Bethel Finance: Strong growth at Teva as Yanai era ends

www.bethelfinance.com Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) reported strong growth in revenue and profit for the first quarter of 2012, as CEO Shlomo Yanai left the company today. Teva reported net revenue of $5.1 billion, up 25% from $4.1 billion in the corresponding quarter of 2011. Non-GAAP profit was $1.3 billion ($1.47 per share) up 39% from $900 million (1.04 per share) in the first quarter of 2011. Teva president and CEO Shlomo Yanai said, “After five extremely rewarding years as Teva’s CEO, I will be stepping down today. It has been an immense privilege to lead Teva’s outstanding global team through such an exciting period. Together we turned Teva into a highly diversified global pharmaceutical company, with an expanded geographical footprint and additional lines of business. Over the last few months I have had the great pleasure of working closely with my successor, Dr. Jeremy Levin, to ensure a smooth transition. I am very confident that Jeremy will lead Teva to even new heights and I wish him every success.” Commenting on the results Yanai said, “2012 is off to a good start for Teva. We enjoyed a quarter of strong growth for our branded products, in our US generics business, and in the developing markets Teva operates in. All of these served to offset weaker generics sales in Europe, which resulted primarily from the macro-economic conditions in that region." Revenue in the US in the first quarter of 2012 was $2.8 billion (54% of total revenue), up 46% from the first quarter of 2011, as a result of strong revenue of both generic products, including the launch of seven new products not sold in the first quarter of 2011, and branded products, primarily due to the inclusion of Cephalon. Revenue in Europe in the first quarter of 2012 was $1.3 billion (26% of total revenue), down 2% from the first quarter of 2011, but up 3% in local currency terms. Revenue in Europe benefited from the inclusion of Cephalon products and sales synergies following the successful integration of the acquisition, as well as stronger revenue from branded products, primarily Copaxone. Revenue in the rest of the world (including Canada, Israel, certain markets in Eastern Europe, Latin America and Asia) in the first quarter totaled $1 billion (20% of total revenue), up 21% from the first quarter of 2011. In local currency terms, this revenue grew 23%. The growth in revenue resulted primarily from the inclusion of Taiyo and Cephalon, as well as from a strong performance in Eastern Europe, Latin America and Israel. Branded products revenue in the first quarter was $2.1 billion, up 54% compared to $1.4 billion in the first quarter of 2011. The increase in branded products revenue was mainly due to the inclusion of Cephalon sales (mainly Provigil with $291 million in revenue, Treanda with $148 million and Nuvigil with $84 million). Most of Teva’s major branded products also had strong revenue. Global revenue recorded by Teva for multiple sclerosis treatment Copaxone rose 8% to $909 million from $838 million in the first quarter of 2011. Global in-market sales of Copaxone rose 4% to $941 million. Azilect revenue recorded by Teva rose 9% to $72 million, while global in-market revenue rose 7% to $96 million. Teva will distribute a cash dividend for the first quarter of 2012 of NIS 1.00 per share. The record date will be May 21, 2012, and the payment date will be June 1, 2012. Tax will be withheld at a rate of 25%.

Bethel Finance: Moody's cuts Israel's banking outlook to negative

www.bethelfinance.com International ratings agency Moody's has downgraded its outlook for Israel's banking sector from "Stable" to "Negative." According to Moody's the new outlook reflects the expected slowdown in growth, and the challenging environment expected in Israel over the next year to 18 months. The report said, "The banks' capital metrics are tight relative to those of global peers. The weakness in the Israeli corporate-bond market poses credit risks for the quality of assets the banks hold because of the banks' high credit concentrations in domestic corporate conglomerates." The report added that Israel's environment will continue to be challenging with GDP growth expected to slow significantly in 2012 mainly sue to lower exports due to the insoluble crisis in Europe. In addition, the report cited the growing geo-political tensions related to Iran and neighboring countries, which are likely to further lower business confidence and economic activity. Moody's also believes that the risks in the credit sector will continue due to rising returns on corporate bonds challenging the ability to finance corporations.

