Teva Pharmaceutical Industries Ltd (TEVA) 2015 Q3 法說會逐字稿

Good morning.

Good morning, everyone.

My name is Kevin Mannix, Senior Vice President of Investor Relations for Teva.

I would like to welcome you to Teva's third quarter 2015 investor meeting.

And I would also like to welcome everyone who is joining us remotely by phone and on the web.

A copy of the slides, as well as this morning's press release can be found on our website, tevapharm.com under the Investor Relations section, as well as on the Teva investor relations app.

Discussions during today's event will include certain financial measures that were not prepared -- discussions during today's event will include certain financial measures that were not prepared in the accordance with generally accepted accounting principles.

Reconciliations of those non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in this morning's press release.

We'd ask that you take a moment to read the forward-looking statement on slide 2, regarding our projections and our presentation, as well as in our earnings release.

During today's presentation and Q&A, management will make projections or other forward-looking statements which are dependent upon future matters or events.

Before we kick things off, I would like to take just a quick moment to run through this morning's line-up of speakers which can also be found on slide 3. Including a review of the third quarter results, we will have approximately an hour of presentations from Erez Vigodman, Teva's President and CEO, Eyal Desheh, our CFO, Siggi Olafsson, President and CEO of Global Generic Medicine, Dr. Michael Hayden, President of Global R&D and Chief Scientific Officer.

We will then spend the rest of the available time, taking any of your questions, ending no later than 10 AM.

Also joining us for the Q&A session is Dr. Rob Koremans, President and CEO of Global Specialty Medicines, Dr. Carlo De Notaristefani, President and CEO of Teva Global Operations, David Stark, General Counsel for Global Markets, and Mike Derkacz, Senior Vice President, Head of Global CNS.

And now I would like to turn it over to our CEO, Erez Vigodman to begin this morning's meeting.

Erez?

Thank you, Kevin.

Good morning.

I am delighted to touch base with you.

This morning, we thought it's important nowadays to touch base, face to face with you in order to discuss our Q3 results, first nine months of 2015.

Also to show and share with you, the way we are delivering on all the promises, since the beginning of 2014, in a way which gains more and more momentum as we go along.

And also to address all the questions that you might pose to us, again especially nowadays.

So we are here, management team of Teva in order to address all the questions that you might have that pertain to our performance, pertain to the Allergan deal, to the Rimsa, to the way we see 2015, the way we see Copaxone, the way we see -- even first signs that pertain to 2016.

So let's start with the numbers.

And what Q3 tell us is the continuous momentum that we have been building and accelerating since the beginning of 2014.

$4.8 billion versus $5 billion quarter over quarter minus 5%.

On a constant currency basis, Q3 2015 possesses 3% growth.

Operating income plus 2%, on constant currency basis plus 7%.

Net income plus 1%, EPS plus 2%, with $1.35 per share.

Cash flow from operations, $2 billion excluding the modafinil payment, $1 billion including the modafinil payment versus $1.6 [billion] and $1.4 [billion] before and after one-time settlement litigation payments quarter over quarter.

EBITDA for $1.6 billion 2% higher compared to Q3 at 2014.

Three months, tell the same story in a very consistent fashion, and even underscore further the momentum that Teva has been gaining here.

With minus 2% on top revenues year-over-year, but 6% on constant currencies basis, 9% increase of operating income, 11% on a constant currencies basis, 9% increase of net income of EPS and EBITDA, and a very strong cash flow from operations and a free cash flow, before and after modafinil and other litigation settlements.

So basically the very strong Q3 results, together with the performance during the last nine months and Q4 outlook, has taken us to raise for the third time during 2015 our full-year guidance from $5.15 to $5.40 range to $5.40 to $5.45 range.

Or to put it another way, we are raising today midpoint range by $0.15.

And that's the third time Teva is doing it during 2015.

So the purpose of the next 10 minutes is to basically share with you the way we see Teva delivering on all the promises, all the promises financial promises, operational promises, strategic promises since the beginning of 2014.

We started 2014 with a promise to get our house in order first, to solidify the foundation of Teva.

In generics, that's a totally entirely different business today.

Siggi is going to share with you.

That is a entirely different business today on an standalone basis.

Specialty, we now only focus, three TAs, we change profoundly the way we think and act in specialty.

Strong focus on core TAs, where we were able to establish strength, and where we are positioned to claim for global leadership, and that's the way we think today.

We are going to today share with you, how we have been evolving and bolstering our pipeline in each one of these TAs.

Cost reduction program which is on track to deliver, after the $600 million of net revenues, of cost measures that were delivered during 2014.

We are on track to deliver on the promise to generate $500 million of net cost reduction in 2015.

Operational [network], we have been transforming the operational core of Teva, and we are on track to own -- one of the most competitive operation network in our space.

Quality, we are elevating the quality bar consistently, making quality more and more of core competency for Teva and strong focus on cash flow, strong focus on cash flow.

That is something that is critical today.

That's something that will be critical after the -- we close the deal with Allergan.

Eyal will provide you with much more details there, but we are improving continuously the cash flow we generate -- operate -- our cash flow from operations, free cash flow quarter after quarter.

Then based on that, and in conjunction with all the measures that were designated in order to solidify the foundation of Teva, we also did everything that was required in order to maintain the Copaxone franchise.

I think Q3 2014 provides the evidence, maybe the most compelling evidence that one could have expected.

A number of figures which are relevant here.

40 milligram market share today for the entire MS space is 22.6%.

That's today the leading medication in the MS space.

The 40 milligram, together with the 20 milligram account for 94.5% of the Copaxone space together with the Glatopa.

The 40 milligram today accounts on a standalone basis for 72.5% of the entire MS space -- Copaxone space including Glatopa.

These are -- and the entire Copaxone family accounts today for very close to 30% of the total MS space.

These are very compelling numbers.

And Q3 is an important milestone in the process of maintaining the Copaxone franchise.

Once we got the house in order, and once all the measures that we conducted in order to maintain the Copaxone franchise started to deliver, we have taken the offensive.

Here in December 2014, we promised that [BD] will play a much bigger role for us in 2014.

We promised that Teva in 2014 is taking the offensive, and we started to deliver against that.

With -- basically we have five main buckets that were specified by the end of 2014, on the generic side, on the specialty side.

And also, we said that if the right large transaction shows itself, we might entertain such a transaction, if it delivers the targets that we aspire to generate.

We worked very hard, in order to make the right one showing itself.

But at the end of the day, Teva was able from the second half of 2014, and in the course of 2015 to deliver here also on all the promises, on all the promises.

We started with Labrys on the specialty side, a growth enhancing deal.

We proceeded with Auspex, again another specialty deal, growth enhancing deal for us, which provides us not only with a very attractive pipeline assets, but also with close enough to market pipeline assets.

And then we signed the agreement which is not even mentioned here, with Eagle in the January of 2015, in order to also to protect the vast majority of net revenues and profits that emanating from Treanda.

And just recently, we announced the very large Actavis -- we call it Actavis generic -- that is how we were asked to call the -- basically the company acquired from Allergan.

So Actavis generics, this transaction is transforming Teva.

Siggi will shed more light on that, but the Actavis generic transaction transforms Teva.

We were able also during the last number of months to announce another deal which is fully in line with the promises and the strategic direction that we have embarked upon, in a quest to reach out to billions of patients, to the billions in key growth markets, we executed the transaction in Mexico.

And there were a number of smaller transactions that were also executed during the course, over the course of 2015, [Immuneering], Gecko Health, [AmWell] and IBM Watson, a number of transactions that provide Teva with unique technologies that reinforce further the strategy that we have been accommodating.

Basically, the conjunction of all the measures Teva has been conducting, changing profoundly Teva.

We are changing Teva.

We are basically solidifying the foundation of the Company, unlocking value from existing assets.

And we are, with all the measures that were conducted, and with of course, the work that we shall yet to execute pertaining to the Allergan deal and the Rimsa deal in the course of Q1 2016, we will be able to enhance significantly the financial profile of Teva, to enhance significantly the financial profile of Teva.

To diversify net revenues and profit streams, to bolster even further our specialty pipeline, and to position the company to continue the transformation journey we have embarked upon since the beginning of 2014.

And to put it another way, what we are generating here, what we are generating here is a diversified growth platform, with balanced portfolio of durable product that offers very attractive, very attractive growth prospects bottom line and top line, or top line and bottom line.

And we believe that over time, it offers also the opportunity to increase re-rate the multiple of Teva.

So when you look at what we have been generating in here that's a compelling attractive platform that offers growth prospect top line, bottom line, and over time also the opportunity to re-rate the multiple.

Going forward, we will put strong focus on two key areas in terms of future BDs, areas that marked here by the two circles.

One is to continue bolstering our specialty pipeline, in order to drive even further the growth prospect, in order to drive even further the uniqueness of the product portfolio, and in order to drive even further the EPS multiple.

By the same time, we'll continue to look actively at potential transaction in key growth markets after the acquisition of Rimsa in Mexico.

I -- we decided that, given all the questions that were posed to us by most of you, especially after the decision of the Patent Office to institute the IPR on three Orange Book patents out of four, questions that relate to how we see 2017 with generic competition to 40 milligram, we decided although we strongly believe that we will be able to prevail, we would strongly believe that the decision of the Patent Office to institute the IPR on three Orange Book patents is far from a ringing endorsement on claims against the validity of the 40 milligram patents.

We strongly believe that we will prevail at the end of the process.

But our role is to be prepared for different scenarios, and Teva is preparing itself for different scenarios.

And everything that we have been doing the last 20 months is in a quest to be fully prepared for different scenarios.

