Teva Pharmaceutical's CEO Discusses Q2 2013 Results - Earnings Call Transcript

Aug. 1.13 | About: Teva Pharmaceutical (TEVA)

Teva Pharmaceutical Industries Ltd (NYSE:TEVA)

Q2 2013 Earnings Call

Aug 01, 2013, 8:00 am ET

Executives

Kevin Mannix - Vice President, Head of Global Investor Relations

Jeremy Levin - President, Chief Executive Officer

Eyal Desheh - Chief Financial Officer, Group Executive Vice President

Richard Egosi - Group Executive Vice President, Chief Legal Officer and Company Secretary

Michael Hayden - President - Global Research and Development, Chief Scientific Officer

Allan Oberman - President and Chief Executive Officer of Teva Americas Generics

Robert Koremans - President and Chief Executive Officer, Teva Europe Designate

Dipankar Bhattacharjee - President, Chief Executive Officer, Generics Europe

Jon Congleton - Senior Vice President and General Manager, Global CNS

Analysts

Ken Cacciatore - Cowen

Randall Stanicky - Canaccord

Elliot Wilbur - Needham & Company

Aaron R. Gal - Sanford Bernstein

Chris Schott - JPMorgan

Jami Rubin - Goldman Sachs

David Maris - BMO

Gregg Gilbert - Bank of America

David Risinger - Morgan Stanley

David Buck - Buckingham Research

Marc Goodman - UBS

Operator

Welcome to the Teva Pharmaceutical second quarter 2013 conference call. My name is Dawn, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Kevin Mannix, Vice President, Head of Global Investor Relations. Kevin, you may begin.

Kevin Mannix

Thank you, Dawn. Good morning and good afternoon, everyone. Thank you for joining us today to review Teva's second quarter 2013 earnings results. I am joined today by our President and CEO, Dr. Jeremy Levin, our CFO, Eyal Desheh, Richard Egosi, Executive VP and Chief Legal Officer, Dr. Michael Hayden, President of Global R&D and Chief Scientific Officer, Allan Oberman, President and CEO of Teva Americas Generics, Dr. Rob Koremans, President and CEO of Specialty Medicines, Dipankar Bhattacharjee, President and CEO of Generics Europe and Jon Congleton. Senior Vice President of CNS.

Jeremy will begin by providing an overview of the highlights from the quarter, followed by Eyal, who will then provide additional details on our consolidated financial results. We will then open the call for a question-and-answer period, which will run until approximately 9:00 AM Eastern Time.

Before we start, I would like to remind you that our discussions during this conference call will include forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements, as a result of foreign currency translation effects, macroeconomic trends, interruptions in our supply chain and other factors that could cause actual results to differ as discussed in Teva's report on Form 20-F and Form 6-K. Also, we are presenting non-GAAP data, which excludes the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements and reserves and impairment and related tax effects.

These are amounts we cannot predict at this point. As mentioned in the past, we present these non-GAAP figures to show you how, we, the management team and our board of directors look at our financial data.

With that, I will now turn the call over to Jeremy. Jeremy, if you would please?

Jeremy Levin

Good morning, everyone, and welcome to Teva's second quarter earnings call.

As you all know, we have had a very busy week. The U.S Federal Court of Appeals confirmed validity of select COPAXONE patents through May 2014, but not others including one patent expiring September 2015. We are disappointed with this part of the Appeals Court decision and we will appeal that decision. I want to remind you that COPAXONE is a complex synthetic peptide. We believe that a purported generic version would need full scale, placebo-controlled clinical trials in RRMS patients.

As a consequence, we are not sure of a generic timing or approval. In addition to appealing the court's decision, this company has been preparing for the potential launch of the generic COPAXONE. In May 2013, the U.S. FDA accepted our sNDA submission for a more convenient schedule of three times weekly dosing of COPAXONE, 40 milligrams per meal.

We anticipate FDA actions in the first quarter of 2014, and if approved we are prepared with an aggressive launch strategy for the first half of 2014. Teva is a different company today than one year ago. I have great confidence in the company and its future. We will be a leaner, more agile, more focused company with the business model that capitalizes on the strength of both, our specialty and generic businesses and we will continue to drive growth in our OTC business.

We now have a strong global team in place aligned with our mission to deliver generics and complex generics and to create a pipeline of truly innovative next-generation therapies.

I will now address our 2013 second quarter results. Steady product performance allowed us to realize sales of $4.9 billion non-GAAP earnings per share of $1.2 per share for the second quarter of 2013, compared to $4.9 billion of sales and earnings per share of $1.12 for the first quarter of 2013. We believe, we are on track to achieve the goals that we set for 2013.

Looking forward to the rest of the year, we anticipate ending the year near the mid-point of our original annual guidance. Eyal will provide greater details on our 2013 outlook during his remarks later in the call. Overall, our generic business performed in line with our expectation for the U.S. We continue to manage our generic business with a disciplined focus on the profitability and sustainable profitable growth.

During the quarter, we generated record sales for COPAXONE of $1.1 billion, a 9% increase compared to the second quarter of 2012. COPAXONE continues to lead the U.S. and global markets in both, sales and market share. We strongly believe COPAXONE's well established clinical experience and unsurpassed 20-year efficacy and safety profile in an extremely unpredictable disease, will continue as a favorable treatment option for physician and patients when selecting a long-term therapy.

In our CNS franchise, Azilect continues to experience strong in-market share growth and Nuvigil maintained over 49% of new therapy starts. In our respiratory franchise, we are pleased to see that ProAir increased its market share in the short-acting beta agonist in the U.S., while Qvar maintained the number two position and inhaled corticosteroid global market.

We anticipate two Phase III clinical trial results in this franchise in the second half of this year. The first being the Nuvigil Phase III study bipolar study result expected in late August. If positive, we expect to file an sNDA with the U.S. FDA by the end of 2013. In addition, the results from the Phase III reslizumab study will read out during the second half of 2013.

In oncology, TREANDA sales increased 27% in the second quarter of 2013 versus the second quarter of 2012. Teva was issued a complete response set up for TREANDA injection, which is a new liquid formulation of the approved TREANDA injection.

We believe, the requested data from the FDA is available and we work closely with them. As you may remember, the FDA did not request any additional studies. We are enthusiastic about our goal to create sustainable growth by advancing our internal proprietary programs as well as through innovative partnerships that will complement Teva's key business areas.

The successful example is our OTC joint venture with Procter & Gamble, which continues to show strong results across all regions with 21% growth in the first half of 2013, compared to the same period in 2012. We see this JV as a major growth opportunity for Teva on a global basis.

