TEVA PHARMACEUTICAL INDUSTIES LTD.

Ivana Babic

Brandon Blitzer

Thomas Grill

James Stevensson

Dr. Steven Chang

Global business

December 1, 2009
TABLE OF CONTENT

1. EXECUTIVE SUMMARY

Teva’s total sales have increased from 1,1 billion US dollars in 1998 to 11,1 billion US dollars in

2008. The sales composition by region has changed and Today North America together with

Europe count for about 89% of the company’s total sales while Israel‘s share has decreased

significantly. However, the changes in sales composition can simply be explained by the

aggressive mergers and acquisitions strategy the company took on in the US and to some extends

in Europe.

2. INTRODUCTION

Founded in 1901, followed by well organized management, innovative researchers and numbers

of strategic mergers and acquisitions Teva Pharmaceutical Industry Ltd. (Teva) has become one

of the top 20 pharmaceuticals in the world. The company is also the biggest generic drug

company in the world.

This paper is going to give you an understanding about Teva.

The company is producing drugs for different treatment categories but it’s focused on

supplying generic drugs and branded products for certain niche categories. Two of their better

known branded drugs are Copaxone® 2,2 bn for multiple sclerosis and Azilect® 175 mill for

Parkinson's disease. The company also supplies API (Active Pharmaceutical Ingredients). Today
they operate in Israel, Asia, Latin America, North America and Europe where North America

and Europe count for about 80% of its total sales. 1

This paper is written for the class “global business”. It will present an overall
picture about the pharmaceutical company Teva.

1 http://www.mergentonline.com/compdetail.asp?company=15867
 3. TEVA PHARMACEUTICALS GLOBAL PERFORMANCE

Until 2007 Teva was the biggest generic drug producer with the largest sales by volume, largest
number of products and the most patent challenges. However they faced challenge from other
generics such as Mylan and Barr when they are acquiring other firms, expanding their business
and digging into Teva’s market share. In the beginning of 2009 Teva completed its acquisition of
Barr, elimination one potential competitor. Mylan still remains a competitor to look out for in the
generic drug market.
However, Teva seem to be doing well in the global environment. Net sales improved
18% to 11.1 billion dollars in 2008, which is an all time high for the company. This growth can
be explained by the strong performance all their business units had. In the US, the company had
higher generic sales and they also launched a record number of new products. In 2008, 73 % of
Teva’s revenues came from generic drug, 22 % from branded drugs and 5 % from API. Expect
from 2004, 2006 and 2008 net earnings have increased each year from 1998 to 2008.2
Teva’s Copaxone is the leading drug for MS therapy both in the United States and
globally, with a market share of approximately 30%. Copaxone is a key growth driver for the
companys over all profitability. In the third quarter of 2009 in-market sales increased 38% to 776
million dollars, over the third quarter of 2008. In the United states the in-market sales increased
53% to 540 million dollars compared to the third quarter of 2008. Outside the Unitet States in-
market sales grew 23%. (Teva pharm., 2009)3
According to Fortune’s raking “100 fastest-growing companies” Teva ranks number 56.
The Pharma report of 2009 (MM&M, 2009) ranked Teva as number 12 in US sales 2008.

Top 20 Pharmaceutical Companies by US Sales ’08

Rank Company 2008 Total 2007 Total
(billions) (billions)
1 Pfizer 20.51 23.52
2 GlaxoSmithKline 18.37 20.14
3 AstraZeneca 16.29 15.47
4 Johnson & Johnson 15.99 16.28
5 Merck & Co. 15.49 17.64
6 Amgen Corporation 13.39 14.34
7 Roche 13.06 3.58
8 Novartis 12.43 13.92
9 Eli Lilly & Co. 11.43 10.28
10 Sanofi-Aventis 11.01 10.87
11 Abbott Labratories 9.99 9.06
12 Teva Pharmaceuticals 9.20 7.93
13 Bristol-Myers Squibb 8.03 6.87

2 http://www.tevapharm.com/pdf/Teva20F2008.pdf,
Growinghttp://www.maheshsundar.com/Home/maheshsundarcom---pharma-updates/teva-pharma---a-safe-
prescription

3 Teva’s Third Quarter 2009 Results report.

14 Takeda 8.00 3.51
15 Wyeth 7.64 8.61
16 Boehringer Ingelheim 6.42 5.76
17 Schering-Plough 4.91 4.69
18 Forest Laboratories 4.08 3.87
19 Eisai Corp. 3.97 3.68
20 Mylan 3.32 3.57
Total others 77.85 77.23
Total market 291.47 286.87 4

Revenue Healthcare R&D

Total Revenues Net income 2008
Rank Company Country 2008 Employees 2008
(USD millions) (USD millions)
2008 (USD millions)

1 Pfizer U.S. 70,696 11,318 14,111 137,127

2 J&J U.S. 63,747 NA 10,576 119,200

3 Bayer Germany 48,149 3,770 6,448 108,600

Hoffmann–La
4 Switzerland 43,970 NA 8,135 78,604
Roche

5 Novartis Switzerland 41,460 NA 11,946 98,200

United
6 GlaxoSmithKline 40,424 6,373 10,432 103,483
Kingdom

7 Sanofi-Aventis France 40,328 NA 7,204 99,495

8 AstraZeneca UK/Sweden 31,601 NA 5,959 67,400

Abbott
9 U.S. 29,527 2,688 4,880 68,697
Laboratories

10 Merck & Co. U.S. 23,850 4,678 7,808 74,372

11 Bristol-MyersS. U.S. 19,977 NA 2,165 42,000

12 Eli Lillyand Co. U.S. 18,634 NA9 2,953 40,600

Boehringer
13 Germany 16,959 1,977 2,163 43,000
Ingelheim

4 IMS Health, National Sales Perspectives

14 Takeda Pharma. Japan 15,697 1,620 2,870 15,000

15 Amgen U.S. 14,771 3,366 3,166 48,000

16 Genentech U.S. 13,400 15773 3,640 33,500

17 Baxter Int. U.S. 12,300 614 1,397 38,428

18 Teva Pharma. Israel 11,080 495 546 26,670

2009 numbers.

5 http://www.mergentonline.com/
In the charts below we can see Teva’s stock performance compared to some of their competitors.
Teva’s stock has had a steady growth from 1998 to 2009.
 4. GLOBAL SALES COMPOSITION BY REGION

As we can see in the charts below to total sales have increased with about 10 billion
dollars over a 10 year period of time (from 1,1 billion to 11,1 between the years
1998-2008). We can also see that there is quite a significant change in sales
composition between the regions.

In 1998, a not insignificant portion of the sales were conducted in Israel

(23%) when in 2008 that portion was a lot smaller, only 4%. The charts also show
that North Americas share has grown to include 58% of the company’s global sales.
Latin America has also stepped in and become a source for the company’s sales.

Total sales by region 1998

100%=1,1 billion US dollars

Total Sales by Region 2008

100% = 11,1 billion US dollars

6

The changes in the sales composition can be explained when looking at Tevas
strategic mergers and acquisitions. During the 1990’s they adopted an aggressive
M&S strategy in the US which made them a major player in the global market
especially for generic drugs. They also adapted the strategy in Europe.

6 http://www.tevapharm.com/pdf/Q4'08_Israe_%20Market_170209_2.pdf
KEY TO SUCCESS

One of Teva's keys to success is its strategy of filing patent challenges on branded products, thus
attempting to gain a "first-to-market" advantage with its generic equivalents. The company also
achieves its early market strategy by entering marketing alliances with branded pharmaceutical
makers, including Savient Pharmaceuticals, Biovail, and Impax Laboratories.