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UPDATE 2-Teva warns on profit as drugmaker's problems deepen

* Q3 EPS $1.00 down from $1.31

* Generics margins under pressure

* Lowers year EPS, revenue forecasts

* Shares down 20 pct

* New CEO says debt reduction a key priority (Adds details, comments from CEO/CFO)

JERUSALEM, Nov 2 (Reuters) - Teva Pharmaceutical Industries , the world's biggest generic medicine maker, said it would miss 2017 profit forecasts due to competition in the U.S. market and weakening sales of its multiple sclerosis drug Copaxone, hammering its shares

It was the latest blow for the Israeli-based company, which is dealing with narrowing profit margins, a nearly $35 billion debt burden that could lead to a credit rating downgrade, and an irate investor base that is seeking a clear direction.

A day earlier U.S. shareholder Allergan announced it would begin selling down its 10 percent stake.

Teva's new chief executive Kare Schultz took the reins this week and committed to improve the firm's balance sheet.

"I recognise the significant debt burden that Teva is currently under, and it will be an absolute priority for me that we stabilize the company's operating profit and cash flow in order to improve our financial profile," Schultz said on Thursday.

He did not take any questions after brief remarks during a conference call and left other executives to respond to analysts' enquiries.

Schultz needs to convince investors Teva can boost growth and cut debt that was built up mostly to finance its $40.5 billion purchase of generics business Actavis, part of Allergan, last year.

His predecessor stepped down in February after criticism for a string of expensive acquisitions and delayed drug launches.

Teva's shares on Thursday slid another 20 percent on Nasdaq and in Tel Aviv to bring its losses to 64 percent since August.

"The shares will likely drop further after this latest guidance cut and are unlikely to recover until the new CEO lays out his vision for the company and gives a steer on the 2018 outlook, which will be just as challenging as 2017, given the roll-out of Copaxone generics," said Berenberg analyst Alistair Campbell in a note, referring to the launch of cheap, copycat competitors to Copaxone.

Similar to poor second-quarter results three months ago, which triggered a big share sell-off, Teva attributed most of its problems to rapidly falling prices of generic medicines in the United States.

COPAXONE

It also cited a decline in sales of Copaxone, which has just started to face generic competition, a lower-than-expected contribution from new generic launches in the United States and a lower contribution from Venezuela.

"We are now facing two headwinds - continued pressure in U.S. generics and in our own Copaxone," said interim chief financial officer Mike McClellan.

With Copaxone prices falling around 10 percent in the third quarter and generic competition starting sooner than expected, Teva again reduced its 2017 estimates, while executives declined to comment on 2018.

It cut its 2017 earnings per share (EPS) forecast, excluding special items, to $3.77-$3.87 from $4.30-$4.50 and its revenue forecast to $22.2-$22.3 billion from $22.8-$23.2 billion.

Analysts had been expecting full-year EPS of $4.19 on revenue of $22.6 billion, Thomson Reuters I/B/E/S data showed.

Teva reported third-quarter adjusted EPS of $1.00, down from $1.31 a year earlier, on revenue up 1 percent at $5.6 billion.

Generic drug profits fell to $619 million from $982 million, on sales of $3.01 billion, down from $3.26 billion.

Sales of Copaxone fell 7 percent to $987 million.

"We now project approximately $400 million of revenues from new product launches in the year, compared to the previous projection of $500 million," Teva added.

The company had planned to pay down $5 billion of debt in 2017 and was working to sell off non-core assets to that end. But McClellan said debt payments would only be $3.5-$4 billion.

In September, Teva announced it would sell the remaining businesses in its speciality womens health business for $1.38 billion.. It noted that in all, it expected $2.3 billion in net proceeds from asset sales in 2017.

"We will continue to look at our cost base. We will be doing a review to see if there's additional non-core assets that it would make sense to monetize," McClellan said. "We have some important decisions to make in order to stay investment grade."

He added that while there was no plan to raise more equity, it was something that would be considered with Schultz and the board.

Teva will pay a quarterly dividend of 8.5 cents a share, unchanged from the second quarter when it cut the payout by 75 percent. (Additinal reporting by Tova Cohen; Editing by Jason Neely and Mark Potter)