Over the past quarter, our R&D team has doubled the NTE pipeline identifying four new products for development, including abused-deterrent opioids and addiction treatments, bringing the total number of NTEs under development to eight. As a result of our efforts, we expect approximately 10 NTEs in clinical developments over the next two years which we believe will begin to generate sales as early as 2016. I look forward to providing greater details as these programs continue to progress.

As we look at our pipeline, as I stated before, we will discontinue those programs that do not warrant future investment. Last week, we announced our decision to discontinue our Biologics program with Lonza. Teva will focus on a proprietary biologics strategy to create a balanced portfolio of biobetter, biosimilars and innovative biologics.

We recognized the challenges that biosimilars may bring, however we also understand the potential return they may deliver to Teva, and going forward will utilize our great expertise of biologics as we build this program in a disciplined and focused manner.

As an example, we will be launching our long-acting G-CSF in Europe in Q3. The business development and R&D teams are working to enhance our proprietary pipeline and to create the next generation of product, including those in CNS, where multiple sclerosis remained a key focal point as well as those in respiratory and oncology. We are very pleased by our progress in obtaining pipeline assets and in technologies we further accelerate our efforts over the next several months.

I look forward to updating you on our progress. The five-year $1.5 billion to $2 billion cost reduction strategy, we announced at the end of 2012, remains on track. These savings will be used to stabilize our operating margins as well as investing in building long-term business growth.

During the second quarter and first half of 2013, Teva's return of cash to shareholders out of its cash flow from operations was 65% and 53%, respectively, which was distributed to shareholders in the form of dividends and stock repurchases. Teva's board remains committed to delivering shareholder return. I have great confidence in where the company is today and in its future. We continue to execute on our strategy to focus on our generic operations, a core component our business to drive robust momentum in our specialty business to reduce cost structure and to make the right strategic decisions and investments in our business.

We have built a strong and diverse business and a robust pipeline that positions Teva to achieve a high level of performance and growth.

I will now return the call over to Eyal.

Eyal Desheh

Thank you, Jeremy, and good morning, everyone. We are happy you are joining us today to discuss our financial results for the second quarter of 2013. Overall, we are satisfied with the financial result of this quarter which met our expectations. Our result this quarter compare with Q2 last year, which was particularly strong and still included sales of Provigil and royalties from Atorvastatin.

We are reporting net revenues of $4.9 billion, a slight decrease of 1% compared to the second quarter of 2012, non-GAAP operating income of $1.3 billion, non-GAAP net income of $1 billion and non-GAAP diluted earnings per share of $1.20, a decrease of 6% compared to the second quarter of last year. These results were influenced by exchange rates, negative headwind of $55 million on revenues and $35 million on our non-GAAP operating profit. We benefitted this quarter from strong performance of our specialty business primarily of COPAXANE, TREANDA and ProAir as well as our OTC business which is progressing well and continues to deliver double-digit growth quarter-over-quarter.

These positives were offset by softer performance of our generic business in the U.S. where no major losses this quarter compared to several products, we had exclusivity for in the comparable quarter, primarily the generic version of Lexapro, modafinil, irbesartan and royalties associated with the sales of atorvastatin. We do expect, however, that our U.S. generic business will materially improve in the second half of the year with launches of new generic products, particularly of Niacin which is expected by the end of Q3. In Europe, our generic sales decreased primarily due to our selective and profitable approach in Germany, coupled with lower sales in Italy and Spain, in some cases, due to the general market environment in this countries.

I would like to touch next on the adjustment we made this quarter to our GAAP results which were particularly high at $1.85 billion before tax impact. A majority of these adjustments, approximately $1.4 billion, are in connection with legal settlement and reserves related to the pantoprazole and modafinil cases. As previously communicated, we made $930 million provision this quarter as a result of our settlement agreement with Pfizer concerning our generic launch of pantoprazole in 2007. As part of this settlement, we paid $660 million to Pfizer in July and will pay the rest through October 2014.

With regards to our modafinil litigation, we have decided to include a $485 million provision in the financial statement for this quarter covering a settlement in principal with certain customer and an additional amount for a possible settlement with the remaining plaintiffs. We believe that the settlement in principal is in the best interest of the company and represent prudent risk management given the particular circumstances of this case. As a result of the modafinil and pantoprazole provisions and other adjustments recorded a GAAP net loss of $452 million this quarter and GAAP loss per share of $0.53.

I now want to briefly touch on several highlights of our financial performance this quarter. Our non-GAAP gross profit margin was 58.7% in the quarter compared to 59.5% in the second quarter of 2012 reflecting decreased contribution from the sales of certain high margin generic medicines in the U.S. offset by higher sales of OTC products and COPAXONE.

Our net non-GAAP R&D expenses were $336 million in this quarter or 6.8% of revenues, an increase from $298 million or 6% of revenues in the second quarter of 2012, reflecting primarily the increased activity and good progress made by our global R&D organization. Our non-GAAP selling and marketing expenses and G&A expenses remained stable year-over-year at $973 million and $319 million respectively. The overall split of operating profits before G&A expenses between our main lines of business for the quarter is as follows, global generics 24%, multiple sclerosis 51%, other specialty brands 20%, OTC and other businesses 5%.

Our non- GAAP financial expenses and provision for tax in the quarter were slightly lower compared to the second quarter of 2012 and amounted to $82 million and $161 million respectively. Our non-GAAP annual tax rate for 2013 is affected from the mix of products we sell and the geographies we sell in and from certain tax benefits from planned mergers of certain subsidiaries.

Cash flow from operations in the second quarter was approximately $0.9 billion compared to $1.2 billion in the second quarter of 2012, mostly reflecting the reduction in net income in the first half compared to last year and a payment to the Israeli tax authorities. Free cash flow, which excludes capital expenditures and dividend, was $378 million reflecting also the increase in dividend payments.

During the quarter, we have repurchased approximately 7.6 million shares for an aggregate cost of approximately $300 million. With the dividend paid this quarter, we returned an aggregate amount of $565 million to our shareholders and approximately 65% of our quarterly cash flow from operations. Our board has approved a quarterly dividend for the second quarter of ILS 1.15 per share. Based on the exchange rate on July 30, 2013 of the Shekel to the U.S. Dollar, this translates into approximately $0.32 per share or a total amount of $272 million.

