Mylan's Shares Shrink After Two Top Execs Resign
Two top executives at
Mylan Labs
(MYL) - Get Report
resigned today, raising new questions about the drug maker's prospects.
President and COO Richard Moldin and CFO John Hanson have quit to "resolve differences of opinion surrounding matters of corporate culture," Mylan announced today. Moldin had been with the company for just 14 months, Hanson eight months. Neither company representatives nor the executives were available to elaborate.
Shares in Mylan were down slightly in Monday trading, until news of the resignations was released at 1:24 p.m. EDT. Investors then fled the stock, pushing Mylan shares down $3.74, or 12.5%, to $26.16.
The voluntary resignations are bound to push another dark cloud over the Pittsburgh-based drug maker. During the past two years, Mylan has suffered from a
credibility problem on Wall Street, mainly because it has a history of missing financial forecasts.
But things have been looking up for Mylan in recent months, especially in its generic-drug business. Second-quarter results will include, for the first time, sales of a generic form of the anti-anxiety drug BuSpar, and the company is nearing approval to sell a generic version of the cancer drug Taxol.
When Moldin joined the company, one of his main goals was to build Mylan's branded drug business because of the higher margins compared with generics. In a recent report initiating coverage,
Goldman Sachs
analyst Katherine Breedis estimated that revenue from branded drugs would account for 17% of total Mylan sales in fiscal 2002. Breedis rates Mylan a market outperformer and her firm doesn't do banking for the company.
Mylan executives were not available for comment, but in its announcement, the company said it was still on track to meet fiscal 2002 guidance provided in early April. At that time, the company said it would earn $1.30 a share to $1.33 a share for the year ending March 31, 2002.
Mylan also said that former senior executive Clarence Todd, who retired in May 1999, was returning to serve as interim president and COO with current CEO Milan Puskar. Gary Sphar, Mylan's vice president of finance, is serving as interim CFO.