Teva Pharmaceutical Industries Ltd. (NASDAQ: TEVA) today reported record
results for the quarter and year ended December 31, 2009.
“2009 was a very good year for Teva, a year in which our company
delivered record-breaking sales and profits across all our geographies
and major businesses.”
Full Year and Fourth Quarter Highlights:
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Record quarterly and annual net sales of $3.8 billion and $13.9
billion, up 33% and 25%, respectively, compared to the comparable
period in 2008.
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Quarterly non-GAAP net income and non-GAAP EPS of $847 million and
$0.94, up 28% and 18%, respectively, compared with the fourth quarter
of 2008. Quarterly GAAP net income and EPS totaled $379 million and
$0.42, respectively, compared with a loss of $694 million and a loss
of $0.88 per share in the fourth quarter of 2008.
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Annual non-GAAP net income and non-GAAP EPS of $3.0 billion and $3.37,
up 22% and 11%, respectively, compared with the year ended 2008.
Annual GAAP net income and EPS totaled $2.0 billion and $2.23,
respectively, compared with $609 million and $0.75 in 2008.
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Quarterly non-GAAP operating income of $1.0 billion, up 41% compared
with the fourth quarter of 2008. Quarterly GAAP operating income
totaled $412 million, compared with a loss of $412 million in the
fourth quarter of 2008.
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Annual non-GAAP operating income of $3.9 billion, up 35% compared to
2008. Annual GAAP operating income totaled $2.4 billion, compared with
$1.1 billion in 2008.
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Record global in-market sales of Copaxone® of $2.8 billion
in the year ended 2009, up 25% in the fourth quarter and for the full
year compared to 2008. Copaxone® continues to be the
leading MS therapy in the U.S. and globally.
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Record annual cash flow from operations of $3.4 billion.
“2009 was a very good year for Teva, a year in which our company
delivered record-breaking sales and profits across all our geographies
and major businesses.” said Shlomo Yanai, Teva's President and Chief
Executive Officer. “This was also a year of major strategic
achievements, including the successful integration of Barr, a process
which was completed less than a year after closing, and from which we
expect to continue to derive significant synergies for many years to
come.”
Mr. Yanai continued, “I believe that especially against the backdrop of
a troubled world economy, our results this year demonstrate Teva’s
agility and the strength of our balanced business model, which enable us
to deliver continuous profitable growth year after year.”
Net sales for the fourth quarter increased 33% to $3,802 million,
compared to $2,848 million in the fourth quarter of 2008. Net sales for
the year increased 25% to $13,899 million, compared to $11,085 million
in 2008. The integration of Barr's business contributed to the growth in
sales in all of Teva's geographies, particularly in the U.S., Russia,
Poland, Germany and Croatia.
Exchange rate differences contributed approximately $98 million
to sales in the fourth quarter of 2009 as compared to the fourth quarter
of 2008, while having a negligible effect on operating income. The
impact on sales resulted primarily from the decline in the value of the
U.S. dollar relative to certain other currencies (primarily the Euro,
the Canadian dollar and the Hungarian forint), partially offset by the
strengthening of the U.S. dollar against the Russian ruble and Argentine
peso, in the fourth quarter of 2009 compared with the comparable quarter
in 2008.
For the full year 2009, exchange rate differences negatively impacted
sales by $572 million, while having an approximately $37 million adverse
effect on operating profit compared to 2008.
Non-GAAP net income for the fourth quarter of 2009 totaled
$847 million, an increase of 28%, while non-GAAP diluted earnings
per share were $0.94, an increase of 18% compared to the comparable
quarter in 2008. The share count used for the non-GAAP calculation of
fully diluted earnings per share for the fourth quarter of 2009
increased by approximately 78 million shares compared to that of the
fourth quarter of 2008 due, primarily, to the shares issued in
connection with the acquisition of Barr. On a U.S. GAAP basis, net
income for the fourth quarter totaled $379 million compared with a loss
of $694 million in the fourth quarter of 2008, while diluted earnings
per share were $0.42, compared with a loss of $0.88 in the fourth
quarter of 2008.
Non-GAAP net income and non-GAAP EPS for the fourth quarter of 2009 are
adjusted to exclude the following items:
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Legal settlements of $379 million;
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Amortization of purchased intangible assets and inventory step up of
$139 million;
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Impairment of assets of $71 million;
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Restructuring charges and acquisition costs of $25 million;
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Purchased in-process R&D of $23 million;
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Other net financial income of $8 million; and
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A related tax benefit of $161 million.
Non-GAAP net income for the full year 2009 totaled
$3,029 million, an increase of 22%, while non-GAAP diluted earnings
per share were $3.37, an increase of 11% compared to 2008. The share
count used for the non-GAAP calculation of fully diluted earnings per
share for 2009 increased by approximately 75 million shares compared to
that of 2008 due, primarily, to the shares issued in connection with the
acquisition of Barr. On a U.S. GAAP basis, net income for the full year
totaled $2,000 million compared with $609 million in 2008, while diluted
earnings per share were $2.23, compared with $0.75 in 2008.
Non-GAAP net income and non-GAAP EPS for 2009 are adjusted to exclude
the following items:
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Amortization of purchased intangible assets of $485 million;
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Legal settlements of $434 million;
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Inventory step up of $302 million;
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Impairment of assets of $110 million;
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Restructuring charges and acquisition costs of $94 million;
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Purchased in-process R&D of $23 million;
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Other net financial income of $8 million; and
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A related tax benefit of $411 million.
