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UPDATE 1-Teva Pharmaceutical reports big drop in profits, slashes dividend

(Adds details, management comments, share price reaction)

JERUSALEM, Aug 3 (Reuters) - Israeli drugs group Teva Pharmaceutical Industrial Industries reported a steeper than expected drop in second-quarter earnings on Thursday, due to weaker prices in the United States, and cut its interim dividend by 75 percent.

Along with a substantial reduction in its 2017 outlook, shares in the world's largest generics drugmaker tumbled 16.5 percent in Tel Aviv and its New York shares were equally weak, opening down 17 percent at $26 - the lowest level since November 2004.

On a conference call with analysts Teva officials offered little in the way of hope for a turnaround, saying the company expects the fall in generic drug prices to accelerate in the second half of 2017 and on into 2018.

"The board understands our shareholders' disappointments," said Chairman Sol Barer. "We understand that significant change is required and we all have a sense of urgency."

Barer was asked when Teva would announce a new CEO, Erez Vigodman having stepped down in February after a series of missteps, but did not offer a timetable, saying there would be no rush to find the right candidate, which must have "significant CEO level experience at major pharmaceutical companies."

"This is a very critical hire for us as we are determining in many ways the leadership for a long time," he said. "Six months is not a long time to look for a CEO." Teva has had meetings with a number of candidates, Barer noted. "We have made significant progress and it has been positive so far," he said, also deflecting questions from analysts on the prospects of splitting the company into two -- generics and specialty drugs.

Teva's chief financial officer has stepped down, leaving it up to new management to restore investor confidence.

Berenberg analyst Alistair Campbell said the company was "under intense pressure", given its lack of a permanent CEO or CFO and stretched balance sheet.

AstraZeneca CEO Pascal Soriot had been named by Israeli media as a likely to successor to Vigodman but the boss of the British drugmaker, which faces its own challenges, said last week he was not a "quitter".

"This is a very tough quarter for Teva," said Umer Raffat, an analyst at Evercore ISI. "I see a true floor somewhere between $18 to $27 a share depending on what end of guidance, cost cuts and multiple youre willing to assume. If I just take midpoint of these two scenarios, perhaps the true floor is in low-mid $20s a share."

DIVIDEND, OUTLOOK CUT

Teva said it earned $1.02 per share excluding one-off items in the second quarter, down from $1.25 a share in the same period last year. Revenue rose 13 percent to $5.7 billion on lower prices in the United States and drug launch delays.

It cut the quarterly dividend payout to $0.085 per ordinary share from $0.34, a move Teva officials said was needed to help pay down $5 billion of debt this year and invest in its business.

Teva, which bought Allergan's generics business for $40.5 billion in August, was expected by analysts to have earned $1.06 per share on revenue of $5.72 billion, according to Thomson Reuters I/B/E/S Estimates. Synergies and cost cuts from the merger are expected to reach $1.6 billion in 2017, it said.

Global sales of Teva's best-selling multiple sclerosis drug Copaxone - down to 18 percent of revenue from 23 percent last year - fell 10 percent in the quarter to $1.02 billion.

As a result the company has cut its full-year earnings forecast to $4.30-$4.50 a share from $4.90-$5.30 previously on revenues now expected to total $22.8-$23.2 billion, down from its previous forecast of $23.8 billion-$24.5 billion.

"This adjusted outlook takes into consideration the impact of increased price erosion in our U.S. generics business, which is expected to be in a high single-digits rate through the remainder of the year, and delays in generic launches in the U.S.," Teva said.

It added that the outlook for the business also reflected the continued deterioration in political and economic conditions in Venezuela, but it assumed no generic competition to its Copaxone 40mg version in the United States in 2017.

Teva said that at least one Copaxone 40mg competitor would impact the bottom line by 20 to 25 cents.

Earlier the company also said it would continue to pursue a breach of contract suit against the former owners of its Rimsa plant in Mexico after a New York judge rejected Teva's claim of fraud. (Additional reporting by Ben Hirschler in London; Editing by Greg Mahlich)