Ladies and gentlemen, thank you for standing by and welcome to the Teva Reports Third Quarter 2014 Results Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation, followed by a question-and-answer session. (Operator Instructions) I must advise you the conference is being recorded today on Thursday, 30 October 2014. I would now like to hand the conference over to your speaker today Mr. Kevin Mannix, Vice President, Head of Global Investor Relations. Please go ahead.

Thank you, Tracy. Good morning and good afternoon everyone. Thank you for joining our call to discuss Teva's third quarter 2014 financial results. I'm joined today by our President and CEO, Erez Vigodman, our Chief Financial Officer, Eyal Desheh; Sigurdur Olafsson, President and CEO of Global Generics Medicines Group; Dr. Rob Koremans, President and CEO, Global Specialty Medicines; Dr. Michael Hayden, President of Global R&D and Chief Scientific Officer; Carlo De Notaristefani, President and CEO Global Operations; David Stark, Senior VP and General Counsel, Global Medicines; and Mike Derkacz, Vice President and General Manager CNS. Erez will start by discussing the highlights of the quarter, as well as perspectives on the business and outlook. Eyal will then provide additional details on our financial results. We’ll then open the call for a question-and-answer period, which will run until approximately 9 AM Eastern Time. 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, 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 will now turn the call over to Erez. Erez, if you would please?

Thank you, Kevin, good morning and good afternoon. I am delighted to open the call today and to share with you the main highlights of the quarter and also the progress we have been making in all the components of our 2014 must-wins. Q3 was a solid quarter for Teva, significant improvement in all profit margins, generics profitability grew substantially, robust cash flow from operations and free cash flow, Copaxone 40 milligram is on-track for year-end goal of 55%, strong focus on our pipeline, therapeutic area decision, solid uptake of certain important recent launches, good progress in clinical trials, on-track to deliver $650 million in net cost savings in 2014 and many increased shares in purchase program $3 billion in total a very good fund. Net revenues were flat quarter-over-quarter, plus 2% in local currencies. Operating income increased by 13% to $1.5 billion with 29.7% operating margin. Net income increased by 6% on the back of our effective tax rate to $1.134 billion with 22.4% margin. EPS increased by 4% to 132. We generated $1.4 billion of cash flow from operating activities and $924 million of free cash flow. Year-to-date net revenues are up by 1%. Operating income increased by 10%, net income increased by 6% to $3.226 billion, cash flow from operations increased by 39% to $3.375 billion and we have almost doubled free cash flow to $1.9 billion. We solidified the foundation of Teva, streamlining the organization, created a sound, stronger, more equipped competitive base for the near future. We’ll share with you today tangible outcomes to the five main pillars, I specified shortly after taking charge. Cementing our global leadership in generics, while improving profitability and driving organic growth, fully executing our cost reduction program, significantly improving our operational network to drive efficiency and optimized capacity, strong…

Thank you Erez and good morning everyone. It was a very busy quarter for global generics, firstly initiated review of all the markets we’re operating in today to prioritize them, where we want to play going forward and how we want to play in different markets. What are the key therapeutic areas and dosage forms we want to offer and how we can differentiate from our competition. We also continued ongoing effort on efficiency. As I have mentioned before, Teva generics focus is on the bottom-line and the growth of the bottom-line. We can improve the operating profit in three different ways, COGs which is already in progress through our savings program, efficiency in sales and marketing and last but not least the product mix which include new product launches. We saw a significant improvement in third quarter and we have a very aggressive target to improve further the profitability of the generic business over the next three years. Global generic medicine has worked closely with R&D to direct the generic R&D effort to match the strategy of the business. The generic organization was established in the quarter on key positions filled. The goal is simple to regain focus on generic the global operating model, two key areas global portfolio and commercial excellence. Global portfolio focus is to align the product selection with the strategic objectives and the commercial excellence is centering on the current business opportunities and efficiency. Our growth markets which are the markets other than North America and Europe are going through an in-depth strategy exercise to define its core markets short-term, long-term goals and steps needed to reach them. This was a very strong quarter for the generic business. Operating profit before D&A was up 40% year-on-year and there was a strong profitability in most of…

Thank you, Sigurdur. Copaxone 40 milligram has gained already 10% market share in the MS space, and it accounts for 57.4% of the entire family based on most recent IMS data updated to October 14. Copaxone 40 milligram was launched also in Argentina and Israel and in Chile pending in Russia, Brazil and EMEA. We thought it is also important to share with you relevant TRX data that demonstrate durability of the Copaxone versus the other competition. Copaxone total Rx in the quarter for Tecfidera launch was 172,000 scripts. Copaxone total Rx in Q3 2014 was 171,780 scripts. Copaxone total Rx in the three quarters following Tecfidera launch was 496,133 scripts. Copaxone total Rx in the three quarters following 40 milligram launch was 187,227 scripts. As you know we appealed to the U.S. Supreme Court in our Copaxone patent litigation. Arguments were held on October 15th. We raised strong argument which basically focused on the proper standard of review to be applied in patent claim construction. While it is not possible to predict how the Supreme Court will decide things, we’re optimistic that the Supreme Court will rule in our favor and overturn the decision of the federal circuit. With the Supreme Court rule in our favor it will probably send the case back to the federal circuit to decide it again based on correct standards. There is no set time for the Supreme Court decision but we generally expect it to come late this year or Q1, FDA decision on our most recent CP citizen petition, expected by late November 2014. I would like to ask now Mike Derkacz, Vice President and General Manager U.S. Teva CNS to share with us why we believe we’re on-track to achieve 65% conversion rate by year-end without generic Copaxone.

