- See Past Events page for webcast link and links to my notes from other company presentations at this event
- Presenter: William "Bill" Marth, President and CEO, Teva Americas division
- Analyst opening comment - Teva is now in a tougher period after years of "doing no wrong" and seeing stock price shoot straight up...You have been very busy doing deals since releasing 2015 guidance in early 2010 (and around that time saw all time share price high around $65)
- Teva - the company as we see it is not as much about the $31b in sales, but being global dominant player in the generics market. we are soon to be #1 in japan. already #1 in US and Germany, these are top 3 generic markets in world
- Still want to grow in russia and latin america
- Total generic business should expand to $130-150b in next 5-10 yrs, demand for healthcare rises, and generics are the most cost effective solution...
- Continue reading after the jump...
- Teva is also a robust speciality player...neurology today, plus respiratory and women's heath..will skip large metabolic diseases (need 1000 rep sales force for these)
- Market saw Teva's vision, but now imminence of threat about Copaxone is causing concern. Perhaps we should have handled this differently. See recent inequitable conduct decision as positive, don't see approval on horizon.
- We are here to say that "there is life beyond copaxone" [hat tip to Dew Diligence on iHub who has been reading Teva management's words, body language, and strategy like a book for at least a year]
- Question: current PE is 8-9x...why use cash to make acquisition vs share buybacks? We did put in $1b buyback and have been very active...some thought this should be much larger (ie, $5b)
- Copaxone- had planned for flat volume growth y/y, on track for that after gylenia launch
- Copaxone biosimilar threat?- First there is the issue of sameness and then whatever other steps applicant would have to take
- looking to 12015, Copaxone sales forecast as $1.8-2b in MS market that will be larger than today's, so won't have 40% market share anymore
- 3x weekly trial: closed enrollment, data in 12 months, submit to FDA 2h2012, market 2h2013
- What is most important to MS pts- keep me where I am today, no worsening disability. 2nd concern- safety- no more risk than I am taking now
- Question: current thoughts on debt/EBITDA leverage? Still have flexibility? Ratio is now 24%, will increase w/ cephalon deal, but have found out that they will keep current credit rating, not looking to expand more, will pay this debt down as they have been done w/ previous acquisitions
- The 20% of CEPH integration that centers around r&d, philosophy, commercialization is most critical over the coming months and years
- Question: 2015 guidance assumes no generic copaxone? Correct. The forecast includes $1.8b sales, don't believe any generic will be in market at that time, maybe some sort of alternative branded product (huh?). Copaxone will suffer from the orals first. Indefiniteness argument is out, Mylan wanted to re-plead. Glad that we have a good, thorough judge, think 2014 patents will hold. Think that potential generic will have to prove chemical sameness and then confirm in vivo and in vitro. Probably over time some follow-on (FOB) will come. No entries on clinical trials.gov, but have heard that some people have surveyed clinical trial centers asking about protocols
- Generic enoxoparin program? no update. dont want to get into game of point/counterpoint. next release anyone will see will be launch, still hopeful for this year
- There have been no settlement discussions for copaxone w/ NVS/MNTA. no linkage with enoxoparin [someone please tell this to the message board crazies]. We are working from the high ground, why try to settle now? The party we would ultimately be dealing with would be NVS, not MNTA [this was an odd statement thrown in, came across as a dig against MNTA. MNTA and NVS always say they are joined at the hip and do all such legal matters together. TEVA doesn't want MNTA to have a seat at the grownups table at Thanksgiving?]
- We will deal with the Momenta testing patents "at the appropriate time", we don't feel threatened by these
- CEPH- based on cash flow and synergies, feel that they actually paid very little for the pipeline - but think there are a lot of exciting things there
- before CEPH, teva would have been 14th largest branded pharma company...so please don't think we don't know what we're doing
- IMS - $300b in US pharma sales, $50b is currently generic. This leave a quarter trillion dollar opportunity- applications representing about half of this are already filed. These drugs however are not as easy to get as in the past (ie formulation challenges)
- Teva believes they are currently underweight in Brazil
- prices contracting in EU, but gaining in share. The EU is a market with 500m people where generics are not appropriately represented, EU has 50's % conversion, not 70's closing in on 80% like see in US, we have the capabilities to deliver this growth
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