The World’s Top Ten Generic Companies

1. Executive Summary

1.1 The Top Generic Pharmaceutical Companies are Expanding Their Portfolios
1.2 Aims, Scope and Format of this Report
1.3 Research Methodology

2. An Overview of the Leading Generics Producers in 2004

3. The World Generics Market

3.1 The World Generics Market to Grow by over 12% Per Annum to 2010
3.2 Price is the Principal Competing Factor in the Generics Market
3.3 The US has the Largest Generics Market
3.4 Countries with Lowest Branded Drug Prices have the Highest Generic Growth
3.5 Patent Expiration is the Major Driver in All Generic Markets
3.6 In 2004 the US Generics Market was Worth Over $18bn
3.7 Generic Penetration of the US Pharmaceutical Markets Reaches 50% by Volume
3.8 The UK has the Highest Generic Penetration by Value in All European Markets

4. The US and European Regulation of Generic Drugs

4.1 Generic Pharmaceuticals in the US Market
4.2 The Hatch-Waxman Act, Patent Expiration and the Promotion of Generic Drugs: Title I of the Act
4.3 The Hatch-Waxman Act Title II has Promoted Innovation in the Branded Pharmaceutical Industry
4.4 The Success of the Hatch-Waxman Act
4.5 Generics in the European Market and European Patent Hurdles
4.6 European Generic Drug Development: Variation Between European Countries
4.7 Data Exclusivity in the EU Results in Extra Years Protection for Patented Drugs
4.8 Additional EU Patent Protection is Afforded by Supplementary Protection Certificates
4.9 Compulsory Licensing Allows Generic Manufacture Before Patent Expiry
4.10 The WHO and Compulsory Licenses
4.11 Compulsory Licenses and the TRIPs Agreement
4.12 The Benefit of Being the First Generic to Market
4.13 Biogenerics is Potentially a Very Large Market
4.14 Bioequivalence is a Big Problem for the Biogenerics Industry
4.15 US Biogeneric Regulatory Framework
4.16 European Drug Regulation
4.17 European Biogeneric Regulation

5. TEVA Pharmaceutical Industries

5.1 Background: Teva was Initially a Wholesaler Company
5.2 Except for Copaxone Teva Branded Drugs are a Small Part of the Business Model
5.3 Copaxone Remains an Important Revenue Source for Teva
5.4 Copaxone Worth Over 19% of Total Teva sales
5.5 The World MS Market Will Continue to Grow Helping Sales of Copaxone
5.6 Teva's Pipeline for Novel Drugs is Small
5.7 Approvals and Launches for Teva Generic Pharmaceuticals in 2004-2005
5.8 Teva Financials, 2004
5.9 Teva's North American Generic Pharmaceutical Sales are 64% of All Sales
5.10 Teva European Generic Pharmaceutical Sales are High
5.11 Generic Sales in Israel Account for Most of RoW Sales
5.12 Generic Sales Increase in 2004 by Over 50%
5.13 Mergers and Acquisitions, 2000-2004
5.13.1 Novopharm, Teva Classics and Honeywell FPC
5.13.2 Sicor Inc.
5.13.3 Dorom Takeover in Early 2004
5.14 General Pharma Agreements
5.14.1 Teva and Alpharma's Gabapentin Agreement
5.14.2 Teva and Active Biotech's Laquinimod Agreement
5.14.3 Teva and Schwarz' Truce over Moexipril
5.14.4 Teva and Biovail's Dispute Resolved
5.14.5 Teva and Gamida-Cell
5.15 Litigation
5.15.1 Teva Settle with Bristol-Myers Squibb Regarding Carboplatin
5.15.2 Teva Continue to Sell Hydrocodone Bitartrate and Ibuprofen
5.15.3 Pfizer's Accupril Patent Found to be Valid
5.15.4 Teva Saveint get Go-Ahead for rhGH
5.15.5 Fosamax Patent Invalid
5.15.6 Teva Settle with GSK over Lamitrigine
5.16 Company Outlook, 2004-2010

