MIRA
INFORM REPORT
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Report Date : |
02.05.2007 |
IDENTIFICATION DETAILS
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Name : |
TEVA PHARMACEUTICAL INDUSTRIES LTD. |
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Registered Office : |
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Country : |
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Date of Incorporation : |
1901 |
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Legal Form : |
Public Limited Liability Company |
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Line of Business : |
Developers,
manufacturers, marketers and exporters of pharmaceuticals, chemicals, and
veterinary products. |
RATING & COMMENTS
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MIRA’s Rating : |
A |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
name & address
TEVA
PHARMACEUTICAL INDUSTRIES LTD.
PETAH TIKVA 49150
Telephone 972 3 926 72 67
Fax 972
3 924 60 26
HISTORY
Originally founded
in
Later registered as
a public limited liability company, as per file No. 52-000721-2 on the
26.4.1935, under the name of TEVA MIDDLE EAST PHARMACEUTICAL AND CHEMICAL WORKS
LTD.
Following certain
changes, a new public limited liability company was registered as per file No.
52-001395-4 on the 13.2.1944, under the present name.
Since 1976 the
company is a merger of the following companies:
1. TEVA LTD.,
2. ASSIA LABORATORIES LTD.,
3. ZORI
At later dates
published a prospectus offering its shares to the public both in
SHARE CAPITAL
Authorized share
capital
SHAREHOLDERS
1. TEMPLETON FUNDS, 9.15%, part of FRANKLIN RESOURCES, INC,
2. Dr. Philip Frost, 2.66%,
3. Eliyahu (Eli) Hurwitz, 1.3%,
4. Harold Snyder, 1.19%,
5. Subject’s subsidiaries, 1.04%,
6. Shares are also traded on the Tel Aviv Stock Exchange, the NASDAQ
(symbol TEVA) and SEAQ International Stock Exchanges.
Subject current
shareholding structure is as follows:
Parties of
Interest – 6.35%
Institutional
holdings – 9.08%
The public – 84.57%
Besides the
TEMPLETON FUND, no shareholder holds over 5% of subject.
DIRECTORS
1. Eliahu (Eli) Hurwitz,
Chairman,
2. Dr. Phillip Frost, vice Chairman,
3. Prof. Meir Heth,
4. David Shamir,
5. Leslie Dan,
6. Dr. Max Reis,
7. Mrs. Ruth Cheshin,
8. Dov Shapir,
9. Harold Snyder,
10. Dr. Leora Rubin Meridor,
11. Riger Abravanel,
12. Prof. Moshe Mani,
13. Abraham Cohen,
14. Prof. Michael Sela,
15. Prof. Gabriela Shalev.
GENERAL MANAGER
Shlomo Yanai,
since March, 2007.
BUSINESS
Developers, manufacturers,
marketers and exporters of pharmaceuticals, chemicals, and veterinary products.
TEVA and its
subsidiaries develop generic drugs in all major therapeutic categories, which
are distributed worldwide.
89% are from
pharmaceutical products, 10% from API (active pharmaceutical ingredients)
products and 1% from veterinary and other products.
64% of sales are
to North America, 24% to
Operating from:
1.
Partly owned head office and plant on an area of
9,125 sq. metres in
2.
Owned plant (on a leased plot) on an area of 11,897
sq. metres in
3.
Plants (mostly owned) in Kfar Saba, Netanya, Kiryat
Shmone, Beit Shemesh, Petah-Tikvah, Ashdod and Ramat Hovav, serving subject and
its subsidiaries,
4.
Branches and plants worldwide, mainly spread in
Europe and
Having in all
26,670 employees, of which
MEANS
Consolidated B/S
shows:
US$ (millions)
31.12.2006 31.12.2005
ASSETS
Current assets
Cash and cash equivalents 1,332 1,276
Short term investments 712 935
Accounts receivable: trade 2,922 1,769
Inventories 1,879 1,114
Prepaid expensed and other current assets __795 __411
7,640 5,505
Investments and
other assets 613 424
Property, plant
and equipment (net) 2,193 1,361
Intangible assets
(net) 1,987 635
Goodwill _8,038 _2,462
20,471 10,387
====== ======
LIABILITIES
Current
liabilities 4,071 2,260
Long term
liabilities 5,223 2,077
Minority interest 35 8
Equity 11,142 _6,042
20,471 10,387
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Current market
value US$ 30.6 billion.
