Ladies and gentlemen, thank you for standing by. Welcome to Teva Pharmaceutical Q1 Earnings Conference Call. My name is Amie and I will be the operator for today’s call. At this time all participants are in a listen only mode. Later, we’ll conduct a question and answer session. Please note that this conference is being recorded. The audio webcast is available on Teva’s website at ir.tevapharm.com. And if you cannot connect the webcast, a copy of the slide deck is also available on the website. I will now turn the call over to Kevin Mannix, Vice President, Head of Global Investor Relations. Kevin, you may now begin.

Thank you. Good morning and good afternoon everyone. Thank you for joining us for our call to discuss Teva’s first quarter 2014 financial results. I’m joined today by our President and CEO, Erez Vigodman; our Chief Financial Officer, Eyal Desheh and additional members of the Teva executive committee. Erez will start with some brief opening remarks followed by Eyal who’ll provide an overview of the highlights from the quarter. Then Erez will spend some time discussing his perspectives on the business and immediate priorities for Teva. We will then open the call for a question and answer period. Before we start, I’d like to remind you that our discussion during this conference call will include forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. Factors that could cause actual results to differ are discussed in Teva’s report on Form 20-F and Form 6-K. Also we are presenting non-GAAP data, which excludes the amortization of purchased intangible assets, costs related to certain regulatory actions, inventory step-up, legal settlements, reserves and impairment, and related tax effects. These are amounts that we cannot predict at this point. We present these non-GAAP figures to show you how the management team and our Board of Directors look at our financial data. With that, I’ll now turn the call over to Erez. Erez, if you would, please?

Thank you, Kevin. Good morning and good afternoon. I'm delighted to be here today as the CEO of Teva. I could give you the starter speech about what I am doing as a new CEO in developing a deeper understanding of the company and how I will unveil a new strategy in the not so distant future. Instead I'm going to share with you my key areas of focus in the short-term that will fix the foundation of Teva's core business. We orient our strategic direction and ultimately solidify our position in the industry and return Teva to being a premier investment opportunity. Before I do that Eyal will review the quarter performance and touch briefly on our 2014 outlook which we reaffirmed earlier this morning. After Eyal has concluded, I will review with you how we plan to unlock additional value in our business.

Thank you, Erez. Good morning and afternoon everyone. I'm happy to provide a detailed business and financial review for the quarter. As always, we are presenting most of our results on a non-GAAP basis, while our GAAP results appear in our quarterly press release as well as in the 6-K which will be filed later today. When we look at highlights of the quarter, you can see that this was a solid quarter and a very good sight for the entire year. Most notably, the increase in net income and earnings per share of 8% and 9% respectively compared to last year. We also had good cash flow generation this quarter with a strong focus on cash. The 2014 results that are included $200 million payment following last year’s settlement with Pfizer as appears on this slide. Moving on to slide number six, regarding our guidance. We are reaffirming our 2014 guidance, just as a reminder, we have two scenarios for 2014 depending on the outcome of Copaxone generic introduction, both scenarios are reaffirmed today. Let’s look at our revenues and revenue bridging. The improvement of our sales this quarter was nicely split between the generic and the specialty businesses. In generic we experienced significant growth in the United States market, with 17% year-over-year growth to a total of $1 million was a number of new product launches. However part of the growth was offset by weaker sales in Eastern Europe due to an exceptionally warm winter and politically instability in Russia and Ukraine. Japan, due to a weak yen and continued quality issues, which we are handling and our API business which suffered from production issue. We believe that the second half of 2014 will show an improved performance of these parts of our business. The specialty business continues…

Thank you Eyal. These are 2014 must wins for Teva fixing the foundation; maintaining Copaxone franchise, solidifying the agents that will drive organic growth for us and position Teva for long-term value creation. There is a lot of value we can unlock from getting our house in order by delivering on our cost reduction program, by accelerating operational network transformation and integration and by strengthening our global generic leadership, while improving profitability. We are fully committed and on track to deliver $1 billion reduction in gross expenses by the end of the year; $2 billion reduction in gross expenses by 2017, from which $500 million fall into net profit by 2017. I strongly believe that we can be more ambitious on net savings. Therefore, we have been facing all the operational aspects of our business. In order to identify the relevant opportunities that will enable us to increase the net savings that will impact our net profit by 2017. We have been working out the details of this process and later this year once we exhaust the cost and once we are able to see the details of our next five years plan we will come back to you and update you on the revised guidance. Teva shall transform its operational network; plan to close or divest 11 plants and this plan is already underway. 16 additional plants are under evaluation. We are in a process of resigning significant capacity to local facilities in our network. We have launched operational excellence plan in a quest to dramatically increase the competitiveness of our plans and fully integrate them into the network. We are discovering and exploring all the consequences from Teva, API business situation. And [with the plan] it is already in place in order to return a sustainable solid growth…

Operator, we will now open the call for question-and-answer.

Thank you very much. (Operator Instructions) Your first question comes from the line of Liav Abraham from Citibank. Please ask your question.

