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Teva Pharmaceutical Industries Ltd. (NYSE:TEVA)

Q3 2007 Earnings Call

October 30, 2007 8:30 am ET

Executives

Kevin Mannix - IR

Shlomo Yanai - President and CEO

Dan Suesskind - CFO

George Barrett - Corporate EVP, Global Pharmaceutical Markets and CEO of Teva North America

Bill Marth - President and CEO of Teva USA

Moshe Manor - Group VP of Global Innovative Resources

Analysts

Randall Stanicky - Goldman Sachs

Adam Greene - JP Morgan Chase & Co.

Ricky Goldwasser - UBS

Michael Tong - Wachovia

Elliot Wilbur - CIBC World Markets

Tim Chiang - FTN Midwest Securities

Andrew Forman - WR Hambrecht & Company

Louise Chen - Morgan Stanley

Marc Goodman - Credit Suisse

Richard Silver -Lehman Brothers

Ronny Gal - Bernstein

Ken Cacciatore - Cowen and Company

William Kirby - Nevsky Capital

Robert Uhl - FBR

John Boris - Bear Stearns

Corey Davis - Natexis Bleichroeder

Greg Gilbert – Merrill Lynch

Operator

Greetings, ladies and gentlemen, and welcome to the Teva Pharmaceutical Industries Limited Third Quarter 2007 Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Mr. Kevin Mannix. Thank you, you may begin.

Kevin Mannix

Thank you, Diego. Good morning and good afternoon everyone. Welcome to Teva's third quarter 2007 Earnings Call. We hope you've all had a chance to review our press release, which we issued earlier this morning. A copy of the press release is available on our website at www.tevapharm.com. Additionally, we're conducting a live webcast of this call that is also available on the website.

Today we're joined by: Shlomo Yanai, President and Chief Executive Officer; Dan Suesskind, Chief Financial Officer; George Barrett, Corporate Executive Vice President, Global Pharmaceutical Markets and CEO of Teva North America; Bill Marth, President and CEO of Teva USA; and Moshe Manor, Group Vice President of Global Innovative Resources. Shlomo, George and Dan will begin by providing an overview of our results. We'll then open the call for question-and-answer period.

Before we proceed with the call, I'd like to remind everyone that the Safe Harbor language contained in today's press release also pertains to this conference call and webcast.

I would now like to turn the call to Teva's President and Chief Executive Officer, Shlomo Yanai. Shlomo?

Shlomo Yanai

Thank you, Kevin. Welcome, everyone, and thank you for joining us today as we review Teva's results for the third quarter of 2007. I am really pleased to report that Q3 '07 was a very strong quarter. Despite the challenging comparisons created by the remarkable third quarter of 2006, during which we had exclusivity on three of the largest products in our industry history, we deliver strong results in Q3 '07 driven by increasing sales across our many businesses. I believe that our ability to achieve such growth demonstrate once again the strength and soundness of our balanced business model.

Our net sales in Q3 '07 reached $2.4 billion, representing a 4% increase as a result of Q3 '06. Our operating profit was $651 million with net profit of $525 million and all of these ultimately bring us to diluted EPS of $0.64. Strong contributions from Teva's many businesses and geographies drove our result in Q3.

I would like to mention some of the quarter's highlights, beginning with our US generic business.

Teva USA continues to solidify its position as the market leader. We are committed to building strong and lasting relationships with our customers by finding new ways of bringing value to them and ensuring that they have a constant flow of new products.

We have already launched over 25 products this year and our market share continues to grow, a significant achievement in light of the loss of last year's major exclusivities. In Western Europe, sales grew 22% for the Q3 '06, supported by strong performances in the UK, Italy and France. We also pleased with our performances in Germany, and while Germany is a relatively small business for us, we were glad to learn from AOK, Germany's largest health insurer, that following our participation in their second tender, we have been awarded a significant increase in the number of molecules we can contract to supply in 2008 and 2009. At AOK's request, we will provide additional details only after all the formalities are finalized. These changes are seen in Germany. Western Europe's largest markets are very encouraging to us. And we believe they may signal change in dynamics in the European market more generally. Changes that we believe would be quite favorable for Teva.

In our international business increasing sales were driven largely by the strong performance of our business in Central and Eastern Europe, where sales were up 35% of the Q3 '06 and we saw especially impressive growth in Russia.

This was also an excellent quarter for our innovative business, with record-breaking global in-market sales of Copaxone up 24% over Q3 '06. Copaxone is now the leading therapy for the treatment of multiple sclerosis in the U.S. by far the world's largest MS market.

We are also very enthusiastic about Copaxone's continued success globally and in Q3 '07, we once again captured the largest share of the growth in the global MS market, and as you all know, the latest clinical data continues to reinforce Copaxone's unmatched track record of efficacy and safety.

Q3 '07 was very good quarter for Teva's global respiratory business as the ongoing conversion from CFC- to HFA-based inhalers among other adolescents grow global West European sales up yearly 35% for the results in Q3 '06.

As the process of conversion continues, we expect to see continued growth in this segment. George and Dan will be providing you with more details about our performance in Q3. Before I turn the call over to Dan, I would like to say a few words about our ongoing strategic review.

I have showed review on our last few earnings calls, some of the preliminary findings from our review. Findings that have made us extremely excited about the opportunities that lie ahead for Teva.

The work we have done has confirmed that there is a great potential to continue growing our business, and that Teva unique strengths as the generic market leader combined with our innovative model will enable us to capture and maximize this opportunity.

As you have heard me say before, we are confident that we can continue Teva's long tradition of continuous profitable growth, and given Teva's excellent track record, I am excited about the possibility that we can achieve even more substantial growth in the years to come.

The strategic review is now in its final stages and we have begun the process of implementing its findings in to our work lane for the next years, a process we will complete towards the end of 2007. Once we do, I would like to share more details about our strategic reviews, key conclusions, as well as discuss some additional strategic issues at an Investor Briefing Event to be held in New York City and about which we will be providing you with more information in the coming weeks.

Thank you all very much for your attention, and now I would like to turn the call over to George. George?

George Barrett

Thanks Shlomo. I'll take a few minutes to provide some greater detail on the performance of our business in Q3. Our core generic business has been performing well across all regions. From the demand perspective, we continue to experience a tailwind on a global basis as appears both public and private continue to promote use of generic. In the U.S. generic prescriptions as a whole continue to grow. According to the June IMS National Prescription Audit, generic prescriptions grew at more than 10%, fueled at least in part by Medicare Part D where most program designs strongly encouraged generic utilization.