6. Novartis’s Sandoz

6.1 Background: Novartis Re-branded Its Generics Companies as Sandoz in late 2003
6.2 Sandoz Products: Retail Generics
6.3 Sandoz Products: Contract Biopharmaceuticals
6.4 Sandoz Products: Active Pharmaceutical Ingredients (API)
6.5 Sandoz Products: Product Intermediates
6.6 Sandoz Has Wide Ranging Strategic Objectives To Consolidate Its Position In The Generics Sector
6.7 Sandoz Net Sales in 2004 Increased While US Sales Fell
6.8 Cardiovascular Agents Constituted the Principal Market for Sandoz
6.9 In 2004 Sandoz Provided over 10% of All Novartis Sales But Had Low Growth in Comparison
6.10 The Majority of Sandoz' 2004 Sales Were in Retail Generics But The Highest Growth Was in Biogenerics
6.11 Sandoz Reported Decreases in Operating income, Profit and Operating Margin for 2004
6.12 Sandoz Achieved a Growth Rate of Over 10% in the first half of 2005
6.13 Sandoz Has Consolidated Its Market Position Through Acquisitions
6.13.1 Sandoz Acquisition Post-Unification: Sabex
6.13.2 Sandoz Acquisitions Post-Unification: Durascan
6.13.3 Novartis Buys Hexal and Eon in $7bn Deal
6.14 Sandoz Files Lawsuit Seeing FDA Ruling On the Biologic Drug Omnitrope
6.15 Sandoz Invests in Low Cost Production
6.16 The Outlook for Sandoz 2004-2010 - Being Part of Novartis Will Provide a Significant Advantage

7. Merck KgaA Generics

7.1 Merck Generics is a Leading International Generic Pharmaceuticals Group
7.1.1 Merck - The Oldest Pharmaceutical Company in the World
7.1.2 The Structure of the Merck KGaA
7.1.3 The Generics Division Generates the Largest Sales in Merck's Pharmaceuticals Business Sector
7.1.4 Recent Developments in Merck Generics - Expansion of Core Business
7.2 Merck Generics Worldwide: the Merck KGaA group of companies
7.2.1 Alphapharm - Australia
7.2.2 Genpharm - Canada
7.2.3 Merck South Africa
7.2.4 Generics UK Limited
7.2.5 Dey Incorporated
7.2.6 Other Merck Companies Worldwide
7.3 Merck Generics Financials, 2003-2004
7.3.1 Two Types of Generics Markets
7.3.2 Generics Division the Most Successful for Merck in 2004
7.3.3 Successful Business in France
7.3.4 Integration of Dey as the Basis for Strategic Reorientation
7.3.5 All Regions Except for Japan Yielded Positive Growth in 2004
7.3.6 Other Key Financial Results - 2004 Marked a Significant Increase in Profits for Merck KGaA
7.4 Major Developments in Merck Generics
7.4.1 Innovative Products for High-Growth Indications
7.4.2 Acquisition of NM Pharma from Pfizer
7.4.3 Litigation and Other Claims Against Subsidiaries Resolved
7.4.4 Merck To Leverage Its Position In Generic Respiratory Medicines
7.5 The Outlook for Merck Generics, 2004-2010 - Strategic Focus Should Provide Continuing Growth

8. Schwarz Pharma

8.1 The History and Background of Schwarz Pharma
8.2 Schwarz Pharma Has Core Strengths in Cardiovascular and Gastro-Intestinal Fields
8.3 Schwarz' Product Portfolio - An Extended Range of Indications Treated
8.4 Approval of Generic Omeprazole is a Major Coup for Schwarz Pharma
8.5 Schwarz Financials, 2003-2004
8.5.1 Sales Increase Significantly After Omeprazole's Launch But Fall in 2004
8.5.2 KUDCo's Generic Omeprazole - Declines in Revenue Greatly Affect Schwarz' Net Sales Figures
8.5.3 Schwarz Pharma: The Financial Outlook for 2005
8.6 Litigation and Agreements
8.7 Research & Development
8.7.1 Overview of R&D Issues in Schwarz Pharma
8.7.2 Pipeline Developments - Parkinson's Drug Candidate Being Assessed In US and Europe
8.8 Schwarz Pharma: Company Outlook 2004-2010 - Declining Reliance on Generic Omeprazole Expected