Looking forward to the rest of 2013, we anticipate ending the year near the mid point of our original 2013 guidance of revenues between $19.5 million to $20.5 million and non- GAAP diluted earnings per share of $4.85 to $5.15. In terms of our quarterly earning breakdown, we anticipate Q3 to be closer to Q2 level and Q4 to be the strongest this year. Exact breakdown depends on several factors including the outcome of the appeal in the generic COPAXONE litigation and exact timing of approval and launch of our generic Niacin product which is currently planned for late Q3.

This concludes my prepared remarks. Thank you all for your time and attention this morning. I would now like to open the call for questions.

Question-and-Answer Session

Operator

Thank you. We will now begin the question-and-answer session. We ask that you limit yourself to one question and one follow-up question. (Operator Instructions) Our first question comes from Ken Cacciatore from Cowen. Please go ahead.

Ken Cacciatore - Cowen

Jeremy, just wondering with the COPAXONE loss, understanding that you are appealing it, but how do you plan on handling that next year in terms of guidance. Are you going to risk adjust it or not? And how would you encourage us to handle it? Then I will have a follow up.

Jeremy Levin

Good morning, Ken. How are you.

Ken Cacciatore - Cowen

Good, thank you.

Jeremy Levin

So, first of all, we have planned for the COPAXONE situation as you see it today and I am going to let Eyal discuss how we think about that but we are not giving guidance for 2014 at this call at this stage.

Eyal Desheh

Yes. Hi, Ken, good morning. First of all, we are in the process, this is time of the year when we are in the process of planning the detailed plan for 2014. [AUDIO GAP] As always, we plan for next year number, our number. As we get closer to the end of the year, we will have more clarity, specifically for COPAXONE. This is our appeal and the result of the appeal, we might know before year-end and before providing guidance for 2014 but we will be responsible and based on the best knowledge that we will have, we will either risk adjust or not, as the case maybe, but we will need to get closer to the guidance time.

Ken Cacciatore - Cowen

Okay. Then wondering, Jeremy, does this is in anyway alter the way you are approaching business development and your M&A strategy? Does this accelerate it or does this help to you plans in anyway?

Jeremy Levin

Ken, you know we have had a pretty laid out plan in our minds for what we want to do and the top areas of target have not changed and we will definitely do what make sense strategically and financially for the company.

Operator

Thank you. Our next question comes from Randall Stanicky from Canaccord. Please go ahead.

Randall Stanicky - Canaccord

Great. Thanks, guys. Jeremy, you talked about looking for NTE approvals beginning in 2016. I am just curious when does that business hit critical mass? And, as you think about the peak opportunity, is this a $4 billion business or an $8 billion business? Any color you can provide there would be great.

Jeremy Levin

Hi, Randall. Good. I will hand in a second over to Michael, but the way we look at this it's a multibillion dollar opportunity. There are coupled with a couple of things that we have said before which I think I just want to reiterate these are low investment, high potential opportunities. So, as we look at each one of these, we are looking at peak sales possibly between the range of the $300 million to $500 million thereabout per product.

Their investments are relatively low compared to other types of investments of the low, low, low millions or up to $10 million, tens, maybe $20 million, but we are not looking at major investments per product. If we are fortunate, one or two of these really take off, we are expecting them to be very substantial. So, Michael, perhaps you would like to elaborate a little further there for Randall.

Michael Hayden

Hi. Good morning, Randall. Thank you for the question. As you know the way we view the NTE's, which are build on the strength at Teva of both, our generic history as well as insights into medicines coming from the specialty. We are looking at about 10 to 15 NTE approved for development per year. When you look at them and you have so elegantly described that in your own report from Canaccord. This is really a three to five-year submission rate and time to approvals.

As you can see where, this is similar to what one expects for Phase III asset, but it's much less investment. We are expecting to have submission from our anti-portfolio. Some of them is early as 2014, and this will go on. This will be significantly increased. If you look at a portfolio, if you had 10 to 15 in 2013, the major area of submission will be 16 and 17 and all of these would be expected to be on the market within five years subject to various patents and other issues making sure IP is protected, so this is, in our opinion, a multibillion-dollar opportunity and it's going to be enhanced as you are going to go forward. This is equivalent to putting 10 products into Phase III development every year from now going forward.

Operator

Thank you. Our next question comes from Elliot Wilbur from Needham & Company. Please go ahead.

Elliot Wilbur - Needham & Company

Good morning. First question for Jon if he is online, I am assuming that he is. With respect to COPAXONE, you previously talked about an acceptability to switch roughly to 30% to 35% of the patients to the new three times a week formulation and I am just wondering how much you have tested those assumptions under a scenario that does include generic formulation of COPAXONE on the market?

Second question for Alan with respect to U.S. generic performance, certainly continues to track under street expectations and I am guessing that even looking at the second half or was some of the new expected launches, still seems like mid-to-upper end of your previous guidance is a bit of a stretched target, so I am kind of wondering with respect to that business what is not performing up to your prior expectations? Thanks.

Jeremy Levin

Morning, Elliot. Jon is across the table here, so why don't we just start with him and walk up after COPAXONE question over to Alan is also here. Go right ahead, Jon.

Jon Congleton

Thanks, Jeremy. Elliot thanks for the call. The numbers that we recorded have been 30%, 35% based on the research that we have done. We have continued to pressure test that obviously talking to our customer bases. We hear numbers up to 50%. Obviously, we are going to be prepared for the TIW for a complete conversion of patients who are choosing the TIW.

We know that there is great interest in the efficacy and safety and tolerability of COPAXONE and looking to advance the way that patients can administer it, how they can utilize it. It has always been of interest to them. We have always tried to bring improvements to the market.

So we will be prepared for as big of one uptake as can be met by the market. It could be anywhere from a third to a half, based on the research we have right now. I think it's also critical to know what the timing, as Jeremy said, in his statements of an approval early next year, with the planning of potentially a follow on COPAXONE on May 14.

We know this is a complex market to satisfy the needs of all customers. So we are very comfortable with the way we can introduce the TIW and I think there maybe some challenges that a generic can introduce, very generic even in a rapid timeframe. Allan?

Allan Oberman

Super. Thanks, Jon. Thanks, Elliot, for the question. As Eyal laid out in his comments, the first half of the year, at comparables versus last year, that included significant exclusive products as well as royalties which we did not have this year. In the first half, we have launched nine new products, all relatively small products. The real growth comes from the new products that we have to launch in the back half of the year.