Today 12 of the 17 national Medicare prescriptions sponsors now offers standalone plans, which cover generic drugs for beneficiaries in the doughnut hole. Generic utilization process system is now over 60%. In our European markets, we continue to see bolder actions by private, public and semi-public payers to push generic.

We believe still that strong penetration of generic products and integrated consideration of incentive, positive or negative, for physicians, pharmacists and consumers. We can point the countries like France, Italy and Spain as markets for the incentive systems are beginning to have a positive impact on the utilization of generic.

Similar actions are taking place around the world in places like Brazil and Japan, where generics are increasingly seeing essential components to health care cost containment efforts. Demand is, of course, only relevant if we have the market physicians take advantage of the opportunity.

With that said, let me turn to the market. Although the signs of the U.S. generic market always seem to attract new players, we continue to absorb an increasing concentration of market share among the market leaders. Well, these may seem paradoxical, the intense concentration of our customer base is driving some consolidation of share as there are few suppliers capable of handling the increasingly large needs of these market markers.

Teva USA now holds approximately 20% of the generic scripts and the top four players account for about 55% share. Considering the fact that our very large exclusive products from last Q3 now competition, we are very pleased with the increase of more than 20 million prescriptions versus the same quarter last year.

With strong results across our full product line, but modest contributions came from our generic version of Oxycontin, Allegra, Lotrel, Wellbutrin XL and Famvir, the later three of which we're not sold in the comparable quarter in 2006.

The rate of price erosion in our base has remained relatively steady over the past 18 months. Our business in Western Europe was very strong in Q3. Shlomo, gave you the growth rate, but I want to emphasize that these figures were driven by strong performances across all of our countries and we are demonstrating our ability to thrive in both the branded and substitution segments of the generic market.

A particular note, France and Italy stood out as top performers. In France our objectiveness at the pharmacy level is paying dividends and in Italy, our business is well positioned to benefit from the current transition, on a physician base to a pharmacy based market. In Hungary, our pharmaceutical unit, which targeted both physician and pharmacists, is well positioned and we appeared well in a tough environment, actually increasing our market shares.

And a few words about Germany, Shlomo, mentioned that we are pleased with indications we're getting regarding our performance in the most AOK tender. As a reminder the AOK is the largest health insurer in Germany with approximately 40% market share. The AOK has signed agreements with several pharmaceutical companies for exclusive rights to sell a group of modules into the AOK. The recent tender included 83 molecules.

Recently several companies filed a complaint that the AOK tender system failed extreme laws. A hearing took place recently to address this issue and we expect the ruling on this complaint on November 16th of this year. Although this legal challenge may slow the process somewhat, our attempt is that the force is out of the barn, on the general direction of German cost containment measures, and we feel optimistic about our prospects in Germany, as we look forward to the coming year.

Our business in Central and Eastern Europe has been excellent with our Russian business being the largest contributor. In Russia additional funds have flowed into the DLO, the state-run pharmaceutical program, helping to expand the market, and at the same time, our sales force and product line expansion has helped to our growth.

Outside of North America and Europe, we would see our greatest contribution from Latin America, where Chile, Peru and Venezuela are standing out. These were high-growth markets, and our local manufacturing capacity has allowed us to expand as the demand growth.

Our pipeline has positioned us to take advantage of the momentum and our market position. In the U.S., we have 150 products that FDA awaiting approval with the brand value of $88 billion. Of these, we believe that 43 are paragraph IV with a first to file position. In Europe, our portfolio of applications includes 147 different compounds awaiting approval in various countries. This represents 308 formulation and 2481 dossiers.

Let me give you an update on our respiratory business. Shlomo mentioned that we continue to experience exciting growth. In the U.K. our respiratory business has benefited from the withdrawal of the CFC-based Becotide by GSK, and the effectiveness of our sales force has contributed to strong performance, both in the U.K. and in France.

In the U.S., we are of course in middle of a more dramatic change related to the CFC, HFA conversion on Albuterol MDI. Our ProAir brand continues to perform well in this context, capturing nearly 60% of the HFA strip. However, the rate of conversion slowed down considerable between May and September, stalling in a 50% range. We had anticipated accelerated conversion as work exited the CFC market, but apparently the last remaining CFC player Armstrong had enough CFC propellant to allow them to capture part of the work CFC market share.

Based on this, it is unlikely that the conversion rate at yearend will reach the 70% range we had anticipated and provided on our second quarter conference call. Having said this the data from the past four weeks show the market up tick with conversion moving above 60% and we are encouraged that the conversion rate is now again moving in the right direction and we have the capacity ready to supply the market.

Finally, our innovative business had a terrific quarter with Copaxone leading the way. Copaxone’s in-market sales increased by 24%, we are seeing excellent growth in both the U.S. and outside of the U.S. This year’s meeting of the European committee for Treatment and Research in Multiple Sclerosis in-product featured finding some several direct comparative studies of high dose interferon beta and capacity.

The results from these recent head-to-head studies, sponsored by our competitors, has confirmed the rapid, significant benefit of the Copaxone therapy. The past misperception has been the high dosing interferon maybe more efficacious than Copaxone, the rigor of scientific evidence has proven otherwise. We believe that these recent comparative data along with Copaxone, superior tolerability and the only long-term data in the MS market would support additional product growth. The R&D support for MS franchise is progressing nicely. Our ongoing study of 40 milligram glatiramer acetate is on schedule for submission to FDA in the back half of 2008. And we have just screened our first patient in the course of two Phase III clinical trials for oral MS candidates laquinimod.

Azilect, our treatment for Parkinson's Disease, continues to show strength, reaching substantial market share from European market and shooting solid numbers from top dental movement disorders specialist in the U.S. We are hopeful that the ongoing studies may result in improvements for our labeling, which should facilitate significant growth for Azilect.

With that update, I’ll turn the call back over to Dan.

Dan Suesskind

Good afternoon, thank you George and a good day to all our friends around the world. We appreciate you taking the time to join us today, as we report on this very strong quarter of which we are very proud. George provided overview for our business activities and now I would like to translate those into numbers. One thing to keep in mind this quarter is that like last quarter, the comparative figures are exceptionally strong.

The comparable quarter of '06 included, as Shlomo and George have already mentioned, the exclusive launches of very major products, including some of the largest launches in the history of the U.S. Generics. By comparison in Q3 of '07 we have just one small launch in the U.S. and exclusivity on one other product.

In Q3 '07 sales of the three products, which dominated the comparable quarter were about $400 million lower. Most of this gap was covered by increased sales of other U.S. Generic products, supplemented by substantially increased sales in some of our other businesses and which finally exceeded the sales level of the comparable quarter. Most of this came from branded products and branded markets with relatively high gross margin but also unlike U.S. Generics with high cost, mainly SG&A.

