Meeting with management continue to buy ahead of NT catalysts

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1 COMPANY UPDATE Buy Meeting with management continue to buy ahead of NT catalysts What's changed Yesterday, we had the opportunity to sit down with Teva s CEO (Shlomo Yanai) and CFO (Eyal Desheh) where we discussed several topics including strategic outlook and anticipated opportunities from the Barr acquisition. Overall, we continue to see Teva as increasingly well positioned to deliver solid long-term growth and would highlight the following: (1) 2009 and 2010 setting up to be key years and we remain ~3% and ~6% above consensus; (2) Competitive landscape becoming increasingly competitive with size, scale and selection as meaningful barriers with Teva holding a clear leadership position globally and other consolidator interest becoming less clear in our view; and (3) Big-to-big transition likely to continue to the benefit of Teva with CVS announced intention to acquire Longs another data point. Reaffirm Buy rating and $56 price target. Implications The release of Azilect data will be the next key catalysts and we continue to see upside here (see our recent report from July 28 Proprietary survey provides support to Azilect upside opportunity ). Key dates: (1) ADAGIO results presented at EFNS August 26 we believe the data will give investors and physicians insight into Azilect s market potential. (2) American Neurological Association (ANA) meeting in Salt Lake City, Utah on September 21 where there will be another presentation along with abstract with further data from ADAGIO. Valuation Our 12-month $56 price target is equally weighted on P/E and EV/EBITDA. Key risks (1) Timing closing deal with Barr; (2) Integration of Barr; (3) Usual generic risks industry pricing and litigation key variables. Investment Profile: Teva Pharmaceuticals Low Growth Returns * Multiple Volatility Percentile 20th 40th 60th 80th 100th TEVA Americas Healthcare Est. Market Leaders Peer Group Average High Growth Returns * Multiple Volatility * Returns = Return on Capital For a complete description of the investment profile measures please refer to the disclosure section of this document. Key data Current Price ($) month price target ($) Market cap ($ mn) 36,192.7 Dividend yield (%) 1.0 Net margin (%) 19.9 Debt/total capital (%) /07 12/08E 12/09E 12/10E Revenue ($ mn) 9, , , ,060.7 EPS ($) P/E (X) EV/EBITDA (X) ROE (%) /08 9/08E 12/08E 3/09E EPS ($) Price performance chart Aug-07 Nov-07 Feb-08 May-08 Teva Pharmaceuticals (L) S&P 500 (R) 1,700 1,650 1,600 1,550 1,500 1,450 1,400 1,350 1,300 1,250 1,200 INVESTMENT LIST MEMBERSHIP Americas Buy List Americas Conviction Buy List Coverage View: Neutral Israel: Pharmaceuticals Share price performance (%) 3 month 6 month 12 month Absolute 3.9 (2.2) 8.0 Rel. to S&P Source: Company data, Goldman Sachs Research estimates, FactSet. Price as of 8/13/2008 close. Randall Stanicky, CFA The Goldman Sachs Group, Inc. does and seeks to do business with (212) randall.stanicky@gs.com Goldman, Sachs & Co. companies covered in its research reports. As a result, investors should Robert P. Jones be aware that the firm may have a conflict of interest that could affect (212) robert.p.jones@gs.com Goldman, Sachs & Co. the objectivity of this report. Investors should consider this report as Alex Pekler, CFA only a single factor in making their investment decision. Customers in (212) alex.pekler@gs.com Goldman, Sachs & Co. the US can receive independent, third-party research on companies Adriana Kalova covered in this report, at no cost to them, where such research is (212) adriana.kalova@gs.com Goldman, Sachs & Co. available. Customers can access this independent research at or call For Reg AC certification, see the text preceding the disclosures. For other important disclosures go to Analysts employed by non-us affiliates are not required to take the NASD/NYSE analyst exam. The Goldman Sachs Group, Inc. Global Investment Research Goldman Sachs Global Investment Research 1