Bethel Finance: Shekel stays flat against dollar and euro

www.bethelfinance.com The shekel is again flat against the dollar and euro in inter-bank trading today as concerns over the crisis in Europe and the French and Greek election results persist. The shekel-dollar exchange rate rose 0.19% this morning, compared with yesterday's representative rate to NIS 3.809/$, and the shekel-euro exchange rate fell 0.04% to NIS 4.951/€. On global markets the dollar continued to strengthen against the euro to $1.298/€ but fell against the Japanese yen to ¥79.74/$. The shekel has not been adversely affected by the decision of Moody's to lower the outlook of Israel's banks from "Stable" to "Negative." Regarding international currency trading Prico CEO Yossi Freeman said, "The strengthening of the dollar against the euro and investors concerns about the political change in France alongside uncertainty about the future of the Greek government have will continue to contribute to the weakness of the euro and the strengthening of the dollar, the Swiss franc and the Japanese yen. In the short term there is no change in our belief that the dollar has not yet fulfilled it strengthening potential against the shekel. However, the shekel remains restricted in its movement above previous levels. In the medium term, we believe the shekel will again strengthen."

Bethel Finance: Tel Aviv Municipality approves Saturday minibuses

www.bethelfinance.com The Tel Aviv-Jaffa Municipality today approved a plan to operate seven new sherut (private minibus services) routes, which will operate across the city, including on Saturday. The Ministry of Transport will have to approve the plan. Tel Aviv councilwoman Tamar Zandberg (Meretz) proposed the plan. She said today, "I am proud that my proposal has been approved. Functioning public transport every day is the norm worldwide, and we should not accept anything less. The time has come to update the status quo.' Zandberg said that polls taken in 2010 showed broad support for the measure. 62% of Tel Aviv residents and 93% of secular Jews support the operation of public transport on Saturdays. Zandberg said, "40% of Tel Aviv-Jaffa's residents do not own a car, and cannot travel one day in seven. These residents are stuck, grounded, unable to travel beyond walking or cycling distance on their day of rest. Continuous transport is essential for a sustainable city. This is a social act of the first order and we're ready to fight for our rights, up to the High Court of Justice if necessary." The new routes are as follows: Hatayism terminal in east Tel Aviv to the city center; lines from south Tel Aviv to Jaffa; lines from east Tel Aviv via Jaffa to the seashore, the Tel Aviv Port, the Exhibition Grounds, and Kiryat Atidim; lines from northeast Tel Aviv to the city center and Jaffa; and lines from the Central Bus Station via the city center to the northern neighborhoods.

Bethel Finance: Clinical trials weigh on Given Imaging profit

www.bethelfinance.com Given Imaging Ltd. (Nasdaq: GIVN; TASE: GIVN) reported lower profits on higher revenue for the first quarter of 2012, badly missing the analysts' forecasts. The company believes, however, that it will meet its financial goals for the year, once it completes pivotal clinical trials for its Pillcam Colon 2 capsule. Revenue rose 5% to $41.8 million for the first quarter from $40 million for the corresponding quarter. GAAP-based net profit fell to $201,000 (per share) for the first quarter from $677,000 for the corresponding quarter, and non-GAAP net profit fell to $1.8 million ($0.06 per share) from $3 million. The analysts' consensus was earnings per share of $0.13 on $48.9 million revenue. Non-GAAP operating profit fell to $2.1 million for the first quarter from $3.9 million for the corresponding quarter. R&D expenses totaled $2.2 million in the first quarter, mainly for the PillCam Colon 2 pivotal clinical trials in the US and Japan, compared with $800,000 spent on the trial in the corresponding quarter. The clinical trial's goal is to test whether the capsule is more effective than a colonscopy in finding polyps in the colon. First quarter sales in the Americas rose 11% to $26.7 million for the first quarter from $24.1 million for the corresponding quarter, but Europe, Middle East and Africa sales fell 3.5% to $10.8 million from $11.2 million, and Asia-Pacific sales fell 10% to $4.2 million from $4.7 million. The company expects weak sales in Japan to recover in the second quarter. Worldwide PillCam small bowel sales rose 4% to 56,400 capsules in the first quarter from 54,200 capsules in the corresponding quarter. PillCam small bowel sales in the Americas rose 1% to 33,700 capsules, and sales in the EMEA rose 0.6% to 15,100 capsules, sales in the Asia-Pacific rose 32% to 7,700 capsules. Worldwide sales of diagnostics products rose 28% to $12.6 million for the first quarter from $9.8 million for the corresponding quarter. Given Imaging had $105 million in cash and cash equivalents at the end of March. Given Imaging CFO Yuval Yanai told "Globes", "The numbers were expected. The good news is the strong growth in US sales, after falling for several quarters. We also showed strong growth in sales of the diagnostics products that we've acquired over the past three years. Diagnostics products now account for 30% of our revenue." Given Imaging president and CEO Homi Shamir attributed the revenue growth to higher sales in North America, which offset weak sales in southern Europe and Japan. "During the quarter we continued to advance our PillCam Colon 2 pivotal clinical trials in the US and Japan and we are very pleased that the enrollment and capsule ingestion phases of these trials are complete. We are on target to conclude these trials by June," he said. "Our investment in the PillCam Colon 2 trials is reflected in our bottom line results for the quarter." Given Imaging's share price fell 2.5% by mid-afternoon on the TASE to NIS 69.30, after rising 0.1% on Nasdaq yesterday to $18.73, giving a market cap of $575 million.