Teva believes that excluding these items facilitates investors'
understanding of the trends in the Company's underlying business. In the
fourth quarter of 2008, non-GAAP net income and non-GAAP EPS excluded
acquisition of in-process R&D, impairment of financial assets,
impairment of assets, amortization of purchased intangible assets, legal
settlements and a related tax effect; in the year ended 2008, non-GAAP
net income and non-GAAP EPS excluded similar items as in the fourth
quarter, but also excluded by a settlement payment from an institution
in connection with the Company's auction rate securities portfolio. See
the attached table for a reconciliation of U.S. GAAP reported results to
the adjusted non-GAAP figures.
Quarterly non-GAAP operating income (which excludes the legal
settlements, amortization of purchased intangible assets and inventory
step up, impairment of assets, restructuring charges and acquisition
costs, and purchased in-process R&D, as detailed above) increased 41% to
$1,049 million, compared with the fourth quarter of 2008. On a U.S. GAAP
basis, operating income for the fourth quarter of 2009 totaled $412
million compared to a loss of $412 million in the comparable quarter of
2008.
Annual non-GAAP operating income (which excludes the amortization
of purchased intangible assets, legal settlements, inventory step up,
impairment of assets, restructuring charges and acquisition costs, and
purchased in-process R&D, as detailed above) increased 35% to
$3,853 million, compared with 2008. On a U.S. GAAP basis, operating
income for 2009 totaled $2,405 million, up from $1,145 million in 2008.
See the attached table for a reconciliation of U.S. GAAP reported
operating income to the adjusted non-GAAP figures.
Sales in North America for the fourth quarter reached
$2,324 million, accounting for 61% of total sales and representing an
increase of 35% compared with the fourth quarter of last year. Quarterly
sales benefited from the launch of generic versions of Prevacid®
Delayed-Release (lansoprazole), Allegra-D® 12 Hour
(fexofenadine HCl/pseudoephedrine HCl) and the re-launch of Pulmicort
Respules® (budesonide) in the quarter, as well as the
continued strong sales of generic versions of Protonix®
(pantoprazole), Adderall XR® (mixed amphetamine salts), Lotrel®
(amlodipine benazapril), Accutane® (isotretinoin), Yasmin®
(drospirenone and ethinyl estradiol), Eloxatin®
(oxaliplatin), and Famvir® (famciclovir) launched in previous quarters.
The quarter's sales also reflected continued strong sales of Copaxone®
and ProAir™.
For the full year, sales in North America reached $8,585 million, up 34%
compared to 2008. For the full year, sales benefited from strong generic
sales, as well as increased sales of Copaxone® and ProAir™.
As of February 5, 2010, Teva had 216 product applications awaiting final
FDA approval, including 43 tentative approvals. Collectively, the brand
products covered by these applications had annual U.S. sales of over
$113 billion. Of these applications, 140 were "Paragraph IV"
applications challenging patents of branded products. Teva believes it
is the first to file on 89 of the applications, relating to products
with annual U.S. branded sales exceeding $55 billion.
Sales in Europe in the fourth quarter of 2009 totaled
$925 million, accounting for 24% of total sales and representing an
increase of 30% compared with the fourth quarter of last year. In local
currencies, sales in Europe grew 20% compared with the fourth quarter of
2008. The increase in sales was mostly attributable to strong generic
sales in Germany, Poland, France and Hungary as well as increased sales
of Copaxone® and Azilect®.
For the full year, sales in Europe increased 10% compared to 2008,
reaching $3,271 million. In local currencies, sales in Europe grew
approximately 22% compared to the full year 2008. This increase in sales
resulted from strong generics sales throughout the region (mainly in
Germany, Spain, Poland and France), as well as increased sales of
Copaxone® and Azilect®.
Since the beginning of 2009, Teva received 1,035 generic approvals in
Europe relating to 164 compounds in 324 formulations, including 12
European Commission approvals valid in all EU member states. In
addition, Teva had approximately 3,143 marketing authorization
applications pending approval in 30 European countries, relating to 241
compounds in 485 formulations, including 9 applications pending with the
EMEA.
International sales in the fourth quarter of 2009 totaled
$553 million, accounting for 15% of total sales and representing
an increase of 35% compared to the fourth quarter of 2008. In local
currencies, international sales grew 32% compared with the fourth
quarter of 2008. The increase in sales was driven by increased sales in
certain countries in Latin America and Israel.
For the full year, international sales totaled $2,043 million, up 20%
compared with 2008. In local currencies, international sales grew
approximately 32% compared to 2008. For the full year, sales benefited
from strong sales in all geographies, including Russia, Latin America
and Israel. Latin America contributed 37% of international sales, while
the CEE and Israel contributed 25% and 24%, respectively.
Copaxone® continued to lead as the number one
MS therapy in the U.S. and globally. Global in-market sales reached $747
million in the fourth quarter of 2009, an increase of 25% over the
fourth quarter of 2008. In the U.S., quarterly in-market sales increased
33% to reach $509 million compared to the fourth quarter of 2008.
In-market sales outside the U.S. totaled $238 million, up 13% compared
to the fourth quarter of 2008. In local currencies, in-market sales of
Copaxone® outside the U.S. grew 2%. Sales in Europe grew by 32%,
compared to the fourth quarter of 2008, while sales in other
international markets were adversely affected by the timing of tenders.