The market responded enthusiastically on Friday to the five-year strategic plan presented a day earlier by Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA). Teva's share price jumped 4.4% on Nasdaq, on a huge volume, to a peak of $59.34. Teva's market cap currently stands at $52.3 billion
"We feel great satisfaction at the way the market received the information we provided at the conference," says Teva president and CEO Shlomo Yanai, in an interview with "Globes".
The strategic plan presented on Thursday includes ambitious financial targets: by 2015, the company expects to reach sales of $31 billion, and a net profit of 22% of sales, i.e. $6.8 billion. This means more than a doubling of the company's top and bottom lines, in comparison with the results expected for 2009.
"The growth rate we presented is quite ambitious, but it expresses a quantum leap up compared with the growth of recent years. However, it is a much more complicated task to maintain a growth rate like this as the company becomes larger,"says Yanai.
In Teva's previous strategic plan, presented two years ago, the target was 2012 sales of $20 billion and a net profit of over $4 billion, but since then, Teva has acquired Barr and expanded its activity. The current plan already includes an element of acquisitions, and Teva estimates that a third of the expected growth, i.e. $5-6 billion, will come from acquisitions.
One of the main points of Teva's program is maintaining the existing proportion of generic activity to branded activity, led by MS treatment Copaxone.Revenues will grow, but the ratio will remain the same as at present: 70% to 30% in favor of generics. "Generics is our main activity, and we have a considerable advantage in it. It will remain our first priority," says Yanai. "However, the branded businesses are not something marginal and unimportant, and they have great potential. We are moving from very large dependence on one product to a more multi-dimensional and balanced business."
Published by Globes [online], Israel business news - www.globes-online.com - on January 10, 2010
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