Thank you, Erez. It is my pleasure to report that the Copaxone 40 milligram conversion continues to progress as planned. As of October 17th, Copaxone 40 milligram is 57.4% of TRXs of the Copaxone franchise. And even more importantly 40 milligram new-to-brand prescriptions now account for 80% of the Copaxone franchise. This is a very important leading indicator and a very reliable metric, as it truly represents new-to-brand patients. Another important early indicator for us, are enrollments of shared solutions. And I am happy to report that 85% of shared solutions enrollments are at 40 milligram. We continually monitor 40 milligram performance across various health plans across the country. And in one national health plan in particular that provided Copaxone 40 milligram unrestricted day one of launch now has a Copaxone market share TRXs of over 80%. So this is what happens when you take a product with a clear patient benefit and put it in the hands of an exceptional team, in this case the Teva neuroscience sales and marketing team and couple that with a world class patient support provided by shared solutions and clinical nurse educators. The fact that it is this team that gives us the utmost confidence that we will continue to execute according to plan, especially when you consider that as of October 1st, Copaxone 40 milligram now has access to 94% of lives nationwide. Now it’s important to note, that these prescriptions will not manifest for about two months in TRXs, and that’s due to the fact that on average it takes about three weeks for patients to go through the benefits enrollment process. In addition 20 milligram patients will work down their existing inventory. So thank you very much Erez and it is back to you.

Thank you, Mike. On Q2 call I had shared with you how we plan to drive organic growth in our specialty franchise. I mentioned how we’ll defend potential LOEs, lot of exclusivities, the focus on successful execution of near-term launches, narrowing the focus on therapeutic areas, delivering on the promise in our pipeline. Develop unique patient centric strategies in our key PAs. Today, we'd like to provide you with tangible outcomes from the measures we have been taking. I would like to ask Dr. Rob Koremans to discuss our 2014 launches performance.

Thank you, Erez. And I am happy to report that it is not only Copaxone 40 that is really doing very well in terms of launches. We are extremely pleased with all of our key launches that we have undertaken this year so far, with all of the key launches being significantly over plan. I am also here to share Adasuve where we see less uptake as initially planned and the lessons we've learned from that are quite clearly show that for Adasuve, we were too optimistic in the time needed for formularies to take this fantastic product on-board. We remain optimistic for the product and we continue to believe that this is a fantastic product for patients and will give us up to $250 million of sales. But clearly the performance so far has not been as good as we had planned. This is not true for all of the other launches they are very much on-track to deliver. Plan B One, now the 75% market share in the emergency contraception in the U.S. GRANIX with over 10% of the short acting GCSF in the 12 months of launch, Lonquex which is in Germany now almost 12 months on the market and has also achieved over 10% of the long-acting GCSF and our DuoResp, Spiromax launch which is now in seven countries early in launch performing extremely well, it also benchmarks at other launches in this therapeutical area. So all-in-all, we are well on-track to deliver and this makes us very optimistic going forward, back to you, Erez.

Thank you, Rob. On the promise to focus on therapeutic areas, our strategic review of therapeutic areas included an extensive evaluation of our current and future capabilities to address unmet patient needs, the competitive landscape dynamics, barriers to entry and profitability with the purpose of crafting the winning strategy to achieve global leadership in each core TA. The core TAs on which Teva will focus are CNS including MS, neurodegenerative diseases and pain and respiratory including asthma and COPD. We are committed to being a world-leader in CNS and respiratory, both areas underpinned by significant and growing unmet patient needs. We strongly believe that the conjunction of our existing portfolio integrated global R&D, pipeline assets, patient intervention infrastructure and capabilities salesforce platforms and innovation capabilities positions us to deliver true value for patients and payors and to generate significant financial value for our shareholders. In woman health and oncology where we have a significant commercial presence and capabilities we will focus on market ready or go-to-market assets to maximize sustainable profitability and we will actively evaluate opportunities for commercial activities and collaborations. Innovation around the existing molecules will focus on core TAs and will continue in other TAs as well while we can bring substantial value to patients and payors targeting a unique space in the industry at the intersection of novel products and all starting products. In this process we have also identified pipeline projects for discontinuation, divestment or partnership. I would like to ask Dr. Michael Hayden to share with you the relevant details pertaining to assets designated for discontinuation divestment or partnership and also to share with you how we plan to deliver on the promise in our pipeline.

Thank you, Erez good morning to everybody. As Erez has explained, we have numerous assets that are exciting but not core relative to our focus therapeutic areas and these include assets in oncology, gastroenterology and immunology. In terms of our early-stage oncology programs, including two clinical developments, these provide significant and first of best-in-class opportunities and have unique utility against multiple cancer types. In addition, in our assets in gastroenterology and immunology, we have two assets including a first in its class and these assets also provide potential for significant improvement to current therapies in areas of significant unmet need. In addition, we are looking for structured financing and alternative funding for late-stage assets, where there are three programs that are not in our core therapeutic areas and these also offer significant commercial attention. In all of these programs, we've had a process now that has been evolved in talking to the community, the community of investors, both biotech and the pharma community and there has been a tremendous response and tremendous interest in numerous of these assets and we would expect of the coming months to be able to report on progress with regard to divestment of some of these assets and also opportunities for partnering structured approaches to partnering that allows some further development of some of our late-stage assets. Now as a result of this focus, we've been able to, on next slide focus pipeline. What you can see here with green being CNS and pain, yellow in respi, you can see that the vast majority of our portfolio and our pipeline is now focused to build strength and great promise in those three areas, the CNS and pain and respi. You can see also from this particular slide that our focus is not only on innovation…

