Generic Launches Continue at Mylan - Analyst Blog

By Zacks Equity Research,

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Mylan Pharmaceuticals Inc., a subsidiary of generic player, Mylan Inc. ( MYL ), recently announced that it has received final approval from the U.S. Food & Drug Administration (FDA) to launch generic versions of Plavix (clopidogrel), 75 mg and 300 mg. Mylan was the first company to have filed an abbreviated new drug application (ANDA) to market a generic version of Plavix, 300 mg. The early bird will thus enjoy a 180-day period of exclusivity.

Plavix, sold by Bristol-Myers Squibb Co. ( BMY ) and Sanofi ( SNY ), is approved for patients who have had a heart attack or stroke recently, or suffer from a partial or total blockage of an artery (peripheral artery disease). According to IMS Health, Plavix generated U.S. revenues of approximately $6.7 billion for the 12 months ending March 31, 2012.

Apart from Mylan, Apotex Corporation, Aurobindo Pharma, Roxane Laboratories, Sun Pharma, Teva Pharmaceuticals ( TEVA ) and Torrent Pharmaceuticals gained approval for the 75 mg dosage of clopidogrel. Meanwhile, Dr. Reddy's Laboratories ( RDY ), Gate Pharmaceuticals and Teva have received FDA approval for the 300 mg dosage of clopidogrel. Dr. Reddy's was also among the first companies to file an ANDA for generic Plavix 300 mg and has 180 days of marketing exclusivity for the formulation.

As of May 17, 2012, the company had 173 ANDAs pending clearance by the FDA, targeting $98.2 billion in branded sales. Mylan believes that about 39 of these ANDAs are first-to-file opportunities, representing approximately $25.5 billion in branded sales. The revenue figures are as per IMS health for the 12 months ending December 31, 2011.            

Our Recommendation

We are encouraged by Mylan's geographic reach and product depth along with a robust generic product pipeline. However, we are concerned about the company's lackluster performance in Europe, the Middle East and Africa (EMEA) region. Additionally, with most large branded drugs due to lose patent exclusivity within 2017-2018, we have little visibility on the growth prospects for generic companies like Mylan beyond that timeframe.

Thus, we prefer to remain on the sidelines and have a Neutral recommendation on Mylan. The stock carries a Zacks #3 Rank ("Hold" rating) in the short term.

BRISTOL-MYERS (BMY): Free Stock Analysis Report
MYLAN INC (MYL): Free Stock Analysis Report
DOCTOR REDDYS (RDY): Free Stock Analysis Report
SANOFI-AVENTIS (SNY): Free Stock Analysis Report
TEVA PHARM ADR (TEVA): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: ANDA , BMY , MYL , RDY , SNY

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