Mylan First-Quarter Revenue Misses Estimate Amid Lower Sales of Branded Product

Mylan NV (MYL) on Wednesday, May 9, unveiled first-quarter adjusted earnings per share that slightly beat analysts' expectations and revenue that came in below the estimate as net sales in North America fell 19% year over year due in part to lower sales of branded products including allergy treatment EpiPen.

The drugmaker reported adjusted earnings per share of 96 cents, representing a 3% rise from the year-ago period. Revenue declined 1% year over year to $2.68 billion.

Analysts expected, on average, adjusted EPS of 95 cents on revenue of $2.74 billion, according to FactSet Research Systems Inc.

Shares of Mylan were up 4.4% to $36.93 in morning trading on Wednesday. The stock is down 12.7% in 2018 and 2.9% over the past 12 months.

Mylan, whose principal executive office is in Hatfield, England, and global headquarters is in Canonsburg, Pa., said North America net sales totaled $985.3 million, down $229.6 million from the same period last year.

The company attributed the decline mainly to a $108.7 million combined decrease in sales of branded products, including EpiPen; the effect of the loss of exclusivity of high blood pressure treatments olmesartan and olmesartan HCTZ; and the prior-year divestiture of certain contract manufacturing assets.

Meanwhile, Europe segment net sales were $1.04 billion, a 16% increase from 2017. In the company's rest-of-world segment, net sales rose 8% to $626.7 million.

"Mylan's first quarter demonstrates continued execution on our long-term plan," CEO Heather Bresch said in a statement. "Our diversity and durability are what allow us to absorb evolving industry dynamics and natural market volatility, while at the same time accelerate our mission of providing access to high-quality medicine."

On an earnings call Wednesday morning, Bresch addressed potential M&A, noting Mylan "continues to look at opportunities that complement our assets."

Mylan's M&A activity in recent years includes its purchase of ProPhase Labs Inc.'s PRPH Cold-Eeze brand for about $50 million in a deal completed in March 2017.

The company in August 2016 wrapped up its purchase of Meda AB for $6.9 billion, net of cash acquired. Other deals include its acquisition of Renaissance Acquisition Holdings LLC's nonsterile, topicals-focused specialty and generics business in a $1.1 billion deal completed in June 2016.

Mylan in the earnings statement reiterated its full-year revenue guidance of $11.75 billion to $13.25 billion, adjusted EPS forecast of $5.20 to $5.60 and adjusted free cash flow projection of $2.1 billion to $2.5 billion.

In a separate statement on the supply of EpiPen, Mylan pointed to a U.S. Food and Drug Administration supply notification and said that while there are intermittent supply constraints, the product is available.

Mylan said it is receiving continual supply from its manufacturing partner, Meridian Medical Technologies Inc., a subsidiary of Pfizer Inc. (PFE) . "Mylan is expediting shipment to wholesalers upon receipt, and supply levels may vary across wholesalers and pharmacies," the company said.

Mylan added that it had notified the FDA a few months ago of intermittent supply constraints due to manufacturing delays from Pfizer, and both companies have stayed in close contact with the FDA since then to provide inventory updates.

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