That is in a nutshell how the two quarters compare. Before I drill down further let me go over the main financial figures of the quarter. Third quarter '07 net sales were up approximately 4% to $2.4 billion compared to Q3 of '06. Q3 '07 sales included positive currencies effect of $78 million and net income was $525 million, EPS was $0.64.

As a matter of fact Q3 results were substantially the same as the immediately preceding quarter Q2 of '07. We generated $332 million cash from operations with a free cash flow of $155 million. Our balance sheet total increased from June 30th by 3% to $22.5 billion with shareholders equity on September 30th, $12.9 billion up, $0.9 billion from June 30th.

With that overview, let's start the line item analysis starting with sales in our various markets. U.S. Generics is not only our largest business, but also the market in which we have had some of our largest product swings. In Q3 of ’07 we didn’t have new products and exclusivity that would fill the huge hole created by the said loss of exclusivities of Q3 of '06. Instead sales of oxycodone, Amlodipine and Bupropion filled most of this gap, reflecting once again the strength of our leadership.

Overall our North American pharmaceutical sales outside the U.S. Generic benefited from increased sales in our respiratory businesses primarily ProAir, Copaxone as well as higher generic sales in Canada.

Pharmaceutical sales in Western Europe including Hungary, which represented a 25% of global pharmaceutical sales in the quarter, grew 22% to $567 million from the comparable quarter of ’06. In Western Europe, Teva’s most significant markets remain the UK and Hungary, each of which accounted for more than a quarter of European sales, followed by the Netherlands and France.

The most significant increase in sales this quarter was again in the UK followed by France, Italy and Hungary in which we also achieved nice course. In AOK tenders in Germany has little effect on the quarter sales, as most of the quarter was covered by a grace period.

International Pharmaceutical sales, by which we mean sales outside of North America and Western Europe, grew 12% reflecting strong performances mainly in Central East Europe.

Copaxone was a major contributor to the quarter's results. Global in-market sales of Copaxone amounted to $441 million. This is a 24% increase over the comparable quarter, 24% inside the U.S. and 25% outside the U.S.

It is worth noting that this includes again significant unit growth. The highest rate of unit growth we have experienced in the U.S. in many quarters, in a market which is generally regarded to be a mature one. It also represents an increase in market share in terms of total prescriptions from 29.9%, in Q3 of '06 to 31.5% in Q3 of '07. For the second quarter in a row, Copaxone is the top selling MS drug in the U.S.

Once again, this quarter, our global respiratory product business, which is included in the North America and European figures above, performed very well, with sales of $179 million. This represents a 34% increase in sales over Q3 of '06.

Turning now to TAPI, Teva's API division, this quarter TAPI sales amounted to $326 million. TAPI sales to third parties amounted to $130 million, down 8% from the comparable quarter. But TAPI's internal strategic sales of raw materials to Teva's pharmaceutical operations went up 9% to $196 million. Volume wise, Teva's TAPI division actually sold more in Q3 '07 than in Q3 '06.

Stepping down one line in the P&L to gross profit, gross profit margin reached 52.8% in the reported quarter, compared to 55.2% in the comparable quarter. Increased sales and margin in our innovative respiratory European businesses partially offset the effect of the exclusivities we had in the comparable quarter in the U.S. In the last three quarters, we exceeded the gross profit margin range of 47% to 50% range we indicated last year as Teva's normative range of gross profit margin going forward.

We are not changing this at this point and expect to readdress it in February after we complete our '08 to '10 working plan. And from gross margin to R&D, net R&D amounted to $141 million compared to $135 million in the comparable quarter. More than half of this amount went to generic R&D.

SG&A which reached $458 million in the quarter represents 19.3% of sales while significantly higher than the level of the third quarter of '06, it is significantly lower in percentage terms compared to the first and second quarter of '07, and down $11 million sequentially. This level of SG&A expenditures principally reflects the higher rate of sales in branded markets and branded or promoted products among our total sales and offsets some of the higher gross margin achieved in these markets.

SG&A also includes profit sharing with some of our partners in North America as part of settlement agreement on a few products, which in Q3 of '07 were 80% higher than in the comparable quarter of '06.

Operating profit this quarter amounted to $651 million and they are high 27.5% of sales. Financial expenses for the quarter were only $3 million compared with $28 million in the comparable quarter. As we have seen the substantial swings in this line items since it includes not only our net interest expense which is fairly predictable but also the results of hedging activities which in this quarter reduced financial expenses, in contrast to Q3 of last year when hedging activities increased financial expenses. These activities once again explicitly explain the difference between our current normative net interest expense of around $15 million a quarter which is gradually decreasing due to increase cash balances and the recorded figure.

As we have explained in the past, the hedging results are partially offset in the other line items.

Our provision for taxes amounted to $125 million or 19.2% of pre-tax income. It is based on our best estimates at this point of time of the expected 18.4% annual tax rate. This is slightly higher than the 18% provided in the first half of '07. In the comparable quarter last year, the provision for taxes was as low as 12.5%, a catch up or adjustment for the first half of '06 when the provision was much higher.

Applying last year's third quarter tax rate to this quarter income would result in $43 million of higher net income in Q3 of this year. All the above resulted in net income of $525 million and net margin of 22.2%.

As we already mentioned, cash from operations amounted this quarter to $332 million. Our free cash flow after net CapEx of $104 million and dividends of $73 million amounted to $155 million. Investments in Israel and the U.S. accounts for most of the increased CapEx in this quarter.

Our cash balances at the end of the quarter stood at $3.5 billion, no sequential change. During the quarter about $200 million of short-term debt was repaid. Inventories were up $151 million from June 30th reflecting both, our efforts to improve customer service and the currency's impact. In terms of days the increase from 168 days to 181 days.

Net receivables, which are net of SR&A, were up $324 million, DSO up from48 to 61. This is relatively high sales in the last month of the third quarter of '07 compared with more evenly spread sales in the second quarter of 07.

As you know we record receivables on a gross basis and recorded the sales reserves and allowances, the so called SR&A under current liabilities. But in order to facilitate a more meaningful comparison with some of our peers, we've recorded receivables net of these reserves, we net out these figures as well.

Total SR&A at September 30th amounted to $1.5 million down $98 million from June 30. About 90% of the total reserves are from the U.S. Late payable were at the same level ended June 30 and remained at 48 days.

Our share based equity at September reached $12.9 billion up $0.9 million from June and our leverage, measured as debt divided by debt plus equity, stood at $0.29, down from $0.31 in June. Our outstanding debt at September 30 amounted to $5.3 billion of which 63% represents long-term debt.