Thank you, Michael. With unique patient-centric and integrated strategy we believe we can turn our respiratory and CNS pain core therapeutic areas into a 2.5 and 2 billion franchises effectively by 2019 on a combined franchise of $1.2 billion today. Full winning strategy to deliver substantial growth is also developed for the other core therapeutic area in MS, neurodegeneration and migraine. Our 2014 overall performance including strong cash flow from operations and free cash flow as it is manifested by this slide. 31% leverage by end of September 2014 and 1.76 debt-to-EBITDA ratio together with the progress in our transformation process readily trigger for us to resume earnings result, share buyback program so the $3 billion are now available for repurchase. In parallel, we continue to pursue and assess busy opportunities in all sizes subject to assessment criteria that we’ve already shared with you. Overtime, Teva will move from unlocking value by solidifying the foundation in our generic business and in our specialty business to generate value from capturing the synergies between the two and pursuing more and more integration, in a way which will enable us to target a unique space in our industry. I would like now to ask Eyal Desheh to review the financial report with more granularity.

Thank you, Erez. Good morning and good afternoon everyone, and I am happy provide some details on the business and financial results for the third quarter of 2014. As always we’re presenting most of our results on a non-GAAP basis while our GAAP results appear in our quarterly press release, as well as on the 6-K which we will be filing later on today. As you've seen and heard from Erez, from Siggi, Mike, Rob and Michael, this was a very good quarter. At the end of June this year, we divested two OTC plants which contributed about $250 million in annual sales with no profit and we no longer carry these sales. Excluding the divestment of these OTC plants and negative foreign exchange impact, we delivered 2% revenue growth in real terms. At the same time, we saw operating income increased by 13% year-over-year or 15% in real terms. Excellent margins, cost reduction and strong cash flow are the financial highlights for this quarter. Foreign exchange fluctuation had again a small negative impact on our results. As you can see, it reduced revenues by $57 million from Q3 last year or about 1% and operating income was reduced by $26 million. The two currencies with the more significant impact on the profits were the Russian ruble and the Israeli shekels. We are running an ongoing currency and hedging program which partially mitigates foreign exchange impact. Looking at the year-to-date results, we can see that Q3 was not a one-off good quarter. We consistently delivered improved results from the beginning of the year highlighted by 39% increase in cash flow from operations. As you know, we have two possible scenarios for profit and EPS in our guidance this year depending on the outcome of generic competition to Copaxone. We are…

and:

Thank you. We will now begin the question-and-answer session. (Operator Instructions) Your first question comes from the line of Umer Raffat of the ISI Group. Please ask you question.

I had two questions actually both R&D specific perhaps. First, Michael I noticed there is a, have guys examined Copaxone above 40 milligram doses and perhaps potential for less frequent dose administration because it’s unclear to what extends the study at that dose level? And number two I think there is a lot of activity on in MS and on the next-gen period side and you guys clearly have the strongest capabilities both on the formulation and legal fact. So Michael when I look at the slide on R&D I’m curious is there any internal immediate program you guys are looking into as well? Thank you. ISI Group: I had two questions actually both R&D specific perhaps. First, Michael I noticed there is a, have guys examined Copaxone above 40 milligram doses and perhaps potential for less frequent dose administration because it’s unclear to what extends the study at that dose level? And number two I think there is a lot of activity on in MS and on the next-gen period side and you guys clearly have the strongest capabilities both on the formulation and legal fact. So Michael when I look at the slide on R&D I’m curious is there any internal immediate program you guys are looking into as well? Thank you.

Thank you for that question. On the 40 milligram and higher dose than 40 milligram, of course as part of our lifecycle management we are interested in different approaches to further extend the life of the sales and highly affected drug and of course as part of the lifecycle management we’re also doing additional work to define some populations within MS. Who might be particularly have a particular favorable response to Copaxone because not every action just as with every drug response equally to this and that is why it is ongoing and proving to be very exciting in terms of the opportunity to stratify patients to improve the outcome for patient to beginning patients the right drug who will respond. And certainly as part of lifecycle management we’re looking at different approaches to Copaxone leaving cleared all kinds of approaches which I can’t really go into here but obviously this is different formulations, different approaches that really can further extend the lifecycle of this particularly important product.

Thank you. (Operator Instructions) Your next question comes from the line of Ken Cacciatore of Cowen and Company. Please ask your question.

Just first question is as you see the consolidation of the customer base in the generic side. I was wondering if you all could provide your perspective in consolidation on the generic side and maybe discuss if there is any FTC restrictions why there couldn’t be further consolidation of the major players? And then second question is on Slide 29 you gave stringent assessment criteria in terms of things that you would want to buy and you list EPS accretion ahead of generate long-term value to Teva shareholders. So it doesn’t make a kind of sense to me given that there is a lot of late stage de-risked assets out there that on the branded side that could really leverage our commercial footprint if you’re willing to be patient, it wouldn’t be accretive in the near-term but could be very value creating. So can you just discuss exactly how stringent that assessment criteria is, does it have to hit all four before you even make an acquisition? Thank you. Cowen and Company: Just first question is as you see the consolidation of the customer base in the generic side. I was wondering if you all could provide your perspective in consolidation on the generic side and maybe discuss if there is any FTC restrictions why there couldn’t be further consolidation of the major players? And then second question is on Slide 29 you gave stringent assessment criteria in terms of things that you would want to buy and you list EPS accretion ahead of generate long-term value to Teva shareholders. So it doesn’t make a kind of sense to me given that there is a lot of late stage de-risked assets out there that on the branded side that could really leverage our commercial footprint if you’re willing to be patient, it wouldn’t be accretive in the near-term but could be very value creating. So can you just discuss exactly how stringent that assessment criteria is, does it have to hit all four before you even make an acquisition? Thank you.

