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JERUSALEM--(BUSINESS WIRE)--May 4, 2000--Teva Pharmaceutical Industries Ltd. (NASDAQ:TEVA - news) 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.
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.
Teva Pharmaceutical Industries Ltd
Consolidated Statements of Income
(in thousands, except earnings per ADR)
Three months ended Year ended
March 31 Dec. 31
--------------------------------
2000 1999 1999
-------- -------- --------
U.S. Dollars
--------------------------------
(unaudited) (audited)
-------------------- --------
SALES 337,334 287,620 1,282,406
COST OF SALES 199,751 174,792 767,627
-------- -------- --------
GROSS PROFIT 137,583 112,828 514,779
RESEARCH AND DEVELOPMENT
EXPENSES:
Total expenses 22,257 20,562 91,622
Less grants & participations 2,334 1,401 9,780
-------- -------- --------
19,923 19,161 81,842
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 61,662 52,698 233,891
-------- -------- --------
55,998 40,969 199,046
ACQUISITION OF RESEARCH AND
DEVELOPMENT IN PROCESS - - 17,700
-------- -------- --------
OPERATING INCOME 55,998 40,969 181,346
FINANCIAL EXPENSES - net 9,889 6,195 30,165
OTHER INCOME - net 2,694 2,280 10,781
-------- -------- --------
INCOME BEFORE TAXES 48,803 37,054 161,962
TAXES ON INCOME 11,080 9,323 44,335
-------- -------- --------
37,723 27,731 117,627
SHARE IN PROFITS (LOSSES) OF
ASSOCIATED COMPANIES 241 232 (550)
MINORITY INTEREST (100) 299 756
-------- -------- --------
NET INCOME 37,864 28,262 117,833
======== ======== ========
EARNINGS PER ADR ($) 0.30 0.23 0.94
======== ======== ========
WEIGHTED AVERAGE NUMBER OF ADR'S 126,711 125,792 125,880
======== ======== ========
Teva Pharmaceutical Industries Ltd
Balance Sheet Data
(in thousands)
March 31 Dec. 31
--------------------------------
2000 1999 1999
-------- -------- --------
U.S. Dollars
--------------------------------
(unaudited) (audited)
-------------------- --------
ASSETS
CURRENT ASSETS
Cash and cash equivalents 108,247 69,780 77,177
Short-term investments 1,846 2,100 17,226
Accounts receivable:
Trade 340,801 263,033 361,293
Other 119,215 87,907 103,309
Inventories 368,366 350,187 351,478
-------- -------- --------
Total current assets 938,475 773,007 910,483
INVESTMENTS AND NON-CURRENT
RECEIVABLES 32,248 31,839 31,681
PROPERTY, PLANT AND EQUIPMENT:
Cost 865,837 755,654 856,493
Less accumulated depreciation 387,892 309,848 377,957
-------- -------- --------
477,945 445,806 478,536
INTANGIBLE ASSETS, net 293,681 167,809 293,319
-------- -------- --------
1,742,349 1,418,461 1,714,019
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term credit: mainly from
banks 289,132 319,067 276,259
Accounts payable and accruals:
Trade 95,537 93,542 114,454
Other 150,784 90,709 140,053
Proposed dividend 7,069 5,126 6,806
-------- -------- --------
Total current liabilities 542,522 508,444 537,572
LONG-TERM LIABILITIES:
Deferred income taxes 28,609 31,114 31,687
Accrued employee rights upon
retirement, net of amount funded 11,297 3,878 11,041
Loans and other liabilities 388,774 201,302 391,419
-------- -------- --------
Total long-term liabilities 428,680 236,294 434,147
-------- -------- --------
Total Liabilities 971,202 744,738 971,719
MINORITY INTEREST 108 481 17
SHAREHOLDERS' EQUITY 771,039 673,242 742,283
-------- -------- --------
1,742,349 1,418,461 1,714,019
========= ========= =========
Dan Suesskind
Chief Financial Officer
Teva Pharmaceutical Industries Ltd.
011/972-2-589-2840
or
Bill Fletcher
President and CEO Teva North America
215/256-8400
or
Dorit Meltzer
Director, Investor Relations
Teva Pharmaceutical Industries Ltd.
011/972-3-9267554
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