Good morning and good morning, Erez, great to have you on the call. A couple of questions, please. Firstly, regarding Copaxone, your 2014 guidance assumes a loss of 15,000 Copaxone patients to oral agents. Yet as you've shown in the script data, this is not what we are seeing in the script data. We are not seeing such an aggressive decline, and in terms of market share, we are actually seeing a stabilization of Copaxone market share over recent months. Can you comment on the upside to net income and EPS if the trends remains stable and if, particularly if the deceleration to oral remains stable? That's my first question. My second question is on the differentiation of Copaxone 20 milligrams versus 40 milligrams. Can you comment on any conversations that you've had with payers regarding the continued reimbursement of 40 milligrams following the entry of a generic? And Michael, perhaps you can comment on the differentiation of 40 milligrams versus 20 milligrams over and above just the convenience factor. Then just lastly, and plants and supply chain rationalization, you put out some interesting numbers in terms of a larger number of plants that you plan to close or divest over time. Can you comment on the potential net savings per each plant that you plan on shutting down or divesting? Thanks very much.

Thanks Liav. On the third one, we are consolidating the holding side of the investigation process we have been undergoing. So basically, we'll come back to you and it is not going confined just to the operation network transformation. It goes also to other aspects in our operations, which are under scrutiny now. The target is to increase the net effect on bottom-line, this is the target. But I want at this stage to be careful, I took over 2.5 months ago, we are still in the process of investigation. The quest is to increase the target and to be more ambitious and it then it encompasses a number of measures and which are not confined only to the transformation of the opportunity. So, we’ll come back to you, it includes also of course reference to what might be extracted from the operation network transformation. On the first question, at this stage, three months only after the launch of 40 milligram, we want to be more careful before spreading out any message that pertains to potential higher guidance. So and also that as with the, I would say the potential scenario that pertain to Copaxone in the course of 2014. So we prefer at this stage to maintain the guidance, if we see in the course of year that there is a strong reason to change the guidance, we’ll back to you. And on the -- basically on Copaxone let me just say first that with the glacier study that was basically was conducted with findings that were published yesterday I think that we have a very good strong now background to come up to you and to the external wall, with very strong I would say inspiring findings that support strongly the benefits that basically that are provided by Copaxone 40 milligram. Clinical, medical and convenient and I’ll ask may be Michael to address it.

Thank you Erez and thank you Eyal. Yes presented yesterday top-line results of the glacier study at the 2014 American Academy of Neurology in Philadelphia and the glacier was a Phase 3 study open label randomize multi-center study to asses the safety and tolerability and patient experience of Copaxone 40 milligram three times a week to 20 milligrams, the results were extremely interesting and provocative. What we were able to show is a significant a 50% production and injection related adverse events on the 40 milligram less pain, less redness swelling, bruising and wounds compared to Copaxone 20 milligram that actually is a very safe drug in the first place, but the actual benefits in terms of side effect were highly significant mostly injection side reactions and over reactions to 40 milligrams were significantly improved. This is important because this suggests that this is really like a new molecule it also suggests that it will be very important to keep patients on 40 milligram, not switch them back to any other drug because there is significant medical benefit associated with this, objectively assess and most of patient (inaudible) that this is certainly much more convenient in terms of quality of their lives. So we believe that this will add to the stickiness and also talks about the differentiation of Copaxone 40 milligram 3 times a week compared to Copaxone 20 which is already a very safe and effective drug. So this information I think will add to the stickiness and the importance of staying on Copaxone 40 milligram that will be apparent to the patients, the physicians and the payers.

Maybe Rob if you can add to it insights that are (inaudible) patients physicians and payers.

Yes Erez, pleasure. So, Liav as you've seen the uptick by both patients and physicians is really, really good with 25,000 patients currently on Copaxone 40. And we’ve seen actually the same sort of response from the payers 90% or close to 90% of ensured lives in the U.S. have access to Copaxone 40. And it’s already 60% of the payers where actually Copaxone 40 has become the preferred MS therapy. So far I am not going to go into the future expectations and discussions with payers that we will have for tomorrow but the uptick is really, really good. And this is in an environment where both products are available; it's all three stakeholders really see the benefit of our Monday, Wednesday, Friday injections of Copaxone 40. And we’re really very pleased with the uptake.

And just maybe to -- and maybe just to conclude again, 25,000 patients which account for more than 50% on NRx basis, something in the neighborhood of 31% by TRx. And basically, we are on track to achieve the target that we'll set for the end of the May and the end of the day. And we by the same time and again it is for us to fight for the future. We are competing for the future, we are building a new IP protected until 2030, franchise.

Thanks very much.

Thanks very much. The next question comes from the line of Ken Cacciatore from Cowen And Company. Please ask your question.

Hi, thanks very much, just a couple of questions. First on the cost savings, Erez. I just wanted some clarification. It sounds that a net cost savings by 2017, I think you said was 500 million. I just want to understand as I look at your current operating structure, looks like that's about 8% of operating costs. So just want to understand why we can’t deliver more on the bottom-line or is it already such a lean organization. And then also on M&A, there is clearly a whole a lot of different assets out there, some could be near-term accretive whereas others could be business development. You are -- clearly your neurology division is performing exceedingly well, there is a ton of business development assets there that look interesting. Just want to understand, would you look at lease-stage assets versus just on marketed products. And then finally maybe there could be a comment with such good data on the 40 versus the 20 about potentially removing the 20 from the marketplace. Thank you.

