Mylan's 3Q profit triples on strong U.S. sales
Mylan Inc. more than tripled profit in the third quarter on strong sales of generic drugs in the United States and demand for EpiPen, Mylan's branded treatment for severe allergic reactions that's poised to become a blockbuster.
The results at Cecil-based Mylan, which easily topped Wall Street expectations, led the world's third largest generic drugmaker to raise its full-year earnings forecast as it works toward closing a merger that should make it even more profitable.
“Mylan had an exceptional third quarter with all businesses experiencing year-over-year growth,” CEO Heather Bresch said Thursday on a conference call with analysts.
Bresch said she expects her company's deal to acquire the overseas generics business of Abbott Laboratories for $5.3 billion in stock to close in the first quarter next year.
The deal, which includes Abbott's operations in Europe, will allow Mylan to lower its U.S. tax bill by reincorporating in the Netherlands, in addition to growing its product portfolio and sales force.
“We remain excited about the strategic and financial benefits of this transaction,” she said.
U.S. regulators have tightened rules around the so-called tax inversion deals, but those changes have not deterred Mylan.
The company recently boosted the number of shares it is giving Abbott from 105 million to 110 million. The increase means Illinois-based Abbott will own 22 percent of the Netherlands-based Mylan once the deal closes. The Treasury Department recently said foreign companies must own 20 percent or more of the U.S. company after an inversion.
In the meantime, Mylan's existing operations are showing substantial growth, despite delays on approvals by the Food and Drug Administration.
Net income in the July-September quarter was $499.1 million, or $1.26 a share, Mylan said. The results more than tripled net income of $158.9 million, or 40 cents a share, in the same period last year.
Analysts surveyed by Bloomberg had predicted net income of $1.06 a share.
Revenue was $2.1 billion in the quarter, 18 percent higher than the $1.8 billion it recorded a year earlier.
Higher sales in North America, which rose 19 percent to $841.8 million, boosted revenue. And sales from Mylan's specialty unit, which is composed primarily of the EpiPen injector used for allergic reactions, increased 29 percent to $462 million.
Bresch said EpiPen was on track to record $1 billion in sales in 2014, which would be Mylan's biggest single product and its first blockbuster drug. Blockbuster drugs are popular medications for chronic illnesses that generate at least $1 billion in annual sales for a drugmaker.
The strong results also led Mylan to increase its prediction for 2014 adjusted earnings to $3.54 to $3.60 a share. Its previous guidance was $3.44 to $3.54 a share.
But Bresch complained about continued delays at the FDA, which is reviewing two of Mylan's proposed generic drugs, Copaxone and Lidoderm.
Copaxone is a Multiple Sclerosis drug made by Israel-based Teva Pharmaceuticals that generates annual sales of about $4 billion. Lidoderm is used to treat the pain following infection with shingles and is made by Endo Pharmaceuticals Inc. in Malvern, Chester County.
“I am frustrated, as I think the industry is,” Bresch said referring to the delays. “We're working closely with them (the FDA) to get them close to where they need to be. ... That being said, we've received more approvals than any of our competitors, year to date.”
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.