Mylan, Inc. (MYL): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Mylan's first quarter 2014 adjusted earnings of $0.66 per share surpassed the Zacks Consensus Estimate by $0.03. Revenues were shy of the Zacks Consensus Estimate primarily due to weak performance of the Specialty segment. The company still expects adjusted earnings for 2014 in the range of $3.25 $3.60 per share. We are positive on Mylan's acquisition of Agila which has strengthened its presence in the generic injectables market. Mylan's launch of its biosimilar of Herceptin in India is also a positive. We are also encouraged by Mylan's geographic reach and robust generic pipeline. We prefer to remain on the sidelines until more visibility is obtained on the company's pipeline and therefore retain our Neutral recommendation on the stock.

Overview:

Canonsburg, Pa.-based Mylan Inc. specializes in the development, manufacture, marketing, and distribution of generic, branded, and branded generic pharmaceutical products, as well as active pharmaceutical ingredients (APIs). The company, which operates in about 140 countries and territories, is one of the leading generic and specialty pharmaceutical companies in the world. Mylan's product portfolio encompasses various therapeutic areas including cardiovascular, central nervous system, anti-infective, gastrointestinal, endocrine and metabolic, and respiratory agents.

Mylan also has a Specialty business, which focuses on medicines for respiratory, allergy and psychiatric conditions. Through its controlling interest in its Indian subsidiary, Mylan Laboratories Limited (formerly known as Matrix Laboratories Limited), Mylan has direct access to one of the largest active pharmaceutical ingredients (API) manufacturers in the world. Mylan Laboratories also engages in the supply of APIs for the manufacture of antiretroviral (ARV) drugs used in the treatment of HIV. Meanwhile, the acquisition of Merck KGaA's generic business, Merck Generics (MG), in Oct 2007 has allowed Mylan to expand its global footprint.

Mylan has been constantly making acquisitions to drive growth. In Sep 2010, Mylan acquired privately held Bioniche Pharma Holdings Ltd, which provided it with access to the North American injectable drugs market. Mylan has combined Bioniche Pharma with its own unit dose business, UDL Laboratories, to form a new unit called Mylan Institutional, which is a part of the company's North American generics segment. Mylan has also entered the biologics space by striking a partnership with India-based Biocon Ltd. In Feb 2013, Mylan extended its partnership with Biocon. The companies signed a definitive agreement to develop and commercialize the generic versions of three insulin analog products. In Jan 2014, Mylan launched its biosimilar version of Roche's breast cancer drug Herceptin (trastuzumab) in India. Mylan has co-exclusive rights with Biocon to market the drug in India.

In Nov 2011, Mylan entered into an agreement with Pfizer whereby the latter granted Mylan exclusive global rights to develop manufacture and commercialize Pfizer's generic version of GlaxoSmithKline's respiratory drugs, Advair and Seretide, utilizing Pfizer's respiratory delivery platform.

In Aug 2012, Mylan joined forces with Pfizer to develop, manufacture, distribute and commercialize generic drugs in Japan. The companies entered into an agreement to form an exclusive long-term strategic collaboration.

In Sep 2012, Mylan entered into a settlement agreement with Pfizer, Pharmacia & Upjohn Company LLC and Pfizer Health AB. The patent litigation was related to Mylan's generic version of Pfizer's Detrol LA (tolterodine tartrate ER, 2 mg and 4 mg) for overactive bladder with symptoms of urge urinary incontinence, urgency and frequency. In 2013, Mylan acquired the rights to a novel LAMA respiratory compound from Pfizer for multiple indications.

Mylan reported $6.91 billion in total revenues in 2013, up 2% year over year.

Currently, Mylan reports revenues from two segments:

Generics (including the Indian subsidiary Mylan Laboratories) This segment primarily develops, manufactures, sells and distributes generic or branded generic pharmaceutical products in tablet, capsule injectable or transdermal patch forms. In addition, the segment is engaged in the manufacture and sale of APIs. Generics revenues are derived from sales in North America, Europe, the Middle East and Africa (collectively, EMEA), and Asia Pacific. The company derives the majority of its revenues from this segment. In 2013, third party net revenues from the Generics unit were $5.87 billion, down 1% due to unfavorable foreign exchange impact.

Specialty Under this segment, Mylan markets branded specialty nebulized and injectable products for life-threatening conditions. In 2013, the Specialty segment recorded revenue of $981.7 million, up 17.6% from the previous year. The most significant product in this segment is EpiPen Auto-Injector, used to treat severe allergic reactions like anaphylaxis. Mylan and Pfizer have an agreement for EpiPen, under which Pfizer manufactures and Mylan markets the product.


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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 The NASDAQ OMX Group, Inc.



This article appears in: Investing , Stocks

Referenced Stocks: API , MG , MYL

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