Mylan (MYL) Accounted for a U.S. Tax Rate in the Profitability of the EpiPen. - TheStreet

Updated at 9:45 a.m. EDT to include a statement from Mylan.

NEW YORK (TheStreet) -- Mylan's (MYL) - Get ReportSEC filing revealed that it's claimed $50 per EpiPen profitability accounted for a 37.5% U.S. tax rate. 

Mylan CEO Heather Bresch testified before Congress last week about the dramatic increase in the price of EpiPens and was questioned about their profitability. 

"After subtracting EpiPen related costs, our profit is $100 or approximately $50 per pen," she said in reference to the EpiPen 2-Pak. 

"You want us to believe that your profit is less than $50?" Rep. Jason Chaffetz (R-Utah) asked her in the hearing. 

"If you took company allocation and all that in, then yes," she claimed. 

"I don't know who the investors of this company are, but man, I'm telling you, this is some fishy business because these things do not add up," Chaffetz said. 

"The Wall Street Journal out with the story today, quoting analysts saying, 'That's not appropriate. They shouldn't be applying this U.S. tax rate. And by implying that, it implied that the profitability was lower than it actually should have been,'" reported CNBC's Meg Tirrell on "Closing Bell" Monday. 

"They did a tax inversion so they re-domiciled outside the country. Even if they were U.S.-based, I mean big companies do not run with a 37.5% effective tax rate even if that's the statutory rate for a lot of their income," CNBC's Michael Santoli said. 

The company's overall tax rate was 7.4% last year, CNBC's Kelly Evans noted. 

"Is it legitimate for Mylan to claim this was the right way to present the information?" Evans asked Renaissance Macro Research Chairman Jeff deGraaf.

"If one of my analysts did that, they wouldn't be one of my analyst for long. I don't know all the facts so I don't want to speak out of term, but that seems a little fuzzy to me," deGraaf said. 

Mylan sent the following statement to The Street on Tuesday morning:

"Tax is typically included in a standard profitability analysis and the information provided to Congress has made clear that tax was part of the EpiPen® Auto-Injector profitability analysis. In fact, Mylan has provided Congress with a detailed analysis of EpiPen® Auto-Injector profitability. It also is important to note that use of a statutory tax rate for the jurisdiction being analyzed (in this instance, the U.S.) is standard. Just as we did not use a blended global tax rate, we also did not allocate corporate expenses associated with running the business, which would have further reduced its profitability. We believe it is most appropriate, and conservative, to focus entirely on EpiPen® Auto-Injector specific costs and associated taxes."

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings team rates Mylan as a Buy with a ratings score of B-. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks that the team covers.

You can view the full analysis from the report here: MYL

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