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Teva Pharmaceutical Industries Limited (NYSE:TEVA)

Citi Global Health Care Conference

February 27, 2012, 14:00 p.m. ET

Executives

Lesley Russell - SVP, R&D Global Branded Products

Kevin Mannix - IR

Unidentified Analyst

We will get started. Our next session will be Teva Pharmaceuticals. We have the great pleasure of introducing Lesley Russell, seated on my left. She is a hematologist, oncologist with over 19 years of international pharmaceutical industry experience in leadership in the therapeutic areas of hematology, oncology, neurology, psychiatry, pain and inflammation, respiratory medicines, cardiovascular medicines, and stem cell therapies, all important areas within Teva’s branded focus going forward. And to Lesley’s immediate left, everyone knows Kevin, Kevin Mannix also from Teva.

So, Teva has obviously been able to expand its critical mass, it now has an R&D about 1.5 billion in R&D. It seems as though a good chunk or a large portion of that or about $1 billion is certainly allocated towards the branded portfolio.

Can you maybe help walk us through from a prioritization standpoint some of those products that both Teva and Cephalon has in terms of what those priorities are that might be on that A list, B list or C list going forward?

Lesley Russell

So, what we did after the acquisition in October last year was to really bring the two portfolios together, and as you said, rank them in terms of priorities in terms of what should absolutely get from this, what should absolutely not get from this, those two are the kind of easy ones to do and then that sort of group that fell in between, which we call B, that had some clinical data that suggested potential utility, but probably really far and long and up in [ph] clinical development to know how successful they were going to be. I think in terms of the A list, it was really the late stage assets, so anything in either portfolio that was in currently in Phase III development, we clearly decided to continue. And then some of those cases of the programs nearing fruition and hopefully data become available in the very near future. Those in particular are from the Cephalon side of the acquisition, Nuvigil for bipolar depression, our tamper-deterrent hydrocodone. Both of those have data coming up in the very near future. Nuvigil shortly in the second quarter for the first study and then about a quarter late for the second study. With hopefully, both of those things successful, then an NDA, a supplemental NDA application going in about three months thereafter.

For the hydrocodone program, the safety and efficacy study is completed. We have yet to unblind the data. There has been some to-ing and fro-ing with the agency around statistical analyses. And we just wanted to make sure we cleared them up before we proceeded with unblinding. And then we are in the middle of undertaking a liking study and hopefully if the data were positive we would get some wording around liking and preference in the product label. Again that program heading for an NDA around the October timeframe.

We also have a number of the respiratory programs, these ones came from the Teva side. We have dry powder nasal spray, beclomethasone spray for allergic rhinitis. We have a PDUFA action date on the end of March. So, hopefully, an approval, a new product coming onto the market shortly thereafter.

And then the other programs and I’m probably missing a few now, because either are about to enter Phase III or currently in Phase III, in early stages of Phase III and clearly we decided to continue those.

Unidentified Analyst

So, maybe we can touch on the Nuvigil opportunity especially in light of the clinicals coming available on the bipolar indication, Provigil currently enjoys some use in that area, possibly largely off-label. Is there enough – do you believe within the clinical development of Nuvigil that there will be enough within the label to differentiate at least on the bipolar side, the product from Provigil?

Lesley Russell

I think it will have the advantage of having had a formal and rigorous clinical trial testing which there has been lots of small amounts of work done with Provigil but never any formal registration program done with a view to getting an indication. The other part about Nuvigil versus Provigil is the dosing is different, so there is not an automatic 200 of Provigil equals 200 of Nuvigil, because Nuvigil is single enantiomer, and the longer-lasting half life of the racemic mixture, the doses aren't equipotent in terms of dosing. So, it's not going to be, I never say never, but it’s going to be more difficult to automatically -- you can’t automatically substitute it. It will require extra work that way to substitute one for the other.

