Mylan reaffirms annual guidance as first-quarter sales rise 5%, swings back to profit

Headline results for the first quarter:

Revenue

$2.6 billion (forecasts of $2.7 billion)

+5%

Profit

$20.8 million

Versus loss of $25 million

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

What the company said:

Mylan noted that "the COVID-19 pandemic did not have a material negative impact to our condensed consolidated results of operations in the first quarter of 2020 as we were able to continue manufacturing and distributing products." Company president Rajiv Malik said "the strategic locations of our plants have enabled Mylan to avoid disruptions due to logistical challenges in any one part of the world," while risks were further "mitigated…by having multiple [active pharmaceutical ingredient] and finished-dose sources where possible." He added "at this time, we do not foresee any supply disruptions."

The drugmaker suggested that the COVID-19 pandemic boosted sales by 2% in the quarter, explaining that "overall volume growth...was favourably impacted by increased customer buying patterns and patient prescription trends...primarily in our Europe segment."

Meanwhile, CEO Heather Bresch said "we remain on track to close the pending combination with Pfizer's Upjohn business in the second half of the year" into a company called Viatris, with the transaction having recently been approved by regulators in Europe on condition that Mylan divest certain generic products there.

Other results:

  • North America segment: $955.5 million, up 4%, boosted by sales of Yupelri and Wixela due to the launch timing of each product's impact on the year-ago period, partially offset by lower pricing as a result of "changes in the competitive environment," including for levothryoxine
  • Europe segment: $1 billion, up 14%, lifted by higher net sales of existing products, with Mylan noting that aside from the impact of COVID-19-related stockpiling, volumes grew by about $40 million "due to the resolution of supply disruptions encountered in the prior-year period"
  • Rest of World segment: $610.8 million, down 5%, with sales hit by COVID-19 in China and Japan, as well as lower pricing, primarily driven by government price cuts in Australia and Japan

Looking ahead:

Mylan reaffirmed that it expects 2020 sales to be between $11.5 billion and $12.5 billion, versus analyst predictions of $12.2 billion,  with adjusted profit in the range of $3.2 billion to $3.9 billion. The drugmaker said its guidance "accounts for COVID-19 impacts forecasted through the second quarter, and assumes healthcare systems around the world will begin to resume their normal functions in the second half."

The company also indicated that it is working on details regarding a global restructuring programme, "including workforce actions and other restructuring activities," with more information to be disclosed as plans become finalised. The drugmaker noted that due to the uncertainty surrounding the coronavirus pandemic, it has "delayed the implementation of the 2020 restructuring programme."

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