We anticipate launching the same number of products that I guided at the beginning of the year in the 20 to 25 range. So that means we have about 10 to 15 new products still to launch. Aggregate brand value exceeds $10 billion and, as Eyal noted, the largest of products within the launch are Niacin. So we are pretty optimistic about the improvement in the back half of the year versus the front half of the year.

Then I will just marry that with the comments that we have made about our generic strategy earlier in the year that we are focused on creating shareholder value and not necessarily driving after volume share. I mentioned in the past, we have taken price increases in order to enhance value. We are managing the mix of our products to enhance the margin. We are working very closely with our channel partners and managing the inventory and doing overall what's right for the business.

So I am pretty optimistic that you are going to see an improvement in the second half versus the first half, given the different comparables we have as well as the strength of our activity as we look over the next six months.

Operator

Thank you. Our next question comes from Aaron R. Gal from Sanford Bernstein. Please go ahead.

Aaron R. Gal - Sanford Bernstein

Good morning and thank you for taking my question. The first question is on the cost cut. Then I have a follow-up. Jeremy, I remember from my consulting days, that usually there is a time when we begin implement a program in which you begin to push down kind of like targets for cost cuts through the various business lines and from there to various country managers and line managers. I was wondering as you guys are preparing to execute on your cost cuts, just given as much as how big it is as a percentage of cost structure, where, currently, in the thinking process are you? Do we actually have targets communicated to the different country managers and the different operating line managers?

Jeremy Levin

Morning, Ronny. Actually I didn't know that you worked as a consultant, previously. Interesting. Look, we are completely on track to achieve our goals in this. We have an organization structured. We have communicated down at least one level, two levels now, and we know where we are going, what areas we want to target and how are we going to target them. Let me pass you to Eyal who was intimately involved with me in building the organization and just let me reiterate something else.

This is not something that is be simply passed out across the company. This is something that is being managed actively by a core team, headed by Erez Israeli, very experienced in this company. So supported by infrastructure and also appropriate, let me use the word, consulting support to make sure that is happens. There is unanimity across the entire senior management team of how to do this, when to do it and where to do it?

So Eyal do you want to make some comment there?

Eyal Desheh

Yes I can. Hi, Ronnie. Good morning. Excuse me for exposing you, but Ronnie works for BCG and they are the ones supporting. They have supported us in putting the plan in place.

Aaron R. Gal - Sanford Bernstein

Which makes me suspicious.

Eyal Desheh

Anyway, currently this is the plan which is based on if I remember correctly 111 is different project that was been pushed down to the level of the business units, the countries, the plans and the sales and marketing teams and definitely to all the G&A activities which are in first place where you need to reduce, because G&A people like me don't sell or don't develop, so that's the first place you look, but it is based on a very detailed plan that has been as you push down to the level of the floor where really cost and expenses occur. It is based on procurement group that we have put together and we recruited one of the best people in the industry to run the global procurement program and this is already up and running very, very fast and with a lot of energy.

It's about putting together a comprehensive plans that that Carlo is implementing in our operation, number of plant, where we would produce and how can we reduce the cost of production and on and on. It's not at the high level. Everyone already has targets, time table, gross exchange. By the way, we also grow we are changing the organizational structure whereas specialty group is being put together and as managing all the specialty business globally and the global support function of the company like finance, like IT, (Inaudible), like legal, are now managed centrally with accountability for expenses that each one of the management members have.

Aaron R. Gal - Sanford Bernstein

Great. Quick follow-on to Michael. Michael, looking little bit Laquinimod program and I was wondering few things. First, where do we stand in terms of the European submission for the Laquinimod multiple sclerosis? And where do you stand in your thinking about moving either the Lupus or the Crohn's program forward to a Phase III? Is there decision that has been made?

Michael Hayden

With regard to the European submission, we have had a response from the agency. We are essentially developing responses to this. We feel that all of these questions can be answered appropriately and so we are still looking to approval next year with the launch in next year of Laquinimod.

With regards to Laquinimod in Lupus and Laquinimod in Crohn's disease, we are encouraged as you know by both, the interesting Phase II data with both. We are developing the protocols, aligning materials for both and we expect both of these to essentially start early next year.

Aaron R. Gal - Sanford Bernstein

Phase III?

Eyal Desheh

Phase III.

Operator

Thank you. Our next question comes from Chris Schott from JPMorgan. Please go ahead.

Chris Schott - JPMorgan

Thanks very much. Just had two questions here, the first one, given the Lonza announcement, can you just update us on the importance of biosimilars to Teva's overall growth strategy? And, maybe as you are talking through that, can you just remind us, how much of an investment is going into your biosimilar effort at this point and maybe talk about some of the more attractive targets that you see in your portfolio and I just have a follow up after that.

Jeremy Levin

I will take that if it's okay. Maybe I will bounce of a couple of responses to Michael there. Look, first of all with regard to the Teva-Lonza joint venture established as you know in 2009. And from my perspective, a lot of things have changed in the biosimilar field, new regulatory frameworks and I think leading to a lot of new increased scientific hurdles cost of development, extension, time to market, et cetera, so we took the opportunity to really focus down on what we want to do here.

I think from our perspective, you have to look at the biosimilars as part of our overall strategy for biologics, which is to create a balanced portfolio of biosimilars, [bio beta] and innovative biologics which are aligned within the overall Teva strategy, so we are developing a portfolio of high value biosimilars which are aligned within that portfolio and they basically address unmet needs of technically feasible and don't compete with the fast follower or a biobetter.

The kinds of additional characteristics that we are interested in this area are the potential to combine with other drugs in Teva's portfolio. So the biosimilars, biobetter approach, which is from our perspective, will be complemented with an innovative biologics based approach based on a small number of highly targeted and competitive unique platforms that we have, which from our perspective, offers multiple product opportunities and will create highly differentiated products all again synergistic with Teva's small molecule programs.

As you know, we have, at this stage, quite a number of products that are both in Phase 3 or registration. So I am very comfortable with the overall approach now and we are committed to it but, again, biosimilars within the context of an overall strategy towards biologics.

Michael?

Michael Hayden

Thank you for that important question. So it is balanced. Our innovative biologics, our unique biologics are really focused on major unmet medical needs. I am sure you are aware we are in a Phase 3 trial getting towards a lot towards the end of this year for reslizumab anti-IL-5 important for asthma. In terms of biobetters, we are also looking at different biobetters essentially for validated targets and large indication. We are, as an example, in the growth hormone space looking at long acting growth hormones. That's in a Phase 2 in an effort to really enhance the convenience and adherence and acceptability of this medication for patients in need.