Unidentified Analyst

On the tamper-deterrent hydrocodone, certainly with some of the guidelines that have been drafted by the FDA about trying to eliminate the use of acetaminophen, how do you see this product positioning if you look at the number of units for hydrocodone and its use, whether it’s Vicodin or Vicodin generic, a lot of product is used there in pain management. How do you think about this asset and it's positioning?

Lesley Russell

So, this would be a pure hydrocodone product and it would be a long acting one. So, this would be a product that’s administered twice a day. The current hydrocodone products available on the market all have either acetaminophen or ibuprofen, or something linked with them and they’re all immediate release products, so they are used as rescue meds or for short-term acute pain control. This would be for chronic use. It certainly gets away from the potential liver toxicity issues of acetaminophen and certainly the concern around overdosing on these products that contain acetaminophen. And the other aspect of hydrocodone is that it has some tamper deterrent characteristics in it. So not foolproof, we will be the first to say that it's not foolproof, but certainly some tamper deterrent characteristics, that go some way to addressing some of the real public health issues around abuse and misuse of opioids.

Unidentified Analyst

So, this would be considered a Class II product?

Lesley Russell

Schedule II?

Unidentified Analyst

Schedule II?

Lesley Russell

No, there still would be a Schedule II product yet.

Unidentified Analyst

There would be, okay. Moving on to the oncology side, just any thoughts Treanda first line?

Lesley Russell

We filed Treanda first line in combination with Rituxan, so first line use in indolent non-Hodgkin lymphoma. I think we've just hit it in 2012 just as the bells were chiming, I think. [ph] But any day now whether it’s been accepted for filing, hopefully it will be, and then we would expect an action, the PDUFA action date towards the end of October, and I understand it’s a [ph] 10 months review.

Unidentified Analyst

And it was the Rummel study?

Lesley Russell

The Rummel study was part of the application. We obviously did an awful lot of work. I mean I think, we’re now in the first line [ph] and I used to say that the Rummel study had never been done with FDA registration in line. So, there was an awful lot of work that needs to be done to increase the quality of the data in terms of source monitoring the document and everything like that, collecting a lot of scans, CT scans and having them independently read, so we had an independent review of CT scan data. And then making sure that all of the safety reporting was in line with what FDA expects. We knew that it was never going to be perfect, so we had also started our own study, which you may have heard (inaudible). And what we did in the application was submit interim efficacy analysis on around 300 patients, but really showed the same directional trend as we saw with the Rummel, so improvements in complete response rate and a trend, we were beginning to see an improvement in progression free survival. So, we felt very comfortable that the Rummel data was real. And this also alleviated or hopefully alleviates some concerns about having another study that’s been properly monitored or done with all the rigor as expected of a registration study. And hopefully the combination of the pair of them ends up with an [ph] approval.

Unidentified Analyst

Okay. And Omapro?

Lesley Russell

Omapro, we are almost ready to file. The file -- we will submit Omapro or omacetaxine. We think it's unlikely that we will be able to use the Omapro trade name at the end of this, ok, [ph] in the middle of March, hopefully after six months prior to review, so an approval six months later, and that would be for in patients with chronic myelogenous leukemia who have failed to prioritizing kinase inhibitors.

Unidentified Analyst

So, you have certainly some critical mass on the oncology side. I think if you look at Teva, it had some earlier stage products on the oncology side, and on top of that certainly a biosimilar strategy.

Lesley Russell

Yes, the other product that Teva had on the oncology side was a collaboration with OncoGenex. So the Antisense, the Custirsen, so that product that’s come into our portfolio doing very nicely in Phase II studies, more than half way enrolled now. So, a readout on the first line metastatic castration resistant prostate cancer at the end of next year, so hopefully a relatively near-term product in that space. So, that one coupled with the Cephalon oncology pipeline plus some very interesting earlier stage access, but hadn’t really seen prime time, but some potentially interesting targets like PD1 antibody. And I think actually it's really quite a nice oncology portfolio.