Subject and
several of its subsidiaries are “Approved Enterprises” and as such enjoys tax
benefits and state incentives.
There is one
charge for an unlimited amount registered on the company’s assets, in favor of
the State of Israel.
ANNUAL SALES
Consolidated
Statement of Income
US$
(millions)
Year
ended 31.12
2004 2005 2006
Sales 4,799 5250 8,408
Gross profit 2,239 2481 4,259
Operating income 578 1313 801
Income before income taxes 604 1309 706
Net income 332 1,072 546
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Subject had
incurred losses in the 1st half of 2006 as a result of costs of the
integration of IVAX into subject (see more in CHARACTER).
OTHER COMPANIES
Main subsidiaries
(all 100% stake unless otherwise stated):
IVAX
PHARMACEUTICALS INC.,
PLANTEX LTD.,
PLANTEX U.S.A. INC., active pharmaceutical
ingredients.
ABIC LTD.,
developers, manufacturers, exporters and marketers of pharmaceutical and fine
chemicals, human and veterinary chemicals, vaccines, anti-cancer products,
animal feed additives and vitamins, etc. Owns ABIC VETERINARY PRODUCTS LTD. and
ABIC BIOLOGICAL LABORATORIES TEVA LTD.,
TEVA
PHARMACEUTICALS
TEVA PHARMACEUTICALS U.S.A. INC.,
TEVA PHARMA ITALIA S.R.L.,
PHARMACHEMIE GROUP,
NOVOPHARM LTD.,
TEVA NEUROSCIENCE INC. (
PROSINTEX INDUSTRIE CHIMICHE ITALIANE (Srl)
(
TEVA CLASSICS S. A. (
TEVA SANTE SAS (
TEVA PHARMACEUTICAL FINE CHEMICALS SRL (
SICOR INC., SICOR PHARMACEUTICALS INC., SICOR
EUROPE S.A.,
DOROM SRL,
RAKEPOLL HOLDING B.V., the
TIANJIN HUALIDA BIOTECHNOLOGY COMPANY LTD.,
45%,
LEMERY
HUMANTRADE KFT.,
97.4%,
TEVA HUNGARY
PHARMACEUTICAL MARKETING CO. LTD., 98%,
TEVA
PHARMACEUTICAL WORKS CO. LTD., 98%,
ORPHAHELL B.V.,
the
GENCHEM
PHARMA LTD., 100%,
MEDICA
AG,
TEVA UK LTD.
TEVA MEDICAL LTD.
SALOMON
LEVIN & ELSTEIN LTD. (S.L.E.),
TEVA
PHARMACEUTICALS
HUMANTRADE
PHARMACEUTICAL WHOLESALE COMPANY LTD.,
ASSIA
CHEMICAL INDUSTRIES LTD.
BANKERS
Bank Leumi
LeIsrael Ltd., Central Branch (No. 800), Tel Aviv.
Bank Hapoalim
Ltd., Belinson Branch (No. 552), Petach Tikva.
Israel Discount Bank
Ltd., Main Branch (No. 010), Tel Aviv.
CHARACTER AND
REPUTATION
Nothing
unfavorable learned.
Subject is ranked
1st in the list of leading Israeli companies in terms of market
value. It is ranked among the top 20 pharmaceutical companies in the world and
the leading generic pharmaceutical company.
In the local
market subject has a 25% market share in the pharmaceutical field. TEVA is the
largest non-governmental supplier of healthcare products and services in
As of February
2007, subject had 162 product registrations awaiting FDA approval (including
some products through strategic partnerships), including 42 tentative
approvals.
Subsidiary
NOVOPHARM (acquired in 2000 for US$ 262 million) is the second largest generic
manufacturer in
Subject's first brand-name drug Copaxone for multiple
sclerosis remains its biggest source of sales and profit.