And in order to share with you here first time, how we see 2017, with -- under 2017 -- under a different scenario which is a generic competition to 40 milligram, that's basically the way we are seeing it impacting us.

So 2017, a conservative estimate of full-year impact of generic competition to Copaxone is $1.2 billion in net revenues.

So less $1.2 billion of net revenues from Copaxone 2017, and [$0.65] in EPS post Actavis generic close, which means basically that it is based on share count, after we close the deal with Actavis.

By the way, before based on the share count, before we close the deal that's something in the board of $0.80.

So before we close the deal, $0.80, after we close the deal $0.65.

That's the number.

Estimates include expenses reduction in [COGS], [SG&A] and tax, and it assumes two generic competitors.

So when you look at a number, and you put it in the right perspective, I think it tells a very compelling story.

When we will be able to share with you the guidance for 2016, and maybe even beyond 2016, after we close the Allergan deal, and we plan to do that early next year after we close the Allergan deal, we will provide of course, all the relevant numbers that pertain to that, including EPS numbers that we are not able to share at this stage.

At this stage, we believe that the [$0.65] per share tells and spells out the most important message to our investors.

With that, I am handing over to Eyal.

Thank you.

Thank you very much, Erez.

Very happy to provide the financial review for yet another very good quarter for Teva.

We have been [building] and raising our results for quite some time, and we do it this quarter, we're not taking this for granted.

A lot of work been invested in making these results happen, which is our obligations to you.

So, review this quarter, revenues were 5% down, due to currency impact which I will show in a couple of sides, but they were 3% up in real terms.

A very strong gross margin, very good cost control, very strong cash flow which I will review in more detail, and see how our cash flow picture is really supporting our ability to [grow] with the inorganic growth and business development transactions.

When we look at the year to date results, very, very strong, on minus [2]% revenue but 6% gross in real terms.

We have very, very strong results to deliver, 9% in all line items, 9% increase year-over-year.

In real terms, constant currency -- this is 11% of gross that were delivered -- delivering for operating income, net income, and earning per share, and our strong cash flow for the year.

I will show a forecast of how we believe our cash flow is going to end -- to end the year.

And last but not least, EBITDA, a lot of focus on EBITDA these days around Teva.

$5 billion year to date for the first three quarters of EBITDA, very strong, supporting our credit, supporting our cash flow and supporting our results.

Foreign exchange.

We continue to see headwind, compared to last year.

Most of the decline of major international currencies against the dollar happened in Q4 last year to remind you.

So when we compare Q3 to Q3, we see a real decline which is resulting in $370 million impact on sale, $72 million impact operating profit.

For the three quarters, it's almost $1.1 billion impact on our revenues, and $120 million impact on operating profits.

So results were achieved, despite this headwind in exchange rates which made them even a bit stronger.

EBITDA.

Here is our annual EBITDA.

CAGR here is about 8%, or from 2013.

We estimate -- this is an estimate, first three quarter plus an estimate to Q4, we estimate our EBITDA to be $6.6 billion in 2015 in total.

Just to remind you, this is a non-GAAP EBITDA, which is based on our non-GAAP EBIT plus depreciation.

Liquidity.

We are using the cash flow in order to improve our liquidity ratios in preparation for the funding of the Allergan acquisition or the Actavis generic acquisition that -- we are not acquiring Allergan -- don't jump, that I will review towards the end of my presentation.

Our leverage has improved to 34%.

Our debt to EBITDA from 1.85 last quarter to 1.75, so credit metrics are improving, and total debt is down from $12.5 billion to $11.7 billion.

When we look at cash flow, and we did have an event of a large legal settlement of about $1 billion, which happened earlier this year, but was paid in Q3.

So when we exclude that, our cash flow for 2015, and again what you see here is a forecast for the year, first three quarters plus our estimate for Q4, is over $6.2 billion in operating cash flow.

And what you can also see, when you look at this slide, is how we are becoming more and more efficient at capital expenditure.

So basically from over $900 million in CapEx investment in 2013, we estimate a little bit above $500 million in 2015.

Let's look at our business by geographies and segment in a few slides.

So first a few -- first of all, revenue by geographies.

Not much of a change., compared to last year, our sales in the US have gone up as percentage of total to 57%.

This is mostly because foreign exchange is impacting most of our ex US business.

So today with the update currency, US is 57%, Europe is 25%, and the rest of the world mostly emerging gross market is 80% of our total sales.

And we see what drove our revenue up.

We see that it is coming from almost all segments of our business.

Copaxone, our specialty products, our other specialty -- other than Copaxone, which will be called specialty OTC, and some others.

Some decline in generic, as Q3 last year was very strong in the US market.

And then $371 million foreign exchange headwind that is reducing that.

A few words about Copaxone.

Copaxone continued to demonstrate amazing strength against [oral] competition, now also against generic competition.

You see the numbers, you see the green line is market share of 40 milligram, the biggest selling MS therapy in the world today, it was over 22% market share in the United States, and we are seeing growth in market share in the ex-US territories, as we introduce 40 milligram.

And wherever we introduced 40 milligram, we see it picking up and really gaining market share in every country.

So Copaxone in total, a strong quarter, actually a record quarter in the United States, just a little bit above Q2 at $878 million.

All in all, a very, very strong quarter with $[1.080] billion in total sales, or a little over that.

So Copaxone, very, very durable, and so what we believe is going to be the impact in certain scenarios starting 2017.

Some more words about a breakdown of revenues by business segment.

Not much of a change here.

As you can see from last quarter, our generics 46% of the total, mostly impacted by the currency -- by the currency effect, which hits generics in OTC more than the other parts of the business.

Copaxone the same, 22% of total.

Our specialty products are up in all areas.

Respiratory, CNS, Treanda had a very good quarter to 23%, and OTC and other, 9% similar to last quarter.

And in parallel, the profit, again, very similar picture, 31% of our operating profit is coming from our generic business, with improved profitability from the beginning of the year, 47% from Copaxone, a little lower than in percentage last year, 19% from specialty, a little higher from what we've seen last year.

And what is driving this operating income improvement is coming from all our businesses.

Generics was a $54 million improvement, Copaxone was $53 million improvement, specialty was $[17] million, and negative mostly FX business creates a [gross] in operating profit and drives also the bottom lines up.

So our business outlook.

So you have here, the detailed ranges by line items, as how do we see this.

I'd remind you, I believe this is the 5th quarter in a row that we are beating and raising.

So what happened to our forecast from the original one that you see on the left-hand side that we've guided in December, in December last year.

First of all, sales are up of -- to a range of $19.4 billion to $19.6 billion.

So mid point here, it's about $300 million increase in sales.

Gross profit, a very nice improvement as you can see in the range, in the mid point here.

We are spending more money on R&D, which is a good thing, building a future.

And we are keeping SG&A at the original plan that we had when we started the year.

So all in all, a range of $5.40 to $5.45, a pretty tight range for the year, since it's only one quarter, and the results are looking very good.

Now we are getting a lot of questions on the financing of Actavis generics acquisition, and I want to use is opportunity to provide the details.

Nothing new here.

You've seen this before, but I want to go through the details, and take a couple of minutes to do that.

First of all, one piece of equity, $6.75 billion will go to Allergan.

The ratios were already fixed, so this is approximately 100 million shares -- to be exact 100.5 million shares, at a price that was fixed at $67.30 per share.

$33.75 billion additional cash consideration.

First of all, it is fully backed by committed bank bridge financing from two years from drawdown, with 10 banks --10 major banks sharing equally this financial secured facility.

So how are we going to finance the range?

I will start on the rest -- I will talk from the right hand side, approximately $7 billion in common equity and mandatory convertible preferred.

We plan to do it, as soon as we have the audited financial statement for the carve-out of the Actavis generic business that we are buying.

Again, given market conditions and market looks reasonable today, to do that, we plan to do it as soon as practicable, hopefully before the end of this year, or before the holiday season.

But we still have to make a decision when we get closer.

The rest, $27 billion in bond and term loans, $5 billion term loans for three years and five years are syndicated to a group of banks.

The process were already kicked off, and now we're putting the group of banks together.

And then a multi-tranche multi-currency $22 billion bond offering, in dollars primarily, but also in euros, the British pound, that we are going to split in different markets.

For all these financial activities, underwriter has been assigned, and all the plans are very actively underway.

Last, dividend payment, our Board and his -- in its meeting this week approved $0.34 dividend per share, similar to last quarter which will be distributed to our shareholders.

Thank you very much.

And I would like now to invite Sig Olafsson to discuss generics, and update on the Actavis acquisition.

Siggi?

Thank you, Eyal, and good morning, everybody.

Great to be here.

As you've seen from the number, really the generic business and third quarter continued to drive growth.

What wasn't in third quarter, which we obviously had in first and second quarter, was there was hardly any exclusive products in the US.

It's clearly impacted our overall profitability of the generic business, but that is to be expected.

That is the nature of it.

The beauty is, in the new Teva, when we close the transaction with Actavis generics, we will have 110 of these one-offs to work with.

So the first to files.

But clearly, I think all the businesses are improving the profit margin.

You will see the launches, which are on time.

So I'm really pleased with what we're seeing in the third quarter, and a very good indication for the fourth quarter.

So where is the business?

We really have been improving the profitability over time.

You see it, on the right-hand side, where we were at 16.8% in 2013, 22.1% in 2014, and year to date number is about 28.9%.

Remember, our guidance for the year was a midpoint of 27% operating profit from the generics.

I think we will make that.

This might go down a little bit, because it's skewed towards first and second quarter, because there's no exclusive product in the fourth quarter.

But overall, we will be in the range of 28% operating profit from the generics, which really is first class with the countries we're operating in today.

Europe is doing extremely well.

US is doing well.