For the convenience of our audience, I would again like to mention three figures relating to our share count so we are all on the same wavelength. For the third quarter of ’07 our average share count for purpose of calculating diluted EPS was 832 million. Our share count for calculating diluted earnings per share, going forward in September 30th is approximately 833 million, and the count for calculating our market cap is approximately 771 million shares. For the purpose of calculating diluted EPS and add back of $6 million would be taken into account.

On October 29th the board approved a third quarterly dividend amounting to a total approximately $77 million, on a per share basis our dividend was maintained in Israel Shekel terms at 0.4 Shekel, which translates at the current rate of exchange to $0.10.

Before I close, I would like to say just a few words about my plan to retire from TEVA in the middle of next year. For the last 31 years I have had the pleasure and privilege of serving as Chief Financial Officer of the company, which I view as one of the finest in Israel and beyond Israel.

When I joint TEVA in 76, I never dreamed that our company would become a world leader and never imagined that I would the opportunity to help, guide it to such tremendous growth and prosperity. My years in TEVA have being extraordinary rewarding and existing for me. My wonderful colleagues has made it easy for me to approach my work at TEVA with passion and quite and looking back now at my carrier and the results I can say this was the right formula for me and I am very proud of that.

Over the next six to eight months I intent to work closely with our CFO designate Eyal Desheh and the team, to ensure, that he receives all the support he needs in order to enjoy a seamless transition into his new role. On a personal note, I have known, Eyal, both professionally and socially for almost 20 years, and I am certain that he will be the perfect addition to Teva. His return to the company, following a diverse career, including his current position as CFO of Check Point, no doubt one of Israel's premier companies, will only strengthen what I believe is the very best team of men and women in the industry. I have specially enjoyed my interaction with you the investment community.

Our professional history together is a long one, has been a long one, and I look forward to keeping in touch with you or many of you as long after my days at Teva come to an end which is as I said quite out next year. But today, is not a day for me to bid you farewell. We will have plenty of time for that in the coming months.

Thank you very much. And I will now pass the call back to, Shlomo.

Shlomo Yanai

Thank you, Dan. Actually today I would like to thank you for much more than the result of last quarter. I would like to thank you on behalf of the Teva's family for the 100 plus quarter that you have reported Teva's results, for your enormous and invaluable contributions to Teva's growth and success.

And, on a more personal note for being in the show-time we have known one another, a wonderful colleague and trusted advisor. I wish you every happiness and success in the next phase of your life. But that said done I feel that after 32 years you and Teva are so strongly linked that you won't ever really be able to get too far away, will always remain a Teva citizen.

Dan Suesskind

Thank you, Shlomo.

Shlomo Yanai

I would also like today to welcome Dan's successor as CFO, Eyal Desheh as many of you know Eyal has an outstanding track record as the CFO of Check Point Software Technologies, but Eyal is also veteran of Teva, having worked closely with Dan, as Teva's Deputy CFO and we are very pleased that he will be rejoining us as CFO.

I wish Eyal great success in his new role, and now we will be happy to take your questions.

Question-and-Answer session

Operator

(Operator Instructions). Our first question comes from Randall Stanicky with Goldman Sachs. Please state your question.

Randall Stanicky - Goldman Sachs

Great, thanks very much for the question. Just thinking about full year, I won't ask the question of full year guidance per se, but Dan you made that comment on the second quarterly conference call that 3Q and 4Q would look pretty similar to each other. Does that thought or comment still hold, do you think about until next quarter?

Dan Suesskind

Actually by giving the guidance or adjusting the guidance last quarter to the upper range of what we have said before, it basically implies what you say.

Randall Stanicky - Goldman Sachs

It implies what I say?

Dan Suesskind

Yes.

Randall Stanicky - Goldman Sachs

Okay, maybe just one real quick follow up. [That it] builds around what we checked out. Can you give us an update on where that stands, I think about some of the recent press reports regarding that product?

Shlomo Yanai

Sorry, we couldn’t hear, could you repeat please?

Randall Stanicky - Goldman Sachs

On Wellbutrin XL, any update on market dynamics regarding that product?

Shlomo Yanai

George, are you taking it.

George Barrett

Yes, we had a pretty good transact over there. But, yeah, Randall obviously we are well aware of their reports. I can offer just a couple of comments, just as a way of history. This product, Bupropion XL Wellbutrin as we call it, is an impact product, which has a sales and licensing agreement. FDA reviewed this product and approved it last year, and based on bioequivalence determined that the product was AB rated to Wellbutrin XL. So that's number one. Number two, we have a well established validated adverse supporting system and while we take every adverse support seriously, our level of complaints for this product is totally within the norm, it’s not low. And I should mention here that we’ve sold over 5 million prescriptions, which have been filled with this product since its launch.

Having said all that, since these reports broke in recent weeks, we’ve been working closely with FDA to make sure that all the relevant data is shared between us, most importantly and our priority is and will remain the safety and efficacy of our drugs. So, I think that’s what I can say at this point.

Operator

Our next question comes from Adam Greene with JP Morgan Chase & Co. Please state your question.

Adam Greene - JP Morgan Chase & Co.

Hi, good morning. I think it's more of a joy than a big picture question. How do you think the recent FDA amendment act will impact approval time lines, if at all, if the petition hurdle has been removed or lowered I guess I should say. And then second, we are hearing some brand companies are rethinking to offer a generic strategy in light of best price. But that the transfer price might actually be priced higher to the authorized generic, which might translate to better pricing exclusivity. Are you seeing any evidence of this in your discussions with one of the brand companies or in the marketplace?

George Barrett

Adam?

Adam Greene - JP Morgan Chase & Co.

Yes.

George Barrett

Yeah, this is George. I am going to let Bill get the first part of your question. Maybe I will touch back with you on the second part.

Adam Greene - JP Morgan Chase & Co.

Thanks.

Bill Marth

Yes. Adam on the FDA portion, we don’t really see anything unique coming out of that or anything dramatic at this point in time. We think there is a lot more work that needs to be done. So although it's a step in the right direction, we are going to look for some more work.

Adam Greene - JP Morgan Chase & Co.

Okay.

George Barrett

And as it relates to a different strategy, related to authorized generics in connection with best pricing provisions. Adam I am not sure that we are seeing, at this point, anything different here. We understand the speculation, but I think we would have a hard time telling you that we've seen anything that signals a change in behavior.

Adam Greene - JP Morgan Chase & Co.

Great thanks.

George Barrett

Okay.

Operator

Our next question comes from Ricky Goldwasser with UBS. Please state your question.

