UPDATE 1-Drug company Teva to cut 5,000 jobs, save $2 bln a year
* Most of 5,000 job cuts to take place in 2014
* 70 percent of annual cost savings seen by end of 2015
* Sees 2013 revenue near midpoint of $19.5-$20.5 bln estimate
JERUSALEM, Oct 10 (Reuters) - Teva Pharmaceutical Industries will cut about 5,000 jobs, 10 percent of its workforce, accelerating a cost-cutting plan as it prepares for lower-priced competition for its best-selling drug.
Teva, the world's largest maker of generic drugs, said it expects to save about $2 billion a year by the end of 2017.
The Israel-based company is the latest in a string of big drugmakers to take an axe to costs. Last week, Merck & Co said it would cut annual operating costs by $2.5 billion and eliminate 8,500 jobs, or more than 10 percent of its global workforce.
Others including Pfizer, AstraZeneca and Sanofi have also slashed staff numbers in recent years due to slowing sales growth, often due to competition from cheaper generic medicines - many of which are made by Teva.
Teva's multiple sclerosis drug Copaxone accounts for 20 percent of its sales and 50 percent of profits. But it could face competition from generic rivals next year.
In August, a U.S. appeals court invalidated some patents that could lead to generic versions of Copaxone appearing from competitors in May 2014, a year sooner than expected. Teva plans to appeal.
When Teva announced its cost-cutting plans in December, it said savings of $1.5-$2 billion would take place over five years.
On Thursday it said the savings would be at the top of that range. It said $1 billion would come by the end of 2014 and 70 percent by the end of 2015. The majority of the savings will come from a reduction in the company's cost of goods, it said.
It said most of the job losses would come by the end of 2014 as the company looks to trim assets that no longer fit its core business or are not critical to its future.
"The accelerated cost reduction programme will strengthen our organisation while improving our competitive position in the global marketplace," Chief Executive Jeremy Levin said.
Teva said it would scale down "oversized" parts of the company, while growing its generics business and core research and development programmes, expend its presence in emerging markets and broaden its portfolio - especially in its speciality medicines and over the counter business.
Teva's shares were up 2.5 percent in afternoon trading in Tel Aviv, bringing its gains for the year to nearly 4 percent.
Its peers have fared better, with India's Dr. Reddy Laboratories up 31 percent, Forest Laboratories 21 percent higher and Perrigo up 23 percent.
In the second quarter, Teva's revenue fell 1 percent to $4.92 billion, year-on-year, while it earned $1.20 a share excluding one-time items, down from $1.28.
Teva aims to reinvest part of the initial savings in 2014 and 2015 in high-potential programmes including the development of the company's complex generics and speciality pharmaceutical pipeline, which includes more than 30 late-stage programmes.
Total pre-tax costs for the corporate restructuring are estimated at $1.1 billion.
Teva reiterated it expects ending 2013 near the midpoint of its original target range of $19.5-$20.5 billion for revenue and diluted earnings per share excluding items of $4.85-$5.15.