Mylan's shares plunge as first-quarter sales fall 7 percent, missing forecasts

Headline results for the first quarter:

Revenue

$2.5 billion (forecasts of $2.7 billion)

-7%

Loss

$25 million

Profit of $87.1 million

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

What the company said:

CEO Heather Bresch remarked "Mylan's first-quarter represents a solid start to the year and we remain positioned to reaffirm our guidance for 2019." The executive continued "in the US, where the industry continues to experience volatility, we are leveraging past experience and applying key learnings to our largest launches, like Wixela," which is the first FDA approved generic version of GlaxoSmithKline's Advair Diskus.

Other results:

  • North America segment: $922.9 million, down 6 percent, missing forecasts of $952.4 million, due in part to lower volumes on existing products and remediation efforts at Mylan's Morgantown facility, partially offset by new product launches
  • Europe segment: $895.3 million, down 14 percent, below forecasts of $1.1 billion, due to unfavourable currency effects, lower volumes for existing products and temporary business disruptions
  • Rest of World segment: $642.4 million, up 3 percent, driven by new product sales in Australia, Japan and China, and higher volumes on existing products, partially offset by current impacts and lower pricing on existing products

Looking ahead:

For 2019, Mylan reaffirmed that it expects 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 predict full-year earnings of $4.41 per share, with revenue of around $12 billion.

Meanwhile, the company did not provide an update on its previously announced strategic review, sending shares down as much as 21 percent on Tuesday.

What analysts said:

Cowen analyst Ken Cacciatore remarked "like all generic franchises, there are only so many undifferentiated acquisitions that can be made to cover the constant downward deterioration in the base businesses," adding "at a certain point, the new product cycle needs to materialise. But even in this case with quality launches, it is still not enough."

"This will likely end badly," Cacciatore noted.

 

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