2 Teva Pharmaceuticals: Summary financials Profit model ($ mn) 12/07 12/08E 12/09E 12/10E Balance sheet ($ mn) 12/07 12/08E 12/09E 12/10E Total revenue 9, , , ,060.7 Cash & equivalents 2, , , ,257.8 Cost of goods sold (4,531.0) (5,334.1) (5,843.5) (6,635.8) Accounts receivable 4, , , ,285.7 SG&A (1,901.0) (2,536.3) (2,725.4) (2,641.2) Inventory 2, , , ,104.9 R&D (581.0) (820.7) (922.2) (1,042.2) Other current assets Other operating profit/(expense) Total current assets 9, , , ,648.5 ESO expense Net PP&E 2, , , ,393.9 EBITDA 2, , , ,303.2 Net intangibles 10, , , ,540.3 Depreciation & amortization (521.0) (517.7) (524.4) (561.7) Total investments ,119.2 EBIT 2, , , ,741.5 Other long-term assets Net interest income/(expense) (42.0) (141.0) (32.0) (24.0) Total assets 23, , , ,701.8 Income/(loss) from associates Others Accounts payable 3, , , ,941.3 Pretax profits 2, , , ,717.5 Short-term debt 1, , , ,300.3 Provision for taxes (397.2) (341.3) (454.2) (557.6) Other current liabilities Minority interest 0.0 (1.0) Total current liabilities 5, , , ,241.5 Net income pre-preferred dividends 1, , , ,159.9 Long-term debt 3, , , ,494.7 Preferred dividends Other long-term liabilities ,103.7 Net income (pre-exceptionals) 1, , , ,159.9 Total long-term liabilities 4, , , ,598.4 Post tax exceptionals Total liabilities 9, , , ,840.0 Net income (post-exceptionals) 1, , , ,159.9 Preferred shares EPS (basic, pre-except) ($) Total common equity 13, , , ,820.9 EPS (diluted, pre-except) ($) Minority interest EPS (basic, post-except) ($) EPS (diluted, post-except) ($) Total liabilities & equity 23, , , ,701.8 Common dividends paid (299.0) (383.4) (460.1) (552.1) DPS ($) Dividend payout ratio (%) Additional financials 12/07 12/08E 12/09E 12/10E Net debt/equity (%) (6.1) (16.6) Interest cover (X) Growth & margins (%) 12/07 12/08E 12/09E 12/10E Inventory days Sales growth Receivable days EBITDA growth BVPS ($) EBIT growth Net income (pre-except) growth ROA (%) EPS growth (2.1) CROCI (%) Gross margin EBITDA margin Dupont ROE (%) EBIT margin Margin (%) Turnover (X) Cash flow statement ($ mn) 12/07 12/08E 12/09E 12/10E Leverage (X) Net income 1, , , ,159.9 D&A add-back (incl. ESO) Free cash flow per share ($) Minority interest add-back Free cash flow yield (%) Net (inc)/dec working capital (825.0) Other operating cash flow 98.0 (371.4) (201.4) Cash flow from operations 1, , , ,093.6 Capital expenditures (542.0) (708.2) (564.8) (632.7) Acquisitions (18.0) (414.0) Divestitures Others (793.0) Cash flow from investing (1,353.0) (1,479.4) (564.8) (632.7) Dividends paid (common & pref) (299.0) (383.4) (460.1) (552.1) Inc/(dec) in debt (158.0) (236.0) Other financing cash flows 95.0 (84.0) Cash flow from financing (362.0) (703.4) (460.1) (552.1) Total cash flow , , ,908.8 Note: Last actual year may include reported and estimated data. Source: Company data, Goldman Sachs Research estimates. Analyst Contributors Randall Stanicky, CFA Adriana Kalova Robert P. Jones Alex Pekler, CFA Goldman Sachs Global Investment Research 2

3 Goldman Sachs Global Investment Research 3 Exhibit 1: Teva income statement FY2006-FY2010E $ millions except per share data TEVA-Income Statement FY2006 FY2007 FY2008 FY2009 FY2010 Comments ($ in millions) Actual Mar-07 Jun-07 Sep-07 Dec-07 Actual Mar-08 Jun-08 Sep-08E Dec-08E Est. Mar-09E Jun-09E Sep-09E Dec-09E Est. Est. Pharma Sales North America 4,655 1,071 1,341 1,315 1,435 5,162 1,368 1,505 1,699 1,721 6,292 1,635 1,654 1,656 1,660 6,604 7,326 Growth Y-Y 64.1% 25.9% 9.3% -0.8% 14.6% 10.9% 27.7% 12.2% 29.2% 19.9% 21.9% 19.5% 9.9% -2.5% -3.5% 4.9% 10.9% Europe 1, , , ,417 3,850 Growth Y-Y 34.2% 36.9% 13.1% 