Mylan cuts forecasts on delays in new drugs, weak prices

[August 10, 2017] By Michael Erman

(Reuters) - Mylan NV said on Wednesday that delays in launching key new drugs and eroding prices for generics in the United States will hurt its profitability this year and in 2018.

The generic drugmaker said it was no longer including any major U.S. product launches in its forecast for the year, pushing them back to 2018 due to the uncertain U.S. regulatory environment. The launches include those of Mylan's generic version of GlaxoSmithKline's blockbuster Advair and Teva's multiple sclerosis drug, Copaxone.

Mylan's shares fell as much as 7 percent in morning trading before mostly recovering but still were trading near four-year lows.

The company's stock price has dropped nearly 20 percent since last week as generic drugmakers like Teva and Endo International Plc have said they are facing weakening prices in the United States.

Those companies said customers consolidating to negotiate lower prices and regulators that have approved more versions of drugs to increase competition are hurting their bottom lines.

Mylan said it expects mid-single digit generic drug price erosion worldwide and high-single digit price drops in North America.

Mylan lowered its forecast for 2017 adjusted earnings to $4.30 to $4.70 per share, from $5.15 to $5.55 per share. It also cut a long-standing 2018 earnings per share target of $6 to at least $5.40.

"Mylan had refused to capitulate for over a year as headwinds were building, holding itself out as differentiated and able to weather challenges that its peers were facing," RBC Capital Markets analyst Randall Stanicky said in a research note. "This is clear evidence that generic challenges are being faced by all."

Mylan, the maker of the EpiPen allergy treatment, said its net earnings rose 76.4 percent to $297 million, or 55 cents per share, mostly due to revenue from its purchase of Swedish drugmaker Meda last year.

Excluding one-time items, the company earned $1.10 per share, missing analysts' average estimate by 6 cents, according to Thomson Reuters I/B/E/S.

Total revenue rose to $2.96 billion from $2.56 billion. Analysts had expected $3.03 billion.

Mylan executives expressed frustration that the U.S. Food and Drug Administration has been slow to approve its drugs.

The company said it is disappointed by the FDA's pace in the approval process of its generic version of Copaxone. It said that it has been in discussions with FDA over its generic version of Advair and that no further clinical or device-related studies are required.

(Reporting by Michael Erman in New York and Natalie Grover and Manas Mishra in Bengaluru; Editing by Nick Zieminski and Bill Trott)

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