Mylan Defers Product Launches -- Update

By Imani Moise Features Dow Jones Newswires

Mylan NV said it wouldn't launch any major new drugs in the U.S. market this year, deferring the introduction of two highly anticipated generic drugs amid regulatory uncertainty.

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The delay cut the drug maker's earnings outlook for this year. Its shares were down 4.5% at $30.36 in early trading.

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. The company also cut its forecast for adjusted earnings per share to a range of $4.30 to $4.70, from $5.15 to $5.55 previously.

The company has been developing generic versions of Teva Pharmaceutical Industries Ltd.'s Copaxone and GlaxoSmithKline PLC's Advair, but has raised concerns over its ability to quickly win regulatory approval after executives said earlier this year that the Food and Drug Administration had asked for more information.

"While we may experience delays, mostly in the U.S., in realizing some of these opportunities, our confidence in our ability to bring these important products to market and maximize their potential has not changed," said President Rajiv Malik.

Mylan, like many drug companies, has been coping with increased competition from cheaper, generic versions of its signature drugs as patents expire. Its sales in the U.S. slid 9% during the quarter as generic versions of Mylan's EpiPen Auto-Injector launched. Excluding the dip in EpiPen sales, the segment saw a 4% increase in sales.

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Mylan said it expects generic price erosion to continue this year, at a rate in the mid-single digits globally and high-single digits in North America.

In all for the second 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.

Before premarket trading, the stock had fallen 17% so far this year.

Write to Imani Moise at imani.moise@wsj.com

Corrections & Amplifications

This article was corrected at 1:07 p.m. ET because it incorrectly gave the name of the Food and Drug Administration as the Federal Drug Administration in the fourth paragraph.

The Food and Drug Administration earlier this year asked for more information on Mylan drugs in development. "Mylan Defers Product Launches," at 9:57 ET, incorrectly gave the name of the agency as the Federal Drug Administration in the fourth paragraph. (Aug. 9)

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 the 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.

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.

An FDA spokeswoman said the agency is already implementing a plan to streamline the generic drug review process and expects to approve a record number of generics by the end of the year. She said the agency is continuing to expedite the review of potential first 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 a share, up from $168.4 million or 33 cents a share a year earlier. On an adjusted basis, earnings fell to $1.10 a share from $1.16 a 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 closed at $32.08, up 29 cents, after opening 5.9% lower.

Write to Imani Moise at imani.moise@wsj.com

(END) Dow Jones Newswires

August 09, 2017 18:02 ET (22:02 GMT)