22.3% 17.2% 21.4% 28.0% 37.1% 27.9% 25.0% 29.4% 18.6% 19.9% 17.1% 15.0% 17.6% 12.7% Rest of World 1, , , ,876 2,166 Growth Y-Y 144.6% 31.7% 30.8% 14.4% 10.8% 20.7% 12.9% 15.6% 16.8% 12.6% 14.4% 13.8% 13.9% 13.9% 13.8% 13.9% 15.4% Total Pharma Sales 7,697 1,932 2,243 2,236 2,436 8,847 2,419 2,667 2,837 2,922 10,846 2,862 3,023 2,975 3,036 11,897 13,341 Growth Y-Y 63.7% 29.7% 13.1% 6.5% 14.6% 14.9% 25.2% 18.9% 26.9% 20.0% 22.6% 18.3% 13.3% 4.9% 3.9% 9.7% 12.1% API and Other API Revenue Q: API sales of ~$452mn including internal sales Growth Y-Y 11.8% -0.7% -1.4% -7.9% -7.3% -4.3% 3.4% 9.1% 12.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 10.0% Animal Health and other 171 Included in Pharma sales from 4Q06 Growth Y-Y 644.8% Total API and Other Growth Y-Y 38.4% -0.7% -1.4% -7.9% -7.3% -4.3% 3.4% 9.1% 12.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 10.0% Total Revenue 8,408 2,080 2,386 2,366 2,576 9,408 2,572 2,823 2,983 3,074 11,451 3,028 3,191 3,133 3,200 12,551 14,061 2Q: Revenue positive F/X impact of 6% Growth Y-Y 60.1% 24.4% 9.8% 3.5% 13.1% 11.9% 23.7% 18.3% 26.1% 19.3% 21.7% 17.7% 13.0% 5.0% 4.1% 9.6% 12.0% Total Cost of Goods Sold 4,053 1,043 1,143 1,116 1,229 4,531 1,200 1,318 1,382 1,434 5,334 1,406 1,493 1,457 1,488 5,844 6,636 As a % of revenue 48.21% 50.14% 47.90% 47.17% 47.71% 48.16% 46.66% 46.69% 46.35% 46.65% 46.58% 46.43% 46.78% 46.53% 46.50% 46.56% 47.19% Total Gross Profit 4,354 1,037 1,243 1,250 1,347 4,877 1,372 1,505 1,600 1,640 6,117 1,622 1,698 1,675 1,712 6,707 7,425 2Q: 5th straight quarter with GM above 50% Gross Margin 51.79% 49.86% 52.10% 52.83% 52.29% 51.84% 53.34% 53.31% 53.65% 53.35% 53.42% 53.57% 53.22% 53.47% 53.50% 53.44% 52.81% Research & Development ,042 2Q: expect to get to 7.5% of sales by end of 2008 As a % of revenue 5.88% 6.49% 5.74% 5.96% 6.52% 6.18% 6.96% 7.01% 7.20% 7.45% 7.17% 7.50% 7.30% 7.40% 7.20% 7.35% 7.41% SG&A (adj for Copaxone take-back in 2Q08) 1, , , ,725 2,641 As a % of revenue 18.71% 21.92% 19.66% 19.36% 20.11% 20.21% 19.98% 23.70% 22.70% 22.00% 22.15% 22.50% 21.50% 21.75% 21.15% 21.71% 18.78% EBIT (before one-time items) 2, , , ,060 3,742 Operating margin 27.20% 21.44% 26.70% 27.51% 25.66% 25.46% 26.40% 22.60% 23.75% 23.90% 24.10% 23.57% 24.42% 24.32% 25.15% 24.38% 26.61% Acquisition of in-process R&D Restructuring, other Interest / dividend income (exp) (95) (28) (8) (3) (3) (42) (57) (28) (28) (28) (141) (8) (8) (8) (8) (32) (24) 2Q: included a $25M charge for auction rate securities Other income, net Income before tax 2, , , ,028 3,718 Provision for income taxes Q: 13% is updated.annual guidance estiamte for 2008 Tax rate 14.92% 18.00% 17.97% 19.29% 12.77% 16.88% 14.95% 11.15% 13.00% 13.00% 13.03% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% Share in profits of associates (5.0) 1 (1) Minority interests, net (2) - - (1.0) Add-back in-process R&D (net) Add-back non-recurring, other (net) Net Income (pro-forma) 1, , , ,574 3,160 Add-back of interest adj & other EPS (pro-forma), diluted $2.30 $0.42 $0.63 $0.64 $0.69 $2.38 $0.64 $0.65 $0.72 $0.74 $2.75 $0.72 $0.79 $0.77 $0.82 $3.11 $3.81 Growth Y-Y 44.6% 14.0% -4.0% -13.6% 29.3% 3.6% 52.3% 3.4% 12.5% 7.5% 15.7% 12.8% 21.4% 8.2% 10.0% 12.9% 22.6% Diluted shares (ADRs) Source: Company data, Goldman Sachs Research estimates. 2Q: strong U.S. Copaxone and launches of generic Wellburin XL (150mg) and Risperdal key drivers. 2Q: strength in France, Hungary, Poland, and Czech Republic helped by weakening US dollar 2Q: Growth driven in Russia and across Latin America 2Q: in 2Q08 Teva recognized all N. American in-market Copaxone sales - royalty paid 25% from SG&A 2Q: Copaxone 25% royalty to SNY to be paid from SG&A ~ 22-24% of rev 2Q08-4Q08 (~$60-70M per qtr increase) 2Q: 2008 guidance narrowed to $ from $2.60-$2.75 with 2009 standalone Teva still "to exceed $3.00".