And it's down to the people in Teva, the employees of Teva that have been executing extremely well on this strategy.

The second point here is about the successful launches.

It is not easy in the competition today, and when we are investing in R7D like we do, we need to have success on the other end in launching the product, 350 launches with $1.4 billion in revenue.

Some of them are very small in small markets, but really the key launches we hit.

We had the home run on the key launches.

But in the new Teva, in the combined Teva of Actavis generics and Teva, we will have between 1,000 and 1,500 launches every year.

So the execution is so crucial, but that's also the key to the growth of the new company.

We really have the tools.

We have the pipeline to grow this business.

We are really changing the business model.

I decided to put in the third bullet around the litigations.

You see, this is really part of our business, is the IP litigations.

So 120 litigations, and that has, either we have won in court or we have settled.

That's about 90% success rate.

That's not easy.

There's a lot of hard work.

I think, we have the strongest IP department in the industry.

Because on one hand, we are defending Copaxone for the (inaudible) generic companies, and on the other hand we are obviously challenging the IP of the specialty companies.

So I think we have the best of both world, and really they have done an outstanding work for us.

The R&D pipeline, important.

I think we're excited to see what we get from Allergan.

But also on the Teva side, we have been executing extremely well.

With one exception, I want to mention EpiPen.

We have an action day on EpiPen from the FDA before the end of the year.

And based on the review today, we really expect to get a Complete Response Letter by the year end.

Which to all of you mean that, the delay in launch will be until probably second half of 2016.

Simply, we are not far along in the review of EpiPen that we can expect approval by year end.

Nothing new has happened.

There is no negative feedback.

But simply based on the review, the status of the review, our assumption is that we will get a Complete Response Letter, which will mean at least a six-month delay into 2016.

The last point there, we talk about is Rimsa.

It is exciting.

It's the execution of the strategy of coming into the growth market.

It's a great market, 120 million people.

But really is an opportunity for a company like Teva, which is both in the generics and specialty, to have a platform to sell in that market.

And I will talk about that a little bit later.

So what are we getting from the Actavis acquisition?

Obviously, it's highly synergetic and accretive, but it's not only the money.

It's highly synergetic in terms of commercial presence.

Top three companies, top three pharmaceutical company in over 40 markets around the world, with our own presence in 100 markets, 100 markets.

We offer a solution in specialty and generics in all these markets around the world, and we haven't put a value on it.

We haven't put a dollar value on it -- because all of you, and even us, we don't take the revenue synergies seriously.

But at the end of the day, when it comes down to execution, it's important to remember that there is a real opportunity to grow the business.

It really will transform the generic space.

And what I mean by that is, you saw even yesterday, how the consolidation of our customer base is.

There is a constant consolidation.

The top three customers in terms of value are 83%.

The top four customers are 91% in the US.

In Europe, the top three customers are 65%.

So there has been such a transformation on our customers side, I think this move will change the generic space, in terms of product supply, in terms of pipeline, in terms of offering what our customers are looking for.

Enhanced financial profile is important, because also we are very clear, with a generic business, we want to continue to invest in the specialty business.

We are not changing into a generic company.

We are a Company with generic and specialty, and we really want to improve and increase the R&D spending in specialty, and the opportunity of doing this together between the two, that's really where the opportunity is.

We are creating a business model with this [between], and we see this over and over again.

I mentioned the opportunity for biosimilars.

Some of you have seen the numbers on Granix, where we launched Granix -- our specialty group launched Granix --we got approximately 25% market share against Neupogen.

But it's where the specialty group and the generic groups work together.

We managed to take the space, and we're really I think transforming the business concept together between us.

And last but not least, obviously it has to create value for the shareholders.

But let's not take that as given, it is all about the execution.

So what has happened with the Actavis generics?

Basically, we are working hand-in-hand with preparation for integration.

Obviously, we cannot start the integration.

We're competing with them in the market on a day-to-day business.

But we really have a plan in place what needs to be on day one, what needs to be on day 30, on day 100.

We have started to work on the leadership team.

We intend to have at least the first three levels of the company ready and announced on closing, hopefully more.

And in some of the key business unit, we've already announced, pending closing who will be the leaders of the business.

The synergy targets are confirmed by the team.

They are working that bottom up.

You understand, when you do a due diligence, you don't have all the data to confirm it.

So one key issue in the integration, was really to confirm these synergy targets, and the teams are doing that together.

We really think that we have a good relationship with the anti-trust authorities.

We have had multiple meetings with the FTC, with the European Commission.

We are moving forward.

The review is in line with what we explained to you before.

It's a review of product by product, competition like that.

We don't foresee anything now, for a delay, but obviously we need to focus on it.

The European commission started a little bit later, due to vacation time in Europe.

But overall, we have had a very good interaction, and this is really moving forward.

And last but not least, we have signed the [CDA] with over 40 companies that want to buy any divestiture we need to do.

So we don't think that will be a delaying factor in the execution of the deal.

Quickly on Rimsa, a key growth market, really amazing company.

They have 920 sales reps around Mexico.

They are really a specialty company, well-known brand.

They have OTC business.

But they also have a little bit branded generics, but off their overall revenue, only 6% is generics.

The rest of specialty and OTC.

There is a very strong brand equity, but also but what we use this for, is the platform into the rest of Latin America.

We have a strong business in Chile.

We have a strong business in Peru.

We have a relatively small business in Brazil, which we want to grow.

But this is really an opportunity for us to take it to the next level.

So, what's on our mind for 2016?

First of all, it is the integration.

We can not fail on this transaction, and we are not going to fail.

I think we have everything in hand.

We need to execute on the strategy, we need to execute on the launches.

If you think about 1,500 launches, there is five new launches in Teva, every day of the year next year.

So there will be a lot of people busy.

But this is the key to the growth of the company, because otherwise we cannot grow the business, which leads into the launches.

So with that, I want to hand it over to Dr. Michael Hayden.

Thank you, Siggi.

Delighted to see everybody here.

And also, so pleased to give you just some visibility into our pipeline and our products, although a bigger and deeper visibility will come in a more extensive discussion, once following the closure of Actavis generics.

So just to give you a perspective about our pipeline, these were some of the things we spoke about as the milestones that were important for 2015.

We have had three approvals as you can see.

Importantly our first specialty product for migraine approved Zecuity recently, Copaxone in Japan.

And I will tell you little bit about some of the open boxes here, Vantrela just in a moment.

Major submissions, of course, reslizumab, SD-809 and also for FS Spiromax for asthma in Europe.

And we had presented some of the clinical results of this year, and mostly, and outstanding year.

Great results in migraine, good results in tardive dyskinesia.

I will show you the results today in Tourettes But as in any drug development portfolio, we had two failures, one for the Nav 1.7 antagonist in osteoarthritis, and Qvar BAI for asthma, and I will talk about that in a moment.

We are waiting, and looking forward to results in the very near future about FS RespiClick for asthma in Phase III, and also FP RespiClick in the United States.

When you look at our pipeline, it's a pipeline filled with promise.

We had 32 programs in Phase I to registration, and this is going to lead to between 35 and 40 submissions between 2015 and 2019.

As you can see, the portfolio is focused our key specialty areas, migraine, pain in the dark green, movement disorders, and neurodegeneration and respiratory disease, as the key components, and the key central focus in our core areas, where we hope to become, and are becoming world leaders in these areas.

I want to share with you what I am excited about in the pipeline.

So I'm just going to give you some highlights around the areas in terms of migraine, movement disorders, pain and respi, just to give you some visibility about what excites me about this.

Of course, our Labrys compound after the first anti CGRP antagonist which has demonstrated remarkable effectiveness both in chronic and episodic migraine.

We looked at many doses across two conditions, and all of these achieved outstanding significance, primary and secondary endpoints were met, and not only at three months, but also at one month of therapy.

We are the only monoclonal antibody that is separated from placebo across the entire duration of study for both primary and secondary, and [we're the only] company that has reported results for chronic migraine.

Thus far, no safety concerns have emerged for us, or any other of the products in this space.

When you look at this particular product, there is the potential, the race is not over.

We are at mile 20 of a 26 mile marathon, but it's looking good thus far.

We achieve the best results in terms of decrease in migraine at month three, the primary endpoint, placebo subtracted.

We had good results also in month one, and in fact, the effect and efficacy was seen at one week after therapy.

And if you look at the number of patients who had actually 50% improvement, it was 44%.

Importantly, and not able to be predicted, we had essentially no immunogenicity, very important.

And this may be the reason, that we saw improved efficacy with this particular compound.

So these all are exciting results, exciting for us, but typically important for patients who suffer from episodic in chronic migraine.

When you look at the disability from episodic migraine, half patients lives, 40 million in the United States individuals, are actually their lives are lost due to missing work, missing school, missing a family occasion as a result of episodic migraine.

We've seen major impact on disability, improving these patients lives, and making them feel better.

Current status is that we have an outstanding end of Phase II meeting with the FDA.

There was agreement and support for the CMC plan, the dose, the Phase III clinical plan and strategy, total alignment with the regulatory authorities.

We will be starting both single trials, pivotal trials in chronic and episodic migraine in early 2016, and our target for BLA submission is 2018.

We are making great progress with this particular program.

Importantly for us, it is the product that is innovative and important that is crucial.

But around this product, we also are providing services and solutions.

We've already started this with Zecuity, and we believe that providing services and supports for patients 24/7 enhances, improves their quality of life.

And really is critical as we've seen shared solutions for MS, we have learned from that.

And we've now established migraine support solutions as a key part of our therapeutic strategy to enrich and enhance the quality of life of patients.

Let me share with you where we are.

So in migraine, we have the potential for being a world leader in this very important underserved space.

That's one of our goals.