Hey Ken it is Siggi I will take the consolidation. I think as you rightly said there has been a significant consolidation. Both globally but especially in the U.S. over 60 plus of the generic business I think overall is with the top-three customers. I think it’s difficult for us to say if there is any FTC impact on the consolidation going forward. But we know that as of today it’s 60 plus of the business is are with these three customers. I think in that situation it’s good to be a strong and a large company. We have the largest offering of any generic company in the U.S. we also have the largest offering in Europe where they have a global presence. So I think we don’t see that as a negative to have a strong global customer to work with. We work extremely well with all three of the big customers we can offer them I think portfolio that nobody else can. But question about further consolidation I think it would be a guess on my behalf to take that any further.

And Ken on my end with the right opportunity at the specialty side we might use no longer-term approach in basically looking at the value of measures that we have specified.

And if I could just add there the good example is Labrys where this was a program that’s of course not immediately accretive to EPS but is a strong and solid strategic fit for Teva in terms of pain and migraine and has the potential against a very novel target to generate very significant long-term value. So it depends on the opportunity each of these criteria are important but each assets or each business relationship may have different features that are stronger than others.

Ken the answer is clear on the second one?

Thank you. Your next question comes from Gregg Gilbert, Deutsche Bank. Please ask your question.

Kind of a follow-up on that Erez Teva’s making clearly good progress on solidifying the foundation, should investors expect to have to be active on the acquisition front in the near-term? And maybe what are your key acquisition priorities at this point? And my second question is for Siggi. You mentioned injectables as a key growth area. Are you satisfied with Teva’s capabilities and portfolio in injectables and the hospital channel more broadly or do you think you need to supplement that externally? Thanks. Deutsche Bank: Kind of a follow-up on that Erez Teva’s making clearly good progress on solidifying the foundation, should investors expect to have to be active on the acquisition front in the near-term? And maybe what are your key acquisition priorities at this point? And my second question is for Siggi. You mentioned injectables as a key growth area. Are you satisfied with Teva’s capabilities and portfolio in injectables and the hospital channel more broadly or do you think you need to supplement that externally? Thanks.

So Gregg maybe I take last question first. I think first of all the good thing about Teva obviously there was an offset in the Teva business few years back when we had the quality issue in the Irvine plant. Clearly that has been addressed very significantly. We know we identified that side on the slide previously as being divested or under divestiture at the moment. But we also have a very strong international side for the injectable business. I think overall we need to supplement, we’re looking for further opportunity in injectables but also keep in mind as we are, I said it on the last call and I say it again, I feel Teva is the world-leader on complex injectable development on the long lasting injectables. So I am pleased when those come to market. They’re still a method of gaps in the portfolio, we’re looking for, but overall I am pleased with where we’re today.

And on my end, we have been assessing actively potential opportunities in the market. We look for technologies micro-dose is just one illustration of the notion. We look for attractive pipeline assets and Labrys others, and other illustration of what we might look at. We might pursue generic businesses in Aussie markets and in the contract generic arena if we find the right one. And we might also look at potential attractive specialty assets in United States and all Europe. We don’t rule out the possibility of also transformation transaction if the right one manifests itself.

Thank you. The next question comes from the line of Liav Abraham of Citi. Please ask the question.

First question for Erez you mentioned I think on the last call that you were conducting a full review of the Company's cost base. I was wondering if this has been completed and whether you can provide at least some additional initial thoughts following this review. And the second question for Michael, a two parts on Copaxone firstly I understand that Symptoms’ generic Copaxone was approved in Argentina a couple of months ago. I was wondering if you've gotten hold of this and conducted any tests. This is the branded Copaxone and anything you can share with us? And also on your progress for genetic biomarker tests for Copaxone, how responders, where it stands and potential timing for this coming to the market? Thank you. Citigroup: First question for Erez you mentioned I think on the last call that you were conducting a full review of the Company's cost base. I was wondering if this has been completed and whether you can provide at least some additional initial thoughts following this review. And the second question for Michael, a two parts on Copaxone firstly I understand that Symptoms’ generic Copaxone was approved in Argentina a couple of months ago. I was wondering if you've gotten hold of this and conducted any tests. This is the branded Copaxone and anything you can share with us? And also on your progress for genetic biomarker tests for Copaxone, how responders, where it stands and potential timing for this coming to the market? Thank you.

Michael, please start.

With regard to the polynomial of the Symptoms product in Argentina just to say that we have obtained that particular product and have done detailed analysis. This will be a part of as you know we have an open citizen's petition and the FDA has chosen the citizen's petition and advised us this is the appropriate place for a discussion of the different attributes of Copaxone and portfolio generics and we will plan to submit additional data before the end of November on the results of those particular studies. So ours is just a heads up on that this will be coming in the very near future. With regard to the genetic biomarkers we are continuing generic validation studies and have now completed the validation studies in our cohorts that we have announced from our own studies. These are continuing to provide strong support for the ability to identify a top population of patients could be between 40% to 60% of patients, who are actually -- can be predictive to have an outstanding response to Copaxone. We are continuing this work by using also outside cohorts and we were to see the development of the lab derived test if within one of the months or until 2015 and this has all been unrolled. Of course this is an ongoing process of getting additional information from other cohorts to further validate a highly predictive timing that we have thus far.

