Mylan, Approval of Copaxone Should Provide an Accretive Boost, Generic Advair Next?

Company Overview

Mylan N.V. (NASDAQ: MYL) is a global pharmaceutical company. The company develops, licenses, manufactures, markets, and distributes generic, brand name, and over-the-counter products. Mylan is known for its strength in the generic pharmaceutical industry. Overall, the company’s product portfolio consists of more than 7,500 marketed products sold in 165 countries and territories.

Although Mylan’s corporate seat is located in Amsterdam, the company’s global headquarters is located in Canonsburg, Pennsylvania.

Products and Segments

As noted above, Mylan is a significant player in the generic pharmaceutical industry. As shown below, the company derives a significant portion of revenues from generics, although we note that recent acquisitions have helped to diversify its revenue base:

Source: Company Presentation


Mylan is organized into three geographic segments: (1) North America, which consists primarily of operations in the U.S. and Canada, (2) Europe, consisting of 35 countries in the region, and (3) Rest of World, which consists primarily of operations in India, Australia, Japan, and New Zealand. Revenue for the year ended December 31, 2017, is estimated as follows:

Source: Company Presentation

North America: The U.S. generics market is the largest in the world, with annual sales of $59 billion in 2016. The company has a strong foothold in this market, as one out of every 13 prescriptions dispensed is a Mylan product.

Among generic pharmaceutical companies, Mylan has one of the largest product portfolios. This includes 25 branded and generic topical products, an active pipeline with an additional 25 topical products, and an established U.S. sales infrastructure targeting dermatologists. Mylan also manufactures and distributes a variety of injectable products across therapeutic areas such as allergies, infectious diseases, cardiovascular, oncology, and anesthesia.

One of Mylan’s best-known products is the EpiPen Auto-Injector which has been used for the treatment of severe allergic reactions since the mid-1980s. The company holds worldwide rights to the EpiPen, which is supplied by a subsidiary of Pfizer.

Europe: Generic prescription penetration in Europe varies significantly by country. Germany, the U.K., and the Netherlands have relatively high penetration (approximately 70 percent), while other European markets such as France, Italy, and Spain are characterized by generic prescription penetration ranging from 20 to 45 percent. However, the company notes that actions taken by governments to reduce healthcare costs could help expand the use of generic pharmaceutical products.

Rest of World: The Indian generics market is one of the largest in the world, and Mylan is one of the largest active pharmaceutical ingredient (API) manufacturers in the country. The company also has several research & development sites located there. The primary areas of focus include critical care, hepato care, HIV care, onco care, and Women’s care. As noted above, Mylan also has significant operations and market share in Australia, Japan, New Zealand, and Brazil.


Recent Developments

On October 4, the FDA approved Mylan’s generic version of Copaxone (Glatiramer Acetate Injection), a multiple sclerosis (MS) drug made by Israel’s Teva Pharmaceutical. Copaxone is the most prescribed MS treatment in the United States with brand sales of $700 million for the 20mg dose and $3.6 billion for the 40mg dose.  The company received approval for both 20mg and 40mg doses of the drug, and may be eligible for 180 days of exclusivity.

While Sandoz and Momenta Pharmaceuticals already sell a 20mg generic version of the drug, the larger market opportunity is the 40mg dosage. Analysts from Wells Fargo estimated that Mylan could capture 40 percent of the 40mg market and generate an additional $172 million in quarterly sales. Assuming the company receives 180 days of exclusivity, the new drug could add 13 cents per share to quarterly earnings.

The recent approval of generic Copaxone was prompted by the FDA announcing that it would be introducing measures to approve generic versions of complex drugs more quickly to combat rising drug prices. While this could affect sales of Mylan’s own branded EpiPen, the company will benefit from more expeditious approvals of other generic products. In addition to generic Copaxone, the company is hoping to launch a generic version of GlaxoSmithKline’s Advair asthma treatment.

Mylan is also waiting on an FDA decision (expected October 9, 2017) on MYL-1401H, a proposed biosimilar to Neulasta, which is used to treat neutropenia in adult patients undergoing chemotherapy.


Second Quarter Earnings Review

Mylan reported 2017 second quarter revenue of $3.0 billion, representing 16 percent growth year-over-year. North America sales decreased nine percent primarily due to lower EpiPen sales, but the Europe and Rest of World segments grew 59 percent and 29 percent, respectively. Gross profit increased five percent from the same period one year ago to $1.23 billion, although gross margin fell 500 basis points to 41 percent.

Total operating expenses were flat, and net earnings increased from $168 million ($0.33 per share) to $297 million ($0.55 per share). For the six months ended June 30, 2017, the company had cash flows from operations of $1 billion, approximately double that reported in the same period last year. At March 31, 2017, Mylan listed a cash balance of $613 million, down from $1 billion reported at December 31, 2016. The company had net working capital of $1.8 billion and long-term debt of $14 billion.

After reporting second quarter results, the company revised earnings guidance downward (because weakness in North America) and delayed the expected launch dates of the generic versions of Copaxone and Advair. Given recent events, the company may adjust guidance upward after the third quarter.


Stock Influences

  • FDA approval for generic Advair;
  • Successful integration and acceleration of recent acquisitions;
  • New product launches and developments in the branded and biosimilars segments; and
  • M&A activity.


Risk Factors

  • Approximately 13 percent of Mylan’s ordinary shares are held by subsidiaries of Abbott Laboratories;
  • There has been continued downward pressure on the price of generic drugs;
  • Changes to U.S. tax laws could impact the company’s status as a non-U.S. corporation; and
  • The company has significant exposure to foreign currency movements.


Stock Performance


On October 4, 2017, shares of Mylan opened 17 percent higher and traded at $38.51 intraday, yielding a market capitalization of approximately $17.5 billion. The shares declined prior to second quarter results, and fell further afterward. The stock has since recovered most of those losses and is trading at approximately the same level as it was one year ago. Still, this is well below the high of $45.87 reached in March.

Following are selected analyst ratings and price targets:

Analyst Firm Rating Price Target Date
Jeffrey Loo CFRA Hold $34.00 9/30/2017
Louise Chen Cantor Fitzgerald Neutral $34.00 9/8/2017



The recent announcement from the FDA regarding new measures to expedite approval of generic drugs is a boon for Mylan overall. The launch of generic Copaxone should be immediately accretive to earnings, and the prospect of generic Advair provides further upside potential. The primary concerns are falling sales of the EpiPen and the erosion of generic drug prices.





Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.

Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Ivan Neilson, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.

This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.

We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.

When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.

17B Disclosure

Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.

PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.

Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.

TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.

The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.

Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.