Mylan's full-year earnings estimate falls short as Q4 sales decline 5 percent

Headline results for the fourth quarter:

Revenue

$3.1 billion (in line with forecasts)  

-5%

Profit

$51.2 million

Versus $244.3 million

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

CEO Heather Bresch commented that "our 2018 results were strong, especially in light of the fact that we had lower than expected uptake on generic Copaxone and did not [initially] receive our generic Advair approval, demonstrating once again the resiliency of our business model." The FDA did go on to approve Mylan's Advair generic, Wixela, this past January, with the company launching the product in the US earlier this month at a 70-percent discount to the wholesale cost of GlaxoSmithKline's product.

Meanwhile, company president Rajiv Malik said Mylan "[anticipates] growth of more than $1 billion in new launches, nearly all of which have already been approved, and which reflects a heavier weighting on specialty and complex generic products aligned with the evolution of the pharmaceutical industry."

Other results:

  • North America segment: $1.1 billion, down 16 percent, primarily attributable to lower volumes on existing products due in part to "actions associated with the restructuring and remediation" at Mylan's Morgantown manufacturing plant
  • Europe segment: $1.1 billion, up 1 percent, boosted by higher volumes on existing products and new product sales
  • Rest of World segment: $851.4 million, up 4 percent, fuelled mainly by new product sales, as well as higher volumes of existing products, including higher sales of key brands in China
  • Full-year revenue: $11.4 billion, versus $11.9 billion in the prior year
  • Full-year profit: $352.5 million, versus $696 million in the prior year

Looking ahead:

For 2019, Mylan anticipates earnings in the range of $3.80 per share to $4.80 per share on $11.5 billion to $12.5 billion in revenue. Analysts expect earnings of as much as $5.04 per share on up to $11.86 billion in sales. The drugmaker explained that the lower-than-expected forecast was due to higher projected sales, marketing and R&D costs, sending its shares down as much as 10 percent.

Bresch indicated that a committee formed last year to evaluate possible strategic alternatives, citing the tough US environment for generic drugmakers, is nearing a completion of its review. "It's very difficult to look at the US generic market and paint it with one brush," Bresch said, adding "portfolios are very different. There's no question that value has been extracted out of the US marketplace. We've seen that daily over the course over the last seven months."

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