Maybe before Eyal takes it over, I am sticking to the guidance that was provided to the street during that 2013 and then [I was] suggested $2 billion until the end of 2017, $1 billion until the end of 2014 and by the end of 2017, $500 million folds to the bottom line. This was the guidance. My message today was we and I believe strongly believe that we can raise this guidance. But in order to do it, we have been now exploring all the operation asset of the business and we will come back to you, and maybe against this Eyal can take over.

Yes, I can. Well the answer is very simple. We will reduce all the costs which aren’t necessary to build the business and to support the business and to support high service level and high level of quality in our products. And right now, the plan is that our total spending will go down by $500 million by 2017, of course assuming no transformational event to Teva, the current business model. But as Erez said, we will explore every possibility to take more of that cost saving and efficiency into a good bottom line by additional efficiency measures in our production network, by becoming more and more active and aggressive on procurement, by reducing the level of headcount where people are not necessary but, we do have plans to build the company and we are investing in R&D, we're investing in selling and marketing, we're taking new products to market. Generic and specialty, we have an ambitious program on [NTE]. So, the balance of this addition looks at least $500 million positive, we'll explore every possibility to do more.

And I'm not ruling out to basically looking again at the basically at the sources that are reinvested. It's part of the equation. In this context, and I urge you to look deeply into the pipeline in the context of what we are doing now in 2014 and it was just an illustration what I shared with you, there are other launches in the course of 2014. And these launches are coming from a pipeline which again I'm saying again, I think is not appreciated enough. Against that of course we are directing the sources in order to even bolster further the innovation in the company and R&D that will enable us to produce more new products. And all in all, it's -- there are two sides of this equation. We need to reconsider the resources that are directed, this is one thing, but at the same time, I think that we need to be able to explain and sell to the market the value of our pipeline, at least the way it started to be manifested in the course of 2014. On the third question, Michael, you like to take over? Michael, late stage assets.

Yes, so just to say that, this year we're looking at 6 submissions and I think everybody may have read or heard recently of our outstanding results with ER hydrocodone, this is abuse deterrent -- potential abuse deterrent ER hydrocodone that really does fill a very important need; it’s going to be administered twice daily and we had outstanding results there highly significant analgesic properties associate with this. And this will be essentially submitted before the end of the year. If you look at 2014 in total, we're looking at a total of about eight to nine submissions. We also are looking at four approvals, importantly Copaxone 40 milligrams, (inaudible) we just had approval from the U.S. -- from Europe this week and we're looking at other approval some of the other potential approvals later. And if you look at our whole pipeline and you look at how this is emerging and leading to new submissions, this is going to be increasing over time, we are expecting to have 12 submissions in 2015 and by 2018 we expect to have 17 submissions which is going to be greater than we had in 2011, ‘12 and ‘13 combined. And this talks to a very robust pipeline that probably hasn’t been fully appreciated, a pipeline that has impact both in our CNS and our respiratory franchise as well as on the NTE front we -- ER hydrocodone provides further benefits and further demonstration of the nature of the technology and also the strength and depth of our NTE program.

On the basically late state, I’ll address it. On the last stage versus basically other potential ability initiatives, we are considering another of late stage basically acquisitions. In general CNS is certainly one of the most attractive areas for us. In this respect we strongly believe that we can use the capabilities and the assets we have in CNS in order to solidify further this TA. We look also on potential acquisition of the relevant technologies in the generic space and in the specialty space. And as I said before, we’re not ruling out basically the as being engaged in other transaction. So there is basically a list of possibilities that we are considering and you might see us basically executing transactions on each one of this potential front. And on the basically pulling off Copaxone 20 milligram, this is a question I would like to post to Rob.

Yes, thank you Ken and Erez. So I think it’s clear that what we’ll be seeing that patients have been expressing preference for Copaxone 40 with the fantastic feedback that we’re getting from those patients that have transitioned and are really overwhelmingly positive. And we continue to be committed to meeting the needs of our customers and we’ll make decisions that hold the patient safety and welfare at the center. But at this moment and we will respond to market evolution, at this moment it’s just not opportune to make that decision and I don’t think I would want to make any statements going ahead but we continue to be really look at the wealth of patients and monitor very carefully what’s happening.

Amie, next question please?

Thank you very much. (Operator Instructions). And your next question comes from the line of Jami Rubin from Goldman Sachs. Please ask your question.

Thank you. (Inaudible) I'm looking forward meeting you and person. You emphasized the importance of regaining global generic leadership for Teva. I guess, I'm struggling to understand how to do that without pursuing a major transaction in the generic space. But in the earlier question, you’ve read about a whole bunch of different companies both in brands and generics. Are you happy with the mix of businesses now or it seems that when I'm hearing you say is that you think Teva will probably move to emphasize or get bigger in generics versus brands, but I might be wrong about that, if you could clarify that please? And then secondly, do you see opportunities to divest assets such as API or slimming down R&D in areas that may not fit strategically such as women's health. Is there an opportunity to actually breakup the business or have separate brands business from the generic business. What are some of the possibilities that are on the table now that weren’t with the previous management team? Thanks very much.