Bethel Finance: Steinitz calls for fiscal restraint

www.bethelfinance.com "We at the Ministry of Finance are beginning to prepare the budget for 2013, and maybe for 2014, too. This will not be an easy budget," said Minister of Finance Yuval Steinitz at the "Globes" Finance and Capital Markets Conference today, as he took the opportunity to prepare the public for a wave of tax hikes and budget cuts. Steinitz warned, "Economic responsibility and fiscal discipline are critical conditions for continuing our ability to maintain rapid growth and low unemployment. There are worrying signs in the world. There is the risk that the euro will collapse, deteriorating governance in Europe, slower than expected recovery in key global economies, and so on." The Ministry of Finance predicts 3.2% GDP growth this year, and Steinitz said, "We will do what it takes to achieve higher growth." He said that Israel had the fastest growth rate in the West in 2011, due to an increase in foreign investment. Steinitz said, "There is a global battle against mass unemployment, which is affecting tens of millions of people, if not hundreds of millions. We see that despite the crisis, we expanded participation in the labor force, but since the peak of the crisis, we've seen a drop in unemployment. The method of measuring is less important - in any case, Israel is one of the few countries where the unemployment is lower than before the crisis." As for S&P's credit rating, Steinitz said, "Israel is the only country in the West whose credit rating has been raised in the past three years. Why is this important? It is critical because investors in the world feel that Israel is managed responsibly, it didn’t panic during the crisis and inject massive amounts of money." Speaking at length on the budget and the necessary cuts in it, Steinitz said, "To preserve the economy and the public, we must show responsibility and thought. As I have already said, this is going to be a difficult budget, and at the moment we are only processing the preliminary data related to the budget. I am sometimes amazed that the media knows things that the Finance Ministry does not about budget data. The next budget will require restraint to meet Israel's fiscal framework."

