Mylan's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Mylan (MYL)

Q1 2012 Earnings Call

April 26, 2012 10:00 am ET


Kris King -

Heather Bresch - Chief Executive Officer and Director

John D. Sheehan - Chief Financial Officer and Executive Vice President

Rajiv Malik - President


Douglas D. Tsao - Barclays Capital, Research Division

Christopher Schott - JP Morgan Chase & Co, Research Division

Elliot Wilbur - Needham & Company, LLC, Research Division

David Risinger - Morgan Stanley, Research Division

Marc Goodman - UBS Investment Bank, Research Division

Jami Rubin - Goldman Sachs Group Inc., Research Division

Shibani Malhotra - RBC Capital Markets, LLC, Research Division

John T. Boris - Citigroup Inc, Research Division

Gregory B. Gilbert - BofA Merrill Lynch, Research Division

Aaron Gal - Sanford C. Bernstein & Co., LLC., Research Division

Gary Nachman - Susquehanna Financial Group, LLLP, Research Division

Michael Faerm - Crédit Suisse AG, Research Division

Randall Stanicky - Canaccord Genuity, Research Division



Welcome to Mylan's First Quarter Earnings Conference Call and Webcast. Hosting the call today from 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 p.m. Eastern standard time. The dial in number is (800) 585-8367, or (404) 537-3406 for international callers, with pin number 70819215. [Operator Instructions] It is now my pleasure to turn the floor over to Kris King, you may begin.

Kris King

Thank you, Beverly. Good morning, everyone. Welcome to Mylan's first quarter 2012 earnings call. Joining me for today's call are Mylan's CEO, Heather Bresch; President, Rajiv Malik; Chief Operating Officer, Hal Korman; 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-K for the period ended December 31, 2012, and in our other SEC filings. You can access our Form 10-K 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 earnings press release, which is available on our website, as it contains detailed GAAP to non-GAAP reconciliations of our actual first quarter results.

Before I turn the call over to Heather, let me also remind you that the materials in this call, with the exception of the participant questions, is a property of Mylan and cannot be recorded or rebroadcast without Mylan's expressed written permission.

With that, I'd like to turn the call over to Heather.

Heather Bresch

Thank you, Kris, and good morning, 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 for their passion and hard work. We delivered very strong results this quarter. On behalf of the Board of Directors and our entire management team, I would like to thank each and every one of them.

Our diverse global platform has once again delivered strong results, representing a great start to 2012. Double-digit growth on our North American Asia/Pacific and Specialty businesses allowed us to deliver robust financial results despite persistent macroeconomic headwinds in certain regions, specifically Europe and Australia. We are reaffirming our 2012 guidance of $2.30 to $2.50 per share and we see opportunities for upside during the year. Further, the strength of our platforms, first-in-class science and robust product portfolio give us continued confidence in our long-term growth target for 2013 and beyond.

During the first quarter, we generated total adjusted revenues of $1.58 billion, an increase of 11% on a constant currency basis as compared to last year's first quarter revenues of $1.45 billion. On the bottom line, we delivered adjusted diluted earnings per share of $0.52, an 18% increase over the $0.44 per share we delivered during the first quarter of '11.

In our North American Generics business, third-party net revenues for the quarter were $777 million, up more than 15% from the comparable year-ago period. This strong result was driven in part by launches of 11 new products in the U.S., including Ibandronate and Escitalopram, our first equivalent product that generated the highest and fastest conversion rate in versus generic launch we've seen in recent history. We also enjoyed strong sales in the U.S. on many of our existing products.

Further, consistent with the strength of our R&D capabilities 2 of the 8 first quarter products submissions we made in the U.S. are first-to-file opportunities. Currently we have 171 ANDAs pending FDA approval, 40 of which are potential first to file. Regarding our neurology franchise which is our strategic growth drivers, we're awaiting the court's ruling in the Copaxone patent infringement case whose trial concluded in September of 2011. We remain convinced that we have an AB-rated product and look forward to securing approval in the second half of this year. While we eagerly anticipate the court's ruling and regulatory approval, I'd like to remind everybody that we are not relying on this product to achieve our 2013 target of $275 million. We also are pleased with our performance in Canada, and it's another example of the robustness of our global pipeline.

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