0.225 (approx. 5.4¢) per ADR with respect to the third quarter of 2000.

Teva Pharmaceutical Industries Ltd. is Israel's largest pharmaceutical company, with over 85% of its sales outside Israel, mainly in North America and Europe. The Company develops, manufactures and markets generic and branded human pharmaceuticals and active pharmaceutical ingredients.

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



  2000 1999 2000 1999
  U.S. Dollars 
SALES  450,052 321,142  1,231,383 902,502 
COST OF SALES 269,721 192,704  745,193 540,424 
GROSS PROFIT 180,331 128,438  486,190 362,078 
Total expenses
36,294  21,648  88,681
Less grants & participations 8,654  2,080  14,826 4,467 
R & D EXPENSES - net 27,640  19,568 73,855 60,000
57,202  213,078
  74,420 51,668  199,257 137,384 
17,700 35,697
OPERATING INCOME 74,420 33,968 163,560 119,684
FINANCIAL EXPENSES - net 12,286  7,287  34,326 20,298 
OTHER INCOME - net 498  3,976  4,753  9,690 
INCOME BEFORE TAXES 62,632 30,657  133,987 109,076 
TAXES ON INCOME 14,817  12,595  39,325 32,247 
  47,815  18,062  94,662  76,829 
MINORITY INTEREST - net (700) 178  (41) 475 
NET INCOME 46,608 18,383  93,467 77,779 
EARNINGS PER ADR ($) 0.36 0.15  0.72  0.62 




WEIGHTED AVERAGE NUMBER OF ADR'S 134,874 125,836    132,155  125,836 

 * Before deducting non-recurring expenses of $17.7 million ($0.14 per ADR)
** Before deducting non-recurring expenses of $35.7 million ($0.27 per ADR). 
   Both in respect of acquired R&D in process.

Balance Sheet Data  (in thousands) 

  September 30 
  2000  1999
  U.S. Dollars in thousands
CURRENT ASSETS  1,219,412 951,186 
INVESTMENTS  37,354 28,822 
FIXED ASSETS  - net 544,582  480,430 
INTANGIBLE ASSETS  - net  569,850 286,568 
TOTAL  ASSETS 2,371,198 1,747,006 
CURRENT LIABILITIES 748,200  687,529 
LONG-TERM LIABILITIES:  522,002 349,842 
SHAREHOLDERS' EQUITY 1,093,754  709,324 
Total Liabilities AND SHAREHOLDERS' EQUITY  2,371,198 1,747,006

Sales for the Quarter ended September 30 (US $ thousands)

Sales by Geographical Areas        
Sales for the Period  2000 1999 % Change  % of Total
Israel  62,831  57,815 8.7%  13.9%
North America 264,481   150,525  75.7% 58.8%
Europe  101,078 98,200  2.9% 22.5%
Rest of the World  21,662 14,602  48.3% 4.8%
Total Outside Israel  387,221  263,327 47.0% 86.1%
Total 450,052 321,142 40.1% 100.0%
Sales by Business Segments        
Sales for the Period  2000  1999   % Change % of Total
Pharmaceuticals  401,177 272,798  47.1% 89.1%
A.P.I  43,680 42,701  2.3% 9.7%
Veterinary and other  5,195  5,643  -7.9%  1.2%
Total 450,052 321,142 40.1% 100.0%
Pharmaceutical Sales        
Sales for the Period  2000  1999  % Change % of Total
Israel 59,491 54,067 10.0% 14.8%
North America  244,697  127,914 91.3% 61.0%
Europe 79,621  81,431 -2.2% 19.9%
Rest of the World  17,368  9,386 85.0% 4.3%
Total Outside Israel 341,686 218,731 56.2% 85.2%
Total 401,177 272,798 47.1% 100.0%

Safe Harbor Statement: This report 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.