Yes, maybe Liav just one comment on my end that pertains to your second question. We shall refrain until we submit our response to the CP to refrain from providing more details on the analysis that we have conducted on Symptoms. I know between the split will be able to basically to understand what is our view and what are the findings in the analysis that was conducted in the course of November after we submitted our response. And on your first question, earlier we are providing yield for the first time much more granularity that relates to our cost reduction program. And you see clear association between gross savings and net savings. And now the savings relate to the relevancy in that item. And basically what you can learn from the numbers which were provided is that from the beginning of 2014 until beyond 2017, Teva is committed to generate $1.3 billion of net savings. And from now on by the way we will put all the focus on net savings only which is the relevant number. This is what really matters for you. So from the beginning of 2014 on the back of negative net savings in 2013 of $500 million, in order to generate the 800, we need to deliver and we are committed to it, $1.3 billion of net savings. Now you will be able to basically to monitor and track and the progress and which means that Teva is committed to deliver a number which was not discussed until now with the Street. Overtime, we will continue the assessment and evaluation in order to try to extract more potential savings as we go along.

Thank you. Your next question comes from the line of Chris Schott of JPMorgan. Please ask your question.

Just two questions here. First on transformational acquisitions, I guess a question for Erez, do you believe Teva is ready for such a transaction if it were available and you are obviously making very good progress on solidifying your foundation. But it seems like you've got a number of significant initiatives on your core business that you are kind in the midst of, if in the furnishing of variables is this the right time for that? My second question was on the decision, the Board decision to resume and increase the buyback. Can you just give us some more color of what drove that decision? Thanks very much. JPMorgan: Just two questions here. First on transformational acquisitions, I guess a question for Erez, do you believe Teva is ready for such a transaction if it were available and you are obviously making very good progress on solidifying your foundation. But it seems like you've got a number of significant initiatives on your core business that you are kind in the midst of, if in the furnishing of variables is this the right time for that? My second question was on the decision, the Board decision to resume and increase the buyback. Can you just give us some more color of what drove that decision? Thanks very much.

Okay so, on the first one, Chris the progress that we have been witnessing on day-by-day basis with the transformation of the Company in order for according to must win 2014 that we’ve shared with you here. I feel more and more comfortable with the level of readiness for acquisition in general. And overtime I believe also for conformation and transaction. Basically everything we do create a platform that is much more solid, much more equipped to deliver growth in the future based on organic movement or inorganic movement. And that’s the main purpose of sequence of measures that were specified and was shared with you. On the other front I think I said it I just maybe need to reiterate the notion that on the back of the performance in 2014. The rate of progress in the transformation process all the measures are conducted. And there is a very strong cash flow that we’ve been generating. We felt that that’s the right time to resume the buyback program without derogating from the quest to pursue also acquisitions.

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

I have couple of questions. First on the concerning to solution back across the announcement that you would be stepping down by the end of the year, if you could just update us on how the search is going and whether or not the Board’s meeting for an internal candidate an external candidate and what that might need for the rate of progress that you’re making with the margin improvement story and the new rollout, that being an external candidate may need more time to get up to speed versus an internal candidate? Separately just building on the buyback question, is there anything to lead into the increase of the buyback now, given you have a marvelous acquisition candidates. Is it more a reflection of how expensive deals are out there or that you’re really not looking you may be ready for a transformational acquisition that was really not high priority. Or is it as you’re looking into 2015 and you think the shares are effectively inexpensive? Because you have done a lot of acquisitions on your list and it would seem just speaking with cash would be something that you’d consider? Thank you. BMO Capital Markets: I have couple of questions. First on the concerning to solution back across the announcement that you would be stepping down by the end of the year, if you could just update us on how the search is going and whether or not the Board’s meeting for an internal candidate an external candidate and what that might need for the rate of progress that you’re making with the margin improvement story and the new rollout, that being an external candidate may need more time to get up to speed versus an internal candidate? Separately just building on the buyback question, is there anything to lead into the increase of the buyback now, given you have a marvelous acquisition candidates. Is it more a reflection of how expensive deals are out there or that you’re really not looking you may be ready for a transformational acquisition that was really not high priority. Or is it as you’re looking into 2015 and you think the shares are effectively inexpensive? Because you have done a lot of acquisitions on your list and it would seem just speaking with cash would be something that you’d consider? Thank you.

No, on the second one I’ll start and maybe I will ask Eyal to reinforce it. But David about the right balance between I’d say different dimensions in there. And we need to find the right balance there. I need to be tuned to also I would say need -- and these are our shareholders. It’s also important for us we believe that at this level to of course to spell out a strong message that is around the fate we have in the future of Teva. And in the basically the share price is equivalent today. And by the same time it doesn’t mean that we’ll not be pursuing acquisitions and that’s something that was basically convey via modern ones during the call and I am just underscoring it now again about the balance, about the balance between different dimensions in the capital allocation strategy of the Company. Eyal would you like to add something?

You said most of it and strong cash flow, strong balance sheet, a significantly improved liquidity position and the ability to load more that on the balance sheet if we needed. We’re going into the market as we wrote promptly with no further delay we believe that this is the right time to do it and the stock price represented. And we can always start if an interesting acquisition comes along, which is way above the $3 billion that we have in the current plan. And we’ll continue to execute it day in and day out.

