The CEO of
on Thursday defended his company's pursuit of
, saying King would have helped Mylan make good on its "long-standing strategy" to sell more brand-name drugs.
"Pursuing the acquisition of King would have gone a long way in fulfilling that objective," said Robert J. Coury, who also is vice chairman. "However, King was not the only option available to Mylan."
Although the deal failed, "we were careful and disciplined in our analysis of King as information became available," he said in a telephone conference call to analysts. "We believe that we made correct decisions with respect to King at every point in time based upon the information available at that time. In the end, we believe we ultimately reached the appropriate decision for all our shareholders."
Coury's comments came
less than two weeks after Mylan and King canceled their deal in which Mylan would have paid 0.9 shares of its shares for each share of King. Coury said in January that King's restatement of earnings
made its original price unworkable. The companies couldn't agree on a revised price formula.
When the deal was announced in late July, the value was $4 billion. But the value declined not only in price but also in the eyes of many financial analysts who said buying King would have been a strategic and expensive mistake. That criticism was endorsed more vociferously by New York investor Carl C. Icahn, who has become Mylan's second-largest shareholder.
But Coury said he expects consolidation among peers due to several "negative trends" such as more generic companies entering the market and the presence of generic drugmakers from India and other "emerging markets." In fact, he added, "we continue to believe that the generic industry needs to consolidate."
Asked if Mylan would be an acquirer or acquiree, Coury said he "would not rule out any opportunities" as long as they are "in the best interests of all shareholders."
Coury reiterated Thursday that he expects Mylan's earnings per share for the fiscal year ending March 31 to be 75 cents to 80 cents, adding that the final number should be at the "high end" of that estimate. The prediction includes 6 cents a share related to a legal settlement, but it excludes costs related to romancing King.
The consensus of analysts polled by Thomson First Call predict a fiscal year EPS of 72 cents.
Sounds of Silence
Thursday's teleconference also was notable for what Coury wouldn't say.
He declined to predict EPS for the fiscal year ending March 31, 2006, until Mylan decides on a strategy for its experimental blood pressure drug nebivolol. The Food and Drug Administration recently extended the deadline for reviewing this product by 90 days to May 31. Coury said the agency may act earlier.
He wouldn't say anything about nebivolol. In the past, analysts have been furious with Mylan, saying it hasn't provided much medical data or market-strategy insight for the drug.
On the one hand, the drug represents an opportunity for Mylan to expand its brand-name drug business. On the other hand, many analysts question whether Mylan has the marketing skills to sell a brand-name product. The main rationale for the King deal was to acquire a company with a sales force familiar with selling blood pressure medications.
Nebivolol is sold in more than 40 markets on four continents by the Italian company Menarini Group. It licensed the drug from Janssen Pharmaceutica, a subsidiary of
Johnson & Johnson
. Mylan has licensed the U.S. and Canadian rights from Janssen.
Coury also said little about Icahn, who recently filed suit challenging a decision by Mylan's board to change the date of the annual meeting and to reduce the amount of time for which shareholders could nominate board members. Icahn beat the deadline, offering 11 candidates to replace the existing board. Coury said Thursday that Icahn had withdrawn the lawsuit.
Coury added a familiar refrain that the board "has never been and will never be" influenced by Icahn's actions or comments. Coury declined to say why the board changed the annual meeting date from the usual time in late July to October. Coury said a conference call with analysts wasn't the appropriate forum for discussing board members' deliberations.
Coury's remarks came after markets had closed. In regular trading, Mylan's stock gained a penny to $18.01. In after-hours trading, it added 24 cents.