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Teva Reports First Quarter 2008 Results

Business Wire, May 6, 2008

JERUSALEM -- Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) today reported results for the quarter ended March 31, 2008.

First Quarter Highlights:

* Net sales of $2,572 million, up 24 percent compared to the first quarter of 2007.

* GAAP net income and diluted EPS of $147 million and $0.18, respectively. Net income includes a charge of $382 million for R&D in-process resulting from the acquisition of CoGenesys.

* Adjusted net income and diluted EPS of $529 million and $0.64, reflecting an increase of 55 and 52 percent, respectively, compared to the first quarter of 2007. Adjusted results exclude the $382 million R&D in-process charge resulting from the CoGenesys acquisition.

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Shlomo Yanai, Teva's President and Chief Executive Officer, commented, "The year is off to a strong start for Teva across all of our major businesses. It was a particularly outstanding quarter for Copaxone[R], which crossed the $500 million mark in in-market quarterly sales and became, for the first time, the number one global MS therapy."

Mr. Yanai continued, "We have already made great progress in implementing our new strategy. During the first quarter, we significantly increased investments in R&D and operations in order to support our growth plans; closed the acquisition of CoGenesys; and signed an agreement to acquire Bentley Pharmaceuticals in Spain, one of the fastest-growing generic pharmaceutical markets in Europe--an important region in Teva's strategic plan."

Net sales for the first quarter of 2008 increased 24 percent to $2,572 million, compared to $2,080 million in the first quarter of 2007.

On a U.S. GAAP basis, net income for the first quarter totaled $147 million, while diluted earnings per share were $0.18. Net income includes a charge of $382 million for R&D in-process resulting from the acquisition of CoGenesys, Inc. in February 2008.

Adjusted net income for the first quarter of 2008 totaled $529 million, compared to $342 million for the same period of 2007 (up 55 percent), while adjusted diluted earnings per share increased 52 percent to $0.64 from $0.42.

Net income and EPS for the first quarter 2008 are adjusted to eliminate R&D in-process charges incurred in connection with the CoGenesys acquisition. Teva believes that excluding this item facilitates investors' understanding of the trends in the Company's underlying business. In 2007, no adjustments were made and these results are presented only on a GAAP basis.

Exchange rate differences resulting primarily from the decline in the value of the U.S. dollar relative to certain other currencies (primarily European currencies, the Canadian dollar and the Israeli shekel) contributed approximately 6 percent to the first quarter of 2008 sales. However, our businesses also recorded increased expenses due to these currency movements and, as a result, overall, exchange rate fluctuations had a negligible effect on our operating profit and net income.

Pharmaceutical sales in North America (including Copaxone([R])) for the first quarter, which accounted for 53 percent of net sales, reached $1,368 million, an increase of 28 percent compared with the first quarter last year. Quarterly sales benefited primarily from sales of generic versions of Protonix[R] (pantoprazole) and Lotrel[R] (amlodipine besylate/benazepril) which were launched in 2007, the launch of a generic version of Fosamax[R] (alendronate) in the first quarter of 2008 and strong sales of Copaxone[R].

As of April 30, 2008, Teva had 155 product applications awaiting final FDA approval, including 44 tentative approvals. Collectively, the brand products covered by these applications had annual U.S. sales of approximately $98 billion. Of these, 88 were "Paragraph IV" applications challenging patents of branded products. Teva believes it is the first to file on 49 of the 88 applications relating to products with annual U.S. sales exceeding $38 billion.

As previously discussed, effective April 1, 2008, the management and administration of Teva's activities in the CEE countries that became members of the European Union (most significantly for Teva, the Czech Republic and Poland) were transferred from the International division to Teva's European division. In order to simplify the comparisons resulting from this change, the EU members in the CEE that were previously reported as part of the International group will now be reported as part of Europe's sales, beginning with this reported quarter. The table below provides the revised sales figures for the European and International divisions according to the new geographical breakdown for the first quarter and full year of 2007.

Pharmaceutical sales in Europe (including Copaxone([R])) in the first quarter of 2008, which accounted for 26 percent of net sales, totaled $667 million, up 18 percent compared to the first quarter of 2007. The increase in sales is attributable primarily to strong generic sales in Germany, France, Poland and Italy, as well as increased sales of Copaxone([R])and Azilect([R]).

Business Services Industry

Teva Reports First Quarter 2008 Results

Business Wire, May 6, 2008

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