We have Zecuity already on the market, and we are looking at deepening this portfolio, and also improving this particular product and other indications in the area of migraine and headache for the future.

When we looked movement disorders and neuro degeneration, here again the Auspex portfolio gave us the first product that already has been accepted for an NDA with the FDA just recently.

Important to understand of course, that how this works, and this deuteration, this deuterium substitution for hydrogen, it slows down the metabolism of key products, in key parts of the metabolic pathway.

And what you can see here, for example, if you just look at this, what you see here, is that here's the active metabolite.

And the metabolite is broken down into these products.

These products, cause some of the side effects.

If you slow down the product breakdown into these products, what you would expect by the hydrogen substitution with deuterium here, you would expect to see some decrease in side effects.

It would not have been predictable, that deuterium substitution at this particular point would do this.

It was not obvious.

It was not predictable.

It was even surprising.

But the results that have been seen have really been remarkable.

The FDA has accepted the NDA for SD-809 for treatment in Huntington disease.

And in fact, when you look at this, this is really been associated with significant improvement in the side effect profile associated with tetrabenazine The potential to improve the quality of life for patients.

This would be the only the second drug in history to be approved by the FDA for this particular important condition.

When we look at another drug, just to mention, we have pridopidine The results for Pridopidine will be in the early part of 2016, a drug that we already know has impact on the movement disorder associated with this condition.

And when you see here -- these are total motor score which is our endpoint, we have two Phase III studies that actually demonstrated already highly significant results, important other features, including dystonia, with no impact on chorea.

So the tetrabenazine would be for the chorea, the Pridopidine would be for other movement disorders associated with this particular condition.

This is now in a Phase II clinical trial.

We have enrollment is over.

We are expecting results in early 2016.

And if we reach certain endpoints, this will be allowed to be submitted in 2016, as part of an agreement with the FDA.

This is again, our philosophy and our commitment to become world leaders in the spaces that we are.

And we are currently the world leader in this particular disorder, with three programs in the clinic significantly above any other company.

When we look at SD-809 in tardive dyskinesia, we have reported on the ARM-TD study where it has been completed, and now the AIMS study is also ongoing, and in the middle of its phase.

And we're looking to the results for this study in 2016.

The primary endpoint for the ARM study was achieved.

It was superior, all the secondary endpoints favored SD-809 was well-tolerated.

Importantly, because this is a disorder affecting maybe up to 700,000 people in the United States, we will be targeting maybe 140,000 of the most severe.

And we've seen really some very encouraging results associated with this.

Importantly, as would be predicted, that both for the first study in HD, and the ARM study as we noted, the side effect profile for tetrabenazine, deutetrabenazine was just like placebo.

Placebo, like safety, now confirmed in two studies.

So providing confidence that this is really going to create significant value for patients, deriving the benefits from this therapy without some of the alarming side effects.

Of course, there is another product in development in tardive dyskinesia and from Neurocrine.

And it's very hard to compare these compounds, but what we know, we have provided the data on SD-809 with pharmacokinetics, its uniform metabolism.

We've provided data on safety and tolerability.

The PK profile in metabolism of the Neurocrine product have not been disclosed yet, and the safety data has not been disclosed.

In the clinical signs, as the design of the study were really quite different and are not comparable in that particular way.

So we will wait with interest to see additional data on the Neurocrine product.

In Tourette syndrome, an other important disorders, there is only one drug approved in the United States, aripiprazole.

It has been approved, but aripiprazole, again has a very significant side effect profile.

For a group of patients to have abnormal movements, often have neuropsychiatric signs associated with that.

Big impact in children, but really seen throughout adult life.

We have now completed a Phase I study as one Phase Ib would be.

This was not controlled, not placebo controlled, so very important not to overemphasize these results, 23 patients in adolescence.

Important for us, because this is the first time this has been given to people under children 12 to 18.

And the key efficacy parameters in our Tourette syndrome study were the total tic severity, as well as also the clinical global impression, and also the patient global impression of change.

Let me just give you a quick insight into some of these.

These are just the total tic score of the time, eight week endpoint What you can see here, it is oral and the two endpoints are motor and vocal tic, the motor being the movement, the vocal being the utterances, often inappropriate.

You see a significant decrease at eight weeks with this drug.

And when you combine the total tic score in green here, what you see is a highly significant result associated with this, with a P value that is highly significant.

So this gives us encouragement.

It is early.

It is not placebo controlled, important.

But it gives us confidence to now develop the strategy, and develop and go into Phase III for this particular study, and this particular indication which will be part of our strategy for 2016.

We will be a leader, therefore both in movement disorders and neurodegeneration from Huntington disease to tardive dyskinesia to Tourette's.

And of course, we'll be looking at other movement disorders where we can use these particular drugs where they may confer significant benefit for patients.

In pain we also have a major program, and a major -- to solve a major problem in the United States.

As you all know, last year in the United States, there were more people who died of opioid abuse than all motor vehicle accidents combined, an epidemic.

And in fact, people are using various opioids.

They are crushing them into powders, they are extracting them and injecting, dose dumping with alcohol to get higher levels, and our particular proprietary abuse deterrent technology really prevents all of that.

We look at Vantrela, which will be our first abuse deterrent opioid, what this actually prevents all of these particular properties.

It has robust abuse deterrent properties, and also [oro-milling], which is really grinding it up and taking it orally, it is able to prevent all of these particular properties in a profound way, also snorting.

So it is a very significant abuse deterrence capability.

When we look at Vantrela, the NDA review, this would be important.

We are now at the labeling review stage.

We are expecting approval in the very near future.

And so, this is exciting, exciting because this will be a drug for patients who suffer from abuse, but also importantly, this will be validation of an important program.

And beyond Vantrela, we have a whole host of programs that we are developing using this abuse deterrence technology.

Particularly focusing on the area which causes most problems, the immediate release hydrocodone and opioids are the major cause of opioid abuse.

And so we have developed, and we're developing additional products in the space, and our programs here in immediate release hydrocodone with APAP or oxycodone with APAP, this will provide an immediate release and an analgesic profile when the prescribed dose is ingested.

But importantly, it limits the rapidly toxic drug release when a super therapeutic dose is taken, either accidentally or intentionally preventing abuse and potentially preventing suicide.

So where we are with us in 2015, we are now in Phase III.

We plan to submit the first immediate release hydrocodone APAP, with some unique abuse deterrent properties as I've described you.

We plan and will be a leader in the pain space going forward from here.

And respiratory disease, we also are making tremendous progress in our pipeline.

Uniquely, Teva has the opportunity to have novel molecules against unprecedented targets.

We also have novel technology.

And just to share with you, this is the Gecko that we just spoke about.

This is a unique device that goes onto Spiromax for example, links your to iPhone.

It links to your computer.

It remind you we needed to take the particular dose.

It tells you if you have taken it appropriately, and also calls can be linked to the doctor's office in an effort to really provide additional information to the caregivers associated with that, a simple device that is now being incorporated to enhance the connectivity of our respiratory devices.

And of course, we have AB rated generics also in development.

When you look at uncontrolled asthma as you know, importantly, a significant number of patients with asthma have high [esinophil] count.

And we then developing a product now that is focused on this particular area of severe asthma, inhibitization of IL-5.

This of course is a target that is also other companies have developed against.

Our particular product, humanized monoclonal antibody has proven efficacy.

We met all the primary endpoints in our Phase III study, decreases exacerbations, and importantly, the aspects of lung function improves control and quality of life were enhanced.

We submitted this in March 2015.

We have an ADCOM scheduled for December 9, and a PDUFA date in March 2016.

So you can see this is a program -- and each of the programs that I shared with you coming to maturity, getting to the market, and providing opportunities for significant leadership in these areas.

These are the current status.

We have [Durarest] launched, we have ProAir RespiClick launched, we have fluticasone, salmeteral, spiromax in the EU.

And in the fourth quarter, we're expecting results for the US for FP and FS RespiClick for the US, and these will be submitted again in the first quarter of 2016.

So this represents again culmination of a lot work over a longer period and playing significant role in enhancing our leadership in the respi space.

As we look into 2016, it is going to be an exciting year for R&D, as we see additional approvals deutetrabenazine for HD, reslizumab, the Bendamustine rapid infusion, important to enhance the delivery of treanda.

We'll have major submissions for asthma, a lot in the respi space in FP RespiClick, FS RespiClick, tardive dyskinesia.

As I've told you about hydrocodone IR, which is the major problem in abuse.

And we're beginning clinical results in a whole host of conditions here, Pridopidine, our postherpetic neuralgia study towards the end of the year.

Also some others that are looking at long-acting injectables for schizophrenia, and a whole most of abuse deterrent products that are already enhancing our program, and will enhance our leadership in this particular space.

And now just before I end, just one more thing, I haven't mentioned laquinimod, and that doesn't mean that I'm not excited about this particular product, but laquinimod is not going to have major milestones in 2016.

Laquinimod's time for really talking about this in great detail will be in 2017.

But it's important to note, Concerto is fully enrolled.

We're looking at forward to those pre-results.

Laquinimod has a chance, and is the first study in relapsing remitting multiple sclerosis where the endpoint here, is in fact confirmed disease progression and not relapse rate where Laquinimod has significant opportunities.

We will also get some results for Huntington's towards the end of 2017.

So now I'd like to ask and hand the microphone to Erez to provide the final remarks.

So 65 minutes which were designated in a quest to share with you why we are really excited about the present and future of Teva.

We are strongly committed to continue delivering on all the promises, to continue executing in a similar fashion, to exhaust all the new possibilities that emanate from everything we have done during the last 20, 20 months since the beginning of 2014.

And to continue allocating capital in a way that will enable us to accelerate the transformation even further, in a quest to continue delivering significant value to our shareholders.