Thanks Jami. I would also look forward to talking with you. Basically on the, basically the scenario of bringing up the businesses, this scenario is not on the table. We strongly believe that basically viewing together, the assets capabilities expertise to enable Teva to possess a business model which is unique in this industry. Yes we need to reorient the business model as we go along. I would share with you in the course of 2014 and before the end of the year, the way we believe we shall reorient basically the business model, but with the moving of continuity in this industry and we told that this continuity that we see which are relevant for us. We see a huge opportunity in integrating much further, the various components of our business in a way that will generate a lot of value for TEVA, a value that goes far beyond, the value that can be generated for each one of the different parts. Basically on the question of potential divestitures, the answer is yes. We consider it and it is part of the basically the revaluation that we have been accommodating. On question number one, I strong believe that we need two very strong legs, one in generics and another in specialty in order to be able to capture the benefit, to extract the benefit from the unique capabilities TEVA possesses. Yes, it in case has put it before or reorientation of the business model and number of opportunity that shall be basically entertained. But the two legs are important for what we'll be doing in the future. TEVA, today is the largest global generic company. Yes we need to regain the focus, yes we need to transform the operation in number of aspects. Yes we need to face reality of where the gaps in a number of basically of aspects of our operation and also a number of the geographic. So, yes, we need to face reality and we need to ask in a very aggressive manner in order to close the gap that exists. But I still believe that what we have today and with the measure that will be conducted, we can then, I would say regain the leadership preposition also only by scale. If we need the acquisition in order to make it happened we are considering every possible scenario, we are not rolling out any possibility, but I strongly believe that first we need to be much more focused on the way, we close the gaps before we make a big transaction here although don’t roll it out.

Thank you.

Very much. Your next question comes from the line of David Maris from BMO Capital Markets. Please ask your question.

Good morning. Two questions. First, kind of has a lot of experience launching at risk, so may you can give us some insight on how a generic company might think about launching at risk if you were another generic company and had an FDA approval of generic Copaxone, how would you be thinking about it? And obviously I think most of us think that the damages would prevent someone and first half the process, but how would you think about it. And then separately, you mentioned that Teva’s goal is to regain or to reassert leadership in generics and back to basics and good execution, what do you think some of your competitors moves into brands and attempts to move into brands in the U.S. and EU, does that say something about the growth expectations of the generic market of five years out or you think it’s just something just, an anomaly? Thank you.

Yes, so I’ll maybe address as a second one and then I’ll ask Rich to address the first one. Very interesting question David and thank you for the question. On the next one let me say briefing. One the generic industry is going to double by 2020, so if I look from let’s say 2013 to 2020 generic industry basically a doubled itself. But the (inaudible) generic industry and it is a very different industry. In terms of (inaudible) opportunities in terms of (inaudible) opportunities in terms of basically technologies that are required. And also the (inaudible) biosimilars although there is a question if it belongs to the generic so no, let’s not discuss it now. Basically it means that we need to basically to shift the mindsets in terms of what is needed in order to win in this industry going forward. Teva will do everything which is needed in order to win everything that is needed in order to win. We believe that we have today the assets, the capabilities, the global footprint, the operation network, the mindset all the assets that are required and we will be winning in the generic industry. And yes we need to look at in the eye, yes, there are gaps that we need to close and we’d be closing the gaps. We need to invest in contract generics we need to take decisions, talk decisions on biosimilars we have assets we need second wave, we’ll do everything which is needed in order not to meet the third wave. And there are also other measures that shall be conducted in order really to, I would say to solidify our global leadership in generics. And I strongly believe that one there are opportunities to extract a lot of value from being the global leader in generics, one. Second I believe that in anything we do, it is a very important leg, very important leg and capabilities are very relevant that the way we would be willing to gather capabilities for the generic side, the specialty side will take us basically to capture the opportunities in the changes the industry has been undergoing. I think that from what I see in the products of competitors, I think that there are very interesting moves that are connected by competitor, I think that at least to some extend these are things that we started to do, maybe (inaudible). Sometimes maybe we didn't do it fast enough and we need just fully acknowledge it and we need to accelerate the pace of the positives that we have been accommodating. But I think it's like maybe supporting things that we have been doing and just pushing us to run even faster in order to extract all the opportunities out there. And on the first question I will ask Rob to address, sorry Rich to address.

Hi, David, thanks. Good question. But I guess the first thing I would say is that we believe the federal circuit got it wrong and we expect that the Supreme Court will correct this and reverse in [validity] decision. And as you know we probably have the most expensive experience in the industry with launching at risks and this one will give us serious pause that’s mainly due to the size of the possible damages and the real prospect that a jury in this case would find rule for infringement. The standard (inaudible) is whether the active infringement is objectively based and there are many facts here that a jury might weigh to find (inaudible). First off as the chief justice has commented that we have shown a fair prospect of success on the merits and in fact it is a Supreme Court high reversal rate particularly from federal circuit decision in the pattern area. And also I'd like to remind everybody the very detail opinion at the lower core and the finding of entrenchment of both Sandoz and Myland at the District Court which was held on appeal, it will find entrench. So as a reminder, I'd also like everybody to remember that when there is a case like this will open us, it will lead up to a tripling of the damages exposure. So this is a case, we would seriously pause on.

