Mylan Defers Product Launches -- Update
August 09 2017 - 1:00PM
Dow Jones News
By Imani Moise and Cara Lombardo
Mylan NV cut its earnings forecast for the next year and a half
as the company faces increased competition from generic drugs and
delays in the launch of key drugs amid regulatory questions.
The company said it couldn't count on launching this year
planned generic versions of Teva Pharmaceutical Industries Ltd.'s
Copaxone and GlaxoSmithKline PLC's Advair, after the Food and Drug
Administration asked for more information.
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. "We
honestly see the administrative as the barrier and not the
science," said Chief Executive Heather Bresch.
A spokeswoman for the FDA didn't immediately respond to a
request for comment.
Mylan would be the first company to bring a generic version of
Advair to the market and one of the first to bring a generic
version of Copaxone. The FDA has vowed to approve more generic drug
applications to encourage competition and lower prices, and has
said it is prioritizing the approval of the first generic version
of a drug. But Mylan President Rajiv Malik told investors Wednesday
that the FDA seems more focused on quickly approving subsequent
versions of generics.
Chad Landmon, an attorney who helps generic drugmakers gain FDA
approval, said it has been a challenge for the FDA to prove generic
versions of both Copaxone and Advair function the same as branded
versions. Mr. Landmon, who doesn't work with Mylan, said this is
especially true with Advair because it is administered through an
inhaler.
Mylan executives said Wednesday that the company planned to
submit a response to the FDA's concerns regarding Advair in the
next few weeks.
Mylan also said it expects competition to erode prices for its
generic drugs, by a rate in the mid-single digits globally and high
single digits in North America.
Competition from generic drugs has also hurt Mylan's brand-name
products. The company said North American sales for its EpiPen
Auto-Injector fell more than expected in the most recent quarter as
cheaper generic versions launched. North American sales slid 9%
overall in the quarter ended June 30; excluding EpiPen sales, they
grew 4%.
Mylan now expects revenue this year to come in between $11.5
billion and $12.5 billion, compared with prior guidance of $12.25
billion to $13.75 billion. It cut its forecast for earnings per
share to a range of $4.30 to $4.70, from $5.15 to $5.55 previously.
For 2018, the company now expects earnings per share of at least
$5.40, down from its earlier target of $6.
Umer Raffat, a senior analyst with Evercore ISI, estimated in a
research note that half of the revenue revision came from the delay
of new launches, while the rest stemmed from increased price
erosion and competition.
In all for the latest quarter, Mylan missed views, reporting
earnings of $297 million, or 55 cents per share, up from $168.4
million or 33 cents per share a year earlier. On an adjusted basis,
earnings fell to $1.10 per share from $1.16 per share. Revenue
jumped 16% to $2.96 billion.
Analysts polled by Thomson Reuters had forecast earnings of
$1.16 per share on $3.04 billion in sales.
Shares were flat at $31.71 in early afternoon trading Monday
after opening 5.9% lower.
Write to Imani Moise at imani.moise@wsj.com
(END) Dow Jones Newswires
August 09, 2017 13:45 ET (17:45 GMT)
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