Mylan Q4 profit hit by higher income tax provision, litigation charges

Headline results for the fourth quarter:

Revenue

$3.19 billion (forecasts of $3.23 billion)

+4%

Profit

$20.5 million

Versus $51.2 million

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

What the company said:

CEO Heather Bresch said "Mylan's 2019 full-year and fourth-quarter results demonstrate the durability and strength of [our] business model," which she said "continues to be best positioned to withstand the negative trends impacting the industry." Company president Rajiv Malik remarked that the results "also reflect solid underlying business performance driven by existing products that generated double-digit-growth, including Creon, Influvac, Dona, Amitiza and glatiramer acetate 40 mg, coupled with achieving our target of $1 billion in new product launch revenues."

Mylan noted that profit was impacted by an income tax provision of $114.7 million recorded during the quarter, compared to a provision of $25.8 million a year earlier. The company also booked an $8.9-million charge related to litigation settlements and other contingencies, compared with a charge of $1.1 million in the prior-year period.

Other results:

  • North America segment: $1.1 billion, up 3%, driven by sales of new drugs, such as Wixela Inhub and others, partially offset by revenue declines for existing products, and to a lesser extent lower pricing
  • Europe segment: $1.1 billion, up 2%, primarily the result of new product sales and higher volumes of existing products
  • Rest of World segment: $927.9 million, up 9%, boosted by higher volumes of existing products in certain emerging markets, China and Japan, as well as new product sales mainly in Australia, India and certain emerging markets
  • Full-year revenue: $11.5 billion, up 1%
  • Full-year profit: $16.8 million, down from $352.5 million in 2018

Looking ahead:

Mylan, which is set to merge with Pfizer's Upjohn off-patent drug business, said that excluding the impact of that transaction, it expects 2020 sales to be between $11.5 billion and $12.5 billion, while analysts are projecting $11.9 billion. Adjusted profit for the year is forecast to range from $3.2 billion to $3.9 billion.

Bresch indicated that Mylan is making "excellent progress" on the path to closing the combination, which will be named Viatris. Meanwhile, Malik added "as we look forward, complex products, global key brands and biosimilars, in addition to our business transformation will enable us to deliver on our 2020 guidance and help position Viatris for a strong future."

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