And we plan to meet you next time, in the course of Q1 2016 after we close the Allergan deal.

And until then, and until then, until February maybe March 2016, these are important milestones that we shall deliver on.

Execution of Actavis generics financing, Rimsa deal closing, FTC and EC clearance of the Actavis generics acquisition, Actavis generics deal closing and integration, and combined company guidance which we plan to deliver here in the course of Q1 2016.

On key product pipeline milestones, in a way that is fully associated with all the messages that were conveyed to you by Michael, Vantrela ER FDA action date and launch, bendamustine rapid infusion FDA action date and launch, Reslizumab BLA FDA action date and launch, Pridopidine Phase II results early next year, commencement of TEV-84125 Phase III trial an important milestone for us, FS and FP RespiClick Phase III results.

These are not basically milestones, or relevant milestones for 2016, these are milestones until we meet you next time early 2016.

And in summary, we have made significant progress in 2015, and are delivering on our promises.

A combination of organic growth of strategic business development moves, positions Teva for a new era of growth and leadership.

2016 is an important year for Teva with the integration of Actavis generics, important specialty pipeline milestones, and product launches.

Combined company business outlook and strategy overview will be delivered in Q1 2016 after closing of the Actavis generics deal.

We together, we are building a new future growth for Teva.

Thank you very much.

We're going to start.

We're going to start the Q&A right now.

Gentlemen, if you could just join us on stage, and they're going to be a couple of people walking around with mics.

Let's get everybody settled.

Liav?

Thanks, good morning.

Liav Abraham from Citi.

Firstly, on the Actavis generics transaction.

Siggi, can you just remind us what, if anything could derail the transaction?

And this -- is it a 100% go, is there anything that could stop it from happening?

Secondly, for you on EpiPen, you spoke about a second half 2016 launch.

Can you talk about your confidence level in a second half 2016 approval, any additional commentary on your interactions with the FDA?

And then thirdly, perhaps for Michael or Erez, I'm interested in your capacity for incremental branded deals, given your success with Labrys and Auspex, and to what extent this is a focus and feasible from a balance sheet perspective over the next twelve months, also given the dynamics -- in terms of asset prices at the moment?

Thanks very much?

I'll start with number three, we modeled that $5 billion of capacity for additional bidding transactions until the end of 2016.

Rimsa, basically occupies $2 billion out of $5 billion.

The rest is going to be dedicated for specialty deals until the end of 2016.

And as we go along with the integration, and basically generate a cash flow from the business combination, we will very rapidly be able, 2017 onwards to continue directing our resources toward the specialty deals, in order to bolster further the specialty pipeline.

So we have question one around the deal, the deal with Actavis is fully sealed.

You can read it from the MDA, obviously the MDA is available online.

The only thing is the customary antitrust issue that needs to be reviewed before closing.

So no other transaction can derail our acquisition of Actavis generics.

With regards to the EpiPen, my comfort, and I think I will comment on that, when or if I see the Complete Response Letter, because it's important to not -- I really don't know what the issues are.

At this point in time, the reason why I am making this statement is, having been in this industry for 22 years, I know that we are not at the point of getting approval.

There's an action date before the end of the year.

So we felt it was important to inform you that we expect a Complete Response Letter With regards to my comfort, I think let's leave to see what the FDA comes up with in December, and then happy to talk about my comfort.

So Liav, I want to underscore, there is no way out from the Allergon Actavis -- no way out.

We sealed it in the agreement with Allergan.

It's clear, I am underscoring it, given the basically, the noises around us.

No way out.

The deal is sealed.

Randall.

Randal Stanicky, RBC Capital Markets.

I just want to follow up on that.

Siggi, does the fact that you have a CRL make you more confident that you are looking at a AB-rated approval versus a non-interchangeable approval, number one.

Number two, we published some work this week, that suggested that the average target action date as a percent of overall backlog for companies was 7% in June, and now is 30% to 60% of the overall backlog for most companies.

Can you confirm where you're at, with respect to that?

And then the follow-ups that would be, what's your best guess on the hit rate there?

Obviously, you can get a proposal, a tentative, or a Complete Response Letter -- and it's early, I don't think we know, but is it 50-50?

I mean, how are you think about the potential for, I guess an approval bump off of these target action dates?

So if we take the target action day, so we are getting them, quite a few of them for our backlog.

We are probably -- I don't know the exact number, but we are probably close to the average you mentioned in your question.

In terms, of what actually we get, I think really the FDA has stepped up.

I told some of you that FDA was disappointing, in first quarter where the backlog even increased.

I think now, we have started to sit down to negotiate a new PDUFA, which somehow has impacted, I think the acceleration at the FDA.

The FDA has also presented to us the -- how many new reviewers they have working on it.

And really, I think, that's the FDA has also stepped up in terms of communication and working with us.

So in terms of the action dates, we feel that they pretty much, they meet them so far.

But you either to get the Complete Response Letter or an action on your application.

With regards to the comfort, as I said before, our EpiPen was 505(b)(a) application, and it doesn't automatically switch into a 505(b)(2) overnight.

There's no magic that can happen down in Washington.

So my assumption is, and we still think we are going for a AB rated EpiPen, that's our strategy.

And until I see what I get in the Complete Response Letter, I don't think -- I can't even speculate.

But our application is for AB rated, not for non-AB rated.

But the back and forth so far with the FDA suggests that you are on the path for an interchangable -- ?

We have had multiple interactions with the FDA, and so far there's no roadblock, but basically the review isn't far enough to get action of approved or declined.

Doug, can we get a microphone?

Go ahead.

You're next.

Please go ahead.

Thanks for taking my question.

So I had a few here.

First question I had was, are your thoughts on a generic [Restasis], and if you will acquire something like that through the Actavis deal?

And then secondly, any update on how we should think about divestitures needed to actually close the deal?

And then last thing here, is just on your thoughts on the budget, debt ceiling proposal, and the potential limit to generic price increases?

All right.

So let's start on generic [revlimid].

Of course, I love that asset.

There's only one filer, and that will be coming with the transaction.

The challenge there -- just keep in mind, the challenge there is not the formulation of the product itself.

It has to do with the availability of the RLD of the product.

I have said it before.

I think [Celgene] is at the high tide of settling this issue, because who knows what comes up from discovery.

So I think it would be an opportunity at some point in time to sit down.

I obviously, from my previous life, I know the application, I know the status of it, but somehow I managed to forget that world when I signed my CDA, and left Actavis to join Teva.

But I think we have a great comfort in the asset that we are getting over, and it is a good opportunity.

The brand has been growing extremely well.

And what we have in hand here is I think something -- it's probably not 2016, but going forward I think it's a great opportunity for the new Teva.

No question about it.

In terms of the proposed legislation on pricing control on generics, first of all, we don't really know what is going to be.

But let me give you examples.

So Teva has the largest portfolio on the US market.

We are offering approximately 275 products.

And we have told you that overall on our whole portfolio, we have a decline in price.

The talk about the inflation in generics, when you have a big portfolio it is really not there.

95% of our portfolio is declining, due to the consolidation of the customers I talked about.

There might be [5]% of the portfolio that is either flat or increasing in pricing, due to some abnormalities in the market.

The proposal on the table now, is that you cannot increase prices for more than inflation of generics.

But it doesn't take into account that I am declining on 95% of my portfolio, because they want to look at it molecule by molecule.

That's number one.

And then secondly, from what time point will you look at the price?

Will you look at the price from when the generic launched, which would be fair.

Or do you looked at the low point, after four or five quarters, when you have a fierce competition in the market?

I think this could easily lead to shortages in the market, because there is product out there, if you cannot take a price increase, you simply go off the market.

Secondly, it doesn't take into account that API increases are not according to inflation.

So not that you don't notice, but I'm quite excited about this.

And really I think it's in unfair proposal.

And I think the government is shooting their self in the foot, in terms of shortages in the market.

And how unfair this will be -- I think to the patients at the end of the day, because when the patients don't get their drugs, I think that will really be when people speak up.

And your third question, you have to say it again?

The divestitures.

So as we told you in the beginning, in our modeling we were very conservative in our modeling, which we showed you when we announced the deal.

So far, we are well within that conservative, so it doesn't affect the model.

But it's too early.

Basically the decision on the divestiture comes at the last moment.

I think today we have a very healthy discussion both with the European Commission and the US FTC.

No surprises, really no surprises.

I think in Europe, just to keep in mind, the main divestiture would be in UK and Ireland, and then the US.

We are moving along.

But it's exactly as we expected in the beginning, and within the limit of the business model we put forward of impact of divestitures.

Okay, Sorry, can you just comment on -- ?

Doug, and then Chris.

Kevin.

Kevin, speaker please?

Could you just follow up, Siggi, on what your pricing trends are here in the US for the generic business and abroad?

Certainly, I think there's a lot of questions that we get about, how sustainable pricing trends are in the generic business?

And then secondly, on the Complete Response Letter for EpiPen that you think you will get, do you think it would be unreasonable for the FDA to ask you to do a head-to-head study versus EpiPen?

So on the pricing, I think pricing is obviously based on the competition.

We have talked about that the overall pricing trend is down.

What will change that obviously, there is different things.

I think the consolidation of the customers affect pricing.

I think the backlog, when the FDA releases the backlog of 3,000 NDA affect pricing.

I still think the pricing environment has been quite favorable for generics versus six years ago.

But it's impossible for me to guess, how, what will happen.

For me to guess what the FDA is thinking, I think it's highly unlikely a head-to-head study, because first of all is an injectable product.

So it's not the bioavailability of the product we're talking about here, it's an epinephrine that is injected into the body.

So it's not be bioavailability.

