When Mylan N.V. (MYL) reported its third-quarter 2017 results in November, the drugmaker had good news and bad news. The bad news was that the company's revenue and adjusted earnings fell. The good news, though, was that Mylan executives boosted its full-year 2017 guidance.
Mylan announced its fourth-quarter and full-year 2017 results after the market closed on Wednesday. Did the company meet its expectations? It did. And while there were still some weak spots, the drugmaker's performance improved from the third quarter. Here are the highlights from Mylan's fourth-quarter update.
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Mylan results: The raw numbers
| Metric |
Q4 2017 |
Q4 2016 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$3.24 billion | $3.27 billion |
(1%) |
|
Net income from continuing operations |
$244.3 million | $417.5 million |
(41%) |
|
Adjusted earnings per share (EPS) |
$1.43 | $1.57 |
(9%) |
Data source: Mylan.
What happened with Mylan this quarter?
If it were not for North America, Mylan's revenue growth would have looked pretty good in the fourth quarter. Net sales in Europe jumped 16% year over year to $1.07 billion. Revenue generated in the rest of the world increased 12% year over year to nearly $816 million. Much of these gains stemmed from new product introductions.
The problem, though, is that North America continued to be a sore spot for the drugmaker. It also generates the most revenue for Mylan. Fourth-quarter sales in North America dropped 17% from the prior-year period. Nearly half of that decline stemmed from lower sales for Mylan's EpiPen auto-injector. The company's generics business also faced challenges with the loss of market exclusivity of olmesartan and olmesartan HCTZ, as well as lower pricing and volume for other products.
Mylan's GAAP net income plunged in the fourth quarter. The situation isn't as dire as it might appear, though. Mylan enjoyed a tax benefit of $192.6 million in the prior-year period. In the fourth quarter of 2017, the company recorded a tax expense of $82.8 million, which included the provisional impact of $128.6 million resulting from U.S. tax reform.
For full-year 2017, Mylan reported revenue of $11.9 billion. This reflected an increase of 8% over the prior year. It was also within the guidance range of $11.75 billion to $12.5 billion provided in the company's third-quarter update. Mylan's adjusted EPS for full-year 2017 came in at $4.56, down 7% from the prior year.
What management had to say
Mylan CEO Heather Bresch stated: "Mylan's business continues to deliver solid results, and I am pleased once again to provide a strong outlook for growth, especially given the U.S. environment. Our performance is a testament to the strength, diversification, and resilience of our unique global platform, and it demonstrates that Mylan truly is built to last."
The company's president, Rajiv Malik, added:
2017 clearly demonstrated the strength of our scientific, clinical, regulatory, and intellectual property capabilities and the positive momentum we have built to bring complex products to the market. We realized many opportunities incubated over the last several years, including key product approvals like the first 40 mg/mL strength of glatiramer acetate in the U.S. and Europe, trastuzumab, the first biosimilar to Herceptin for the U.S. market, as well as the first generic version of Allergan's Estrace cream. We have also created a diversified commercial platform across geographies and channels with a differentiated and durable product portfolio. This unique platform makes us a partner of choice for our customers around the globe.
Looking forward
For 2018, Mylan expects revenue between $11.75 billion and $13.25 billion. The midpoint of that range reflects a year-over-year increase of 5%. The company also projects adjusted net earnings of $2.7 billion to $2.9 billion. That translates to EPS between $5.20 and $5.60. The midpoint of that range would give Mylan a solid 18% year-over-year adjusted EPS increase.
There are several things for Mylan shareholders to look forward to in 2018. The company plans to launch a generic version of Advair in the U.S. It also expects to launch its first biosimilar in the U.S., a biosimilar to Amgen's Neulasta. In addition, Mylan should launch its insulin glargine in Europe, as well as many other new products.
