Mylan Swings To 3Q Loss On Medicaid Settlement; Views Beat
DOW JONES NEWSWIRES
Mylan Inc. (MYL) swung to a third-quarter loss due to its $121 million
settlement of a Medicaid-rebate case, masking higher generic drug revenue.
But core results beat Wall Street estimates, prompting Mylan to again boost
its full-year earnings target, this time to a range of $1.24 to $1.28 a share
from $1.13 to $1.20.
Generic-drug use has risen as insurers, among others, increasingly push for
their purchase over higher-priced brand names. But quality-control issues and
shortages at several smaller generic drug makers have allowed larger players
like Mylan to grab market share and boost prices, observers say.
Meantime, Standard & Poor's Ratings Services in September raised Mylan's
ratings closer to investment grade, citing the company's successful integration
of Merck KGaA's (MRK.XE) generics business, which Mylan purchased for $6.7
billion in 2007.
Mylan swung to a loss of $40 million, or 13 cents a share, from year-earlier
profit of $182.4 million, or 47 cents a share. Excluding items such as the
settlement related to allegation it underpaid rebates to Medicaid for several of
the company's drugs, earnings rose to 32 cents a share from 23 cents.
Revenue skidded 24% to $1.26 billion as the prior year included $455 million
from selling rights to hypertension drug Bystolic, which Mylan co-developed with
Forest Laboratories Inc. (FRX). Excluding foreign-exchange impacts, revenue
excluding the gain rose 9%.
Analysts surveyed by Thomson Reuters were expecting earnings, excluding items,
of 27 cents on revenue of $1.23 billion.
Excluding Bystolic and the charges, gross margin fell to 45.6% from 46.7%.
Generics revenue rose 3.7%, with North America seeing a 9.2% increase.
Mylan shares closed at $15.77 and didn't trade premarket. The stock has more
than doubled the past year.
-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com
(END) Dow Jones Newswires
10-29-090726ET
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