So I think that's highly unlikely, but obviously I can't comment on what the FDA is going to do.

Just really quickly, there have been other BX rated epinephrine injections made available in the US market, but never an AB rated version.

And I think the question the market has is what is the hurdle that you think you have to cross to get that AB rating?

That is exactly I hope to tell you, when I see the Complete Response Letter.

Okay, great.

Thanks.

Go ahead.

Thank you.

Doug Tsao from Barclays.

So Siggi, maybe a first question for you, in terms of how you see durability of Granix, given the fact that we now have [Zarzio], a true biosimilar to the Nupogen product approved?

And then, also maybe for Rob, a comment in terms of Copaxone 40 milligram, sort of what you seen in the 20 milligram market with the competition from Glatopa, in terms of what you've learned in the durability of that franchise thus far that gives that you sort of more confidence when we sort of think ahead to 2017 and 2018 or whenever you potentially have competition there, sort of on the ground what you're seeing, that is enabling you to use keep that share instead?

So I think probably Rob is the best one on both these questions.

So when we talk about Copaxone, what we're seeing is really an incredible durability.

Basically patients, doctors continue to stick with the products.

They feel confident.

They trust this product, and it is very important, and they have been on it for many years, right?

And it's a combination of our patient solutions, the way we interact with our patients, the trust they have in the brand itself, and also doctors and really also payers supporting it in full.

And the dynamics at the moment are better than we could have predicted two years ago, and we're seeing that going forward.

We expect like -- this is not going to change dramatically.

So Copaxone really is an incredible product in that respect.

And the way we bring it to market with the shared solutions, our sales force, the medical force, and the relationship we have with the payers is working quite nicely.

And we don't see that going forward, going to be changed dramatically at all.

Copaxone 40 also really offers a value over Copaxone 20.

A three times a week injection, it really make a difference for the patients.

And what you see in Europe, where we are now launching the products as well, in fact in Germany we've taken the largest number of new patients on the market, beating Tecfidera and taking new patients in there.

So when you bring Copaxone 40 in those markets, you see an altogether new dynamic which is really good.

I think it's important to remember, because in the statements, there's also volume goes down a little bit, but Copaxone 40, you use less volume than on Copaxone 20.

So there's an automatic impact of that when you switch and you convert.

And going forward, we feel very confident that we understand what's happening, and don't see any major changes in that.

The dynamics are just very, very favorable.

Granix.

Granix, is really at the moment, it's close to 25% going forward.

We don't expect also major impacts there.

It's really doing well.

It's holding and we expect that it will hold its ground there, it is a combination of being -- different dynamics in the market, the clinics and hospitals have different buying patterns.

We have a fairly high share in the hospital part, and we expect that we'll be able to do that.

And what Siggi alluded to before, the ability to deal with the hospitals on a bigger level from the generics, and very specifically on the customers, the deal with the [DCFs] that combination works out really well.

So we're confident in that field as well.

Do you see an opportunity to pick up some additional share through any sort of additional contracting with IDNs and hospital chains?

We expect that it will stay stable.

We've obviously have tried to get better, but in our forecast models, everything is more like -- more stable market share there.

Should I go?

Okay, thanks.

Mark Goodman at UBS.

Siggi, can you talk about a little more detail in some of the key OUS markets?

Japan seems to be a continued weak area what are you going to do to kind of fix Japan?

And then secondly on the margins, you had a very aggressive goal over several years to improve margins.

Can you talk about like where you are on that, and if you need to re-up those goals, because you have met them so easily?

And where you can move there?

And then just lastly, on the OTC business -- we haven't talked a lot about that.

But it seems like it's going really well.

Can you to talk about what's going so well, and why?

Thanks.

Yes.

So I think if I go quickly through the markets outside of US, with regards to the Europe, our European business is really going well.

I think the top three markets in Europe for us now are UK, Germany and Italy.

All of them are really firing on all cylinders, mainly also due to very successful launches.

[Pridopidine] was a big launch for us in Germany.

The UK team, I think the supply chain in UK has improved significantly, and we've taken opportunity when there are shortages from all the companies.

And in Italy, we have been steadily building out business in Italy.

There are challenges of course in pricing in Germany and Italy, but I think the breadth of the portfolio we are offering, and also really the leadership team we have in these markets, have made this a very good market.

And don't know if you saw earlier this week, but the Spanish government changed the discount policies.

So I think this will be a fairer discount policies for generics going forward.

So overall for Western Europe, it is going well.

With regards to Japan, it is still a challenge.

We have committed, and we're still really much of the -- focusing on improving our business in Japan.

We have an action plan in place, with regards to how we can improve it.

And we hope really that, with in a short period of time we can explain to you how we see the Japanese business.

The reason why we are enthusiastic about Japan, it is the second biggest market in the world, and you can't ignore it.

But also I've been very open about it previously, it is important to have the right profitability in Japan.

And as of now, our profitability is about half of our competitors in the Japanese market.

Just quickly on the rest of the world, we have a strong presence in Russia.

Russia is growing year-over-year.

But overall, the impact of the FX has overshadowed that.

I think the ruble a year ago was in the [30s] where the ruble now is in the [50s], close to [60s].

So really has had the major (inaudible) in volume, in terms of launches we have really been doing well there.

Quickly on the OTC business, I am very pleased with the joint venture with P&G.

The underlying growth has been approximately 9% on the bottom line, which is quite amazing.

The challenge that the OTC has, they have all their revenues in non-US dollars, and they report in US dollars.

So they have been worst hit of any of our businesses.

So when you see a decline on top line in OTC, it's really all FX, and they have been doing extremely well.

They have been, obviously the cough and cold, the Vicks and the line extension of Vicks has been doing well.

But also we have introduced for example, in Russia, a line of products under the [Tayla Brunte] which is a real opportunity in Russia.

We are taking that into other markets.

And the last thing in the OTC is, we've recently launched the Swiss [Veakamin] line in Singapore.

And just a week ago we launched Swiss in UK, a big launch.

I think it is already in approximately 500 food stores in the UK, a huge (inaudible) line and an opportunity to grow the business.

So I think overall, the OTC business is doing very well.

They have more of an FX issue than anyone else, but really good down to earth business that we are really fond of, and want to grow further.

Good morning, and thank you for taking the time to speak to us today.

Ronny Gal from Bernstein.

I got three questions I want to ask.

The first one on the respiratory side.

We are seeing pressure in the respiratory market, and we are also seeing you taking some interesting steps to kind of enhance the value of your branded, reformulations of existing products.

Can you talk a little bit more about it?

If you kind of think about your going to market strategy, how you will differentiate from the generic on one side, and the established brands on the other?

And when do what you expected your branded fluticasone formoterol, the same as Actavis Advair to come to market, versus the entry of the generics, especially your generic?

Second, around Copaxone retention.

You've mentioned the doctors and patient supporting it.

The concern is that some of the payers will simply get over time, a better and better offer from the generics, and begin to shift market share to those.

Can you comment on this?

What you seeing?

And also can you to discuss the role that your hub services center plays in the retention of patients?

Any numbers you can provide there about number of patients, you have people to contact and so forth would be useful?

And third, on the anti-CGRP.

The class looks fantastic in headache.

What you planning about introducing that class in other pain indication?

Is there a broader plan to use the anti-CGRP class, and where you stand in this area versus your competition?

(Multiple Speakers) Let me maybe, Ron, first take the Copaxone question, what we're seeing there.

So we have our in house specialty pharmacy which delivers the -- first delivery typically it's 0.05% the Copaxone business in total And it's really there to make sure that patients when they are initiated by a doctor get on therapy real fast.

It's fully -- all those claims go 100% through the adjudicated payer network, so that it's very, very transparent.

There's no issue whatsoever there.

But it really is to serve to get patients on their therapy.

But typically before-- this could take well over a month, and you know that this is been very difficult.

And we try to do and we've successfully managed to do, is that a patient gets the product, gets the autoinjector needed for the injection, and the training on how to do the real best way of injecting your product, simultaneously and it doesn't appear in three -- and far away from each other.

So far that really, really works well.

So the role that this pharmacy plays there is really make sure that all the logistics work, and patients get started on therapy really fast.

The shared solutions, they really helping to two things and do -- first of all, make sure that patients have financial access, work with patients, and help them to address their questions with their individual plans really well.

And that really works.

And then second, they are there with nurses to help and coach.

What you have to remember I think for MS, those patients they start on therapy, they don't feel a benefit immediately.

The benefit is far out.

But they have an opportunity to feel side effects.

And the injection, even if it's three times a week, is something that is not necessarily pleasant for them.

So helping them through that journey, over all those years, with patients on the product for 20 years, and some of many are there for 10 years, that service it really helps them to deal with the disease, deal with the injections, coach them, and that is creating a huge value.

To your questions on payers pushing back, we have not seen that.

We have 98% coverage.

There really isn't anything happening at the moment, no dynamics, no, nothing coming from patients -- payers in that respect.

That -- everything in that Copaxone franchise, the entire effort since 20 years really has been, serving the patients as good and as fast as possible, and demonstrating the value that we have in that franchise.

Just to comment on the CGRP.

So of course, what we've learned, what's really the big breakthrough here, is understanding that excessive CGRP induces pain.

Migraine, but also other forms of pain, and this also includes visceral pain, abdominal pain.

So we are looking at a whole host -- choices have not yet been made.

The planning, looking at the various indications.

Of course, without saying, we will or won't go in to these indications.

Cluster headache, the Lilly products have gone into that.

We see cluster headache is an important indication particularly, because it is the most severe, leads to suicide in some patients.

So this is really a tremendous need.

We also see So we hope to be able to announce our new indications at our meeting in the first quarter, after the closure with Allergan -- with Actavis generics, where we will be able to give you much more visibility.

