Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) provides its current
outlook for non-GAAP financial performance for the full year ending
December 31, 2014.
In an effort to enhance investor understanding of the business
performance of the company, and to provide more clarity and transparency
regarding its projections for 2014, given the significant uncertainty
concerning possible generic competition to Copaxone® in the
U.S., the Company is providing two alternative scenarios for its current
non-GAAP financial outlook for the year:
-
the "Generic Copaxone" scenario assumes the launch of
at least two AP-rated generic competitors to Copaxone® in
the U.S. on June 1, 2014; and
-
the "Exclusive Copaxone" scenario assumes no generic
competition to Copaxone® in the U.S. during 2014.
Both scenarios assume the launch of Copaxone® 40mg
three-times-a-week in early 2014 and exclusive sales of the generic
version of Pulmicort® in the U.S. throughout 2014. The
outlook provided is organic, and neither alternative includes the
potential impact of any business development activities.
Below is a table summarizing the non-GAAP financial outlook for the two
scenarios:
|
|
Generic
|
|
Exclusive
|
|
|
Copaxone
|
|
Copaxone
|
Net Revenues ($ b)
|
|
19.3-20.3
|
|
19.8-20.8
|
GP (%)
|
|
57%-59%
|
|
58%-60%
|
R&D ($ b)
|
|
1.3-1.45
|
|
1.3-1.45
|
S&M ($ b)
|
|
4.0-4.1
|
|
4.0-4.1
|
G&A ($ b)
|
|
1.2
|
|
1.2
|
OP ($ b)
|
|
4.8-5.1
|
|
5.35-5.65
|
|
|
|
|
|
Finance Expenses ($ m)
|
|
310-350
|
|
310-350
|
Tax (%)
|
|
20%-21%
|
|
19%-20%
|
Number of Shares (m)
|
|
840-850
|
|
840-850
|
EPS ($)
|
|
4.20-4.50
|
|
4.80-5.10
|
|
|
|
|
|
Cash Flow from Operations ($ b)
|
|
2.7
|
|
3.0
|
|
|
|
|
|
Teva estimates that each month of delay in the launch of generic
competitors to Copaxone® in the U.S. will contribute on
average approximately $78 million to net revenues and $0.08 to non-GAAP
diluted earnings per share.
“2014 will be a pivotal year for Teva and a year of major transitions
across the company", stated Eyal Desheh, Acting President and
CEO of Teva. "We will continue to make significant progress in
implementing our strategy. We will focus our efforts on our generics
business and core R&D programs, including high-value complex generics,
promising specialty medicines and New Therapeutic Entities. In our
specialty business, we anticipate six important launches and the
potential submission of ten additional medicines for approval. At the
same time, we are focused on increasing our organizational effectiveness
through our cost reduction program to ensure Teva’s leadership position,
growth and sustainable profitability.”
Detailed financial outlook:
|
|
|
|
|
|
|
|
|
Generic
|
|
|
|
Exclusive
|
|
|
Copaxone
|
|
|
|
Copaxone
|
|
|
U.S. $ in billions
|
Generics inc. API
|
|
9.8 - 10.5
|
|
|
|
9.8 - 10.5
|
Specialty:
|
|
7.3 - 7.7
|
|
|
|
7.8 - 8.2
|
OTC & Other*:
|
|
2.0 - 2.2
|
|
|
|
2.0 - 2.2
|
Total Net Revenues
|
|
19.3 - 20.3
|
|
|
|
19.8 - 20.8
|
|
|
|
|
|
|
|
*Including OTC, distribution & other
-
Net Revenues by Geographies:
|
|
|
|
|
|
|
|
|
Generic
|
|
|
|
Exclusive
|
|
|
Copaxone
|
|
|
|
Copaxone
|
|
|
U.S. $ in billions
|
United States
|
|
9.5-9.9
|
|
|
|
10.0-10.4
|
Europe*:
|
|
5.7-6.2
|
|
|
|
5.7-6.2
|
Rest of the World:
|
|
3.8-4.2
|
|
|
|
3.8-4.2
|
Total Net Revenues
|
|
19.3 - 20.3
|
|
|
|
19.8 - 20.8
|
|
|
|
|
|
|
|