Then a high quality biosimilars with low cost of good are really also being developed very selectively. We are focusing on approaches where we compete using proprietary platforms and targets, drug combinations, leveraging cutting edge technology through partnerships, through an institutions and also in some instances looking at some other looking at another strategic alliances. You probably also know, we have the G-CSF that will be launched later this year. Then we also have in registration a long acting G-CSF, both in Europe and in the United States. Also I have submitted in Europe, follicle stimulating hormone for treatment of male and female infertility and expecting that also to be approved at sometime in the near future.

Chris Schott - JPMorgan

Great. Thank you for the answer. My follow-up question was, just coming to draft guidance on generic Restasis, I guess my question here, that guidance seems to go against the most prior FDA commentary on suggesting a need for a clinical study and it seems in general like the agency is looking to make non-clinical trial based pathways for some more complex generics. I am just interested in your view as you think about COPAXONE and the risk on that front as you are seeing some of those decisions made. Do you think it has a read across to COPAXONE? And if not, why not? Thank you.

Jeremy Levin

I think what you have asked is a long set of questions and a complex one. So let's try and simplify this. Michael, perhaps you can handle a portion of that and let's see how we can play through perhaps Allan can also give some guidance there. Michael?

Michel Hayden

I will say, as you know, Teva is committed to economic access to safe and effective medications. So the real issue is to understand the value and the issues between both innovative and generic compounds. In this regard we have, most important, that when one's looking at a generic for COPAXONE, a very complex molecule to manufacture, that is not only seamless in terms of structure but seamless in terms of effect it guarantees to ensure the safety of patients.

In this regard, our own data using unique and trying a method using transcriptional profiling, essentially using novel computational technology has turned again some of the propofol generic significant and constant differences, not only it happens to be an expression but also biological effect. This raises, for us, concerns about safety and also efficacy and again resupports the concept of the need for clinical studies to demonstrate safety and efficacy with propofol generic.

So opposition is that, this is needed in an effort to really ensure both, safety and efficacy of any drug and we published this some of those stays in an expert opinion in the therapeutic target and using this novel technology we ourselves would be willing to test any purported generic to demonstrate sameness for any of our colleagues or peers in the industry.

Jeremy Levin

Perhaps, Allan you might like to make some comments further?

Allan Oberman

Chris, just for clarification, can you just repeat the question and whether Michael hit on what it was you were looking for?

Chris Schott - JPMorgan

I think he did. I think you have been very clear in terms of your view on why a generic COPAXONE needs more study. I guess I was looking at, we have done agencies that seems like it's on some level under pressure to create pathways to market and I am just wondering how you think about the risk of just getting a suboptimal outcome of draft guidance that may be leads to a pathway that doesn't involve clinical studies. Is that higher risk today than maybe or as two years ago? I guess it was the heart of the question.

Jeremy M. Levin

I think that's more Michael's line. Michael, why don't you address it.

Michael Hayden

Yes. I think it's hard to know. I do not want to predict the activities of the agency. I think the agency is very open to careful considered input and thought and carefully considers these issues in the anticipation safety and efficacy. I think when these issues are deeply understood and considered I would think that the agency may also consider the need for appropriate studies to ensure efficacy and safety for the patient population.

Operator

Thank you. Our next question comes from Jami Rubin from Goldman Sachs. Please go ahead.

Jami Rubin - Goldman Sachs

Thank you. A couple of questions for you, Jeremy, related to M&A. You have publicly stated that you are going to pursue small-to-mid size deals. I think you said up to $2 billion in oncology, respiratory and CNS, so just a couple of questions around that. First, is your board completely behind you on that plan? Second, would you consider going bigger than small-to-mid size? Third, would you consider a deal that would provide you with immediate cash flows as investors wait for the pipeline to materialize? Thanks.

Jeremy Levin

Good morning, Jamie. First of all the board is behind what we are doing. Secondly, with regard to the types of M&A, you are quite right. We have definitely targeted those areas and we will do what makes strategic and financial sense for the company. As regards, returning cash to the shareholders, let me pass you over to Eyal for that answer.

Eyal Desheh

Good morning. Basically, I think we have demonstrated that we are committed to returning cash to shareholders both, with our dividend which was increased in the beginning of the year and our buyback program which we executed on. We have overly executed 55% of the buyback program, which is a three-year program and we will continue with this philosophy of returning cash to shareholders and watching carefully how we allocate capital.

Jami Rubin - Goldman Sachs

Jeremy, can I follow-up please? I guess what I wanted you to opine on is, you have been explicit on the types of deals that you want to do i.e. pipeline-driven innovative deals. I am just wondering given the outlook over the next couple of years, as we wait for the NTEs to play out, is there an increased appetite to do a deal that might be immediately accretive, a different type of a synergy-type deal that's happening across the industry, or is the plan to stick with targeted, focused, pipeline-related deals?

Jeremy Levin

Jami, your comments are quite right. My observations of might be [philosophy] we have on any transactions is accretive transactions are good. They shouldn't be looked at as a short-term item. They should be looked at as value building both, short-term accretion and also long-term capabilities into the company, so I definitely don't limit my target range to those that are simply on pipeline basis. Ideally, one would want both, those assets are limited but certainly we are going to do what's strategically and financially is sensible for us.

Operator

Thank you. Our next question comes from David Maris from BMO. Please go ahead.

David Maris - BMO

Good morning. Jeremy, I have a couple of questions. First, can you talk a little bit about the state of the U.S. and European generic industry pricing, competitors? Are you seeing changes in the role of the increasing buyer concentration. Is it getting tougher? Is it, no it's always been tougher and it's the same? What are you seeing? Is it getting easier for Teva and its scale which had been the goal/ Just trying to understand the dynamic. Then I will follow-up.

Jeremy Levin

David, I am going to give a crack to giving you the overview. We have got some drill down capabilities here on the table. I would like you to get a chance for you to hear from those guys who are actually in the frontline, Dipankar in Europe and Allan in the U.S.

Bottom line is, this has been an incredibly dynamic industry, based originally on essentially a push model where everybody had, the fight was really for the paragraph for exclusivity where you were basically able to command what you wanted to from the different channels here in the United States. Very, very different. As you have seen over the last few months, over the last two years, another dynamic has crept into this which is the increasing globalization of some of these channels.

So I think that the globalization of these channels has had an impact, but sometimes not obvious, sometimes very obvious. We are extremely well positioned to take advantage of many of the changes that are occurring. I am very optimistic given our footprint, both in Europe and America, that in the changes that are occurring across the globe in the generics industry that Teva is almost uniquely positioned to take advantage of those.