But we are committed to CGRP and its role in pain, not only in migraine.

And there will be other indications that we will be prosecuting in the new future.

And maybe on your respiratory question.

So there is a group of patients, it's a huge market, right.

Michael showed you the figures, there is a huge unmet need.

And two out of three patients don't use their devices accurately, which leads to morbidity, mortality costs end to end.

But there's a fairly big group of patients who do fairly well.

They have a moderate asthma or mild asthma, they are well-controlled.

For those patients, adding -- coming with a very connected expensive and extensive service around it, those will make a lot of sense.

The generic is a fantastic offering.

That's why we continue develop.

It will be much more in the masses.

But there is a small group, 15% to 20% of patients -- and that's still significant in terms of numbers out there -- that really drive almost all of the cost.

They are really expensive.

They are hospitalized frequently.

And where we -- with small changes showed for instance, something like a dose counter on Qvar, we have been able to demonstrate in an controlled clinical study that the hospitalization rates reduced by 50% 5, 0. This makes a huge impact.

And improving it further, with what we've seen with the Gecko and the new devices, making sure that those severe patients that are really badly controlled, that drive the majority of costs in asthma and afterwards also COPD, that's where the more elaborate devices, the e-connected devices that give feedback and make sure that you use your product in the right way, that's where we see a role for them.

And in our portfolio we believe, and also reslizumab for the very severe asthmatics, with the high eosinophilic, we have an offering that is basically there to -- just through the severity of the disease, and a tailored offering to patients, rather than one solution for everyone.

And that our go to market model.

We believe that we can claim a space which is unique.

We believe that when you look end-to-end, Teva is really positioned very nicely.

We changed, even the organizational structure of our respiratory business.

We are running today basically end to end, generic, specialty, devices, technologies and services.

And we believe that with a number of anchor products, innovation that base centers on devices, and on unique technologies, we -- and with capabilities we have on the two ends of the spectrum here, we believe that we can target a unique space here.

A space that will enable us to generate compelling value for Teva from that franchise.

Chris?

Great.

Chris Schott from JPMorgan.

So a couple questions there.

First on Rimsa, can you just talk about the multiple paid for that asset, relative to putting top capital to work into other specialty deals, or even just reducing the equity associated with the Allergan deal?

I guess, just help us understand how quickly, can you take advantage of the platform there, because it does seem like the multiple on the current business seemed high relative to maybe some historic comps there?

Second question, is on the timing of synergies from Allergan.

I think originally, you kind of roughly talked maybe a third, a third, a third, in terms of how quickly you can achieve those.

Now you've done some more time with the integration planning, is there any ability to pull that forward faster?

And then my final question, was just a bigger picture one.

I think we've had some questions about pricing, we had -- on the generic side.

I mean, how do you respond to the questions -- because we hear this quite often now, just in the generic industry is at its peak now.

You guys are creating -- a clear dominant player in that space, but it's a space that is best days are behind it.

And just I think we're are all struggling with the multiple stock, et cetera, of just can you keep growing this business even with the platform you have?

And just any thoughts you have on that front, would be appreciated.

Yes, so let me start on the first question.

No, on the last question first, in terms of the generic industry.

So we have talked about it -- with many of you over of -- for all the 22 years I've been doing this, this has been the peak of the generic industry, and we are still going up.

It really has been -- the first to files were (inaudible)10 years ago.

And I should definitely go into the big pharma, and this was not the right move for me.

It's still going pretty strong.

When you look the pipeline, when you have [300 NDA] pending, when you have 110 first to files, when you operating in all these markets, there is still a significant growth in it.

But not only in the generics, and this is I think what investors need to understand is, we are in the whole space -- from generics, from volume and value generics, which is so important in some of the growth market, in the emerging markets, to go to more complex generics, where complex technology, small proteins.

You go to more complex generics which nobody has challenged.

Where are the [problem] of [pellerin] and all these product [after gel] -- these are products that are still not challenged by the generics.

And who can challenge these generics?

There's at least 15 products like that.

You go into the middle space between specialty and generics, in terms of biosimilars, in terms of some special technology.

You go into the specialty phase, where you have a new devices with known molecules, and then you go into the innovation space, like our Labrys, like our anti-CGRP, really, are we are playing in the whole space.

So to say, maybe the volume value generics is challenging, that's absolutely right.

But I think with the infrastructure we have, we still have a lot of growth to do in the whole space.

And that's really what's exciting.

If you are a small company with one product or two products, it's much more challenging

So maybe on that one, just to add two or three insights.

One, the world is not confined to the United States.

There are huge opportunities in the United States, but the world is not confined to the United States.

We see huge opportunities that stem from a much more focused government all over the world put and more and more, so on generics.

In general, in the United States when we see a new set of possibilities, from basically the way we will be able to create a conjunction between volume generics and high value generics.

And then the intersection between generics and specialty, the way it was articulated by Siggi.

So that's point number one.

Point number two, I just -- Siggi put it one way, I want to put it another way.

From the NDA until and all the way to lifecycle management, basically we have developed, I believe, end to end capabilities which are unparalleled.

So when you look at it, when you look at it, I believe over time that's the direction, the entire space will embark upon.

Yes, we will see products on the right-hand side of the spectrum.

We'll see products on the left-hand side of the spectrum, i.e.

volume generics, (inaudible) of the spectrum, high risk, apparently high return products, okay?

We will see more and more TAs converted to all of the kind of to the middle ground, and Teva is positioned to capture, to target that space, in a way which will be unparalleled.

And let me just add one point to that.

In the area of innovation using existing molecules, what's very exciting about the Actavis generics acquisition, together with our own portfolio, the largest portfolio in the world from which we can then think about novel formulations, new ways to deliver.

Our whole abuse deterrent platform is based on two things.

Firstly, the ability to have these generic drugs already manufactured, plus a unique proprietary technology platform.

You put them together, you now have specialty products that can be leading in the world.

There will be many opportunities in this middle space that build on the pillars that are already there, with novel technology that will take us in many different areas.

And just as you see, we go from a Phase I to a Phase III much quicker, lower risk in terms of development, the technology is in place, no CMC risk, no manufacturing risk, the ability to go from concept actually to submission, the time is shortened, the risk is less with significant returns on these products.

With all that, Chris you have to remind me the first two questions again?

Timing of synergies.

So if we think about Rimsa, we obviously, didn't give -- well, we gave the revenue in 2014.

And obviously, the acquisition price of $2.3 billion.

First of all, the multiples in the growth market are significantly higher than in the Western markets, simply because the opportunity is greater.

The going price in Latin America, in markets that are growing double-digit like Mexico, there is a higher multiple, that's number one.

Secondly, what we're doing here is a specialty platform.

Their infrastructure is like [NTE-505B2] specialty products on the [liquid] branded generics in OTC.

So really, they are running a specialty operation in terms of sales force, all the things like that.

That's number two.

Number three, is with the Actavis generics acquisition, we get approximately 30 to 40 products in Mexico which we needed a platform to sell.

Teva was undersized in this market significantly before.

What we have now is a platform to take these products to the market.

And the fourth point is around the Teva strategy around Mexico.

What we have done is basically, we have over-invested in Mexico.

What I mean by that is, we have treated Mexico as a key market, even though we didn't have really the sales infrastructure to take advantage of that.

So we have overfilled in a way too many products in that market, and the same applies on the specialty side which gives us a significant growth.

So we haven't given out the growth, we might do that because this is not -- we're not giving guidance here.

But there will be a significant growth off this platform going forward with all these pillars, and we're really excited about this opportunity, because it's a well-known brand, and will take us to the next market and the fast-growing.

Maybe again, to maybe underscore another dimension.

A number of the markets in the world, Teva will -- aims at generating anything between $700 [million] to $1 billion net revenues, in a way which is very profitable.

And when we say growth market, we are talking about those markets.

Okay, so these are growth markets.

And includes -- it encompasses also Japan.

And at least apparently, Japan is not -- it is a mature market, but when you look at the penetration of generics within Japan, you see the opportunity.

That's why we are committed, we promised it, we are committed, and we'll deliver on it.

Japan will transform the business we have in Japan, sooner than later.

And again, when you look it, day one of the market, where we aim at generating a [$700 million] to [$1 billion] at least of net revenues in a very profitable fashion.

Okay.

Mexico, is eye on that list So it include Japan, it includes Mexico, it includes Brazil, it includes China, which is a much longer term play here, but China is on our list also.

And we are basically aiming at markets where we can generate these numbers, top line and bottom line.

And on the synergies finally.

I think for now, I think it's the right thing to do one third, one third, one third.

I think when we give guidance, we will give more details around the synergies, but what I mentioned is we have validated, we get to it, but I think we leave it to the guidance to talk how they kick in in the first year.

Thanks.

It's Gregg Gilbert from DB.

On Copaxone, first, could you remind us of the key exclusivity periods that expire outside of the US?

And them, within the US, I can understand why you would want to quantify very negative scenario in 2017, but I see David falling asleep over here.

Maybe you can tell us what would have to happen legally to actually see generics in 2017?

Because I think folks are assuming that's a likely case, as opposed to a worst case?

And on Bendamustine, Rob, can you share some commercial strategy at this phase, given how close it is, and how important it is?

And whether or not [Eagle's] launch of a different Benda product in 2016 factors into your thinking at all?

So let me maybe start, and Robert will take over.

We spelled out in a very consistent manner during the last two years that we strongly believe in our 40 milligram IP.

And there were a lot of questions that were posed to us during, and questions that especially after the Patent Office has instituted the IPR.

And we decided that, we're open enough to discuss with Street a scenario area which is different.

For us, it is a less likely scenario.

