Most of the news about Mylan N.V. (MYL) in 2016 has focused on the company's controversial pricing. But the drugmaker was able to change the headlines, if only for a while, when it announced its third-quarter results after the market closed on Wednesday. Here are the highlights from Mylan's quarterly update.
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Mylan results: The raw numbers
| Metric |
Q3 2016 Actuals |
Q3 2015 Actuals |
Change (YOY) |
|---|---|---|---|
|
Revenue |
$3.06 billion |
$2.7 billion |
13.3% |
|
Net income (loss) |
($119.8 million) |
$428.6 million |
N/A |
|
Net income (loss) per diluted share |
($0.23) |
$0.83 |
N/A |
Data source: Mylan. YOY = year over year.
What happened this quarter?
Third-quarter revenue increased from the prior-year period for a couple of primary reasons: acquisitions and new product launches. Mylan completed its acquisition of the non-sterile, topicals-focused specialty and generics business of Renaissance Acquisition Holdings in June. Less than two months later, the company wrapped up its purchase of Swedish drugmaker Meda.
Mylan's generics segment performed better than its specialty business. The company reported third-quarter generics revenue of $2.61 billion, up 17% year over year. Generic drug sales in Europe and the rest of the world increased solidly, but U.S. sales grew only slightly from the prior-year period. This sluggish U.S. generics performance stemmed from lower volumes and selling prices.
Specialty net product sales declined 4% from the prior-year period to $418.7 million. The major culprit behind this decrease was lower unit volumes due to fewer wholesaler purchases in anticipation of the generic launch of EpiPen.
Mylan posted a GAAP loss in the third quarter primarily because of amortization related to acquisitions and a large settlement with the U.S. government over allegations that the company improperly classified its EpiPen products to pay lower rebates to Medicaid. However, the drugmaker reported non-GAAP earnings of $726.4 million, or $1.38 per share. In the third quarter of 2015, Mylan posted non-GAAP earnings of $733.8 million, or $1.43 per share.
What management had to say
Mylan CEO Heather Bresch said:
Our third quarter results were consistent with the full year guidance we provided a few weeks ago. During the quarter, we reported strong performance across our European and Rest of World regions, as well as solid performance across our North American region despite challenging year-over-year comparisons due to the significant contribution from new products in last year's third quarter. In our Specialty segment, while EpiPen Auto-Injector scripts grew quarter-over-quarter, volumes were down due to the lack of wholesaler purchases in the quarter in anticipation of our upcoming generic launch.
Rajiv Malik, Mylan's president, added:
While our industry continues to evolve, the factors that have always been critical to our success remain constant: maintaining one of the industry's broadest portfolios; consistent execution of new product launches; and being able to reliably supply significant volumes to our customers. Mylan's ability to deliver for customers through the strength of our portfolio and pipeline and reputation for quality and reliability continue to make us a partner of choice.
Looking forward
Mylan reaffirmed its recently updated full-year 2016 adjusted earnings per share guidance of $4.70 to $4.90. The company also still thinks it will achieve its target of 2018 adjusted earnings of $6.00 per share.
Look for continued political pressure on Mylan, though. The Senate Judiciary Committee is urging federal antitrust regulators to investigate the company. Three members of the committee are also asking Mylan when it will reimburse the Department of Defense for overcharging for its EpiPen injector. All three senators pushing for reimbursement will still be in the U.S. Senate in 2017.