Ricky Goldwasser - UBS

Yes. Good morning. In the prepared comments, you highlighted that the price erosion has been steady over the last 18 months, in the last quarter, as the pricing activity is benefiting from products such as OxyContin and Lotrel, some of the products that were not in the portfolio same period last year. Were you also seeing similar trends in the exclusivity of those products? Thank you.

George Barrett

Ricky, this is a calculation that we do that tries to eliminate the big moving parts. So, for example, in our calculation the oxy has pulled out in that analysis. What we are trying to look at are those products that we refer to as the base; those product that have been our product line in our essentially, more fully competitive profile.

Ricky Goldwasser - UBS

Thank you.

George Barrett

You’re welcome.

Operator

Our next question comes from Michael Tong with Wachovia. Please state the question.

Michael Tong - Wachovia

Hi. Thanks. May be one for Dan, just looking at the gross margin line, could you quantify or may be give us some qualitative aspect as to where the strength in the gross margin is coming from, is it more from the fact that API was a little bit lower, or you have a higher proportion of proprietary products, or it’s a matter of geographic mix? Just trying to get some color there?

Dan Suesskind

I think I tried to mention, in prepared notes, that the substitute for the loss of sales or the absence of sales, actually in the U.S., which was supplemented by sales from areas, either from areas or from products which are branded, which bring them two things, within two things. First of all, higher gross profit margin and also higher sales, also high SG&A’s which means that they contribute relatively more to the gross profit and they contribute to the operating profit.

Michael Tong - Wachovia

Thank you.

Operator

Our next question comes from Elliot Wilbur with CIBC World Markets. Please state your question.

Elliot Wilbur - CIBC World Markets

Thank you. Good morning or good afternoon. I want to ask a line question around Copaxone sales trends in the quarter. In the first quarter the question is, that specifically in U.S., sales were down modestly on a sequential basis and we saw that same pattern in the third quarter of last year. Historically, it seems as if the first quarter was ’08 seasonally softer, seasonally weak period I am wondering if there is, has been some change in that pattern, and if so why that may be, or whether it is just more coincidental than not?

And then, secondly, Biogen mentioned that TYSABRI is beginning to have more of a negative impact on Avonex and it's not obvious in our ex-trends in the quarter, but I am wondering at the margin, are you seeing any signs that TYSABRI is beginning to have an impact on the Copaxone franchise, whether it'd be incremental share of new patient starts or incremental share of switches? Thank you.

Moshe Manor

Hi, it's Moshe. I think if you look at the number in the U.S., as you mentioned, there is some kind of shift between the Q2 and Q3, but overall you can see the growth of Copaxone in the U.S., which is more than almost double that of the growth of the total market. And as far as TYSABRI goes, actually if you look at TYSABRI in value that capture of 5% market share, and if you look at the size of the market share of all the companies, all products in Copaxone, you can realize that Copaxone was the only product that actually increased market share year-over-year, as the other products lost market share. This means that, more so, the prescription for TYSABRI went on to expand on the other products and Copaxone really benefited from the continued growth.

Elliot Wilbur - CIBC World Markets

Thank you.

Operator

Our next question comes from Tim Chiang with FTN Midwest Securities. Please state your question.

Tim Chiang - FTN Midwest Securities

Hi. Thanks. Dan, I had a question in terms of Copaxone. How does the better-than-effective growth of this product affect the planned buy-back next year from Sanofi? I am a little curious about what the mechanics of this buy-back are? Is it still a certainty that you are going to buy this back, given how fast this product is has actually grown this year?

Dan Suesskind

As we said in the last few quarters, we have an agreement according to which we are going to execute this transfer. As long as we don't improve this agreement or change it and so far it is valid, it is not connected with better or worse sales of Copaxone in any given territory. And so far what we said is valid and a confirmation will be made.

Tim Chiang - FTN Midwest Securities

Okay, great, thanks.

Dan Suesskind

I’m not sure if I was clear in one of my answers before regarding the expected performance of Q4. We have done so far $1.69 for the nine months. We have outstanding, the guidance we gave last quarter, which is the upper end of the range we said before and these two figures are valid.

Operator

Thank you. Our next question comes from Andrew Forman with WR Hambrecht & Company. Please state your question.

Andrew Forman - WR Hambrecht & Company

Dan, I can't imagine the conference call without you on it, congratulations on a distinguished career and I’m sure you'll stick with the Teva family.

Dan Suesskind

Thank you. Well, we've got a special conference, no conference call for that.

Andrew Forman - WR Hambrecht & Company

We'll host it. Post-Ivax a strategic question for you Dan, this is now really two years since the acquisition and there were some highlighted comments today about international markets. What can you say has happened in some of the markets where Ivax had a position in Latin America, and then in Russia, as you mentioned today that has changed in terms of the growth dynamic? I think specifically what are the gross margin and the operating margins in some of these emerging markets, if you were to break them out? I guess the follow-up will be for cost of international markets for George. Can you give us a little more color on the German generic market, which I think you indicated wasn't really a contributor in Q3, but given this big opportunity could be in 2008? Thanks.

Dan Suesskind

George, you want to start or you want me to start, George?

George Barrett

Sure that's fine Dan. But let me take the second part first and I'll give a little introduction maybe on Dan's comments. Andrew, as it relates to Germany, as you know we are coming from a relatively small position in the German market. Having said that, there were several things happening at the same time. Number one, we are building our portfolio, and at the same time we have this transformation occurring in a market, which has been a market very much dominated by this branded generic segment.

The AOK distribute, in short, has started to lead the way in terms of moving towards a more tendered system, which allows us to take advantage of the breadth of our portfolio, the efficiency of our operations and participation in a market in which we have been relatively small.

And as I said, the tender that was issued and awarded recently has been challenged through some legal proceedings, but I think it's inescapable that this correction is going to occur. So whether or not there are some delays in the process because of these legal proceedings, as I said, the horse is out of the barn. I think the movement towards cost containment in Germany is clear and I think for us that bode very well in terms of enhancing our position in Germany in a meaningful way.

Just to lead into Dan's comments, I know you have some specific questions about gross margin, but it relates to our business of the Ivax acquisition. We're really thrilled about many of the parts that we picked up through Ivax. By the summer the respiratory business which we acquired which was through small business at this point, we've been able to grow substantially. We've been able to build infrastructure operationally around it to provide opportunities to take advantage of that market and of the markets both in U.S. and out side of the U.S.

Our businesses in Latin America are doing extremely well and Ivax essentially facilitated our entry into those markets. And those markets are high growth markets with growing middle classes capable of purchasing pharmaceutical products and we grew our position there. The same is true in Central Eastern Europe.

