Mylan's shares fall 9 percent on lowered annual guidance, Q2 sales miss

Shares in Mylan fell as much as 9 percent Wednesday after the company cut its annual guidance and reported second-quarter sales that came in just short of analyst expectations. In the three-month period, revenue climbed 16 percent year-over-year to just under $3 billion, while profit reached $297 million, up from $168.4 million in the same quarter of 2016.

However, the company said it now expects sales this year in the range of $11.5 billion to $12.5 billion, down from a prior forecast of $12.25 billion to $13.75 billion, and below analyst estimates of $12.4 billion. Further, annual earnings per share are predicted to be between $4.30 and $4.70, revised from an earlier outlook of $5.15 to $5.55, and short of expectations of $5.13.

According to Mylan, the revised guidance reflects "expected delays in the timing of certain key new product launches." CEO Heather Bresch explained "given the region's ongoing challenges and the uncertain US regulatory environment, we have elected to defer all major US launches from our full year 2017 financial guidance to 2018, including generic Advair and generic Copaxone."

Mylan president Rajiv Malik said Mylan is navigating a competitive price environment, and expects “generic price erosion for the year of mid-single digits globally, with high-single-digit erosion expected in North America." The company also lowered its profit forecast for 2018, from $6.00 per share to $5.40 per share.

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Mylan acknowledged that revenue in the quarter was hampered by decreased demand for EpiPen due to greater competition in the US, as well as the launch of its authorised generic version of the therapy, which crimped sales by about $172 million. Earlier this year, Kaléo reintroduced its epinephrine auto-injector Auvi-Q in the US, while CVS Health revealed plans to sell Impax Therapeutics' Adrenaclick at an 80-percent discount to the cash price for EpiPen. More recently, Adamis Pharmaceuticals was awarded FDA approval of its epinephrine auto-injector Symjepi.

According to Mylan, revenue in the three-month period was bolstered by recent acquisitions, including Meda and Renaissance's topicals-focused specialty and generics business. The company estimated that the deals boosted sales by $633.1 million in the quarter.

Commenting on the results, Citi analyst Liav Abraham noted that Mylan's performance matches that of other generic manufacturers. "This morning's earnings, while consistent with the larger generic players thus far, are nonetheless not particularly reassuring, and point to structural issues in the US generics landscape," stated Abraham.

For related analysis, read ViewPoints: Mylan confirms feeling the pain but not gain of generics peers.

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