Mylan's EpiPen Recall Likely To Have Low U.S. Revenue Impact: EvercoreISI Analyst

Mylan NV's EpiPen recall, which the company said late last week would extend to the U.S., will likely have a low impact on the company's revenue, Evercore ISI analyst Umer Raffat said Monday. The main cost to Mylan will be replacing the recalled EpiPens, all of which are expiring in the next several months, and thus delaying the purchase of new EpiPens for affected patients by about a year, Raffat said. He estimated the cost at about 3%, or $21 million of Mylan's expected $650 million in U.S. EpiPen sales this year. The EpiPen recall, which Mylan had previously said was confined to about 81,000 EpiPens distributed in Australia, New Zealand, Europe and Japan, was expanded to the U.S. on Friday as a "precautionary measure," since there is the possibility the products have a defective part and might not work in an emergency situation, Mylan said. The U.S. recall applies to 13 lots distributed between December 2015 and July 2016, which Raffat estimated at about 260,000 devices. The products affected by the recall are expected to expire in April, September and October of this year. The recall was prompted by reports of two EpiPens outside of the U.S. failing to activate, and the single lot they were from has already been recalled, Mylan said. Raffat said that it's "comforting to know that this additional recall is more precautionary rather than on the heels of additional malfunction cases." Mylan hasn't filed any financial disclosures about how the recall will affect its business but, according to Bernstein analyst Ronny Gal, "Mylan is doing the math and will consider putting out some disclosure on financial implications." Mylan shares declined 8.6% over the last three months, compared with a 4.2% rise in the S&P 500 .