So I think on a broad strategic sense, those businesses that we acquired through the Ivax acquisition are really turning into very solid platforms for us and with that I will turn it to Dan.

Dan Suesskind

Hi, I don’t think I have much to add to what George said. Obviously these markets, the branded markets mainly, have a higher gross margin than our cope with average. The impact on the operating margin is always met by far lower because they have substantially more expenses than our average businesses in TEVA.

But on top of what George had said I think what they are doing within TEVA is an expansion of our business model, of our balance business model, and they make it even more balanced compared to where we have been before we bought Ivax.

I hope, between the two of us, we answered the question. We could hardly hear it because the line was very bad.

Andrew Forman - WR Hambrecht & Company

Just a follow up George on Germany, what's the size of the generic market and if by chance you got 10% share of that, what would that represent? Can you essentially go in from nothing and given what you've done in the UK, Italy, and France. I mean what’s the realistic market share that TEVA could enjoy over the next couple of years.

George Barrett

Andrew, I don’t think, I would predict market shares. It's probably something we wouldn’t do in any part of our business. I’ll only offer the following. We’re going from a very de minimus position to what I think will be meaningful, there is no reason that we can’t begin to achieve the kinds of penetration that we’ve had in the other European markets, and ultimately our hope is to bring them all into meaningful market leadership positions. Obviously in a place like Germany, this will take time, but our ambitions are significant here.

Andrew Forman - WR Hambrecht & Company

Isn't this the biggest market in Europe?

George Barrett

In Europe.

Andrew Forman - WR Hambrecht & Company

Thanks.

Operator

Our next question comes from the Louise Chen with Morgan Stanley. Please state your question.

Louise Chen - Morgan Stanley

Hi, just curious as to how we think about SG&A leverage for the fourth quarter and then when do you expect to access the oxycodone market. Thanks.

Bill Marth

Lousie, this is Bill Marth. With respect to oxycodone I think…

Shlomo Yanai

I don’t think we are going to give specific guidance on SG&A for the quarter.

Bill Marth

Okay. Lousie, with respect to the oxycodone, I think we have stated previously that this product actually details could believe into 2008. However is really then our intention as a practical matter to the end sales of this at the end of this year. So that's our intention at this point in time, though we have the options to go to someone a little bit later.

Operator

Our next question comes from Marc Goodman with Credit Suisse. Please state your question.

Marc Goodman - Credit Suisse

Yes. So as the comments in the prepared remarks about $400 million lower versus the three key products last year. I just I want to make sure I got that the right. So what you may in a three key product last year there was $400 million less in sales in this quarter and can you talk about those products that you made it up buy. And George, maybe you can just give us a sense of what's happening with Lotrel, oxycodone just quarter-to quarter. I know you don’t like to talk about this much, but just directionally was last quarter the big Lotrel quarter and this quarter was a bigger oxycodone. Just kind of give us a sense of what's going on there.

And then in the past you've given us a little more flavor on Latin American sales. Can you talk about that quarter-to-quarter and maybe actually give us actual sales for that area?

Shlomo Yanai

George let me first repeat what I have said, what I have I said is that, the three exclusive products of Q3 of '06, so it's close to $400 million less in the reported quarter. And from here, George can take it.

George Barrett

Yeah Marc, we have a lot of moving products as you know, so yes we had to absorb some reductions associated to lost exclusivities. A couple of key products were important to us oxycodone was one of them against when you mentioned Lotrel and Famvir and actually Allegra which has been on our line for some time has done well as well as (inaudible).

So there are number of products that I think contributed to our ability to offset. We're probably not going to give you predictive going forward statements about all this products and we don't do that. But maybe Bill could just give a little more color on how we're doing in some of those key products like Lotrel and Famvir, actually what the dynamics looks like.

Bill Marth

Yeah Marc, I would just remind the third quarter of last year had the launch of sertraline in it, so that was a big number. That now withstanding we need to think about the fact that Lotrel is still a very strong product. We have over a 70 share in that product and a very similar share Wellbutrin, and we have some strong share of course with Famciclovir, we launched that product, and there is no authorized generic at this point in time.

So I think we've done pretty good so far, and when you look at the growth then pretty broad based across our portfolio.

Marc Goodman - Credit Suisse

I guess I'm just wondering, like Lotrel, was last quarter Lotrel much bigger than this quarter and Oxy was bigger this quarter than last quarter can you just give us a relative sense?

Bill Marth

Marc, I don't think we can provide quarter-to-quarter breakdown of each of these products.

Marc Goodman - Credit Suisse

In Latin America?

Bill Marth

Well, I think again Latin America is going really well. I think, I mentioned in particular that Argentina, Peru, Venezuela, Chile have been, I would say it was a standout. Mexico was a market that we had an existing business and although in a sense it's more challenging and now we think about two integrations, obviously we have acquired a Mexican business through the acquisition of Sicor and then another business through Ivax.

And so essentially we're going through multiple series of integrations, which is a much more challenging endeavor. But in general I would say that Latin American business is serving us really well. We've got terrific management down there, we've got local production, strong dynamics in the environment and those are the markets for us.

Operator

Our next question comes from Richard Silver with Lehman Brothers. Please state your question.

Richard Silver -Lehman Brothers

First Dan congratulations. Sure we can state a more on a bridged version later, but all the best to you. Couple of questions, back on the gross margins, can you help us out a little bit more on that as far as the brand contribution and whether. I didn't quite understand the answer to the question as far as how we look at gross margin and kind of the sustainable impact from the brand business versus maybe quarterly claims. In the past we've seen obviously on these exclusivities a major impact on the gross margin, but I think what you are suggesting is that the brand portion of the business is now having a more significant impact on trying to get a sense of the sustainability of that? And the second question is on EPS guidance, on if you can just start to have to repeat this but, my understanding from your last clarification was that the upper end of the guidance range, which was 220 to 230 still stands even with the company having generated $1.69 in EPS for the first nine months and I just want to make sure Dan I heard that correctly?

Dan Suesskind

First of all you heard it correctly that's one. Secondly, regarding the sustainability, so far it looks and we don’t have yet, as I said our new work lay, which covers '08 to '10, but I think it is sustainable. The reason we have talked about it, we want to give you a better color of what we are substituting what, in terms of both sales and in-market and that’s the reason why leverage we couldn’t get. It is not something which is unique to the quarter and as such I see it as a sustainable mix.