Okay. Thank you very much.

Thanks very much. Your next question comes from the line of Marc Goodman from UBS. Please ask your question.

Can you give us a little more color on the business overseas? Can you talk about what's happening in some of your key countries? Talk about, obviously, Western Europe, but also in Central Europe, Russia, some of the other key countries just the fundamentals? And then second, I just want to make sure I understand. On biosimilars, now we've decided that this is going to be a very important part of the strategy and we are going to invest in biosimilars internally, or is it really externally we need to go out and acquire the biosimilars development? Thanks.

So I defend your first, basically your first question.

Okay. Thank you very much Erez and thank you Marc. As far as Europe is concern, yes and as far as Europe is concern the results that we have seen in this quarter confirms the strategy that we are executing of pursuing sustainable and profitable business. We saw some under performance in some countries like France and Germany. France due to contractions in the market, but we also saw significant over performance and markets like Italy, Netherlands, Switzerland and many of our smaller market. Align to this, we are also seeing significant improvement in our operating profits and this confirms that the strategy that we have been pursuing is really paying of. So, overall, we are pleased with the results, we have a geographic and a product portfolio, which is really essential to succeed in Europe, it gives us scale and it gives us the ability to leverage our leadership in almost all our key markets.

Maybe, say I'll add a few data points about Russia and the neighboring country. First of all, it was a very warm winter. So, a lot of our business both our OTC business as well as our Rx business has suffered due to the warm weather, but you can count on the weather to change. The other thing that is everybody is of course aware of is political issues in Russia transforming a little bit to economic uncertainties, which is never a good for business, but it wasn't terrible, but the combination slowdown, our OTC business in this area and some of our Rx business in this area, we expect this to recover. Also, the Copaxone tender, which tend to move from one quarter to another didn't happen this quarter in Q1 in Russia we expect this to materialize in the second quarter. So the Copaxone results without Russia which is not an insignificant piece.

And mainly to complete the picture on Europe with specialty, we had a record quarter in the specialty medicines. Copaxone is really doing well gaining market share Lonquex, our long-acting G-CSF is really performing as planned and we are all excited with the just recently received approval of DuoResp Spiromax, which will launch into the asthma and COPD space, which is really a what we believe addressing a need for much improved delivery device to help and address the issues that we see around adherence and compliance with those patients. So in Europe specialty medicines is really doing well and had a fantastic quarter.

Yes, and on biosimilars we shall do it in a way that will enable us to contain the risk, and to accelerate the pace of the implementation which means that we seek basically the right partner in the right areas, in order to develop capabilities that are required for Wave 3 and beyond in biosimilar.

Is there a possibility to work with Lonza again?

No. Michael you would like to add something to it?

Thank you, Erez. As certainly we're of course looking very carefully in the biosimilar space, as Erez has noted, we really have looking to obviously both grow organically, but also look at inorganic growth in terms of potential partners in the space, even though there is regulatory, uncertainty and substitutability, uncertainty we see this as a very important area for us to be in reflecting the hybrid integrated nature of Teva in terms of our relationship with Lonza, we obviously this is a relationship we have deep respect for, Lonza has been an outstanding manufacturing company and we haven’t obviously as we go forward we will include Lonza, as well as many other potential partners for engagement where we need outside help in terms of manufacturing an operation.

Jamie next question please.

Thank you very much. Your next question comes from the line of Aaron Gal from the line of Bernstein. Please ask your question.

Congratulations, Erez. You are the first CEO in three whose first conference call is going through without technical problems. At least, in this respect, you are starting on the right foot. Don't jinx it? Three questions for you. The first one is you mentioned a little bit about personalized medicine and we have talked a little bit about the future of Copaxone. I wonder if you can just talk to us a little bit about the future of Copaxone beyond just maintaining the 40 milligrams? How can this franchise further be develop? You also, some IP on potentially predictive markers for this product as a way to increase the benefit of patients. If you can tell us a little bit about the progress of that effort? Second, capital expenses still are very high. You're running at $1.5 billion annualized about three times to four times your competitors. As part of the review, is there any chance we might be able to see that number coming down if you look at your development plans, what is the horizon for maintaining that kind of CapEx? And last on DuoResp, I'm not too familiar with Teva's capabilities in Europe in terms of launching new branded drugs in respiratory. Can you just give us a quick review of our marketing capabilities? Are you present in all countries, some of them? Where do think you will be able to make inroads? With DuoResp I mean you kind of think about a two to three year target what would those be for a product like that?

Hi, Ronny and thank you for the questions and I will ask Rob to start with the third one.

