) recently announced that it has inked a deal with Shionogi Inc.
and Andrx to settle a patent-related dispute pertaining to the
generic version of Shionogi's Fortamet. The drug is
marketed as an adjunct to diet and exercise to bring down the
level of glucose in the blood.
Following the agreement, Mylan can start selling its generic
version of Fortamet from Aug 1, 2013, or earlier under certain
circumstances. Mylan did not disclose the other terms of the
deal. The transaction will be reviewed by the US Department of
Justice and the Federal Trade Commission.
The resolution of the patent-related dispute regarding Fortamet
has removed a significant overhang for Mylan and represents
further good news for the generic unit of the company. We note
that the company has received quite a few approvals on the
generic front over the past few months.
Mylan's geographic reach and product depth, along with a robust
generic pipeline, are contributing to its overall growth. We are
also pleased with Mylan's focus on emerging markets. Over the
long term, the biggest opportunities for growth in the generics
industry would be expansion in emerging markets.
However, we remain cautious of the company's performance in
Europe, Middle East and Africa. 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.
Mylan carries a Zacks Rank #2 (Buy). Companies like
WuXi PharmaTech (Cayman) Inc.
) look more attractive in the pharma space with a Zacks Rank #1
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