*All members of the European Union, Switzerland, Norway and certain
South Eastern Europe countries
-
Generics (including API) Net Revenues:
|
|
U.S. $ in billions
|
United States
|
|
4.1 - 4.5
|
Europe*:
|
|
3.1 - 3.5
|
Rest of the World:
|
|
2.3 - 2.6
|
Total Generics Net Revenues
|
|
9.8 - 10.5
|
|
|
|
*All members of the European Union, Switzerland, Norway and certain
South Eastern Europe countries
-
Key Specialty Medicines Net Revenues:*All members of the
European Union, Switzerland, Norway and certain South Eastern Europe
countries
|
|
Generic
|
|
Exclusive
|
|
|
|
Copaxone
|
|
Copaxone
|
|
|
|
U.S. $ in millions
|
|
|
|
|
|
|
|
Copaxone®
|
|
3,100-3,200
|
|
3,600-3,700
|
|
Treanda®
|
|
750
|
|
ProAir®
|
|
510
|
|
Azilect®
|
|
390
|
|
Qvar®
|
|
380
|
|
Nuvigil®
|
|
350
|
|
|
|
|
|
|
|
-
Other net revenues of $2.0-$2.2 billion, which include net
revenues from Teva's share in PGT Healthcare, our joint venture with
Procter & Gamble, of $1.0-1.1 billion, and approximately $0.2 billion
of OTC contract manufacturing in the U.S.
Overall in-market
revenues of PGT Healthcare will be approximately $1.7 billion. This
amount represents sales of the combined OTC portfolios of Teva and P&G
outside of North America.
|
|
|
|
Other
|
|
Generic
|
|
Exclusive
|
|
OTC &
|
|
|
|
Generics
|
|
Specialty
|
|
Copaxone
|
|
Copaxone
|
|
Other
|
|
Total Revenues ($ b)
|
|
9.8-10.5
|
|
4.2-4.5
|
|
3.1-3.2
|
|
3.6-3.7
|
|
2.0-2.2
|
|
GP (%)
|
|
41%-44%
|
|
83%-85%
|
|
88%-91%
|
|
88%-91%
|
|
32%-34%
|
|
R&D ($ b)
|
|
0.45-0.50
|
|
0.8-0.9
|
|
0.1
|
|
0.1
|
|
-
|
|
Total S&M ($ b)
|
|
1.7-1.8
|
|
1.4
|
|
0.6-0.7
|
|
0.6-0.7
|
|
0.3
|
|
OP before G&A ($ b)
|
|
2.0-2.3
|
|
1.15-1.55
|
|
2.0-2.1
|
|
2.55-2.65
|
|
0.35-0.5
|
|
% of Teva Total OP before G&A*
|
|
33%
|
|
21%
|
|
-
|
|
39%
|
|
7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Mid-range compared to "Exclusive Copaxone" scenario (approximate)
Non-GAAP gross profit margin excludes amortization of intangible assets
of approximately $1.1 billion.
Non-GAAP selling & marketing expenses exclude amortization of intangible
assets.
Non-GAAP total expenses are exclusive of approximately $900 million of
restructuring expenses due to cost reduction programs
-
Figures for Cash flow from operations are after deduction of
payments of approximately $2 billion in 2014 for legal settlements and
payments related to our cost reduction program.
Note: items not expressed in this
press release in the form of ranges are approximate and may vary +/-5%.
These estimates reflect management`s current expectations for Teva's
performance in 2014. Actual results may vary, whether as a result of FX
differences, market conditions or other factors. In addition, the
non-GAAP figures exclude the amortization of purchased intangible
assets, costs related to certain regulatory actions, inventory step-up,
legal settlements and reserves, impairments and related tax effects. The
non-GAAP data presented by Teva are the results used by Teva's
management and board of directors to evaluate the operational
performance of the company, to compare against the company's work plans
and budgets, and ultimately to evaluate the performance of management.
Teva provides such non-GAAP data to investors as supplemental data and
not in substitution or replacement for GAAP results, because management
believes such data provides useful information to investors.