Perhaps I will start with the North Americas with Allan and then hand over to the Dipankar. This is a drilled down very important strategic question, but goes to a lot of

what's important in the generic industry overall.

Allan?

Allan Oberman

Great. Thank you, David, for the very interesting question. Our view is that the types of deals that have gone on in the channel are different than they were in the past. In the past, it was all about size and scale and the pharmacy footprint throughout the U.S. You are now seeing much more of a view of the retailers on a global basis. Clearly everyone's familiar with the Walgreens alliance with ABC configuration but some of the other larger retailers and wholesalers are testing their metal in other geographies around the world.

That plays well to our capabilities. We operate in 60 countries around the world. We have the biggest global footprint. I would say, it is unusual that a week goes by where I am not asked to input and comment relative to the globalization of this industry. So it really is changing. We believe we are well positioned relative to that change. We believe we can work very effectively with these key customers as a work to globalize to take capabilities from the U.S. to other parts of the world but as we are seeing, in some, to bring capabilities from other parts of the world to the U.S. and to leverage our globalness to be able to work with those customers on a strategic platform to enhance our business and continue to profitably grow with them.

With that I think, I will turn it over to Dipankar to give a European view of this?

Dipankar Bhattacharjee

David, thank you very much for your question. First, let me clarify that what we really consider as Europe for our business. Europe consists of countries of the European Union, Norway, Switzerland, and certain countries of South Eastern Europe. It specifically excludes Russia and it excludes the CIS countries. Overall the regions, as we see, is diverse. It has a population of over 500 million people in 36 countries.

Now, coming to the changes and reforms that you have spoken about. First, reforms are ongoing. Although the pace has slowed somewhat. In terms of price reforms, we find them again. They are ongoing but they are built into our business model. In general, the price erosions that we have seen has been more or less steady. They tend to be between low to mid single-digits. They are usually more than offset by increase in volumes out of increasing generic penetration and new product launches.

As far as consolidation is concerned, we find the consolidation to be gradual, and we are very well positioned to take advantage of that with our broad portfolio. So overall we continue to be quite positive about our generics business in Europe.

David Maris - BMO

Okay. And just as a follow-up, I mean, specifically do you think things will be getting better both, in the European market and the U.S. staying about the same or get worse?

Jeremy Levin

Allan?

Allan Oberman

Well, it's a very interesting question. Good, better, better worse at the same. Certainly from an economic standpoint, these entities are looking to create shareholder value. Our view is, we are also looking to create shareholder value and where the two entities can come together and develop plan that mutually benefit both of our organizations, we both win. Whether it's tougher or not tougher, to me really isn't the important question. The question is, can you work with these globalized entities on a platform that creates mutual value and we believe we are well positioned to do that.

Jeremy Levin

Dipankar?

Dipankar Bhattacharjee

As far as Europe is concerned, we have a broad, resilient and a well distributed business and we enjoy market leadership position in most of the markets that we (Inaudible). In summary, how we see our position is we have a relative competitive advantage, so we see that regardless of the way the market evolves, we will stand to benefit from the relative competitive advantage that we.

Jeremy Levin

David, actually it might be helpful if we just listen for a second here to Michael, and the way that we are thinking about our approach to some of the uniqueness that we have within Teva that's perhaps not been seen on the outside to-date.

Michael Hayden

Thank you, David. And, just to share with you our generics R&D is really very much poised and focused on enhancing value. Paying special attention to the development of complex technologies, what we call high value or complex generics. In particular, we have now established over the last six month centers of excellence in specific regions of the world, which are really focused on serving both, the generic and the branded portfolio. For example, we have assembled the team in sterile devices taking actually major experts from various other sister companies and this is a group that's focused on developing sterile devices for both, the generics and the branded and already making major progress in this regard.

We also have a groups for example in own developing, focusing on thin patches. We have people in [Cremona] who are focused on other aspects of vaginal ring technology, nasal suspensions and all of these are already leading to submissions in technologies that we didn't have in-house before, so we are building competitive nature in our complex generics business around the world in focus [centers] of excellence that are going to further enhance our competitiveness.

Jeremy Levin

In summary, David, I think we got a really good handle on this business in both and all the geographies involved and we have got a technology base which has been focused in these developing, so it's a strong combination between the commercial and the technological development which leads to a tremendous sense of confidence here.

Operator

Thank you. Our next question comes from Gregg Gilbert from Bank of America. Please go ahead.

Gregg Gilbert - Bank of America

Yes. I want to talk a little bit about the dividend and capital deployment. Jeremy, you have talked a lot about management and the board reviewing the dividend every quarter and not just annually. I am curious how that discussion went this quarter, but maybe we should also ask whether there are other potential calls on cash like the [pent-up] result penalty or the Provigil provision as I am sure those things play into why you choose to not raise the dividend more than the once a year.

Then on Europe, I am a little concerned that most companies were putting a nice bounce back to double-digit growth in that region yourself included until this quarter, so can you talk a little bit more specifically about what the drags were this quarter and when can you can you get back to robust growth in Europe that's more reflective of what's going on with that market more broadly. Thanks.

Jeremy Levin

Now let's just go inverse here if, you don't mind. First, we had to Dipankar a second ago, so if you don't mind let's just keep it for the generics. And, okay, now I want to draw specific attention to what Dipankar said about what Europe means. Europe is a geography which for us is quite specific. For others, include many other countries. So, Dipankar, what I would like you do is, to reiterate once again what is Europe. What kind of portfolio we have going there, comparative to the other companies and how they look and then come back to the question, if you get time for questions on the capital allocation. So please lay that out again. Thank you.

Dipankar Bhattacharjee

Thank you, Daren. Thank you for the questions. First, let me clarify again that our results for Europe generics consist of countries in the European Union, Norway, Switzerland and certain countries of Southeastern Europe. Very specifically it does not include countries like Russia and the CIS countries. We see Europe as a diverse region with a population of a 500 million people in 36 countries. In addition, our generics result excludes our biosimilar and specialty medicines.

Overall, as far as the business is concerned, it is performing as we have expected. The small decline that we see in revenue and profit in this quarter is a result of three things. The first is we are executing on our strategy to focus on sustainable and profitable business. We do see some changes in market models. For example, in parts of Spain, where some of the Generics business has moved in into tender, which we have selected not to participate in. Finally, we have had fewer launches in this quarter compared to 2012.