Bethel Finance : Pluristem stem cells save girl's life

www.bethelfinance.com Pluristem Therapeutics Ltd. (Nasdaq:PSTI; DAX: PJT: PLTR)has announced that a seven year-old girl suffering from an aplastic bone marrow whose condition was rapidly deteriorating has seen a reversal of her condition. The improvement came due to a significant increase in her red cells, white cells and platelets following the intramuscular injection of Pluristem's PLacental eXpanded (PLX) cells. Aplastic bone marrow is a disease where the patient has no blood-forming hematopoietic stem cells in the bone marrow. Hadassah Medical Center Bone Marrow Transplantation, Cell Therapy and Transplantation Research Center director Prof. Reuven Or said, "With her body rejecting all possible treatment, and with no other options, we finally turned to Pluristem's PLX cells, which literally saved her life. The results of this unique case indicate that PLX cells may be effective in treating other diseases that affect the bone marrow." The patient has been hospitalized at the Hadassah Hebrew University Medical Center in Jerusalem since August 2011. Her aplastic bone marrow had been refractory to treatment. So she underwent allogeneic stem cell transplantation from a matched unrelated donor. The first transplant was unsuccessful and the patient remained with bone marrow failure. The patient underwent a second allogeneic stem cell transplantation from a second donor. The bone marrow function was very poor and the patient suffered from recurrent infections. Two months after the patient's second bone marrow transplant, the child received PLX cells intramuscularly in two doses about one week apart. Some 10 days after the last administration of PLX cells, the patient's hematological parameters began to significantly increase, an effect that has persisted to date. The patient's general clinical status has also improved. Subsequent analysis has indicated that the PLX cells worked by stimulating the recovery of the hematopoietic stem cells contained in the second bone marrow transplant that she had received over two months earlier. Finally, after nine months of hospitalization, the child will be discharged from the hospital. Pluristem chairman and CEO Zami Alberman said, "Pluristem is extremely happy that our PLX cells have helped this little girl. Remarkably, these beneficial effects were seen in the patient after our PLX cells were administered intramuscularly and correlate with the positive effects on the bone marrow when we administered our PLX cells intramuscularly (IM) in animals exposed to toxic levels of radiation. Pluristem now has several data points to indicate that our PLX cells may work for systemic diseases when given locally, away from the target organ, and without a need to give cells intravenously." In February 2012, Pluristem announced the results of animal studies suggesting PLX cells can be potentially effective in treating the life threatening hematopoietic complications associated with Acute Radiation Syndrome (ARS). In these experiments, animals given PLX cells IM up to 24 hours post irradiation demonstrated a recovery of their red cells, white cells, platelets and bone marrow to almost normal levels. It was that announcement, and the significant deterioration of the patient following two bone marrow transplants, that led Prof. Or to contact Pluristem about the possible compassionate use of PLX cells to treat his young patient. Pluristem recently received US FDA clearance to begin a Phase II clinical trial using the company's proprietary PLX-PAD cell product candidate intramuscularly for the treatment of Intermittent Claudication (IC), a subset of peripheral artery disease (PAD).

Bethel Finance: Makhteshim Agan unit recalls defective product

www.bethelfinance.com Makhteshim Agan Industries Ltd. (TASE: MAIN) is asking customers in a European country to recall an insecticide, after defects were found in production. A subsidiary of Makhteshim Agan produced the insecticide in Israel, and sold it in the European country. The subsidiary sells its products all over Europe. The company intends to replace the defective stock. In a notification to the Israel Securities Authority and the Tel Aviv Stock Exchange today, Makhteshim Agan legal counsel Michal Arlozorov stressed that the fault that led to the decision to recall the product from the shelves was a quality problem discovered during the production process of one product. As soon as the problem was discovered, the company instructed its customers in the country concerned to return the batches of the product to be replaced with new ones. Makhteshim Agan said that the defective material did not represent an environmental danger of any kind. The defect was found a few weeks ago in a routine laboratory test in Israel. Similar tests were carried out at the same time in the European country, and these showed that the product had a chemical profile that was not suitable for its original purpose. The company stressed that the cause of the defect had been found in the course of comprehensive checks carried out after the discovery, and that steps had been taken to prevent the problem from recurring and to ensure faultless production. However, Makhteshim Agan's announcement said that the company had been required to provide explanations to the authorities in the country where the defective product was sold about the nature of the problem and its full extent. Makhteshim Agan expressed concern today that, because of the breakdown, the authorities might consider suspending the permits for the sale of the product in that market. In its notification, the company said in this context that initial checks indicated that even if the permits were suspended, the direct effect on its total sales would not be material. Europe is one of Makhteshim Agan's main markets, with 40% of its output being sold there. Eighteen months ago, ChemChina bought control of the company from IDB Holding Corp. Ltd. (TASE:IDBH), headed by Nochi Dankner.