Hi Ronny. So the as you know, we have U.S. we have an expensive experience with that respiratory. DuoResp Spiromax is a device that is offering a lot of opportunities, it's a very intuitive device to use and we believe it is potential to really address some of the adherence and compliance issues that we are seeing and patients are experiencing with current therapies. We are selling respiratory products in some markets like in UK, and the Netherlands and we've build up capability in Germany ourselves. As you know, in Europe, you're not launching in one continent and all of a sudden and so it’s search subject to getting your price and reimbursement and the market authorization. So that we can launch in sequence and also we're looking at making sure that in the right way in terms of pricing. So we are confident that we can launch in the key markets we have our feets on the ground trend are ready to go and everyone is excited about the opportunity in there.

So if we can look at the Symbicort sales in Europe, and we think about that as our target market, what percentage of that is addressable by your marketing and sales force?

Well, we think, actually think all of it, but not all of it in day one. So that's the moment that during lunch. And frankly also the way we look at the market it's not just exclusively on Symbicort as we know that quite a number of patients and doctors chose device over the active ingredients. So we really believe that is an interesting opportunity. I am really reluctant to give long-term opportunity, but it’s the hundreds of millions for us, so it’s really, really important.

Thank you, Rob. And on the capital expenditure’s question I'll ask Eyal to address.

Yes, hi Ronny. Our run rate for CapEx right now is around $1 billion, I think you mentioned 1.5, it's not. And part of our efficiency measure, we're also look at how much we really need and whether by consolidating the footprint of our operation that will open an opportunity reduce this into future.

And Michael, please address the first question of Ronny.

Yes, thank you Ronny for that very interesting question. So of course Teva has now created and established an outstanding group of scientists in the area of personalized medicines and pharmacogenomics. And as part of our life cycle management for example Copaxone, we've essentially embraced those technologies to understand more about the designing features of those who respond versus who don’t respond. Despite the outstanding success Copaxone, there is a significant number of patients maybe up to 30%, who do not respond as well as the 70%. So we're able to divide the populations into well defined responders and non-responders and using whole genome wide analysis and some clinical factors. We've been able to generate, both initially discovery and then validate these particular parameters that would protect with very high certainty, those people would respond. Now of course when you look at and then you look at that sub population of the responders, there effect on replaced rate becomes the best in the industry, greater than 70%, greater than (inaudible) for a drug that has outstanding acceptability for safety. And as we shown in [Glacier], a highly acceptable side effect rate and convenience for patients. So, we are using personalized medicine in all our portfolio, it's very much intrinsic to drug development, in addition to -- and so this is in the CNS and our early oncology program, all of our early oncology programs have personalized medicine components to it to identify particular populations that maybe particular responsive to therapy, so that we're able to have early failure or early indications of success. In addition, as part of our life cycle management, for example in the CNS and for sub-Q injection, we also are working with the device group, we have an integrated device group serving both our generic and branded portfolio and looking at novel devices that truly enhance compliance, adherence and convenience for patients. So, we see our personalized medicine and our device group all is playing a role and ensuring quality for patients. We're very committed to personalized medicine, because see ourselves as partners for the healthcare system. And Teva is committed to seeing sustainability of the healthcare system, if we have a way to identify those patients who are going to be best responders and those who would not, we wouldn't embrace that to enhance the quality and improve the cost effectiveness of our medications.

And so the obvious question of Copaxone is what's the best from here to patient treatment?

Well, this is a process that we're undergoing. Obviously we have a plan in place, I'm not ready yet to -- this is still being fully elaborated. I think the data -- this is protected in our intellectual properties, very well protected, it's unique. This would be the first personalized medicine in multiple sclerosis. And we're working on our plan for unrolling this but it will be in the near future, we will be more public and transparent on exactly how we're going to unroll this and how are we going to bring this to enhance the benefits for patient.

Thank you very much.

And just capitalizing on this and against in the context of question that [was post] to me before, I think Copaxone is a good manifestation of the huge benefit that stem from fully integrate business model. I know that we used to get all the capabilities we have in (inaudible) and also with very strong I would say capabilities and benefit that stem from innovation and all the molecule and not necessarily in the new clinical entities. So when you look at the why we have been running the model now, I think it just gives some fruitful to for what we might do as we go along with the real envision of our business model.

Thank you.

Very much. At this time, we’ll ask all participants limit themselves to one question and one follow-up question. Your next question comes from the line of Sumant Kulkani from Bank of America. Please ask your question.

Thanks for taking my questions. I’ll ask both of them upfront. First one is, has anything changed in your thinking on the number of players that you expect that could be in a position to launch [address] contract that expire in May? And second, for Erez, it’s been a couple of months since you took over and clearly it must be an exciting time for you to build a new Teva going forward, but is there any opportunity for you to look more like the old Teva on the tax side?

Thank you for the question. It’s a now 2.5 months to be accurate. And we are, I’ll ask Eyal maybe to address it, we are -- basically we look at any possible, potential opportunity to I would say to generate value. And what I promise to do everything in our power everything, in order to basically not just hitting the target (inaudible) but to do everything which is in order to carry out efficiency measures which will take us to really generate value. And I am not ruling out any measure. And tax is under scrutiny also. And if we find the opportunities in the basically in reducing our tax expenditures, we’ll of course accommodate it. Maybe I will take it another step forward.

