 Teva Pharmaceuticals Garrett Hoffman

Agenda  Company Overview  Drivers and Trends  Valuation  Recommendation  WOOF Discusion

Company Overview  Industry: Pharmaceuticals  Market Cap : $45.63 billion  2009 Revenue: $14.8 billion  2009 Earnings: $2.5 billion  Number of generic drugs: >400 in US with >200 awaiting approval, >150 in Europe with >240 awaiting approval

Company Overview  No. 1 Generic-Drug maker  Filled 599 million prescriptions in 2009, 22% of generic prescriptions written  Also makes brand name drugs such as, Copaxone (Multi Sclerosis) and Azilect (Parkinson’s)

Revenue by Product Line

Sales By Channel

Revenue by Geography

Company Overview  Acquisitions  Acquired Ivax Pharmacueticals in 2006  Acquired rival generic drug manufacturer Barr Pharmaceuticals second half of 2008  Acquired Ratiopharm in August 2010 becoming the largest generic manufacturer in Europe  Acquired Merck KGaA’s women’s health unit Theramax in October 2010

Industry Drivers  Health care reform  More people will have access to healthcare  More money will be spent on healthcare  Healthcare insurers often force consumers to use generic drugs vs. brand name drugs as a means to cut costs  Women’s Healthcare reform under Obamacare

Industry Drivers  “Patent Cliff”  Biggest brand named drugs are losing patents CompanyDrug – 2009 RevenuePatent Cliff Ell LillyGemzer - $1.4 billion Zyprexa - $4.9 billion Cymbalta - $3.1 billion Nov Oct PfizerLipitor - $11.4 billion Xalatan - $1.7 billion Viagra - $1.9 billion MerckCozaar/Hyzaar - $3.6 billion Singulair - $4.7 billion

Teva Drivers  Teva has already launched generic versions of Cozaar/Hyzaar  Has resources and capabilities to be first to file applications for generic versions of these drugs  First to file application gets a 180 day window of being only generic supplier  FDA study showed first generic-drug competitor averages about 94% of full branded price, when two generics in market average about 52%, with five generics in market average 33%

Teva Drivers  Looking to expand other lines of business  Women’s Health  Recent acquisition of Merck’s Theramax  Respiratory  Waiting for approval on 10 drugs, 6 completely new brands, by 2015  Expect to see revenues up to $2.4 billion in 2015

Risks  Lose Copaxone Patent in 2014  Litigation and Lawsuits  Unpredictable political atmosphere in Israel

Financials

2010 thus far

Basic Chart

Competition TEVAMylan, Inc. (MYL) Watson Pharmaceuticals (WPI) Pfizer Inc. (PFE) Industry Market Cap$45.63B$6.27B$6.29B$139.71B$7B P/E Operating Margin 27.05%15.20%15.97%32.42%N/A ROE13.76%11.05%9.07%10.88%9.9% Div Yield1.40%N/A 3.10%0%

DCF Value of Operating Business67,578,620 Add: Cash1,995,000 Less: Debt7,017,000 Equity Value62,556,620 Common Shares Outstanding898,000 Implies Fair Value Per Share69.66 Current Share Price50.81 Undervalue by37.10%

Summary Winner Strong Valuation Patent Cliff Healthcare Reform

Recommendation  Purchased 200 shares purchased at $56.33 October 3, 2009  Recommendation: Average down. Purchase 100 shares at $50.81, increasing position by $5,081

WOOF - VCA Antech, Inc.  Industry: Animal Health Care  Market Cap: $1.82B  2009 Rev: $1.3B  2009 Earnings: $131M

WOOF - VCA Antech, Inc.  Animal Hospitals segment operates animal hospitals, which offer a range of general medical and surgical services  Laboratory segment operates veterinary diagnostic laboratories that provide testing and consulting services in the detection, diagnosis, and prevention  Medical Technology segment sells digital radiography and ultrasound imaging equipment; and offers related computer hardware

Financials

2010 thus far

WOOF - VCA Antech, Inc.  SIF purchased 100 shares at $28.70  Currently trading at $20.95  Average price target about $22.50  Recommendation: Close position on WOOF and use proceeds of sale towards Averaging down on TEVA.