NEW YORK (TheStreet) -- Shares of Mylan (MYL - Get Report) were surging 9.49% to $39.35 in after-hours trading on Friday as the pharmaceutical company said it has agreed to pay the government $465 million to settle allegations that it overcharged Medicaid for its EpiPen treatment.
Earlier this week, Mylan was accused of misclassifying the EpiPen in the Medicaid Drug Rebate Program as a generic drug for nearly two decades. Generic drugs must pay Medicaid a rebate of just 13%, whereas brand-name drugs must pay a higher rebate of 23.1% as part of an effort to make the treatments more affordable.
"This agreement is another important step in Mylan's efforts to move forward and bring resolution to all EpiPen Auto-Injector related matters," Mylan CEO Heather Bresch said of the settlement.
Additionally, Mylan cut its full-year forecast for earnings per share to between $4.70 and $4.90, down from between $4.85 and $5.15.
Analysts are looking for earnings of $4.95 per share for the year.
Separately, TheStreet Ratings team rates the stock as a "hold" with a ratings score of C+.
Mylan's strengths such as its revenue growth, reasonable valuation levels and good cash flow from operations are countered by weaknesses including a generally disappointing performance in the stock itself and disappointing return on equity.
You can view the full analysis from the report here: MYL
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 article's author.