And on your first question David the model is committed to improve the governance and to conduct all the measures that were communicated they are just about time and you’ll see important measures that before year-end you’ll see other measures in the course of 2015 in a quest to transform also the governance.

Thank you. The next question comes from the line of Shibani Malhotra of Sterne, Agee. Please ask your question.

I have got a couple. The first is for Siggi, having been at Teva for a few months right now. Can you talk about the cost cutting initiatives? I mean where do you see room for further streamlining and where do you see opportunities for divestitures or areas in generics in particular that you would like to invest in as far as your previous experience? And then the second is around the hydrocodone yard product can you talk you about how this product will be differentiated in the market and then how you’re thinking about opportunity in IR that you talked about going forward as well? Thank you. Sterne, Agee: I have got a couple. The first is for Siggi, having been at Teva for a few months right now. Can you talk about the cost cutting initiatives? I mean where do you see room for further streamlining and where do you see opportunities for divestitures or areas in generics in particular that you would like to invest in as far as your previous experience? And then the second is around the hydrocodone yard product can you talk you about how this product will be differentiated in the market and then how you’re thinking about opportunity in IR that you talked about going forward as well? Thank you.

I think overall there has been enormous progress in Teva. If you see at the end of fourth quarter 2013 the profitability was 19.2% we are just over 22% now I have communicated that I want to improve this even further I think we should be on par with our significant competition out there. So I think by the end of 2017 we should have improved from the beginning of this year or end of last year we should have come improved the profitability of the generic business by about 600 basis points. So we should stay about between 25% and 26% profitability. Where that comes from -- a part of it will come from cost of goods sold. We clearly have a strong initiative there we have a complex supply chain. We are working hand-in-hand with the operation of the supply chain to simplify our operation to lower our cost of goods. We also are looking for a different product mix. The introduction of complex generics they have a higher margin in the market. There is less competition I mentioned a new product that we’re submitting there is much more in the pipeline of these products. But also if we look at the cost sales and marketing and G&A we’re always looking for opportunities in that. This is our efficiency program where can we get the best return on our investment. And what they initiated as I mentioned was a review of all the markets. Teva today is in 60 markets. We are top three companies and close to 30 out of the 60 market. We are reviewing each of these markets and prioritizing them where we want to invest what markets we need to turnaround and where we might want to look for optimistic scenario and that doesn’t has to be a divestiture of the market that could be a different business model that could specialty model going forward. So this work is ongoing I hope to share some of this with investors soonest. The team is working hard but I think we have a good understanding how we can move and improve the profitability of the generic business going forward.

And Shibani if I could just answer that and provide some transparency on our abuse-deterrents ER hydrocodone of course as part of the efficiency measures within Teva we’re also looking and improving our efficiency in our R&D organization and of course that includes our generic R&D and that also includes prioritization of sites, including making sure we have critical mass and economies of scale to truly yield additional benefits inside so as part of the efficiency measures also looking at various sites in our generic R&D organization. Now with regard to the abuse-deterrents ER hydrocodone we have performed and had positive results from numerous abuse-deterrent studies including the RO CREST human abuse liability study and also as we reported in the recent press release from a nasal human abuse liability study. Now these are both category three studies which would support an FDA abuse-deterrents claim of TO3 that is the product would be expected to result in the meaningful reduction in abuse and this would get a highest that you could expect of this the stage with a TO4 claim only when the products extremely demonstrates in the market a reduced abuse in the community. So of course we are pleased our abuse-deterrent technology appears validated and we’re mostly interested to also apply this for other products recognizing that the real epidemic of abuse in the United States but now extensively more in other parts of the world. The major abuse is occurring with immediate released products where it’s maybe 80% of all the abuse in those immediate-release opioids and now we’re directing this very novel technology to development of products that would provide added anchorage and safety and improve mainly to patients and the communities in which they live using this technology.

Michael maybe to add that, this is Rob and Shibani maybe to add on that is also our ER hydrocodone abuse-deterrent formulation is the only one, not only one to have positive clinical trials but it’s going to be twice daily form which is exactly what our pain customers would ask for in managing in this complex pain disease. So our product is really very-very differentiated from that of our competitors.

Thank you. Your next question comes from Ronny Gal of Sanford Bernstein. Please ask your question.

The question one is about Europe. You get couple of really nice launches in Europe around DuoResp and Neulasta follow-on product. Can you describe them a little bit in more details and for some reason when we look at the revenue line for Europe generics, it seems flat. So can you just describe the trends a little bit what is going to that makes those products and that makes the overall line not go up? And second, Erez you discussed in the past keeping the earning lines through for '15 and '16, now that you've got a pretty nice couple of quarters behind you and the numbers beginning to look a little bit better, anymore thoughts. This year we think about this was kind of like the floor and with some buybacks and very nice product trends, we could potentially see better numbers and you are not committing yourself to long-term guidance here but just in terms of how do you think about it? Sanford Bernstein: The question one is about Europe. You get couple of really nice launches in Europe around DuoResp and Neulasta follow-on product. Can you describe them a little bit in more details and for some reason when we look at the revenue line for Europe generics, it seems flat. So can you just describe the trends a little bit what is going to that makes those products and that makes the overall line not go up? And second, Erez you discussed in the past keeping the earning lines through for '15 and '16, now that you've got a pretty nice couple of quarters behind you and the numbers beginning to look a little bit better, anymore thoughts. This year we think about this was kind of like the floor and with some buybacks and very nice product trends, we could potentially see better numbers and you are not committing yourself to long-term guidance here but just in terms of how do you think about it?

