Mylan (MYL)

Q2 2011 Earnings Call

July 27, 2011 10:30 am ET


Heather Bresch - President and Director

Robert Coury - Chairman, Chief Executive Officer and Chairman of Executive Committee

John Sheehan - Chief Financial Officer and Executive Vice President

Kris King - Executive Director of Investor Relations


David Risinger - Morgan Stanley

John Boris - Citigroup Inc

Ronny Gal - Sanford C. Bernstein & Co., Inc.

Michael Faerm - Crédit Suisse AG

Elliot Wilbur - Needham & Company, LLC

Timothy Chiang - CRT Capital Group LLC

Christopher Schott - JP Morgan Chase & Co

Gregory Gilbert - BofA Merrill Lynch

Shibani Malhotra - RBC Capital Markets, LLC

Marc Goodman - UBS Investment Bank

Louise Chen - Collins Stewart LLC



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Welcome to Mylan's Second Quarter Earnings Conference Call and Webcast. Hosting the call today for Mylan is Ms. Kris King, Vice President, Global Investor Relations. Today's call is being recorded and will be available for replay beginning at 1:30 p.m. Eastern Time. The dial-in number is (855) 859-2056 and enter pin number 82698144. [Operator Instructions] It is now my pleasure to turn the floor over to Kris King. You may begin.

Kris King

Thank you, Melissa. Good morning, everyone. Joining me for today's call are Mylan's Chairman and Chief Executive Officer, Robert J. Coury; President, Heather Bresch; and Executive Vice President and Chief Financial Officer, John Sheehan.

During today's call, including the Q&A, we will be making forward-looking statements including those relating to our anticipated business levels, our future earnings, our planned activities, our anticipated growth, and other expectations and targets for future periods. Note that these statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Because these statements are forward-looking, they inherently involve risks and uncertainties, and accordingly, our actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the risk factors set forth in our report on Form 10-Q for the period ended March 31, 2011, and in our other SEC filings. You can access our Form 10-Q and other SEC filings through the SEC website at, and we strongly encourage you to do so.

In addition, during this call, we will be referring to certain actual and projected financial metrics of Mylan on an adjusted basis, which are non-GAAP financial measures. It should be noted that non-GAAP measures such as adjusted revenues, adjusted gross margin and adjusted diluted EPS should be used only as a supplement to, not as a substitute for, or as a superior measure to measures of financial performance prepared in accordance with GAAP. Please refer to today's press release, which is available on our website, as it contains detailed GAAP to non-GAAP reconciliations of our actual second quarter results. Before I turn the call over to Robert, let me also remind you that the material in the call, with the exception of the participant questions, is the property of Mylan and cannot be recorded or rebroadcast without Mylan's expressed written permission. With that, I'll now turn the call over to Robert.

Robert Coury

Thank you, Kris. Hello, everyone, and thank you for joining us today. Before we get started, I'd like to welcome and recognize all of our fellow employees around the world. On behalf of the Board of Directors and our entire management team, I would once again like to thank each of you. Through your continued hard work and unwavering dedication to achieving our goals, we have again delivered another quarter of strong results.

Now that we have half of the year behind us, we are well on our way to achieving our 2011 goals. We experienced significant growth, both on top line and bottom line. We optimized and execute on opportunities, while at the same time, mitigating the inherent challenges within our industry. The most significant of our opportunities in the second quarter was the earlier than expected launch of Budesonide capsules, the first generic version of this product to enter the U.S. market. Even though we had projected this launch to come later in the year, we were fortunate to be able to execute on this opportunity sooner.

We also were able to launch Cyclobenzaprine ER. And even though we were subsequently enjoined by the courts, customers have purchased substantial quantities of our product prior to the court's action. And of course, we were able to derive significant benefit from our first-to-file launch of Letrozole.

More importantly, we see many of these opportunities we realized this quarter as sustainable. And we continue to be very happy with the overall mix of our strong diversified base business in terms of both products and geographies. In fact, this quarter exemplifies how strong and diverse the platform we built truly is, as we continue to successfully absorb the macroeconomic headwinds outside the U.S.

With that said, in Europe, for example, the long-term fundamental growth opportunities have not changed. What has changed is the timing. We now expect to see Europe to be flat to slightly lower in 2011, and instead, fully expect this market to return to growth in 2012.

The real story here, however, continues to be our strong organic growth into 2013, which allows us to absorb these types of challenges while being able to forecast and deliver strong revenue and earnings growth. As reported in this morning's press release, we delivered revenue growth of 15% over the second quarter of 2010. We also delivered growth in earnings per share of excess of 40% as compared to the same quarter last year, reporting $0.42 in adjusted diluted EPS for the second quarter.

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