Last year might not have been very good for Mylan N.V. (MYL), but 2017 is shaping up to be much better -- at least so far. The drugmaker's stock is up. It won a significant court decision over a key rival. Mylan also made progress in advancing two important biosimilars into regulatory review by the U.S. Food and Drug Administration (FDA).
Mylan reported its fourth-quarter and full-year 2016 results before the market opened on Wednesday. Did its streak of good news continue? Here are the highlights.
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Mylan results: The raw numbers
| Metric |
Q4 2016 |
Q4 2015 |
Year-Over-Year Change |
|---|---|---|---|
|
Sales |
$3.3 billion |
$2.5 billion |
31.2% |
|
Net income from continuing operations |
$417.5 million |
$194.6 million |
114.5% |
|
Adjusted EPS |
$1.57 |
$1.22 |
28.7% |
Data source: Mylan.
What happened with Mylan this quarter?
Mylan enjoyed sales gains from all of its geographic regions across the world. North American fourth-quarter sales increased by 22% year over year, to $1.57 billion, thanks primarily to the 2016 acquisitions of Swedish drugmaker Meda and the topicals business of Renaissance Acquisition Holdings focused on non-sterile products.
European revenue in the fourth quarter soared 50% higher than in the prior-year period, to $927.4 million. The Meda acquisition generated most of this growth, although sales were also helped by the introduction of new products and by better performance from existing products.
The company's revenue in the rest of the world climbed 28% higher year over year in the fourth quarter, to $729.2 million. The Meda acquisition again played the most important factor in this increase.
Mylan's net income improved significantly, due in large part to the Meda acquisition. However, the company also benefited from recognition of an income tax benefit of $192.6 million in the fourth quarter. This tax benefit stemmed primarily from the mix of earnings between U.S. and non-U.S. subsidiaries.
For the full year 2016, Mylan reported total revenue of $11.1 billion, up 17.% year over year. 2016 earnings fell 23.4% to $367.7 million. Full-year adjusted earnings per share increased 14% year over year, to $4.89.
What management had to say
Mylan CEO Heather Bresch underscored the company's fourth-quarter and 2016 accomplishments. Bresch stated:
Our strong 2016 results were highlighted by year-over-year constant-currency total revenue growth of 18% and adjusted EPS growth of 14%. The fourth quarter capped off the year with impressive revenue growth of 31% and adjusted EPS growth of 29%. Again, we saw all of our regions contribute to our results for the year, with double-digit revenue increases in North America, Europe and Rest of World, reflecting the resilience, differentiation and diversity of our global platform and our unwavering focus on execution. The diversity of our business was further demonstrated by our six global therapeutic franchises that delivered approximately $1 billion or more in revenue: Respiratory and Allergy, CNS and Anesthesia, Infectious Disease, Cardiovascular, Gastrointestinal, and Diabetes and Metabolism.
Rajiv Malik, Mylan's president, added:
In addition to executing on our core business, we completed during the year our acquisitions of Meda and the non-sterile, topicals-focused business of Renaissance Acquisition Holdings, which further built our scale and breadth from a product and geographic perspective. We continued the successful integration of Mylan, bringing these transactions into our One Mylan platform. Further, we continued executing on the many drivers of our organic growth, as evidenced, for instance, by the U.S. Food and Drug Administration's acceptance of our abbreviated new drug application for Generic Advair Diskus and our submissions for biosimilars Pegfilgrastim and Trastuzumab. With regard to the pricing environment, we continued to see erosion both globally and in U.S. generics in the mid-single digits which was in line with our expectations, and we continue to expect a comparable environment in 2017 given the breadth and make-up of our global portfolio.
Looking forward
Mylan projects full-year 2017 revenue between $12.25 billion and $13.75 billion. The midpoint of that range reflects an increase of 17% year over year. The company expects adjusted earnings per share between $5.15 and $5.55. The midpoint of the range represents 9% year-over-year growth.
Can Mylan deliver on its positive outlook for 2017? It seems quite possible. The acquisition of Meda strengthened the company's portfolio and opened up new distribution channels. There's also a good chance that the FDA will approve Mylan's new biosimilars to Neulasta and Herceptin later this year. After a rocky 2016, this year appears to be on track to be much smoother for the drugmaker.