Yes. We’re sharpening the pencil. We used to be the lowest tax payer in the industry, this is not the case, following a few inversions things have changed when we look around, what happened in 2014 is very clear, something that we have discussed and disclosed in many details before we’re writing on increased profit of Copaxone at zero tax for past 10 years, that benefit expired December 31, 2013 and today our tax rate here in Israel around 9%. So that had a negative impact on the average tax rate. However we’re not done, we’re looking at every possibility to become more efficient on tax side. Everything of course within all the legal measures and the role of tax planning is wide and broad. We will see our tax rates decline in future years as some of our new product will be launched at more friendly tax side environment. So the 20% that we’ve guided for 2014, we started the year little lower than that, I hope to be able to maintain it below 20, but again a lot of thinking is around that this right now, because it does represent a lot of value.

And on a number of competitors with your permission, it is the only question that we are -- we'll not be addressing today. I think that with everything we have said on Copaxone, we have exhausted all our mark. And I think the message is very clear on (inaudible). So I don't want to speculate with going to take this risk.

Thanks.

Thank you very much. Your next question comes from the line of Tim Chiang with CRT Capital. Please ask your question.

Hi, thanks. Erez, when you look at the personnel base at Teva, do you think that you have the right people in place to sort of grow in the future? You need to bringing new people, do you think you have the right senior management at this time?

This is a question, maybe not the only one but it's basically in just little on this question, this is a question that my answer should be, you need to see what I do and not what I say. And I'm not going to say anything before I do.

Okay, great. Thanks.

Thanks very much. Your next question comes from Louise Chen, Guggenheim. Please ask your question.

Hi, thanks. I’ll just ask my two upfront. So under new leadership, I'm kind of curious how your M&A strategy has changed? And then also how you think about prioritizing uses of cash for M&A, R&D repurchase et cetera, how does it differ from the old Teva? And then lastly, just how durable do you believe the switch to 3TW will be when generics enter the market. Thanks.

Use of cash.

Okay. I'll start with the cash allocation. You probably notice that we start or not start we suspended our buyback program it’s still open it is available for us in case we will see the opportunities, but we prefer to use the cash over the past two quarters one on increasing dividend definitely in dollar terms and also an absolute shekel term. We'll dividend coming up, we reduce our financial leverage and our debt to create more capacity for additional we talk a lot about M&A and potential acquisition and looking to expand our portfolio and pipeline both of specialty and also biosimilar, also by external purchase or acquisition of molecules so I am not going to add on that. But basically right now all the options are open we will consider every quarter and I believe that we are looking at a balance cash allocation.

Yes and on the second question. It’s clear for me that we first shall unlock the value that can (inaudible) from all the measure that design to solidify, to fix the foundation. And it’s clear that that’s first priority for me. But again and I want to reiterate what I said before, while the focus remains on fixing the foundation and driving organic growth. We are aware of the opportunities around us and we cannot ignore what is going on in the industry nowadays, we cannot ignore it. And we are fully aware of the opportunities around us and there are opportunities for Teva. So, I would say the right condition, we might go to a transaction which is beyond the scope of just transaction that were conducted during the last 2 to 2.5 years.

The 20 milligram switch.

Yes, Rob can you address the 40 milligram switch?

Yes, sure. So what we see is a very, very good response from patients on the 40, you also heard from Michael, the clinical benefits being demonstrated in the Glacier. What we also know is that when you ask patients and doctors and like, would they want to use a product that has never been really tested in men and has no safety and efficacy data. In other words, so called generic, there is a huge reluctance from them. And what I pick up from payers as well is they started to understand it. And there is a real threat that instead of saving money by forcing people to lower price generics, patients will opt out and switch not only to 40, but it could also happen to other products right. So, payers start to understand that they should not just think about forcing people at least from some of the payers, I picked that off. So, all-in-all what we see with the benefits of Copaxone 40. Clinically relevant and the proven safety and efficacy of Copaxone. And in general patients reluctant to switch par say, when they're doing well and many of those patients are really doing well. we feel confident that Copaxone 40 is going to hold, but you also heard from Rich that mainly there is price pressure in the American market and there will be some impact on the ‘14 if something that not immediate short term, but more long term is a factor that I think we're aware of. Jamie?

Thank you very much your next question comes from the line of David Risinger from Morgan Stanley. Please ask your question.

Yes, thanks very much and congrats on the 40 milligram success to-date. With respect to my questions, I guess I will keep it to two, as you asked. First, with respect to biosimilars, could you just frame for us how you define the three waves and then once again reiterate Teva's positioning for the three waves? And then second, with respect to personalized Copaxone, could you just frame for us what percentage of multiple sclerosis patients would likely be better candidates for Copaxone if there is a diagnostic test available? And then also, any comments on how that might cut both ways, whether it would drive any current Copaxone patients off of therapy because the test isn't highly encouraging for them versus the opportunity to capture broader market share with a personalized medicine test? Thank you.

Thank you, David. Michael can you address the biosimilar of the question?

Sure.

And also the Copaxone question.