Unidentified Analyst

Moving onto the central nervous system of which we touched on that with Nuvigil. Can you help walk us through at least current state on laquinimod; a very important product for multiple sclerosis and just your thoughts on, have you had your meeting with the FDA yet, and...

Lesley Russell

Yes, we had a meeting -- shortly after the acquisition went through, we had a meeting with the agency around laquinimod. I think it's probably no surprise to anyone in this room that FDA did say they thought we would need another study. As you may recall, the ALLEGRO study was very, very positive in terms of both primary and secondary endpoints. And the BRAVO study, which is the second study, just missed on the annualized relapse rate. So, I guess, not surprisingly, FDA said you really would need a third study. So, we soon met with them on another occasion to talk really about what that third study would look like, and they are in the process of putting a special protocol assessment in place. Because we got verbal agreement that they would accept disability as an endpoint, where we believe laquinimod has almost stronger data than the DARR rate [ph] and we just want to make sure that we have all of that in place. The other part of laquinimod is that we will also assess a higher dose. We will keep 0.6 milligram dose in place, but also look at a higher dose 1.2 milligrams to see if we can improve the clinical benefit. So, that program is almost ready to go, we will probably start that in the next two or three months. Obviously, we’d love laquinimod to have been submitted for NDA this year, but that isn’t going to be the case. But I do think we were almost there. I do believe the drug works. I think we just now need to show another [ph] study.

Unidentified Analyst

Same situation in Europe?

Lesley Russell

Europe is a little different. We have met with two European agencies, we met with AFEP and we met with BfArM. I think a somewhat different scenario, they certainly said that potentially it wasn’t completely necessary to have both studies with statistical significant endpoints. They were going to look at the totality of the evidence and so we know a review and a decision has been made about probability of success and whether we should submit or not.

Unidentified Analyst

And on Copaxone just an update on the ongoing work that’s there.

Lesley Russell

We are nearing completion of study on Copaxone, that double the doses, Copaxone is administered in subcutaneous injection every day. We’ve nearly completed and we’re in the final follow-up stages of the study where Copaxone, the dose is doubled to 40 milligrams and you administer it three times a week. Intuitively, you believe the patients will prefer less injections rather than more injection. So, assuming that the data look comparable to the daily administration, it's not a head to head comparison, but if you look at the dataset side by side, and I think if they look in the same ballpark anyway, we’d go ahead and submit the supplemental NDA with a view that a reasonable chunk of the business would move over to a three time’s weekly administration which will have some patent protection around it.

Unidentified Analyst

And just your thoughts on the timing?

Lesley Russell

Timing for that submission is in sort of November timeframe.

Unidentified Analyst

And the low concentration?

Lesley Russell

Low concentration, well, I’d say it's a low volume. So, we’ve actually halved the volume with a view to less injection site pain. That study is getting geared up to start; site initiations are taking place and we hopefully should get going on that very quickly.

Unidentified Analyst

And timing?

Lesley Russell

Timings of that, one is we are assuming about a year to enroll, and at least one year follow-up, so 2.5 year program, that’s sort of ballpark.

Unidentified Analyst

Okay. Other things within the pipeline?

Lesley Russell

Yes, we have obatoclax, which is a pan Bcl-2 inhibitor going -- literally just about to start Phase III studies in extensive stage small cell lung cancer. That was a product that Cephalon acquired from Gemin X, and we had a very straightforward end of Phase II meeting with the agency. So that’s actually gearing up to go. And then the other big Phase III program that we are about to start on is the mesenchymal precursor cells in congestive heart failure. So, in my mind, one of our really exciting cutting edge science program with huge potential along with (inaudible) obviously, but a very exciting program in heart failure.

Unidentified Analyst

And also the Revascor program? That is the Revascor program which you are going forward with?

Lesley Russell

Yes.