I will start with the second one earlier. We will provide more visibility into 2015 at least 2015 during our guidance call in December.

If I talk about the generic revenue in Europe, I think overall you can see that the generic revenue in Europe is flat to a little bit declining. But overall the reason we are doing that is we are focusing on the bottom-line. We are participating in fewer tenders in Germany and we are running the business for a bottom-line. So we have new launches, we have a good business, but overall there is a slight decline. Even though the profitability in Europe is significantly less over the last year, and maybe Rob, you talk about the DuoResp and Neulasta.

Yes, with pleasure. So the DuoResp Spiromax is now recently launched it is in seven countries. It’s the first that launches with our fantastic device that would allow really much better delivery of products to patients in their lungs as they are intuitive designs. It’s in seven countries in the market and this is a product that we expect slow penetration but ultimately it’s going to reach 450 million to 500 million in sales which is a very important launch and it’s tracking well ahead of plan. :

Please go ahead.

So what I guess just the best part of bringing up the question of mix versus unit cost, so even discussing moving facilities to eastern, to lower cost location. But you also have a little bit of a mix affecting your tail right now from both the Europe and the United States with couple of launches in the second quarter. So when we think about your cost structure I think most people are talking about cost per 1,000 pills. Can you just give us a feel, I mean you look at this number internally I am sure, how was your cost per thousand decreasing overtime, has it already decreased from let's call the beginning of this year? How much? If we look at 2015, what are we looking at here that is what is the effects of the cost versus mix effect in your business? Sanford Bernstein: So what I guess just the best part of bringing up the question of mix versus unit cost, so even discussing moving facilities to eastern, to lower cost location. But you also have a little bit of a mix affecting your tail right now from both the Europe and the United States with couple of launches in the second quarter. So when we think about your cost structure I think most people are talking about cost per 1,000 pills. Can you just give us a feel, I mean you look at this number internally I am sure, how was your cost per thousand decreasing overtime, has it already decreased from let's call the beginning of this year? How much? If we look at 2015, what are we looking at here that is what is the effects of the cost versus mix effect in your business?

Carlo maybe you take it all.

Yes, thank you Erez and thank you Ron for the question. We track our cost per 1,000 tablets like everyone does and we are starting to see an impact of the migration of our products but most importantly the impact we are seeing is from the effect of our procurement initiatives which are bringing meaningful reduction in our cost of goods. We are targeting the 2% to 3% reduction in actual cost of our material and we are seeing that flowing through the bottom-line. And the other aspect that is having an impact is our operational excellence program, the typical Lean Sigma activity on our strategic sides where we are concentrating our focus. So we have the plan to reduce our solid cost of goods of about 10% over the next three years in conversion cost and that's complemented by the procurement impact on the materials.

And Ronny I believe that during 2015, maybe before the end of the year, we will be able to show and to provide more granularity in terms of competitiveness of our different facilities a lot the other competition. And also there is an intention which is not yet manifested in the what was presented to you until now to invested in direct resources to establish operations also in local country something which is not yet in the equation but we started to move. And I believe that during 2015, we would be able to share with you our progress also on this one.

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

So two questions first and perhaps Michael. Hey you didn't provide an update on the MTE program that hasn't been talked about in terms of sort of update in terms of the renewed R&D focus. And the my second question for Eyal, if you could just provide us with a bridge in terms of the revenue guidance adjustment that we saw with a slight take down in terms of the top-end. I think much of that is FX. But just curious what other factors that might be involved there? Thank you. Barclays Capital: So two questions first and perhaps Michael. Hey you didn't provide an update on the MTE program that hasn't been talked about in terms of sort of update in terms of the renewed R&D focus. And the my second question for Eyal, if you could just provide us with a bridge in terms of the revenue guidance adjustment that we saw with a slight take down in terms of the top-end. I think much of that is FX. But just curious what other factors that might be involved there? Thank you.

Thank you so much for that question on the MTE program although the way we like to refer to it, not as the emulation ease in the existing molecules. This still remains a very important source of new products for our pipeline. We have now 18 products approved for development and these include obviously using innovation for example using our abuse-deterrent technology, the opportunity to do formulations that combine those and still we’re making great progress. So we’ve seen tremendous synergy between that is built on our of course large generic portfolio. But there has been tremendous synergy and creativity coming out of the interaction between the specialty, the medical perspective, the chemical perspective and our group in the generic space. In addition to that as we think about an innovation using existing molecules, it’s not just about the pill but it’s also about novel modes of delivery, novel modes of enhancing patient compliance, it’s using different approaches to digital help that will help in this approach. So it’s been a well of many new ideas and this is going to -- this will be the first year that we actually have MTE already approved and what we’re excited about is living up to its potential as announced about a year ago. We announced in for events actually entering to chronic development. And again this will be an accelerated development fulfilling the promise of accelerated and getting to the market from the time we start of less than six years and the cost at the end will be significantly less than other products, because it’s built on portfolio knowhow, tremendous knowledge in the product or from the APIs in place and we’re able to look at novel approaches to improve. And this is mostly in our core areas but we’re of course also looking at significant opportunity to outside core areas, where there is a tremendous patient need and Teva has the ability to service that need.

And in terms of the 18 programs that you mentioned, Michael will those largely be the ones that were discussed last year? Barclays Capital: And in terms of the 18 programs that you mentioned, Michael will those largely be the ones that were discussed last year?

