Introducing the world leader in generic pharmaceuticalsEyal Desheh, CFO
UBS Global Life Sciences Conference, Grand Hyatt, New YorkSeptember 24, 2008
�Forward looking statementsForward looking statements
TODAY�S PRESENTATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH EXPRESS THE CURRENT BELIEFS AND EXPECTATIONS OF MANAGEMENT. SUCH STATEMENTS INVOLVE A NUMBER OF KNOWN AND UNKNOWN RISKS AND UNCERTAINTIES THAT COULD CAUSE TEVA'S FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS TO DIFFER SIGNIFICANTLY FROM THE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH DIFFERENCES INCLUDE RISKS RELATING TO: TEVA'S ABILITY TO ACCURATELY PREDICT FUTURE MARKET CONDITIONS, TEVA'S ABILITY TO SUCCESSFULLY DEVELOP AND COMMERCIALIZE ADDITIONAL PHARMACEUTICAL PRODUCTS, THE INTRODUCTION OF COMPETING GENERIC EQUIVALENTS, THE EXTENT TO WHICH TEVA MAY OBTAIN U.S. MARKET EXCLUSIVITY FOR CERTAIN OF ITS NEW GENERIC PRODUCTS AND REGULATORY CHANGES THAT MAY PREVENT TEVA FROM UTILIZING EXCLUSIVITY PERIODS, COMPETITION FROM BRAND-NAME COMPANIES THAT ARE UNDER INCREASED PRESSURE TO COUNTER GENERIC PRODUCTS, OR COMPETITORS THAT SEEK TO DELAY THE INTRODUCTION OF GENERIC PRODUCTS, POTENTIAL LIABILITY FOR SALES OF GENERIC PRODUCTS PRIOR TO A FINAL RESOLUTION OF OUTSTANDING PATENT LITIGATION, INCLUDING THAT RELATING TO THE GENERIC VERSIONS OF ALLEGRA�, NEURONTIN�, LOTREL�, FAMVIR�, AND PROTONIX�, THE IMPACT OF CONSOLIDATION OF OUR DISTRIBUTORS AND CUSTOMERS,THE EFFECTS OF COMPETITION ON OUR INNOVATIVE PRODUCTS, ESPECIALLY COPAXONE� SALES, THE IMPACT OF PHARMACEUTICAL INDUSTRY REGULATION AND PENDING LEGISLATION THAT COULD AFFECT THE PHARMACEUTICAL INDUSTRY, THE DIFFICULTY OF PREDICTING U.S. FOOD AND DRUG ADMINISTRATION, EUROPEAN MEDICINES AGENCY AND OTHER REGULATORY AUTHORITY APPROVALS, THE REGULATORY ENVIRONMENT AND CHANGES IN THE HEALTH POLICIES AND STRUCTURES OF VARIOUS COUNTRIES, OUR ABILITY TO ACHIEVE EXPECTED RESULTS THOUGH OUR INNOVATIVE R&D EFFORTS, TEVA'S ABILITY TO SUCCESSFULLY IDENTIFY, CONSUMMATE AND INTEGRATE ACQUISITIONS, POTENTIAL EXPOSURE TO PRODUCT LIABILITY CLAIMS TO THE EXTENT NOT COVERED BY INSURANCE, DEPENDENCE ON THE EFFECTIVENESS OF OUR PATENTS AND OTHER PROTECTIONS FOR INNOVATIVE PRODUCTS, SIGNIFICANT OPERATIONS WORLDWIDE THAT MAY BE ADVERSELY AFFECTED BY TERRORISM, POLITICAL OR ECONOMICAL INSTABILITY OR MAJOR HOSTILITIES, SUPPLY INTERRUPTIONS OR DELAYS THAT COULD RESULT FROM THE COMPLEX MANUFACTURING OF OUR PRODUCTS AND OUR GLOBAL SUPPLY CHAIN, ENVIRONMENTAL RISKS, FLUCTUATIONS IN CURRENCY, EXCHANGE AND INTEREST RATES, AND OTHER FACTORS THAT ARE DISCUSSED IN TEVA'S ANNUAL REPORT ON FORM 20-F AND ITS OTHER FILINGS WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE AND THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
�TodayToday’’s discussions discussion
Introducing TevaIntroducing Teva
Financial and strategy update
Q&A
�Introducing TevaIntroducing Teva
Established 1901
$9.4bn 2007 sales
~60 countries
~28,000 employees
�Three lines of businessThree lines of business
100%=$9.4bn6%
75%
19%
Generic pharmaceuticalsGeneric pharmaceuticals
API (external only)API (external only)
Innovative pharmaceuticalsInnovative pharmaceuticals
synergies
balance
(2007)
�The worldThe world’’s number 1 generics players number 1 generics player
9.4
7.4
4.6
2.5
2.5
2.4
2.3
1.9
1.7
1.4
1.3
1.3
Teva
Sandoz
Mylan
Barr
Watson
RatioPharm
Stada
Actavis
Ranbaxy
Perrigo
Dr. Reddy's
Gedeon R.
