Mylan Inc.
(
MYL
) recently entered into a settlement agreement with Orion
Corporation to resolve the patent litigation in relation to the
generic version of Orion's Comtan (entacapone tablets: 200 mg).
Comtan is approved for the treatment of patients suffering from
idiopathic Parkinson's disease, showing symptoms of end-of-dose
"wearing-off".
The settlement of the dispute allows Mylan to launch its
generic version of Comtan any time after March 31, 2013. As per
data released by IMS Health, the annual sales of entacapone
tablets for the twelve months ending September 30, 2012 came in
at $104.9 million.
The generic segment at Mylan is its primary growth engine. The
segment received some encouraging news recently when the US Food
and Drug Administration (FDA) approved Mylan's Abbreviated New
Drug Application (ANDA) for Quinine sulfate capsules USP (324
mg), the generic version of privately held Mutual Pharmaceutical
Company's Qualaquin capsules.
Qualaquin capsule is approved for the treatment of
uncomplicated plasmodium falciparum malaria. As per IMS Health,
Quinine Sulfate Capsules' annual sales, for the twelve months
ending September 2012, came in at around $31.9 million.
We remind investors that the company received several
approvals for its ANDAs in the recent past. Still, Mylan has
around 178 ANDAs pending for FDA approval. These pending ANDAs
are worth up to $79.2 billion in annual sales as per IMS Health.
Out of these 178 ANDAs, 35 are potential first-to-file
opportunities representing $21.2 billion in annual brand sales
for the year ended June 30, 2012.
Our Take
We are encouraged by Mylan's geographic reach and product
depth along with a robust generic product pipeline. However, we
remain concerned about the company's lackluster performance in
the Europe, Middle East and Africa (EMEA) region.
Additionally, as most of the large branded drugs are due to
lose patent exclusivity within the 2017-2018 period, we have
little visibility on the growth prospects of generic companies
like Mylan beyond that timeframe.
We currently have a Neutral recommendation on Mylan. The stock
carries a Zacks #2 Rank (Buy) in the short run. Pharma stocks
that carry a Zacks #1 (Strong Buy) Rank include
Dr. Reddy's Laboratories Ltd.
(
RDY
).
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