Richard Silver -Lehman Brothers

And then just follow up on the guidance range, given that this quarter was obviously strong and I know you didn’t provide quarterly guidance, but you -- as I look at the numbers, what would be the reason for the fourth quarter being perhaps weaker than the third quarter, which is what implies, particularly given that the fourth quarter is typically a seasonally strong quarter for the company?

Dan Suesskind

It is mainly, we said last quarter that we are giving sort of guidance for the next six months without given a breakdown, between the two quarters. We didn’t know what it will be. Now we know that a little better regarding the shift from one quarter to another either way and it still remains as in the same, its mix as in the same guidance.

Richard Silver -Lehman Brothers

Okay. Thank you.

Operator

Our next question from with Ronny Gal with Bernstein. Please state your question.

Ronny Gal - Bernstein

Thank you for taking my question. Couple of questions first rest of world sales. If we net off the effect of the dollar, how much do we really seen in terms of growth and rest of the world sales over the last two or three quarters? It just looks like net effect of the dollar base in terms of markets we are roughly in line or maybe just a slight increase? And similarly on TAPI if we kind of draw a line for the last three quarters, we have seen that a little bit of transforming here about weakening business. How should we think about TAPI going forward? Is this just a seasonal issue or any new generics products coming through? How should we think about the external sales of TAPI to the business? And thank you?

Shlomo Yanai

You asked me the second question, though we asked to ask only one question a participant. Regarding API, it is obviously like in the generic business it is tied closely to launches and developments of products in the final dosage form. And obviously the API is preventing on that to some extent, because their supply is 2000. In addition to that, as we have said in the past, other companies backward integration is to some extent had an impact on our sales. But we have to remember that for us in most of the actually the internal sales are more important others. They are our strategic sales which support our pharmaceutical products and is certainly important for us in spite of the fact that at the end of the day in the booking unit (inaudible) it doesn’t matter. They are very strategic sales for us.

Now we have to repeat the first question because the line was so bad that I couldn’t understand what you’ve asked? Sorry.

Operator

(Operator Instructions)

Shlomo Yanai

So let’s move to the next question. I am dam sure we'll pick up this question later.

Operator

Our next question comes from Ken Cacciatore with Cowen and Company. Please state your question.

Ken Cacciatore - Cowen and Company

First of all congratulations Dan, and then a question for you. You gave three year work plan about nine months to go and now were nine months later. I don’t means it's preempted but sometimes as you go nine months forward you pick up more visibility and sometimes less and I believe you said easily exceed 250 in '08 and easily exceed $3 in 2009.

And not looking for exact numbers, but would you feel that you have picked up a better visibility? Or worst as we've progress through nine months and then for George, can you just give us a sense if there is any discussion going on Protonix, or can you give us any characterization of how that process is underway right now?

Dan Suesskind

First, it’s Dan. By definition you get better visibility as further you go out, although we are not referring today to any of the numbers as we did refer to them in the last quarter. We will address them as customary with Teva when we come out with our annual figures in February of next year.

George Barrett

Yeah. And as related to your second question I can offer only a few comments. One, we do in fact a final approval generic Protonix number one, number two we have reviewed the findings from the core proceedings and beyond that I think it's not in my best interest at this point to provide any more detail on it.

Operator

Thank you. Our next question comes from William Kirby with Nevsky. Please state your question.

William Kirby - Nevsky Capital

Hello. My question is on the Q3 tax rate. You mentioned that earlier, but what should we be expecting in the future? Will it be more like what we saw in Q3? Or will we see a return to the 18%?

Dan Suesskind

If you refer to the future as next quarter, then the tax rate that we have put in now is the best estimate of how the year should look like, which means that we are at 18.4% for the year. If you are asking…

William Kirby - Nevsky Capital

I meant in future years, yeah.

Dan Suesskind

Okay. If you roll out further, I would say that for modeling purposes, this is probably a reasonable rate going forward, although as we always say, it is very sensitive to the origin of where we make the profit, because we have a very diverse range of global tax rates at Teva. Even having one quarter, one launches from the U.S., for this in the U.S. or another quarter a similar product from this one, will quite be a meaningful impact on our tax rate. For modeling, I would say this is probably your best bet, although it can vary around this number.

William Kirby - Nevsky Capital

Okay. Thank you.

Operator

Our next comes from Robert Uhl with FBR. Please state your question. Please state your question.

Robert Uhl - FBR

Thank you. I am just wondering if you could give us an update on your biosimilar strategy. For example do any of those 147 filings in Europe include some generic version of protein products, if yes how many, when do you think they might be coming to market?

George Barrett

I'll just give you a quick sense of clarity that relates to the filings. We have made a biosimilar filing, I cannot disclose how many. We are certainly like most companies store it in the informative stages building biogenerics business and capability. Robert, you probably heard us say this before, we feel that the tools involved in building this are going to be many of the tools that we have the ability to the technologies, what type of technologies, manufacturing operations ability to un-finish the ability to do clinical trials, if necessary, the ability to influence physicians, pharmacist and payers alike. So I think at this point we feel strongly committed to our biogenerics strategy and we’ve said also couple of times that this is the latest years in that business or strategy, but that we really believe that the opportunities as we come into next decade for companies that are able to participate will be meaningful and perhaps we'll talk a little bit more about this when we get a chance to meet in our Investor Day, but this is an area in which we are very excited, about which we are very excited.

Robert Uhl - FBR

Thank you.

Operator

Our next question comes from John Boris, with Bear Stearns. Please state your question.

John Boris - Bear Stearns

Sure, thanks for taking the question. Just like to go back to Wellbutrin XL, George, just on your comments. Can you just discuss any steps that the FDA they have to take surrounding the product going forward and can you characterize any risk that Wellbutrin XL might have on your earnings for the remainder of this year and going into '08? Thanks.

George Barrett

Yeah, John, it would be, I do look into speculate on any actions that could be taken. We can say is that our scientific data indicates that our product is by [2012] Wellbutrin XL. So anything beyond that honestly would be pure speculation. I don't think it will be helpful or productive. The tests that we provided are used as a standard, which is testing in human that sort of the key ingredient here. So obviously we will keep wide open dialog with FDA on this. In the overall risk of things, this is in the big picture of Teva, not a enormous product, but as I said, let us do we need to do in terms of sharing any information with FDA, if they want information and we can provide information and beyond that there is no point of speculating.

John Boris - Bear Stearns

Thanks.

Shlomo Yanai

We are giving some more time today to the conference call since we don't have a lunch tomorrow in New York, but we limit it to another three questions. Please limit one question per participant. Try to be short in the question and we will try to be short on the answer.

Operator

Our next question comes from Corey Davis with Natexis Bleichroeder. Please state your question.

