) has joined forces with
) to develop, manufacture, distribute and commercialize generic
drugs in Japan.
The companies entered into an agreement to form an exclusive
long-term strategic collaboration. The financial terms of the
agreement were not disclosed.
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PFIZER INC (PFE): Free Stock Analysis Report
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Approximately 350 products and 125 pipeline candidates will be
included in the partnership. All products will be marketed under
the Pfizer brand. However, the names of both companies will be
displayed on the labels of the drugs.
As per the terms of the agreement, Pfizer will undertake the
commercialization duties, while Mylan will head the research and
development and manufacturing responsibilities. Although Mylan and
Pfizer will continue to function separately in Japan, they will
collaborate on generic products. Both companies will share the
costs and profits from the collaboration.
Through this deal, Mylan intends to strengthen its presence in the
lucrative Japanese generic market. As per the data provided by IMS
Healthcare, Japan's generic retail prescription market is the sixth
largest in the world. The Japanese government plans to increase the
generic utilization volumes to 30% from 24% by the end of 2012.
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, with most large
branded drugs 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.
Thus, we prefer to remain on the sidelines and have a Neutral
recommendation on Mylan. The stock carries a Zacks #2 Rank (Buy
rating) in the short term. We currently have a Neutral
recommendation on Pfizer, which carries a Zacks #3 Rank (short-term