Though you may not have heard of it, Teva Pharmaceuticals is Israel’s largest company, and one of the top 20 pharmaceutical companies worldwide.
With profits of $1.07 billion in 2005, Teva became the nation’s first corporation to make more than a billion dollars in profits in one year — largely helped by fast-growing sales of Copaxone, the company’s first patented drug for the treatment of multiple sclerosis, which recorded sales of $1.2 billion last year.
The acquisition of the Florida-based pharmaceutical company IVAX in July 2005 for $7.4 billion made Teva the world’s largest manufacturer of generic pharmaceuticals.
“2005 was a challenging year for the pharmaceutical industry,” observes Israel Makov, Teva’s president and CEO, “but it was a record-breaking year for us, not only financially but strategically.”
Estimates suggest that Teva’s sales will surpass $7 billion this year. Its latest acquisition should reinforce Teva’s already strong presence in North America and Western Europe, and give the Israeli company a firm foothold for the first time in Latin America and Eastern Europe.
One of the country’s longest-established firms, Teva was founded in 1901 in Jerusalem as a small wholesale medication business; it was called Salomon, Levin, Elstein, after its founders.
Imported pharmaceuticals were loaded onto the backs of donkeys and camels for distribution. The company very quickly became the main marketing arm for pharmaceuticals in the land of Israel — a position it maintains today as the fully owned distribution subsidiary of Teva.
During the 1930s, with the arrival of many pharmacological professionals fleeing Nazi Germany, the first manufacturing plants were established in the region. These small-scale companies, including Teva (Hebrew for nature), which became the production arm of Salomon, Levin, Elstein, struggled to compete with imported ready-made pharmaceuticals. But World War II boosted the local manufacturing industry (supplies from war-torn Europe were interrupted), and companies like Teva and local competitors Zori and Assia extended sales to neighboring countries under British control.
In 1951, Teva became one of the first companies to issue its stock on the newly formed Tel Aviv Stock Exchange. The modern entity of Teva was formed in 1976 when the company merged with its two main rivals and Assia’s CEO Eli Hurvitz took over the helm.
It was Hurvitz, a kibbutznik who joined the company in a junior management position after graduating in economics and business administration from Hebrew University in 1957, who would transform Teva into a global pharmaceutical powerhouse. Hurvitz, 73, stepped down as CEO in 2002 but continues to serve as chairman.
In the 1980s, Teva consolidated its position in Israel by acquiring Israel’s two remaining major drug manufacturers, as well as a leading producer of active pharmaceutical ingredients and a manufacturer of disposable medical equipment. By 1985, when Teva’s annual sales topped $100,000 for the first time, nearly half of which were exports, the company was ready to take on the world.
By 2004 Teva was America’s largest pharmaceutical
provider, with one out of every 15 U.S. doctor’s prescriptions buying a Teva medication.
Currently, Teva’s shares are the most popular with institutional investors on the Tel Aviv Stock Exchange. Teva’s shares are also traded on Nasdaq, and the London and Frankfurt stock exchanges.
While Teva remains far behind the world’s largest pharmaceutical companies like Pfizer, which expects an annual cash flow of $16 billion in 2006, if its patented pharmaceuticals succeed, the day may come when the Israeli company becomes the world’s No. 1.