Corey Davis - Natexis Bleichroeder

Yeah. Thanks very much. Hopefully this will be short. The question is regards to your strategy when it comes to the launching commodity generic launches, when you know there is going to be tamed right off the back. And may be I haven't looked at enough of these, but I seem to know there is big economy of market share where on certain products your rate is top just like your strategy, has been in others you know where and I'd love if the philosophy will be one top shop for customers, you have to offer everything even if it’s a last leaders are something changed or are these just kind of wild areas?

George Barrett

Yeah. Corey, George. Our strategy is very much about providing a broad line of product for our customer. So it's more of a one off issue. I think if you look at the products, it's more about timing, I think generally speaking when we are in at the earlier stages whether or not that product has three competitors or 12 we do very, very well. Naturally when you are coming in to product late then that, as I told you before share moves sort of slowly in this industry. So when you come in late share tends to come to you a more gradually. Having said that we are often very patient and if we don't have the share that we need in the first weeks of launch we are not discouraged, very often we are vertically integrated and deeply committed to the long-term proposition of staying in there in the market. And our strategy is very much consistent with what you'd expect from us.

Corey Davis - Natexis Bleichroeder

So I guess the other two I was thinking of Lamasil and Norvasc were you are very low you would say that was just due to being late in the constant strategy of not wanting to be there?

Bill Marth

Yeah Corey this is Bill Marth yeah, I definitely had a lot to do with money and priority at that point of time. So in the long run I think you will see those shares even out.

Corey Davis - Natexis Bleichroeder

Right, thanks very much.

Bill Marth

You're welcome.

Operator

Our next question comes from Greg Gilbert with Merrill Lynch. Please state your question.

Greg Gilbert – Merrill Lynch

Thank you. Any comments on the potential impact of the AMP rule, whether it goes through or not? And also have you seen any impact or if you expect to see any impact that we could see regarding further consolidation of the bio base in the U.S? Thanks.

George Barrett

Why don’t I let Bill start on this.

Bill Marth

Yeah Greg, on AMP, as you know in October we began the process. And we think right now that there's really no change to our thoughts on AMP, which are much, much like we've got that the integration of AST was. That said there's still a number of opportunities for this -- for the multiplication to change, the market growth is still strong as well as avoidable is moving up. So, there is still couple of opportunities for this to change yet. But we haven’t changed our opinion on AMP at this point of time.

George Barrett

And relative to the increasing size of our customers, I’ll just quick introduction, Bill, we are looking the timing here. Greg, you know that we’ve said for quite some time that our market makers in the U.S., are large and understandably demanding. That creates certain challenge to growth that also creates tremendous opportunity for us. So we have tended to benefit from the increasing strength of our customers. We have the resources, the product line, the services, the tool, the integration of IT systems, capacity in order to crape value for those big market markers. So it's sort of a story of two countervailing forces, one being the challenges of dealing with bigger customer who certainly has a right to be demanding and the other are I think unique ability to provide value to those market markers. So I don’t think I’d say there is any enormous change that we’ve seen in recent months related to this, but that’s what the generally picture is from that angle.

Bill Marth

No the only comment, I would say Greg that that’s very much we expect these kinds of moves. We expect demand continue and that’s the way we positioned our business and built our resources to handle that.

Greg Gilbert – Merrill Lynch

Fair enough. Thank you.

Bill Marth

You’re welcome.

Operator

Our next question comes from Elliot Wilbur with CIBC World Markets. Please state your question.

Elliot Wilbur - CIBC World Markets

Thanks for taking the follow-up. I guess since we are denied the opportunity of enjoying lunch with you tomorrow, I’m wondering if George, Dan or Bill if you can maybe just refine it with any updated data points on a couple of your program for opportunities that maybe haven’t been so well vetted lately specifically Prevacid and Concerta. And then follow-up on Protonix you guys have made it pretty clearly that you believe that this is a shared exclusivity situation and I’m wondering, how steadfast out you think that indication from FDA is. And are we talking about a two player generic market or is there a possibility here that maybe a shared exclusivity situation also including Santos? Thanks.

George Barrett

Why don't I take the second part first, and then I'll let Bill talk more generally. Again I think at this point we believe it's reasonable to assume there are two first filers on Pantoprazole beyond that, Elliot again, I'm going to unfortunately restate what I said earlier there is very little I can say other than that. Another part of the question I'm just going to let Bill touch on it.

Bill Marth

Yeah Elliott, on Prevacid that trial actually Pantoprazole started yesterday, similar arguments to a certain degree within as with Pantoprazole there was inequitable conduct and structural obviousness. Those are significant challenges but we will hope for the best.

Elliot Wilbur - CIBC World Markets

Any update on conservative just you could revise the bill is there any update?

Bill Marth

No update.

Elliot Wilbur - CIBC World Markets

Okay.

Operator

Thank you. There are no further questions at this time. I would like to turn the floor back over to, Shlomo Yanai for closing comments.

Shlomo Yanai

Thank you. I would like to follow-on the question regarding Ivax and I would like to underline actually to emphasize the importance or the strategic importance that I see as maybe one of the most important advantages that we acquire by the Ivax acquisition. And I'm pointing out that to what George said, which is not only the platforms that we gain in Latin America and Central East Europe, but for creating a situation that as a company that's looking forward for growth, we're right now having a good positioning so to speak and actually even know how about many different business models, which reflect what the situation in those parts of the world.

Having said that, if you bare in mind these countries are the countries that are presenting the highest growth space in the coming future. Is come altogether that we as the largest generic company in the world may leverage part of our know how from one market to other market and by understanding better than any other company, other generic company the situation in those places in the world, we can have a substantial advantage when we have the market share and market leadership as part of our understanding of what is its main growth in coming future.

We will be more than happy to elaborate more on this issue in our investors briefing as I said before, so I will stop here. And I would like to thank all of you for joining us today. I look very much forward to seeing at our investors briefing event, and thank you all. Thank you.

Kevin Mannix

Thank you, Shlomo. On behalf of behalf of Teva team, I'd like to thank everyone for joining us on this quarterly conference call. As always if you have additional questions, we're happy to take them offline.

Thank you again, Dave could you please provide the callback information?

Operator

Thank you. To access the replay of this conference, please dial 877-660-6853. Once again for a digital replay toll free number is 877-660-6853. For international dialers, please dial 201-612-7415. Once again, international dialers 201-612-7415. The account number will be 3055 and conference ID number 258957. Once again account number is 3055 and conference ID number is 258957. This concludes today's conference. All parties may disconnect now.

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Source: Teva Pharmaceutical Industries Q3 2007 Earnings Call Transcript
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