Conference Call
Teva will host a conference call and live webcast to discuss its 2014
business outlook on Tuesday, December 10, 2013, at 8:00 a.m. Eastern
Daylight Time. The call will be webcast and can be accessed through the
Company's website at www.tevapharm.com,
or by dialing 1-800-510-9691 (U.S. and Canada) or 1-617-614-3453
(International). The conference ID is 15601679. Following the conclusion
of the call, a replay will be available within 24 hours at the Company's
website at www.tevapharm.com.
A replay will also be available until December 17, 2013, at 11:59 p.m.
ET, by calling 1-888-286-8010 (U.S. and Canada) or 1-617-801-6888
(International). The Conference ID is 73093491#.
About Teva
Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) is a leading global
pharmaceutical company, committed to increasing access to high-quality
healthcare by developing, producing and marketing affordable generic
drugs as well as innovative and specialty pharmaceuticals and active
pharmaceutical ingredients. Headquartered in Israel, Teva is the world's
leading generic drug maker, with a global product portfolio of more than
1,000 molecules and a direct presence in about 60 countries. Teva's
branded businesses focus on CNS, oncology, pain, respiratory and women's
health therapeutic areas as well as biologics. Teva currently employs
approximately 46,000 people around the world and reached $20.3 billion
in net revenues in 2012.
Teva's Safe Harbor Statement under the U. S. Private Securities
Litigation Reform Act of 1995:
This document contains
forward-looking statements, which express the current beliefs and
expectations of management. Such statements involve a number of known
and unknown risks and uncertainties that could cause our 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 risks relating to: the ability to reduce operating
expenses to the extent and during the timeframe intended by our cost
restructuring program; our ability to develop and commercialize
additional pharmaceutical products, including our ability to develop,
manufacture, market and sell biopharmaceutical products, competition for
our innovative medicines, especially COPAXONE®
(including competition from innovative orally-administered alternatives,
as well as from potential purported generic equivalents), competition
for our generic products (including from other pharmaceutical companies
and as a result of increased governmental pricing pressures),
competition for our specialty pharmaceutical businesses, our ability to
achieve expected results through our specialty, including innovative,
R&D efforts, the effectiveness of our patents and other protections for
innovative products, decreasing opportunities to obtain U.S. market
exclusivity for significant new generic products, our ability to
identify, consummate and successfully integrate acquisitions and license
products, uncertainties relating to the replacement of and transition to
a new President & Chief Executive Officer, the effects of increased
leverage as a result of recent acquisitions, the extent to which any
manufacturing or quality control problems damage our reputation for high
quality production and require costly remediation, our potential
exposure to product liability claims to the extent not covered by
insurance, increased government scrutiny in both the U.S. and Europe of
our settlement agreements with brand companies and liabilities arising
from class action litigation and other third-party claims relating to
such agreements, potential liability for sales of generic medicines
prior to a final resolution of outstanding patent litigation, our
exposure to currency fluctuations and restrictions as well as credit
risks, the effects of reforms in healthcare regulation and
pharmaceutical pricing and reimbursement, any failures to comply with
complex Medicare and Medicaid reporting and payment obligations,
governmental investigations into sales and marketing practices,
particularly for our specialty medicines (and our ongoing FCPA
investigations and related matters), uncertainties surrounding the
legislative and regulatory pathways for the registration and approval of
biotechnology-based medicines, adverse effects of political or
economical instability, corruption, major hostilities or acts of
terrorism on our significant worldwide operations, interruptions in our
supply chain or problems with our information technology systems that
adversely affect our complex manufacturing processes, any failure to
retain key personnel or to attract additional executive and managerial
talent, the impact of continuing consolidation of our distributors and
customers, variations in patent laws that may adversely affect our
ability to manufacture our products in the most efficient manner,
potentially significant impairments of intangible assets and goodwill,
potential increases in tax liabilities resulting from challenges to our
intercompany arrangements, the termination or expiration of governmental
programs or tax benefits, environmental risks and other factors that are
discussed in our Annual Report on Form 20-F for the year ended December
31, 2012 and in our other filings with the U.S. Securities and Exchange
Commission. Forward-looking statements speak only as of the date on
which they are made and the Company undertakes no obligation to update
or revise any forward looking statement, whether as a result of new
information, future events or otherwise.
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