9. Watson Pharmaceuticals

9.1 A History and Background to Watson Pharmaceuticals
9.2 Watson’s Strategy – The Development of Technologically Challenging and High Demand Products
9.2.1 Watson Devotes Significant Resources to R&D
9.2.2 Watson is Involved in Strategic Alliances and Collaborations
9.3 Watson’s Generics Operations – A Large Product Portfolio Combined with A Strong Pipeline
9.3.1 Watson’s Generic Product Range Accounts for Over Two Thirds of Net Sales
9.4 Watson’s Branded Products Typically Yield Higher Profit Margins Than Its Generic Products
9.5 Watson Financials in 2004 – Growth in Revenue Attributable to Generics Sales
9.5.1 Total Revenues, Gross Profit and Net Income
9.5.2 Revenues, Gross Profit and Net Income by Product Group
9.5.3 Gross Margins Decrease from 2003-2004
9.6 Watson: Major Developments affect 2004 Results
9.6.1 Agreement with GSK to Market Generic Zyban
9.6.2 Agreement with Proctor & Gamble to Distribute Generic Macrobid
9.6.3 Watson Terminates its Contract Sales Force Agreement With Ventiv Health
9.6.4 Recent Litigation Proceedings – Possible Adverse Effects on Company Finances
9.7 Watson: Company Outlook 2004-2010 – Strengths in Niche Markets and Good Balance Between Generic and Brand Drugs

10. Pliva – The Leading Generic Company in East European Countries

10.1 Pliva Company Background
10.2 Pliva Products – The End of Pliva’s Proprietary Products
10.3 Pliva Pipeline – Biopharmaceuticals are Key To Future Success
10.4 Pliva’s Key Financials
10.5 Mergers, Acquisitions and Agreements – A Consolidatory Period

11 Mylan Laboratories Inc

11.1 Mylan Company Background
11.2 Mylan Products – Including the First Branded Drug From a Generic Company
11.3 Mylan Pipeline
11.4 Mylan’s Key Financials
11.5 Mergers, Acquisitions and Agreements
11.6 Litigation

12 Alpharma/Actavis

12.1 Alpharma Company Background – High Revenues, but Low Profit
12.2 Actavis Company background
12.3 Actavis Products – Key Success Will Be US Based
12.4 Actavis Pipeline
12.5 Actavis’s Key Financials
12.6 Mergers, Acquisitions and Agreements – Actavis Continues to Expand
12.7 Litigation – Has Actavis Bought Alpharma at Too High a Price?

13 Barr Pharmaceuticals Inc

13.1 Barr Company background
13.2 Barr Products – The Leading Portfolio of Contraceptives
13.3 Barr Pipeline – Bringing New Contraceptives to the Market
13.4 Barr’s Key Financials
13.5 Mergers, Acquisitions and Agreements
13.6 Litigation

14. Ivax (Now Part of Teva)
14.1 Teva is now the World's Number 1 Generic Company after its Takeover of Ivax
14.2 The Development of Ivax as Generic Drug Company
14.3 Ivax and its Subsidiaries
14.4 Ivax has a Wide Range of Generic Drugs
14.5 Ivax had Good Growth in 2004/5
14.6 H1 2005 Data Shows a Further Increase in Growth
14.7 Growth is Maximum in Latin America
14.8 Respiratory Diseases is a Major Ivax Focus Area
14.9 Recent Product Launches
14.10 Ivax has Marketed Authorised Generics
14.11 Ivax's Branded Products are Either Devices or Branded Generics
14.12 Ivax Market Outlook, 2004-2010

15. Conclusions of this Report

15.1 The Generics Market is Growing, With Good Opportunities for Market Participants
15.2 The US is the Largest Market For Generic Drugs
15.3 The Expiration of Branded Patents is The Most Important Driver of Growth in The Sector
15.4 Characteristics of Differing Regulatory Systems Affect the Market for Generics
15.5 Biogenerics Are Becoming Increasingly Important
15.6 Teva's Acquisition of Ivax is likely to Increase its Domination in The Market - But Teva will Face Strong Competition from Novartis' Sandoz