It's a scenario that we need also to prepare ourselves for such a scenario, and we believe we are fully prepared.

Look at everything we have done during the last two years, in a quest to diversify net revenues and profit [stream] away from -- diversify in general away from Copaxone in particular, okay.

Now at the end of the day, when we come with a scenario which is very conservative, $1.2 billion 2017 is a very conservative scenario.

And it ends up with [$0.68], and you put in the context of Teva, let alone Teva after the business combination Allergon, we will be generating in 2017 onward, I believe it, we put everything within the right context.

$0.68, okay?

Now it is too early for us to deliver EPS 2017, ex 2016, 2017 onward, we will do it one way or another during our early 2016.

But you have all the relevant ingredients in the recipe here, and you just look at the number, look at the $0.68.

I believe it spells out a very strong message to the investment community.

And maybe on Bendamustine, so what we expect the registration, the FDA approval by the end of this year in December.

And then, it is a product that only needs 10 minutes for infusion, versus up to an hour for the current forms, both the lypholized and the liquid form.

There are some customers who will go for a much cheaper, if that would be available generic version, and we know more or less where to expect them.

But there are many customers also who really value that offer that you can make to a patient, where you just spend 10 minutes, instead of that hour in getting your infusion.

And that's what we expect going forward.

We will see a drop in the numbers in the volumes versus the current Treanda, but it still going to be quite significant and an important product, with an opportunity to prolong it for a couple of years.

So we're excited about it.

It looks good.

The FDA -- it's done by [Eagle], but everything we've seen so far, we are optimistic to expect this in December.

And then we want to do the introduction of the rapid infusion bendamustine as soon as possible.

It will take a couple of weeks, but we'll do it sooner -- as soon as we can.

Thank you.

You spoke about the respiratory business a little bit, but what stood out in the third quarter results was the rapid growth of both ProAir and Qvar, up 34% and 44%.

Could you elaborate a little bit more on why those products are growing so rapidly, what the benefit is, and what your medium to long-term outlook is for those products?

So I think, both ProAir and Qvar, you see there is a little bit of an uptick as well in net sales, due to we have a conversion.

So there is the clawbacks that come, and there is -- it's not related to prescription.

But both products continue to do really, really well.

There is a real growth in just about 10% or so.

We've -- in Qvar, we have introduced a dose counter, with the benefits that I had discussed before.

This is really helping patients, and you see the uptake there is very good.

People see it, and it's continued to stay.

We expect that it will continue to grow steadily, going forward.

ProAir, we have the RespiClick form in on the market as well, which is (inaudible )0since we really started launching in June, there's a lot of education that still needs to happen around that product.

It's different.

It's not an NDI, but a multi-dose dry powder inhaler with all the benefits that we can see, in terms of intuitive use and really delivering into the lungs much better.

It's also something the patients feel different.

The aerosol, you feel in your mouth often.

So we went to really explain this and educate patients, and that's going to take a bit of time.

So far, we still need to up there on the RespiClick.

ProAir, it's the overall product brand is doing really well, and going forward.

It's a beautiful opportunity into 2016, and we're happy with that.

But the focus is going forward on, the promotion will be on the RespiClick form, which has a longer life, a better protection, offers benefits to patients.

Good morning.

This is Sumant Kulkami from Bank of America Merrill Lynch.

I have three quick questions.

First, how quickly does Teva need to move in terms of biosimilar business development to build to get to where it wants to be, on it wants to achieve on that front?

Second, do you want to gain more scale in generic injectables?

And third, do you have any target rates for switches on Copaxone 40 milligrams outside the US?

Yes, so let me take the first two.

Biosimilar is a very good question.

Remember, that we have today revenue of approximately $350 million from biosimilars.

These are all the Wave one, plus Granix in the US with [Tenessent], is a biosimilar, but registered under the BLA.

We have the strategy in place for wave two with Lonza (inaudible) which we walked away from.

We currently have in our pipeline three biosimilars, but with a focus on wave three.

I think -- and we have said it previously, we are looking at some kind of partnership, it is important to us.

We have a lot of offer to the partnership in terms of R&D.

I think our biologic R&D, which is obviously doing the specialty products in reslizumab and Labrys.

But also [biobetters] and biosimilars.

So we think about it as a whole package is really, really good and strong.

I think the second thing is our commercial infrastructure, where we talk about the space between specialty and generics are essential to sell the biosimilars.

So I think, we clearly, are looking for partnership in this field.

There is an opportunity.

The time is ticking on us for sure.

But we really will be a player in the space.

The question is, how do you select to come into this space again?

Do you want to play in the wave two space, or should we focus on wave three more than anything else?

In terms of injectables, it's a fair question because 2010, and 2009 Teva was one of a leader in injectables.

There was a quality incident around that time, that took our revenue down.

The good thing now is, with the operation (inaudible) strategies that [Carlo] and his team have been doing, we really have done an amazing job in both relaunching products, but also moving into a different plants around the world.

So slowly we're growing our share.

Also exciting is, with the Actavis generics, there comes a big pipeline of generic products into that field.

So I think going forward, we will be a much, much stronger player in injectables, than we are today.

And it was the?

On the Copaxone --

Copaxone, right.

So the uptake, it is now in Europe in 14 markets.

And frankly, in a country like Germany, the uptake of Copaxone 40 and conversions from the 20 daily to the three times weekly, 40 is even faster than what we've seen in the US.

So it's really doing well.

And what's also very striking, and for us very encouraging, is the fact that we're picking up not just switches from Copaxone 20, but also new patients.

And is actually the number one product in new patients in the German market for instance.

In Europe, it typically takes about a year before its rolled out, and this is a product that was registered many, many years ago, before there were centralized procedures.

So there are three or four waves of registration procedures going in.

So we expect it to be launching in Europe over the next 18 months really.

And that's the time lines that are related to getting the registrations and getting the prices.

We just got the registration in Russia, which is a tendered market.

Now we have to get into those tenders, and we are racing to be there.

Clearly, it will have to compete also with the 20 in the same tenders.

The opportunity short term in Russia is probably smaller than what we've seen traditionally with the 20, but we are excited to get this opportunity as well, adding it to our 20 offering.

And it really strengthens our franchise position there.

And that's what we've seen, not just in the US, we're seeing it in every country where we're launching.

It really helps us in -- continue to be the leading product in the MS space.

25% today, that's the average

Today.

Yes, adoption rate.

The uptake is impressive.

Last question over here.

Thanks very much.

Andrew Finkelstein from Susquehanna.

I was hoping on, the generic side, since we have perspectives here that look at the [Barr] deal internally and from an external perspective, what were learnings from that transaction, that could be applied to buying the Allergan business, which you know is driven by first to file opportunities in US, and how that can be sustained as an engine going forward?

Then on the branded side, if you could talk in any more detail about how the Copaxone net pricing looks, the impact having Glatopa on the market?

What that means in terms of the net price you're getting on the 20 milligram and 40 milligram?

And also from the patient's perspective, how the economics look, in terms of what's out of pocket for them?

And then finally, in emerging markets, if you could review how you do due diligence for transactions like that, to make sure that you can operate as successfully in those markets as a domestic company, with the compliance that's needed from your perspective?

Thanks.

Yes.

So I take one and three.

I think first of all, the beauty is Teva has done multiple transactions through the period, I think been very successful, especially successful in delivering synergies.

The company has always delivered the synergies.

And on, in terms of integration, there are lessons to be learned.

Some things were done extremely well, and some things we could have done better, especially around people and retaining people.

I think also, maybe I bring to the table, the experience of having bought the Actavis generic business twice before.

So buying it for a third time (laughter) I think gives little bit of a comfort, in that we understand how to integrate the business.

But the key in the integration is people, because people are the one thing that delivers the numbers at the end of the day.

It's not the tableting presses, it's not the manufacturing plants, it's not the offices, it's the people, and we really have been careful in selecting the people.

The best of both worlds I think we have a fair process and this has been a key.

And this is why we're going early with announcing the organization.

That's one of the learnings from the previous acquisitions.

I think in terms of how we get comfort in the growth market, it's a very good question.

For us, first of all, Rimsa was in a process.

They had prepared their process extremely well.

They had open books, they were very well (inaudible).

As you have read in the media, we obviously don't know it was a closed process.

But there were many big pharma companies in this process.

There was an opportunity for a very thorough due diligence, on compliance, on finances, on registration, because that sometimes has been an issue where the registrations are not done in the right way.

On their sales practices, on their numbers overall, and on their forecasts.

So we got comfortable.

The sellers were very open, very good people.

They thought about their employees very much in this process.

But we really have a superior opportunity to get a full access, both to management, the numbers, and all the data in the company, because it was in the process, have been preparing itself, probably for over two years to make this transaction happen.

Copaxone.

So the product is competitively priced per se.

The -- we really want to make sure that patients have access to this product, no matter what plan they are on, no matter what part of the health insurance coverage they are in the US.

Copaxone 40 doesn't have any copay, and on 20 it really depends on their plans, but we really make sure that people have access to this product.

Obviously, the gross to net, the discounts have increased a little bit on Copaxone 20 with generics, but nothing that wasn't unexpected or foreseen by us.

And so far, we don't see any signs that this is changing.

So maybe -- something that I would like to add there.

We are very responsible to in everything that pertains to prices, on the generic side and on the specialty side.

And I will even put in another way, all the improvement you see in margins is not driven by price.

It is driven by quantities, and by mix, and by efficiency measures, not by price, 2014, 2015.

And that's a very important message.

Okay.

Thank you very much.

Thank you for joining us today.

If you have other questions, we will be available to answer them.

Thank you.

So just, we thank you for joining us today, and have a good day.

Thank you.