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Mylan misses, guides below views

August 9, 2017

Mylan (NASDAQ: MYL) reported Q2 EPS of $1.10, $0.06 worse than the analyst estimate of $1.16. Revenue for the quarter came in at $2.96 billion versus the consensus estimate of $3.04 billion.


Mylan sees FY2017 EPS of $4.30-$4.70 vs consensus of $5.12 on revenue of $11.5 to $12.5 billion vs consensus of $12.46 billion.

FY18 target EPS moved to $5.40 from $6 vs consensus of $5.64.

Mylan CEO Heather Bresch commented, “Our industry, along with the entire healthcare sector, is at an inflection point. This is providing investors an opportunity to differentiate between pharmaceutical companies focused solely on generics and/or specialty medicines and those capable of delivering a broad and diverse portfolio across multiple channels in various geographies, which remains Mylan’s strategy.

Today, we are a global pharmaceutical company that is a leader in each of our regions, as demonstrated by our second quarter performance. We generated total revenues of close to $3 billion, a 16% year-over-year increase driven by growth in our Europe and Rest of World segments, which now account for more than half of Mylan’s total revenues. Challenges in our North America segment resulted in adjusted EPS of $1.10, down 5% compared to the same period in 2016.

“Given the region’s ongoing challenges and the uncertain U.S. regulatory environment, we have elected to defer all major U.S. launches from our full year 2017 financial guidance to 2018, including generic Advair® and generic Copaxone®. As a result, we now expect to deliver total revenues this year of between $11.5 billion and $12.5 billion, and adjusted EPS of between $4.30 and $4.70.

“Notwithstanding the above, as we look to 2018, we are moving our target of $6.00 in adjusted EPS to at least $5.40. This new target represents 20% growth from 2017 based on the midpoint of our revised adjusted EPS guidance range. Looking ahead, we continue to have great confidence in our underlying business in every region and the opportunities we have for long-term growth.”

President Rajiv Malik said, “Our global integrated platform has long given us the strength to manage whatever headwinds come our way and ensure sustainable growth. By having always managed Mylan for long-term success, we have been able to harvest many exciting opportunities, the most recent of which include our Meda and Topicals Business acquisitions, which continue to meet and exceed our expectations.

“We also continue to navigate a challenging competitive and pricing environment and expect generic price erosion for the year of mid-single digits globally, with high-single-digit erosion expected in North America. Furthermore, we continue to make great progress on our key pipeline programs, and while we may experience delays, mostly in the U.S., in realizing some of these opportunities, our confidence in our ability to bring these important products to market and maximize their potential has not changed.”

Mylan CFO Ken Parks added, “In the second quarter, Mylan once again drove strong cash flow generation, as demonstrated by the 48% increase in adjusted free cash flow to $613.1 million. This strength positions us well to reduce debt levels, while also allowing for financial flexibility for future growth opportunities and maintaining our commitment to our investment grade credit rating.”


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