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TheStreet Open House

Teva Reports Fourth Quarter And Full Year 2012 Results

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) today reported results for the quarter and year ended December 31, 2012.

“Our efforts over the past year clearly demonstrate Teva's ability and commitment to transform the Company. Based on this, we will enter 2013 with a strong and disciplined business focus," stated Dr. Jeremy Levin, Teva’s President and Chief Executive Officer. "Our generic franchise remains the core of our business. We launched 23 generic products in the U.S. in 2012, and anticipate a similar number of launches in 2013. Our specialty medicines business continues to drive value with strong fundamentals in multiple sclerosis, central nervous system, respiratory, oncology and women’s health. Copaxone ® continues to lead the multiple sclerosis market in sales and market share. In March 2013, we plan to submit to the FDA a sNDA for marketing approval of a '3 times a week' dose of Copaxone®. Our new R&D organization is showing great progress. Our New Therapeutic Entities pipeline is advancing as expected. At the same time, we are beginning to add external opportunities through our 'Constellation' business development program. We have launched our 'Reshape' program and are committed to managing our costs while we invest in Teva’s future."

Dr. Levin added, "I am particularly pleased with the Board's decision to increase Teva's dividend. Together with Teva's new strategy backed by our ongoing share repurchase plan, this decision reflects the Board's and management's optimism and confidence. We believe the course we have set for Teva is the right one and will yield real value for patients, customers and shareholders while ensuring the long-term growth of our company."

Revenues by Geography for the Fourth Quarter 2012 1

Net revenues in the United States in the fourth quarter were $2.6 billion (50% of total revenues), a decrease of 14% compared to the fourth quarter of 2011. Provigil ® sales declined substantially due to generic competition that began in the second quarter of 2012, while the other factor affecting the comparison is the unusually high generic revenues during the fourth quarter of 2011 due to extraordinary contributions from our launch of generic Zyprexa ® and from our agreement with Ranbaxy relating to its launch of generic Lipitor ®. The absence of these contributions in the fourth quarter of 2012 was partially offset by strong revenues from generic launches throughout 2012, as well as an increase in Copaxone ® sales

Net revenues in Europe in the fourth quarter were $1.5 billion (29% of total revenues), an increase of 2% compared to the fourth quarter of 2011, or 5% in local currency terms. Revenues in Europe this quarter benefited from stronger revenues from some of our specialty medicines, primarily Copaxone ®, following the take-back of marketing and distribution rights, as well as increased sales from our OTC business. We are continuing to manage our commercial model in Europe in line with our strategy of sustainable and profitable growth.

Net revenues in the Rest of the World in the fourth quarter totaled $1.1 billion (21% of total revenues), a decrease of 3% compared to the fourth quarter of 2011. In local currency terms, ROW revenues declined by 2%. The slight decline in revenues resulted from the sale of certain businesses of Mepha AG, which closed in the first quarter of 2012, as well as weaker performance in Canada, due primarily to government-imposed price reforms. This decrease was partially offset by growth in Latin America.

         
Three Months Ended

December 31,

Percentage Change

2012 from

Percentage Change

2012 from

2012   2011 % of 2012 % of 2011

2011

2011

U.S. $ in millions

in local currencies

United States:
Generic 1,034 1,242 20 % 22 % (17 %) (17 %)
Specialty 1,527 1,770 29 % 31 % (14 %) (14 %)
Others 60 33 1 % 1 % 82 % 82 %
Total United States 2,621 3,045 50 % 54 % (14 %) (14 %)
Europe*:
Generic 930 982 18 % 17 % (5 %) (3 %)
Specialty 420 329 8 % 6 % 28 % 32 %
Others 177 183 3 % 3 % (3 %) (4 %)
Total Europe 1,527 1,494 29 % 26 % 2 % 5 %
Rest of the World:
Generic 698 758 13 % 13 % (8 %) (7 %)
Specialty 159 155 3 % 3 % 3 % 4 %
Others 244 224 5 % 4 % 9 % 11 %
Total Rest of the World 1,101 1,137 21 % 20 % (3 %) (2 %)
Total Revenues 5,249 5,676 100 % 100 % (8 %) (7 %)
 
*All members of the European Union as well as Switzerland and Norway.
 

1 For quarterly revenues by geography and by product line, beginning with the fourth quarter of 2010, please visit our website at www.ir.tevapharm.com.

Revenues by Product Line for the Fourth Quarter 2012

Generic medicines net revenues in the fourth quarter were $2.7 billion (including API sales of $202 million), a decrease of 11% compared to $3.0 billion in the fourth quarter of 2011. Generic revenues comprised 51% of total revenues in the quarter, compared to 52% in the fourth quarter of 2011. Generic revenues consisted of:

  • U.S. revenues of $1.0 billion, a decrease of 17% compared to the fourth quarter of 2011. The decline primarily reflects the significant launches in the comparable quarter (including the generic version of Zyprexa ® and our agreement with Ranbaxy relating to its launch of generic Lipitor ®, which did not contribute to revenues in the fourth quarter of 2012). The decrease was partially offset by continued revenues from launches earlier in 2012 and in the fourth quarter (including the generic version of TriCor ®).
  • European revenues of $930 million, a decrease of 5%, or 3% in local currency terms, compared to the fourth quarter of 2011. We saw declines in revenues in Italy and Spain that were partially offset by increases in Germany, the U.K., France, and Poland. During the quarter we continued to manage the generic business in the region for sustainable profitability, and had several launches, including generic versions of Seroquel XL ® and Detrol LA ® in the U.K.
  • ROW revenues of $698 million, a decrease of 8%, or 7% in local currency terms, compared to the fourth quarter of 2011. The decrease was primarily due to the sale of certain businesses of Mepha AG and lower sales in Canada, due primarily to government-imposed price reforms, partially offset by growth in Latin America and Russia.
 

Three Months Ended

December 31,

   

Percentage Change 2012 from

2012   2011   % of 2012 % of 2011

2011

U.S. $ in millions
 
Generic Medicines $ 2,662 $ 2,982 51 % 52 % (11 %)
API 202 197 4 % 3 % 3 %

Specialty medicines net revenues in the fourth quarter were $2.1 billion, a decrease of 7% compared to $2.3 billion in the fourth quarter of 2011. Specialty revenues consisted of:

  • U.S. revenues of $1.5 billion, a decrease of 14% compared to the fourth quarter of 2011.
  • European revenues of $420 million, an increase of 28%, or 32% in local currency terms, compared to the fourth quarter of 2011.
  • ROW revenues of $159 million, an increase of 3%, or 4% in local currency terms, compared to the fourth quarter of 2011.

Specialty revenues comprised 40% of total revenues in the quarter, unchanged compared to the fourth quarter of 2011.

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