4 Reg AC I, Randall Stanicky, CFA, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Investment profile The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and market. The four key attributes depicted are: growth, returns, multiple and volatility. Growth, returns and multiple are indexed based on composites of several methodologies to determine the stocks percentile ranking within the region's coverage universe. The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows: Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate of various return on capital measures, e.g. CROCI, ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month volatility adjusted for dividends. Quantum Quantum is Goldman Sachs' proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for in-depth analysis of a single company, or to make comparisons between companies in different sectors and markets. Disclosures Coverage group(s) of stocks by primary analyst(s) Randall Stanicky, CFA: America-Healthcare Services:Pharmaceutical Services, America-Healthcare Supply Chain, America-Pharmaceuticals Generics. America-Healthcare Services:Pharmaceutical Services: Charles River Laboratories, Covance Inc., ICON plc (ADR), IMS HEALTH Incorporated, Kendle International Inc., MDS Inc., MDS Inc. (Toronto), Parexel International Corp., Pharmaceutical Product Dev.. America-Healthcare Supply Chain: AmerisourceBergen Corp., athenahealth, Inc., Cardinal Health, Inc., Express Scripts, Inc., Henry Schein, Inc., McKesson Corp., Medco Health Solutions, Omnicare, Inc., Owens & Minor, Inc., PSS World Medical, Inc.. America-Pharmaceuticals Generics: Barr Pharmaceuticals, Inc., Biovail Corp., Mylan Inc., Par Pharmaceutical Cos., Inc., Perrigo Co., Teva Pharmaceuticals, Watson Pharmaceuticals, Inc.. Company-specific regulatory disclosures The following disclosures relate to relationships between The Goldman Sachs Group, Inc. (with its affiliates, "Goldman Sachs") and companies covered by the Global Investment Research Division of Goldman Sachs and referred to in this research. Goldman Sachs expects to receive or intends to seek compensation for investment banking services in the next 3 months: Teva Pharmaceuticals ($46.58) Goldman Sachs had an investment banking services client relationship during the past 12 months with: Teva Pharmaceuticals ($46.58) Goldman Sachs makes a market in the securities or derivatives thereof: Teva Pharmaceuticals ($46.58) Goldman Sachs is a specialist in the relevant securities and will at any given time have an inventory position, "long" or "short," and may be on the opposite side of orders executed on the relevant exchange: Teva Pharmaceuticals ($46.58) Distribution of ratings/investment banking relationships Goldman Sachs Investment Research global coverage universe Rating Distribution Investment Banking Relationships Buy Hold Sell Buy Hold Sell Global 28% 57% 15% 50% 46% 40% As of July 1, 2008, Goldman Sachs Global Investment Research had investment ratings on 3,006 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage groups and views and related definitions' below. Goldman Sachs Global Investment Research 4

5 Price target and rating history chart(s) Te va Pharm ace uticals (TEVA) Stock Price Currency : U.S. Dollar Goldman Sachs rating and stock price target history ,600 1, ,400 1,300 1,200 Stock Price 20 1,100 Sep 27 Jun 26 Jan 18 OP IL N B A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J Source: Goldman Sachs Investment Research for ratings and price targets; FactSet closing prices as of 6/30/2008. Rating Covered by Randall Stanicky, CFA, as of Sep 21, 2005 Price target Index Price Price target at removal S&P 500 Not covered by current analyst New rating system as of 6/26/06 The price targets show n should be considered in the context of all prior published Goldman Sachs research, w hich may or may not have included price targets, as w ell as developments relating to the company, its industry and financial markets. 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