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TEVA | 45 7/8 | +1 9/16
delayed 20 mins - disclaimer

Thursday May 4, 1:05 am Eastern Time

### Company Press Release

## Teva Pharmaceutical Industries Ltd. Reports First Quarter 2000 Financial Results

### First Quarter Earnings Per ADR Up 30%

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
                                     =========   =========   =========

Contact:

         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

More Quotes and News: | Teva Pharmaceutical Industries Ltd (NasdaqNM:TEVA - news)
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