In April 2002 subject acquired BAYER CLASSIC, a subsidiary of BAYER of
In June 2002, subject completed its latest
acquisition of HPFC (HONEYWELL PHARMACEUTICAL FINE CHEMICALS), the raw material
for medicines division of HONEYWELL in
In April 2003, it
was reported that subject will erect a new plant in
In November 2003,
subject announced that it signed a deal to acquire full ownership in SICOR,
developers of API products and generic pharmaceuticals, for a sum of US$ 3.4
billion, US$ 2 billion in cash and US$ 1.4 billion in shares. The deal will be
financed by Bank Leumi LeIsrael Ltd. and Bank Hapoalim Ltd.
SICOR 2003 sales
were expected to reach US$ 550 million.
In January 2004,
subject, in order to finance the SICOR deal, completed a US$ 1 billion capital
raise by issuing convertible bonds on the Nasdaq Stock Exchange.
In August 2004,
subject signed a deal to acquire DOROM of Italy, of the PFIZER Group, for an
estimated sum of €70 million.
In December 2004,
it was reported that subject will allocate US$ 600 million for a buy-back plan.
In April 2005, it
was reported that subject will invest
In July 2005,
subject announced it signed a major deal to acquire IVAX, its main competitor
in the generic drugs field. The deal was finalized in January
In January 2006,
subject completed a US$ 2.75 billion capital raise in a public offering of
bonds, in order to finance the IVAX deal.
The IVAX
acquisition enhances TEVA's position in its traditional
In September 2005,
it was reported that subject will open a new plant in
In November 2005,
it was reported that subject is negotiating a deal to acquire BETAPHRAM of Germany,
for a sum of €350 million.
In December 2005,
it was reported that subject is negotiating a deal to buy MAKRIX LAB of
In January 2006,
it was reported that subject is negotiating a deal to acquire AUKBINGO of India,
for a sum of US$ 500 million.
In July 2006, it
was reported that subject may buy PINEWOOD of
Among
subject's recent durg products (during 2006):
Azilect, the first once daily oral treatment for
Parkinson's disease (PD) has been approved by Health
Subject entered into an agreement with IMPAX and ANCHEN
PHARMACEUTICALS for the marketing of the generic version of Wellbutrin XL (bupropion) tablets, 300 mg, the branded
product marketed by GlaxoSmithKline.
On 29.8.06 subject signed an agreement with THE PURDUE
FREDERICK Company and certain of its affiliates to settle patent infringement
litigation pertaining to subject's OxyContin medicine pending in the United
States District Court for the Southern District of New York. Subsequently,
subject will cease marketing the medicine in the near future.
The international credit rating firm S&P gave
subject the highst 5-star rating in August 2006. During 2005 subject released
30 new products to the
In October 2006
subject announced that CEO Israel Makov will leave his post after 4 years
heading TEVA and be replaced by Shlomo Yanai, who headed MAKTHESHIM AGAN
INDUSTRIES, international agro-chemical manufacturer, based in
In February 2007
Californian based TEMPLETON Funds, which manages funds in volume of US$ over
US$ 500 billion, became subject's largest shareholder.
According to the
Indian media, subject is a contender to acquire AUROBINDO of India (market
value of US$ 886 million).
In March 2007 it eas reported that subject is among the
3 final contenders to acquire Gernman MERCK generic division. Estimated
purchase value: US$ 6.5 billion.
In April 2007, subject received the FDA's tentative
approval for its generic drug for Viagra (by Pfizer), which is the fifh largest
sold grug in the world. The release is pending legal debates regarding patent
rights.
According to the
Chairman of the Chemical, Pharmaceutical and Environment Division at the
Industrialists Association, total sales of the branches in 2006 witnessed a remarkable
12.6% growth to US$ 17.4 billon, after in 2005 sales increased by 10% from
2004.
2006 exports of
the branches were US$ 8.8 billion (35% of which for pharmaceuticals and drugs
and some one third attributed to the chemical industry), a 15.7% increase from
2005, and sales to the local market reached US$ 8.6 billion, a 10% increase
from 2005.
The chemical and
pharmaceutical industries are the 2nd largest export branch (after
the hi-tech) and comprise 30% of
Purchasing abroad
amounted to US$ 1.5 billion in 2006.
The branch
projected sales in 2007 include a 15% rise in sales for export (to US$ 10
billion) and 12% rise in total sales (to US$ 19.5 billion).
SUMMARY
Good for trade engagements.
Maximum unsecured
credit recommended several millions of US$.
RATING EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems
comparatively below average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)