Sure, thank you David. So the wave we see the sort of ways of biosimilars the first wave being those that are more approaching based and Teva has had a great success in that area launching various proteins that are biosimilars or equivalent to that some of them have had long-acting so they have being submitted as BLAs. For example G-CSF follicle-stimulating developments in growth hormones some of those represent the first phase and the first wave. The second wave would be the development biosimilars for drugs that are really coming off market and reaching the end of that patent between 2015 and 2020 and this includes Humira this includes a whole host of different drugs (inaudible) and others that really are going to come to end of patent life in that phase and then the third are those are really coming to the end of their patent life in the 20s. And Teva has significant efforts for those drugs that are coming off patent life in the 20s. We when are not successful in developing although some we’ve made some progress but in a whole only a small number in terms of the second wave and we have been very successful in the first and many of these already on market. So that’s sort of how we see it. It’s somewhat arbitrate defined by essentially by the patent life of these drugs and that’s how we really define it, and certainly in the second wave we are looking to both do some in house development as well as look to partner with those who might have products which we think are appropriate for our pipeline and some of the disease areas we want to be in. In terms of the diagnostic tests, again we're, this is early data, I don't want to really start speculating at which proportion of the population. But rather you just say the test is highly significant, we will have a way to identify patients who are likely to respond and we're still working on how we would implement this within the population. But we see over a net benefit, I mean it's and this not only one has to think about the open market for MS and if you know that you're going to respond to a drug, we think this will be competitive not in terms of just Copaxone but people who are coming into the market, this will add to Copaxone as well as people on other therapies or having some side effects or not doing that well. So but the actual commercial implications of this are really being worked out and I don't we want to comment on this stage.

Thank you.

And I think you know although the competitive diagnostics is we believe is something which is really encouraging. The purpose at this stage was to just to spell out a clear message to you that by really building the future franchise, which is IP protected for many have to go, Teva will not going find itself just to the existing therapy, (inaudible) we'll look for few initiatives that will enable us to work out the measures to take it just beyond the current state. And the notion is that we'll not confine ourselves to what we did in the path to Copaxone. Life cycle management initiatives, innovation around the molecule, new technologies, everything will be exercised in order to basically develop further, much further this therapy.

Thanks very much. Your next question comes from the line of Randall Stanicky from RBC Capital Markets. Randall Stanicky, your line is now open.

Hi, sorry. Few questions, is the opportunity for transformation I mean more on the generic side or on the brand side. And then my second question is there has been a lot of focus on fixing the platform. Going back to the divestures question, would you consider near-term divestures that removed some EPS were better for the business from a returns perspective longer term? Thanks.

At this stage, we are not in a position to address your first question. Basically, we don't want to rule out any possibility.

Randall, could you repeat the second question?

Yes, I just wanted to go back to the platform revisit and divestures. I guess Kevin ultimately the question is how significant could divestures be as you look at some of these businesses that you're in? I mean could really looking out existing some sizable businesses and how do you balance that with wanting to grow EPS in 2015?

Eyal.

Well, Teva is a very well integrated company. Our API business is producing a lot of the API used both by a generic business, but also by our specialty business. Our specialty business is sold not in the U.S. but ex-U.S. and many, many countries, there is collaboration within the sales, the sales team and the approach to regulators and payers. And we do believe that at a broad portfolio of solutions to patients, which is very, very important to Teva. So, we look at them when we look at our pieces, the major pieces of our business. We believe they are integrated, there are some non-core assets, at our business of course we're not going to discuss it one by one but we're looking either to divest or even possibly to close, because we believe there is long-term value in it, but I believe that we'll walk the talk and announce each one, when we do something. But again, they’re pieces of the business, but they are not in the heart of the business.

At this point, Eyal should we expect EPS in 2015 to be higher than 2014?

Well, this is a little too early for guidance. But as we saw our long-term plan, I believe yes, we can improve. But there is one open question that is still hanging above our ability to forecast and everybody’s ability to forecast which has to do with Copaxone.

Understood. Thank you.

Amie, next question?

Your next question comes from the line of Douglas Tsao from Barclays. Please ask your question.

Hi, good morning. Thanks for taking the questions. Just in terms of Copaxone, you made a reference to seeking damages, both if generics do launch at risk for both the 20 milligram, as well as the 40 milligram product. I was just curious, because I can obviously see the rationale for that. I was just curious if you could provide some perspective on precedent for a case where somebody was awarded damages for a similar situation and it doesn’t necessarily even have to be in sort the biopharma industry but just sort of any kind of perspective would be helpful for us. Thanks?

Rich, please.

Yes, hi. Thank you for question. There is no one specific action I’d like to speak about today, since it’s pretty well settled under pattern damages law that we’d be allowed to explore always that the infringing behavior would alter our market to our protected products and we’d be fully compensated for the losses. In this case, the generic 20 milligram would most certainly have an effect on the 40 milligram by slowing or permanently affecting the transition, so we would certainly seek to be compensated for those losses as well.

Okay, great. Thank you very much.

Thank you. I’d now like to hand the conference back to our speakers today.

So thank you all for coming in and for just challenging us, asking the questions. And I look forward to touching base with all of you in the course of the year.

Ladies and gentlemen, that does conclude our conference call for today. Thank you for your participation and many thanks to all of our speakers.