I would like also to draw your attention to the fact that in the first half of 2013 versus 2012, our generics business in Europe, as we have defined, grew by 3%. Our outlook for the rest of 2013 is inline with our expectations.

Gregg Gilbert - Bank of America

So I think what you see here just again great to see we are at the point in. The other competitors that we have include other countries, include very different portfolios.

Dipankar Bhattacharjee

Yes. For example, in our portfolio, we do not include biosimilars. We do not include certain other specialty medicines. In terms of our definition of geography, we do not include Russia and we do not include CIS countries, which have very different growth profile.

Jeremy Levin

Eyal, would you like to address the question of the capital allocation?

Eyal Desheh

Yes. Maybe a few more words based on items that are in response to an earlier question, but I believe we will continue. I think we have demonstrated that we have the ability to allocate cash in a disciplined manner. We will continue to support our strategy and foremost reward shareholders and also service that. We don't have to forget that now. We look forward to some of the events that happened like, pantoprazole settlement, of course was within our plan. We knew about this before. We are committed to the $3 billion share repurchase program. I mentioned we already executed 35% of that in the midpoint of the period. We are now reviewing dividend more frequently with our board. We used to do it once a year. We will do it every quarter. I think it's a good practice.

Gregg Gilbert - Bank of America Merrill Lynch

Any more colors on cash from signs or settlements, that's kind of the heart of the question?

Eyal Desheh

Sorry, can you repeat? I didn't hear it properly.

Gregg Gilbert - Bank of America Merrill Lynch

Are there any large calls on cash that you can see that we can't? Thanks.

Eyal Desheh

I don't know. I don't see anything of that kind at all.

Operator

Thank you. Our next question comes from Dave Risinger from Morgan Stanley. Please go ahead. David?

David Risinger - Morgan Stanley

So I have just two questions. First is, with respect to the cost cutting initiatives, I believe that Teva projected $1.5 billion to $2 billion in cost cuts over the next several years. Could you just update us on what you have achieved to-date and maybe give us a timeline for cost cuts to anticipate?

Then second, with respect to major limited competition U.S. generic launch opportunities. I would love to get any perspective on what we should be watching and if you can include your perspective and confidence on launching a pharmacy substitutable generic EpiPen in 2015? Thank you.

Jeremy Levin

Great. Look, as we announced, we are on track to deliver the $1.5 billion to $2 billion cost cutting initiatives. This spreads out effectively in a ramped up fashion, relatively small savings in 2013 plan and then much greater amounts starting to impact in '14, '15 through to '17.

Some milestones will be pretty obvious. Plant closure, shifting of employees, et cetera, other milestones won't be. From my perspective as Eyal mentioned earlier on, the team is in place to do this. We are starting to act very aggressively on it and it is an operational entity as we speak and you will see the effects over the next few years ramping up.

Eyal, do you want to make any additional color on that?

Eyal Desheh

No. I think we gave a full detailed answer in response of the two questions that we got with regard of this. Our plan for 2013 is very well on track and we mentioned early on that we will a [$200-ish] cost saving already this year with the happening and as we made progress with this, we gain more confidence. It gets very, very detailed and we are now in the execution phase.

Jeremy Levin

So, knocking over now to Allan, you had a question on U.S. generic launches. In particular, EpiPen, really looking forward to that so, Allan, go right ahead please?

Allan Oberman

Great. Thank you for the question, David. I just want to take step back and talk about the selection and development strategy that we have deployed as we refocused our U.S. generics business. I think I have said it in previous occasions in conjunction with what Michael just described. We are really focused on developing high barrier to entry complex generics.

When you look at the timeliness of those generics and when the market value of those generics will peak. So, later in this decade you will see a significant number of these products that will be commercialized and we anticipate limited competition from these products when we commercialize those later in the decade.

As we work through the next few years, there are a handful of complex products that we anticipate commercializing. One of them which I will get to in a moment, but marrying the high barrier to entry complex with the selection of products around Paragraph IV first file and I will just underscore and remind us of the comment that I made on Investor Day that more than half of the selection and development efforts that we are deploying are against these potential Paragraph IV first to file exclusive products that we anticipate will come to market, derive economic value before a number of competitors ultimately enter to compete with us.

Specifically, with regards to EpiPen, we have made the submission. We continue to work very closely with the FDA on this submission. We are optimistic about our ability to get approval and launch that product in 2015 as we have articulated and we will continue to work with the FDA to ensure that that progresses forward with the timetable that we have describe, so we are pretty optimistic about that one.

Operator

Thank you. Our next question comes from the David Buck from Buckingham Research. Please go ahead.

David Buck - Buckingham Research

Yes. Thanks for taking my questions. First, for Jeremy on COPAXONE opportunity. Can you talk about the ability to still have price in the injectables market and maybe broadly where you see the volume trends for COPAXONE as we entered 2014. Then with the 3TW launch next year, can you talk about what the marketing plans might be for COPAXONE standard formulation? Would you look to try and harvest that or continue keeping that as a brand and perhaps discounting more to managed care et cetera, if you do have generics. Then just for Allan, can you give an update on where Teva's [old model] in the U.S. stands? Thanks.

Jeremy Levin

Thanks, David. A couple of things. Let's start with the COPAXONE. We have got Jon here. On the global basis, Jon looks at this. See if he can drill down into what's happening in the U.S. and maybe Rob here will have a couple of comments on how you see this also in Europe and then the 3TW, why don't you hit into that Jon?

Jon Congleton

Alright. So David, thanks for the question. The first on the volume. Obviously, it's a very dynamic time in the marketplace. We knew that. We had planned for it. The thing is, we are very pleased with what we have seen so far in the first half of the year. Our TRx's, our units, with Copaxone are very stable. There is some attrition in market share. You would expect that with a new market entrant but it's probably little bit less than we had built into our forecast. Clearly, the profile that Copaxone has developed over the last 20 years, its as far unsurpassed efficacy, safety and tolerability still resonates in the market.

In fact, there were questions I received pre tied to the launch as far as what place would Copaxone have given all the oral alternatives. I will tell you, David, that over the last two weeks on a weekly basis IMS new Rx data, Copaxone has returned to market leadership. So it's voluble. It's still new. But if you look at the most recent two weekly reports, Copaxone is back to the number one prescribed new Rx products. So, I think it speaks very highly of the profile of the drug. It speaks to what patients are look for. We are basically planning pragmatically, David. So, we are looking at volumes declining. We have highlighted that in December of 2012 but we are acting optimistically. We are supporting this asset very aggressively.