Unidentified Analyst

Teva had a long history at least within the respiratory area, just your thoughts on at least the progress that I know you mentioned about the beclomethasone asset?

Lesley Russell

Good progress. I mean I think Teva has a nice proprietary technology in inhalation devices. I think we sort of potentially cover all aspects from a metered dose inhaler to a dry powder inhaler or the new Spiromax breath-actuated inhaler. My problem with this, firstly, there’s way too many acronyms, so I have to learn a new vocabulary. But I think those programs are coming along nicely. The development is going as expected and I think potentially provides nice alternatives to the currently available Advair or Seretide potentially with these formulations. Obviously, we already have QVAR and ProAir in the market. ProAir also has a dose counter that’s been applied on the actuator that should get approved soon, so an upgrade in the device for ProAir. But I think there potentially is big opportunities with all of these molecules and certainly one part of our portfolio that warrant some attention.

Unidentified Analyst

On the generic Advair product that you were working on, just your thoughts around particle size and FDAs buy into the device that you have?

Lesley Russell

No, it's won’t be a generic. So, it would be a new drug application, so looking at fluticasone and salmeterol in the Spiromax device, which will be a dry powder inhaler. So, looking to have comparability with in terms of what Advair is able to do, but with a new hopefully improved device.

Unidentified Analyst

Just your thoughts around business development going forward, certainly a very full pipeline.

Lesley Russell

As my old boss used to say, you can never have too much stuff, and I think that is the case. We do have a very exciting pipeline, and a pretty extensive one now. But I think we also acknowledge that not all of it is going to work. So, you need to have a constant feeding in of assets in sort of earlier stage Phase II development. So, a lot of attention on looking for potential product acquisitions that would come in and sort of complement what we are already doing and keep the pipeline moving through.

Unidentified Analyst

As you assess your pipeline, do you use decision analysis on the pipeline or what is the method for assessing different products using probabilities and…

Lesley Russell

We use probabilities, look at net present value. We obviously have to look at the amount of work that still needs to be done, probability of not only of clinical success but regulatory success, very dynamic marketplace where people are now looking for innovation. So, we have to factor in lots of things to make us believe that hopefully the proof of concept data that we are looking at has a reasonable chance of success. I mean I think that obviously supplementing our current existing franchises is a good thing to do. We are also opportunistic and would not necessarily be able to -- sort of thinking of new therapeutic areas. I think we keep it sort of fairly opportunistic and sort of broad stroke but apply basic principles.

Unidentified Analyst

So, as you see the company therapeutically defined as Teva standalone, it certainly was well defined within neurology, certainly respiratory are key areas. As you look at this, certainly there’s complementarity on the oncology side, certainly pain side. Other complementary areas?

Lesley Russell

I think that earlier stage I think that sort of follow on for laquinimod after multiple sclerosis is to look at our earlier stage program ongoing in Crohn’s disease and in lupus nephritis. I think those potentially takes us into GI and immunology, respectively. I think in the GI space, we also had with Cephalon an option deal on Alba’s larazotide in celiac disease, so you could see that both of those look like they are going to make it that start to form a GI franchise. We also had some lupus programs and also undertake our proteosome inhibitor into lupus nephritis, so you’ll begin to see that stuff come in too. So, I think -- actually it was amazing, I mean we looked at the portfolios, there was -- we were working in remarkably in many of the same areas, and I think each other’s product complemented the others pipeline. So, I think from that point of view it was a very nice fit.

Unidentified Analyst

When might we see the full portfolio laid out in the future for Teva for the combined entity?

Lesley Russell

I know that Kevin is working on a date for that, I believe it's going to be in the early fall, but I think that would be an opportunity to really lay out everything we are doing in a bit more detail and hopefully show you some data too.

Unidentified Analyst

Lesley, thank you very much for your time. And we will move to the breakout, which will be in the Park Avenue Suite. Thank you.

Lesley Russell

Thank you.

Question-and-Answer Session

[No Q&A session for this event]

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