Mylan Cuts View On Drug Delays -- WSJ
By Imani Moise and Cara Lombardo
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (August 10, 2017).
Mylan NV cut its earnings forecast for the next year and a half as the company faces increased competition from generic drugs and delays in the launch of key drugs amid regulatory questions.
The company said it couldn't count on launching this year the planned generic versions of Teva Pharmaceutical Industries Ltd.'s Copaxone and GlaxoSmithKline PLC's Advair, after the Food and Drug Administration asked for more information.
On a call with investors, the company blamed the delays on restructuring at the FDA and said that it didn't expect the agency to require any more clinical or device-related studies. "We honestly see the administrative as the barrier and not the science," said Chief Executive Heather Bresch.
Mylan would be the first company to bring a generic version of Advair to the market and one of the first to bring a generic version of Copaxone. The FDA has vowed to approve more generic drug applications to encourage competition and lower prices, and has said it is prioritizing the approval of the first generic version of a drug. But Mylan President Rajiv Malik told investors Wednesday that the FDA seems more focused on quickly approving subsequent versions of generics.
An FDA spokeswoman said the agency is already implementing a plan to streamline the generic drug review process and expects to approve a record number of generics by the end of the year. She said the agency is continuing to expedite the review of potential first generics.
Chad Landmon, an attorney who helps generic drugmakers gain FDA approval, said it has been a challenge for the FDA to prove generic versions of both Copaxone and Advair function the same as branded versions. Mr. Landmon, who doesn't work with Mylan, said this is especially true with Advair because it is administered through an inhaler.
Mylan executives said Wednesday that the company planned to submit a response to the FDA's concerns regarding Advair in the next few weeks.
Mylan also said it expects competition to erode prices for its generic drugs, by a rate in the mid-single digits globally and high-single digits in North America.
Competition from generic drugs has also hurt Mylan's brand-name products. The company said North American sales for its EpiPen Auto-Injector fell more than expected in the most recent quarter as cheaper generic versions launched. North American sales slid 9% overall in the quarter ended June 30; excluding EpiPen sales, they grew 4%.
Mylan now expects revenue this year to come in between $11.5 billion and $12.5 billion, compared with prior guidance of $12.25 billion to $13.75 billion. It cut its forecast for earnings per share to a range of $4.30 to $4.70, from $5.15 to $5.55 previously. For 2018, the company now expects earnings per share of at least $5.40, down from its earlier target of $6.
Umer Raffat, a senior analyst with Evercore ISI, estimated in a research note that half of the revenue revision came from the delay of new launches, while the rest stemmed from increased price erosion and competition.
In all for the latest quarter, Mylan missed views, reporting earnings of $297 million, or 55 cents a share, up from $168.4 million or 33 cents a share a year earlier. On an adjusted basis, earnings fell to $1.10 a share from $1.16 a share. Revenue jumped 16% to $2.96 billion.
Analysts polled by Thomson Reuters had forecast earnings of $1.16 per share on $3.04 billion in sales.
Shares closed at $32.08, up 29 cents, after opening 5.9% lower.
Corrections & Amplifications The Food and Drug Administration earlier this year asked for more information on Mylan drugs in development. An earlier version of this article incorrectly gave the name of the agency as the Federal Drug Administration. (Aug. 9)
Write to Imani Moise at [email protected]