To the question on the Copaxone 40 mg introduction, what we will do with the 20 mg, we will continue to support both. We think it's important to provide both alternatives. Again as I said earlier, anywhere from a third to a half of the patients have indicated right now that they have a preference for the three-times-a-week 40 milligram. That percentage may grow as we bring that to the market or we are continue to satisfy our patients who are taking the 20 mg daily.

As to pricing and rebating, we haven't generally spoken about that. Clearly there are more alternatives out there that does apply some level of pressure within the payer space, but when you have an asset like COPAXONE that really has been the market leader, it is going to continue to be the market leader. That gives us a level of leverage, if you will, to work appropriately with the payers and the customers. Rob, if you have any thoughts on that?

Rob Koremans

Sure. No, thanks Jon. So, actually Europe, it's fairly similar picture with one exception. There is no new entrance to market yet of new oral competition in Europe. We see steady growth of COPAXONE in Europe with low single-digit growth and we were very pleased also with the UK Court ruling that confirmed our patent in Europe. So, the business of COPAXONE in Europe is really progressing nicely and we see the same preference and the safety track record and the efficacy track record also in Europe as well. So very confident and happy with the current developments.

Allan Oberman

David, it's Allan. With respect to your question on temozolomide, it's one of those products that I described earlier is in the 10 to 15 with in excess of $10 billion of brand value that we have our sight set on for the balance of this year.

David Buck - Buckingham Research

Can you confirm that that's expected to be this months?

Allan Oberman

I am sorry. Can you repeat the question?

David Buck - Buckingham Research

Just my understanding was the U.S. temozolomide launch could be as soon as August. Just want to confirm that's if in fact the case?

Jeremy Levin

It's in our near term sights.

Operator

Thank you. Our last question comes from Marc Goodman from UBS. Please go ahead.

Marc Goodman - UBS

First, can you specifically talk about France? How that market has changed dramatically and how you are doing relative to the market with respect to market share? So are you growing relative to the market?

Second, there was a comment about, there was $485 million hit for Provigil. There was some specifics of the case drove you to doing this. I was wondering if you get into that a little bit, why now.

Then third, can you talk about the OTC business? Obviously its doing very well, I am just curious how do we forecast this on a quarterly basis? What's happening with respect to new launches the rest of the year? How do we think about that? Thanks.

Eyal Desheh

Hey, Mark. Good morning to you. So we will deal with this in a broken up. What we will do is we will ask Dipankar to talk about France, specifically we went through really an interesting experience, one at the end of the day which has been extremely positive for us in France, over this last three months. Secondly, I will ask Rich to really take a look and try and answer some of the questions around the legal case and then I will come back to the OTC.

Dipankar, why don't you walk us through where we stand in France?

Dipankar Bhattacharjee

Marc, thank you very much for the question. First, I would like to underline the fact that France is one of the countries which has benefited from changes in regulations that has driven growth in generics penetration over the last 12 months. We have, along with several other generics players, have benefited from that growth. So, in France, in recent quarters we have seen double-digit growth. In addition to that as far as market share is concerned, we are very focused on executing our strategy to focus on winning sustainable and profitable business. Our market share has marginally declined, however it is entirely within how we have planned our business in terms of improving our profitability out there. Going forward, we will continue to be focused on executing our strategy for wining profitable business in France and elsewhere in Europe.

Jeremy Levin

Then secondly, we are very pleased by the performance of the team in France. They have done a great job and very optimistic about the ability to have this as a very robust business there. With regard to the legal aspects of our decisions, I am going to ask Rich obviously to take that if you don't mind.

Richard Egosi

Hi, Marc. Thanks for the question. First of all, as you know as Eyal mentioned, we are on the settlement agreement on the principle that we have with certain of the customer plaintiffs we believe is in the best interest of the company and reflects our prudent risk management. As far as the timing, the Supreme Court recently (Inaudible) issued its decision and that [a end of the stay] in the proceeding in the antitrust suit. I mean the [case] and also eliminate uncertainty about the legal standard and that brought the parties together at this juncture to start discussing settlement.

Jeremy Levin

Marc, I think your last question was regarding OTC. Over the next few months, I think we will be laying out how we think about this. We have got specific managers who are being brought into the company. What I would like to do is, just have two comments. First of all from Michael with regard to your R&D pipeline. Then secondly with regard to the overall management of this, Rob has reporting to him a world-class OTC team that have joined us, so Michael just briefly?

Michael Hayden

Well, thank you, Marc. Just to let you know, a new aspect of our whole R&D organization is R&D for OTC. We are building on the generic mindset and already coming up with some very interesting and novel innovative ideas in the OTC space. It's been very interesting. This has been the natural extension of thinking about the generic business, but it's taking to another perspective in terms of OTC. I think you will see some novel, innovative approaches coming out of R&D that have impact on the OTC business.

Eyal Desheh

And, Marc, maybe to add on that from launches point of view, we reported before that we had launched Vicks in countries like Poland, Hungary, Czech Republican, Russia where it's continuing to do well. We are expanding that in Ukraine and the rest of the CIS. And, what is really nice to see is, that from all the global OTC players in the top-10, we are actually the only one that's really increasing in sales and market share. So, our partnership with and Proctor & Gamble and PGT is really delivering well.

We have recruited some good talents from companies like JNJ and we are doing a fantastic job, so the team is motivate and they leverage our capability from Teva as developing products and launching them into the pharmacy and the marketing inside and knowhow from Procter & Gamble. It's working so far, so we are very optimistic.

Jeremy Levin

Marc, just to wrap that up, as a joint venture, we feel happy having a greater discussion and giving greater color to this in conjunction with our partner Procter & Gamble and our joint venture PGT. We are very happy about this JV. It's a great alignment of forces between two strong companies using the strength of both to compliment each other, not just in products but also in commercial and in our ability to penetrate different markets. We will be giving more color on this.

Operator

Thank you. I will now turn the call back to Dr. Jeremy Levin for closing remarks.

Jeremy Levin

Well, thank you very much, everybody. I really appreciate your joining us this morning and we will be around to ask us some questions for some of those who will be calling in and look forward to talking with you more over the next, not just the next year over the next few days and weeks and I hope to have a chance to see some of you face to face.

Operator

Thank you, ladies and gentlemen. Today's conference will be available for digital playback as of August 1. You may dial 888-843-7419 or 630-652-3042, enter passcode 35300463 followed by the pound sign. This concludes Teva Pharmaceutical's second quarter 2013 conference call. Thank you for participating. You may now disconnect.

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