Well there are new ones of course and we haven’t -- but we will be finding a time to share those with the market, so that people can gain confidence about not only the announcement in the future development but real announcement in the clinical development pathway on the road to approval. And we look forward to sharing more transparency on details about that program in the upcoming year.

And then Eyal if you could just provide some thoughts or details in terms of the guidance? Barclays Capital: And then Eyal if you could just provide some thoughts or details in terms of the guidance?

Sure. When we’re looking at Q4 you can extract it from the annual guidance we’re looking at over $5 billion in top-line. When compared to Q4 last year which was very-very strong on sales we’ll probably be equal tax on it about $140 million less than last year, this is all compared to Q4 last year. FX impact could be as high as $100 million, sales of our OTC plants included about $60 million in the sales of Q4 last year. This is the majority of the difference in top-line. All this would not have an income on operating profit the operating profit is expected to be higher than in Q4 last year. And as I mentioned earlier we’re going to have higher taxes, with 7% effective tax rate in Q4 last year and this quarter is going to be anywhere between 19 to 20, so in line with what we have guided for 2014. So these are the big pieces, cost reduction, improved efficiency, good mix in sales, improvements in generics that we’ve seen throughout the year but on the top-line foreign exchange impact the sales of the OTC and Copaxone could be lower than what had in Q4 last year which was one of our biggest quarters ever.

So maybe Doug I would like you to maybe to reinforce the net on the bottom-line. Among tax expenses, number of shares and final expenses we have $0.20 to $0.25, in Q4 2014 versus 2013 just on the back of these three components, before the impact of 100 million net revenues left in Copaxone, Q4 2014 versus Q3 2013. So if you take all these components you understand basically also the bridge of EPS between the quarters. So $.20 to $0.25 finance expenses, number of shares and tax expenses $0.22 to $0.25 before $1 million less net revenues they are terminating for Copaxone. So you can understand there basically what we plan to generate in terms of at least operating profit Q4 2014.

Yes, which means that the rest of the business, the generic business both U.S. Europe, rest of the world and only other specialty business that we’re running globally is going to show improved results and compensate for the mostly non-operating profit items that are having a negative impact.

Thank you. Your next question comes from the line of Marc Goodman of UBS. Please ask the question.

Could you talk about generics a little bit in the U.S. Xeloda, Lovaza, Baraclude, obviously those were the big drivers if you can talk about how much revenue did you get from them? And then kind of the rest of the base and whether there is price increases in some of your base business and whether that impacted some of it? And you talked a little bit about Europe can you talk about the rest of the world a little bit with generics to come of the important regions for you and the growth drivers there? And then just one question in the branded portfolio, there is a drug called Albutropin which obviously a growth hormone, there is many growth hormones on the markets so I’m curious, what the hook is for this product? Thanks. UBS: Could you talk about generics a little bit in the U.S. Xeloda, Lovaza, Baraclude, obviously those were the big drivers if you can talk about how much revenue did you get from them? And then kind of the rest of the base and whether there is price increases in some of your base business and whether that impacted some of it? And you talked a little bit about Europe can you talk about the rest of the world a little bit with generics to come of the important regions for you and the growth drivers there? And then just one question in the branded portfolio, there is a drug called Albutropin which obviously a growth hormone, there is many growth hormones on the markets so I’m curious, what the hook is for this product? Thanks.

Let me talk a little bit about the U.S. I think overall we have a good of the new launches this year Copaxone being the generic Lovaza Omega-3 and Entecavir, Entecavir was a new launch for us in the quarter I think all of these three products have been very significant contributor to the year. I think in fourth quarter the big launch in fourth quarter I mentioned seven launches but I think there is an expectation of launch of celecoxib sometime in December. I think its December 10th. I think the pricing I’ve said it before there is never a price increase on the base business as a whole like any other business if there is a price opportunity that comes in the market we look for that, but the base business itself has been eroding overall because of the consolidation of the customers. When there is an opportunity when there is a shortage in the market we obviously look for pricing like any other business. But overall as I’ve said many times before the base business itself, is slowly eroding the overall of the base business. If we look at the rest of the world we have a very significant generic business in Russia. It’s a good business we’re improving the pipeline in Russia we’re building that. Obviously we also have the good Russian business due to the Copaxone tender that Eyal mentioned in his presentation. We see that business growing going forward. We see a double-digit growth in the business even though the market is growing high single-digits. Obviously the FX has impacted us the effect of the ruble has affected us just in third quarter and we expect to see that in fourth quarter. For the rest of the world Latin America is still a significant contributor, we’re a strong player in Chile, in Peru. We have a growing business in Argentina. We have a relatively small business in Brazil which we want to grow further and the same applies to Mexico. So these are the key growth markets that we want to focus on. There is multiple opportunities. We have a significant portfolio that we haven’t introduced in these markets. We really see a good opportunity I expect the growth markets to be the fastest growing region of the Teva business going forward with the exercise we’re doing today.

I’ll just comment on the Albutropin product, this is a good product in development in our pipeline of course it’s the 100 milligram once weekly liquid formulation with a unique and competitive device.

Can you hear me? Please continue to standby. The conference will resume shortly.

Okay Tracy I would like to thank you all very much for attending our call today and I look forward to touching basically with you in the near future.

Thank you. That does conclude our conference for today. For those of you wishing to review this conference, the replay facility can be accessed by dialing within the UK on 0845-254-5205 or alternatively on country code press (44)-145-255-0000. The reservation number is 13650976. Thank you for participating, you may all disconnect.