List of Tables

Table 2.1, Sales 2004 All Companies: Total Group Sales and Generics Sales, 2004

Table 3.1, World Generic Revenues ($bn), 2004-2010
Table 3.2, Branded and Generics Price Differentials in Selected Leading European Countries, 2004
Table 3.3, World Generic Market by Country Market Share, 2004
Table 3.4, World Generic Market Growth Rate (%), 2004
Table 3.5, The Top Ten US Generic Drugs by Revenue ($m) and Prescription Number (m), 2004
Table 3.6, US Top Ten Generic Drugs as a Function of Combined Branded and Generic Drugs by Prescription Number (m) and Revenues ($m), 2004
Table 3.7, European Generic Market Share (%) by Value and Volume, 2004

Table 5.1 Teva Subsidiaries and Associated Companies
Table 5.2, World Revenues ($m) for MS Drugs Including Copaxone, 2004
Table 5.3 Teva's Research Pipeline for Novel Drugs, March 2005
Table 5.4, Teva's Co-Marketing and Co-Developer Companies and Drugs, 2005
Table 5.5 Generics by Teva Approved by the FDA with Brand Equivalent and Company, 2004-5
Table 5.6, Generics by Teva Approved by the FDA with Brand Equivalent/Company and Company Sales ($m), 2004
Table 5.7, Teva Generic Drugs Launched in 2004/5 Whose Branded Revenues were Either Blockbuster or Near-Blockbuster Status
Table 5.8, Teva Generic Drugs in the Pipeline with Brand Equivalent Revenues ($m)(2004), as of March 2005
Table 5.9, Teva's Net Sales and Income ($m), 2002-2004
Table 5.10, Teva Pharmaceutical Industries Ltd. Consolidated Statements of Income, 2003-2004
Table 5.11, Teva's Net Sales and Income ($m), Q2 2004 and 2005
Table 5.12, Teva Sales ($m) by Geographical Region, 2004
Table 5.13, World Generic Revenues ($m) for Teva, 2003-2004

Table 6.1, Sandoz Generic Product Portfolio, 2005
Table 6.2, Sandoz Total Net Sales ($m) By Region, 2003-2004
Table 6.3, Sandoz Net Sales (%) by Country Region, 2003-2004
Table 6.4, Sandoz Generics by Therapeutic Area: Shares of Total Sales, 2004
Table 6.5, Sandoz Sales (%) of Total Novartis Sales ($m), 2004
Table 6.6, Sandoz Financials, 2004
Table 6.7, Novartis Sales by Business Area ($m) and Shares (%) of Total Sales, 2004
Table 6.8, Sandoz and Novartis First Half Sales ($m) Results, 2004 and 2005
Table 6.9, Sandoz and Novartis First Half Sales (%) Results, 2005

Table 7.1, Genpharm: A Selection of Generic Products
Table 7.2, Generics UK: Selected Generic Products
Table 7.3, Dey Generics Product Portfolio
Table 7.4, Merck Generics Affiliates Worldwide
Table 7.5, Merck KGaA: Group Key Figures, 2004
Table 7.6, Merck KGaA: Pharmaceuticals Business Sector Key Figures, 2004
Table 7.7, Merck Generics Key Figures, 2004

Table 8.1, Leading Schwarz Pharma Products
Table 8.2, KUDCo: Generic Products
Table 8.3, Schwarz Pharma: Financials 2003-2004
Table 8.4, Schwarz Pharma: Top 5 Products, 2004
Table 8.5, Schwarz Pharma: Products in Clinical Development, 2005

Table 9.1, Watson’s Generic Product Portfolio
Table 9.2, Watson’s Branded Product Portfolio
Table 9.3, Total Revenues, Gross Profit and Net Income, 2001-2004
Table 9.4, Net Revenues ($m) by Product Group, 2003-2004
Table 9.5, % of Revenues Contributed by Product Groups, 2003-2004
Table 9.6 Net Revenue Estimates ($m) By Product Line, 2005
Table 9.7, Gross Profit ($m) Contributed by Product Groups, 2003-2004
Table 9.8, Gross Margin (%) for the Twelve Months Ended December 31, 2003-2004
Table 9.9, Condensed Consolidated Financial Statements of Income, 2003-2004

Table 11.1, Total Revenue ($m) and Profit ($m) for Mylan
Table 11.2, Mylan Revenues ($m) from Therapeutic Area
Table 11.3, Key Financials for Mylan
Table 11.4, Key Financials for Mylan, Generic Segment
Table 11.5, Key Financials for Mylan, Branded Segment