Revenues, $ bn, 2007
Source: company publications
�With a strong branded operationWith a strong branded operation
Multiple sclerosisMultiple sclerosis
Parkinson’sParkinson’s RespiratoryRespiratory
Supports balanced business model
Marketing/branding skills for branded generics
Highly profitable business
�Vertical integration through inVertical integration through in--house Teva APIhouse Teva API
InIn--house APIhouse API
Generic & APIR&D to maximizesfirst-to-file pipeline
Guaranteed qualityingredient supply
for generics business
�Generics is all about scale Generics is all about scale –– Teva is #1Teva is #1
8%21%
6%
12%
13%
8%
11%
7%
10%
65%
39%
1997 2007
Top 461%
Top 435%
Faster organicFaster organicgrowthgrowth
Better atBetter atM&AM&A
Big players
get bigger
IMS TRx MAT June, % of total
#1 - Teva
Others
#4
#3
#2
Barr
456
294
201
224
128
91
85
84
79
58
17
12
63
236
1
114
93
89
Teva
Mylan
Novartis/Sandoz
Pfizer
Watson
Barr
Merck
GSK
Mallinckrodt
AstraZeneca
Actavis
Greenhouse
Apotex
Qualitest
Strategic partnership with customersStrategic partnership with customers
306
264
Ranking of prescription volume, total Rx’s, millions, U.S. market
Source: IMS Health, March 2008, NPA
BIGBIG BIGBIGtoto
GenericBranded
473
585
294
201
224
91
85
84
79
58
17
12
63
236
114
93
89
Teva + Barr
Mylan
Novartis/Sandoz
Pfizer
Watson
Merck
GSK
Mallinckrodt
AstraZeneca
Actavis
Greenhouse
Apotex
Qualitest
Big Gets Bigger Big Gets Bigger –– with Barrwith Barr
602
306
264
Ranking of prescription volume, total Rx’s, thousands, U.S. market
Source: IMS Health, March 2008, NPA
BIGBIG BIGBIGtoto
GenericBranded
�R&D to feed the industry's largest pipelineR&D to feed the industry's largest pipeline
U.S., 23 July 2008
�Globally diversified businessGlobally diversified business
49%58%
20%
28%
25%4%
6% 10%
1997 2007
100%= $1.1bn
North America
Europe
International
$9.4bn
Israel
�
Japan, Southern Europe
US,Western Europe
Brazil, Mexico, Russia
China, India
Focused geographical expansion strategyFocused geographical expansion strategy
Teva marketsTeva markets
Mature economies, aging population
Growingeconomies, healthcare expenditures
Growingeconomies, healthcare expenditures
Increased generics useIncreased generics use
Stable generics useStable generics use
Branded genericsBranded generics
APIAPI
• M&A• Partnerships• Portfolio
expansion
• Market share• Portfolio
expansion• Big to Big
• M&A• Partnerships• Portfolio
expansion• More focus and
resources
• Sourcing
�The Japan opportunityThe Japan opportunity
• The world’s 2nd pharmaceutical market, with a relatively low generics share
• Government aims todouble generics use in 5 years
�
50%Local expertise
50%Global expertise
Announcing our strategic partnership in Announcing our strategic partnership in JapanJapan
�������� �������������� $1bn$1bnsales in 2015
�A platform for growth in JapanA platform for growth in Japan
�Global pharmaceutical supply chainGlobal pharmaceutical supply chain
Canada (3)
US (5)
Mexico (4)
Peru
Chile Argentina
Venezuela
Israel (5)
UK (2)
Ireland
Spain
France
Hungary (2)
Czech Rep
Poland
Netherlands
Manufacturing facilities
�
Barr (global) (pending)
Successful M&A track recordSuccessful M&A track record
Index, 1995 = 100
Sales
CAGR
23%
SalesSales
CAGRCAGR
23%23%
Net income
CAGR
29%
Net Net incomeincome
CAGRCAGR
29%29%
IVAX (global)
Biogal(Hungary)
Biocraft (US)
APS Berk(UK)
Pharmachemie(Netherlands)
Copley(US)
Novopharm(Canada)
Honeywell (Italy)
Dorom(Italy)
RDL(India – API)
Bayer Classics (France)
CoGenesys(technology)
Sicor(global)
Bentley (Spain)
�2012 target2012 target
REACH
$20$20billionsales
EXCEED
20%20%net income
margin
�Pioneering Pioneering biogenericsbiogenerics beyond 2012beyond 2012
Attractive market Unique Teva assets
• > $200bn by 2015
• Patent expirations –40% of total value
• R&D, marketing investments limitnumber of competitors
• Israeli and CoGenesysR&D capabilities
• Financial resources
• Early on ex-US activities (biosimilarGCS-F - TevaGrastim®)
