Mylan's second quarter 2014 adjusted earnings of $0.66 per share
fell short of the Zacks Consensus Estimate by $0.01. Revenues too
narrowly missed the Zacks Consensus Estimate. We are disappointed
by the soft generics sales in the U.S. The company now expects
adjusted earnings for 2014 in the range of $3.25 to $3.45 and
revenues in the range of $7.8 billion to $8 billion. Mylan's deal
with Abbott to buy the latter's branded specialty and generics
business in the developed ex-U.S. markets is a prudent move. The
all stock deal is expected to close in the first quarter of 2015.
Mylan said that its 2018 earnings guidance (of at least $6.00 per
share) could be reached earlier in the event of the deal achieving
its desired results. We remain Neutral on the stock.
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
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
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
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
Mylan, Inc. (MYL): Read the Full Research
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