Table 12.1, Total Revenue ($m) and Profit ($m) for Mylan
Table 12.2, Total Revenue ($m) and Profit ($m) for Actavis
Table 12.3, Top Selling Products for Actavis’ International Group
Table 12.4, Top Selling Products for Actavis’ Third Party Global Group
Table 12.5, Key Financials for Actavis
Table 12.6, Alpharma Revenue ($m) by Geographical Region, 2004
Table 12.7, Actavis Listed Subsidiaries, 2004

Table 13.1, Total Revenue ($m) and Profit ($m) for Barr
Table 13.2, Key Financials for Barr
Table 13.3, Barr Sales ($m) by Product Category
Table 13.4, Barr Profit ($m) by Product Category
Table 13.5, Summary of Barr Acquisitions

Table 14.1, Total Revenue ($m) and Profit ($m) for Pliva
Table 14.2, Pliva Pipeline Products
Table 14.3, Regional Markets for Pliva
Table 14.4, Key Financials for Pliva
Table 14.5, Revenue ($m) and Profit ($m) by Business Sector

List of Figures

Figure 2.1, The Leading Generics Companies: Total Sales and Generic Sales, 2004
Figure 2.2, The Leading Generics Companies: Generic Sales by Company, 2004
Figure 2.3, The Top-5 Generics Companies by Sales, with Teva & Ivax Combined, 2004

Figure 3.1, World Generic Revenues ($bn), 2004-2010+

Figure 6.1, Revenue From The Novartis Group, 2004
Figure 6.2, Sandoz' Net Sales ($m) by Region, 2004
Figure 6.3, Sandoz' Net Sales (%) by Region, 2004
Figure 6.4, Sandoz: Therapeutic Areas as a % of Total Sales, 2004
Figure 6.5, Sandoz: Total Sales ($m) By Therapeutic Areas, 2004
Figure 6.6, Sandoz Sales ($m) Compared With Novartis Pharmaceutical and Other Sales, 2003 and 2004
Figure 6.7, Sandoz Sales (%) of Total Novartis Sales, 2004
Figure 6.8, Sandoz: Net Sales Split by Business Based on Third Party Sales, 2004
Figure 6.9, Sandoz: Net Sales Growth (%) by Business Sector, 2004
Figure 6.10, Sandoz: Net Sales, Operating Income and Profit ($m), 2004
Figure 6.11, First Half Revenues, 2004 and 2005

Figure 7.1, Merck Sales by Division, 2004
Figure 7.2, Merck Generics Sales by Region (%), 2004
Figure 7.3, Merck Generics Sales by Region ($m), 2004

Figure 8.1, Schwarz Pharma: Total Sales (%) by Region, 2004
Figure 8.2, Schwarz Pharma: Total Sales (%) by Therapeutic Area, 2004
Figure 8.3, Revenues of AstraZeneca's Prilosec and KUDCo's Generic Omeprazole, 2002-2004
Figure 8.4, Schwarz Pharma Net Sales ($m), 2000-2004
Figure 8.5, Schwarz Pharma: Financials 2003-2004

Figure 9.1 Revenues and Profits (%) Derived from Third-Party Manufactured Products, 2002-2004
Figure 9.2, Watson’s R&D Expenditure, 2002-2004
Figure 9.3, Pipeline Developments at Watson, 2001-2004
Figure 9.4, Total Revenues, Gross Profits and Net Income, 2001-2004
Figure 9.5, Watson: Revenues from Generic Sales Compared With Branded, 2004
Figure 9.6, Watson: Numbers of Generic Products Compared with Branded Products, 2004
Figure 9.7, Revenues by Product Group, 2001-2004
Figure 9.8, Contributions ($m) to Gross Profit from Operations, 2003-2004
Figure 9.9, Contributions (%) to Gross Profit from Operations, 2004
Figure 9.10, Gross Margin (%) for the Twelve Months Ended December 31, 2003-2004

Figure 11.1, Actavis Sales By Market, 2004
Figure 11.2, Actavis Third Party Global Sales By Market, 2004
Figure 11.3, Actavis Own-Label Sales By Market, 2004