��Barr acquisition Barr acquisition –– compelling value creationcompelling value creation
+
Strong
Attractive
Extend
Expand
Exceed
strategic fit
economics
global leadership
portfolio / pipeline
20/20 target
��TodayToday’’s discussions discussion
Introducing Teva
Financial and strategy updateFinancial and strategy update
Q&A
��Overall results for Q2 2008Overall results for Q2 2008
2,8232,823Sales$m
Net income$m
EPS$
2,3862,386
539539515515
0.650.650.630.63
+18%+18%
+5%+5%
+3%+3%
Q2 2007 Q2 2008 Change
��Overall results for H1 2008Overall results for H1 2008
5,3595,359Sales$m
Net income$m
EPS$
4,4664,466
1,0681,068857857
1.291.291.051.05
+21%+21%
+25%+25%
+23%+23%
H1 2007 H1 2008 Change
* Non-GAAP numbers; Q1’08 includes in process R&D of $382M
��Sales growth driven by nonSales growth driven by non--US marketsUS markets
1,5051,341North America - pharma
Europe - pharma
International - pharma
Total - pharma
API
Total
762610
400292
2,6672,243
156143
2,8232,386
12%
25%
37%
19%
9%
18%
2007 2008 ChangeQ2 sales, $ million
��Growth picking up in all businessesGrowth picking up in all businesses
6%
16%
22%
11%
-1%
10%
12%
25%
37%
19%
9%
18%
North America - pharma
Europe - pharma
International - pharma
Total - pharma
API
Total
Q2 year-on-year sales growth
Q2 ‘07
Q2 ‘08
Q2 ‘07
Q2 ‘08
Q2 ‘07
Q2 ‘08
Q2 ‘07
Q2 ‘08
Q2 ‘07
Q2 ‘08
Q2 ‘07
Q2 ‘08
��Continued track record of growth Continued track record of growth –– Q2Q2
676 624
1260 13411505284 362
527610
762
89 108
240292
400
127 133
145
143
156
0
500
1,000
1,500
2,000
2,500
3,000
2004 2005 2006 2007 2008
APIPharma - InternationalPharma - EuropePharma - North America
1,176 1,227
2,172
2,386
2,823
��CopaxoneCopaxone®® growth accelerating in nongrowth accelerating in non--US US marketsmarkets
Non-US
US
Total436
563
In market sales$ million
Sales growth versus previous period
�CopaxoneCopaxone®® has become the #1 MS therapyhas become the #1 MS therapy
21%
23%
2005
32%
22%
25% Copaxone®
24%
2006 2007
Avonex®
Betaseron®
Rebif®
Tysabri®1%
25%
2004 Q2’08
24%
23%
19%
25%
8%
Market share, value, %
�Increasing R&D spendIncreasing R&D spend
7.1% 7.0%
5.9%6.2%
7.5%
R&D, in $ millionsR&D, in $ millions R&D, as % of salesR&D, as % of sales
2004 2005 2006 2007 2004 2005 2006 2007 2008target
Q22007
Q22008
��Increase in cash generationIncrease in cash generation
256155
324
512 56875
73
79
95106
106
104
142
139132
Q2 2007 Q3 2007
Net asset purchase
Dividends distributed
Free cash flow
$ million
Q4 2007 Q1 2008 Q2 2008
$410macquisitions
$410macquisitions
437
332
545
746806
Cash from operations
��Leverage going downLeverage going down
12.1 14.4 15.1
4.0 3.4 3.3 1.5 2.0 1.4
Debt - short-termDebt - long-termEquity
Selected balance sheet items, $ billion
30 June2007
31 March2008
30 June2008
31% 27% 24%Leverage
17.619.8 19.8
��Summary Summary –– or what did we learn?or what did we learn?
� That Teva is the world’s largest Generic company and it is widening the gap from the rest of the pack
� That we have a vertically integrated, balanced business model which combines generics and innovative products
� That we have a truly global geographic presence and that we focus on the growing markets
� That we will continue to drive our business using a robust combination of organic growth and acquisitions
� That we are among the best in acquiring, integrating and creating value
� And that it is all about strategy, innovation, scale and market share
��All this worked well for shareholdersAll this worked well for shareholders
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Pharma Ind Teva Ind S&P 500
The Pharma ind index is a weighted average index composed of the industry leading pharmaceutical companies (generic and innovative) with a total market cap of approximately $1 trillion (excluding Teva and Barr). The prices are adjusted for dividends and splits.
��TodayToday’’s discussions discussion
Introducing Teva
Financial and strategy update
Q&AQ&A