February 19, 2018

Mylan cuts sales forecast as pricing pressure grows

10 August 2017, 01:58 | Darrell Baldwin

Biotech stocks in focus

Biotech stocks in focus

Mylan, the maker of the EpiPen allergy treatment, said its net earnings rose 76.4 percent to $297 million, or 55 cents per share, mostly due to revenue from its purchase of Swedish drugmaker Meda a year ago.

Novartis' Sandoz unit already markets a generic to the 20 mg version of Copaxone, but Mylan has hoped to be among the first wave of copies to the 40 mg version - a brand that earned $3.3 billion in USA sales the year ending November 30, according to IMS Health data cited by Mylan. The launches include Mylan's generic version of GlaxoSmithKline's blockbuster Advair asthma treatment and Teva's multiple sclerosis drug, Copaxone.

Mylan on Wednesday cut its forecasts for this year and next as eroding prices for generic drugs and challenges getting new products approved in the U.S. hurt the drugmaker's profitability.

Mylan's shares fell as much as 7 percent in morning trading before mostly recovering but still were trading near four-year lows.

The decision will affect the launch of generic versions of the Advair and Copaxone drugs.

On a call with investors, the company blamed the delays on restructuring at the FDA and said that it didn't expect the agency to require any more clinical or device-related studies. The difference can likely be attributed to generic price erosion and competition, among other factors, he said.

Mylan chief executive Heather Bresch said the entire healthcare sector is at an inflection point.

Generic drugmakers in the United States were hit by weakening prices in the quarter, and Mylan said it expects mid-single digit generic drug price drops worldwide and high-single digit falls in North America. But Mylan President Rajiv Malik told investors Wednesday that the FDA seems more focused on quickly approving subsequent versions of generics.

Sales of its signature EpiPen autoinjector, used to treat anaphylaxis, fell 9 percent in the second quarter of 2017 as generic versions came on the market, even though the market segment saw a 4 percent increase in sales. The stock was down 5.8% to $29.94 at 9:41 am.

In all for the latest quarter, Mylan missed views, reporting earnings of $297 million, or 55 cents a share, up from $168.4 million or 33 cents a share a year earlier.

Acquisitions boosted net sales in the region by $151 million during the period but lower generic prices and stepped-up competition to Mylan's flagship EpiPen Auto-Injector more than offset the inclusion of new businesses.

Mylan now expects 2017 adjusted earnings of $4.30 to $4.70 per share, down from $5.15 to $5.55 per share.

Total revenue rose to $2.96 billion from $2.56 billion. Excluding one-time items, the US-based company earned $1.10 per share. Mylan also cut its 2018 earnings per share target from $6 to at least $5.40.

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