Please ensure Javascript is enabled for purposes of website accessibility

Mylan N.V. Improves in the Third Quarter Thanks to International Sales

By Keith Speights - Updated Nov 6, 2018 at 11:20AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The drugmaker continued to struggle in the U.S., but new products in the rest of the world boost its third-quarter performance.

Despite being a global drugmaker, the fortunes of Mylan N.V. (MYL) are tightly linked to the U.S. market. Continued headwinds in the U.S. for generic drugs caused Mylan to slash its full-year outlook for 2018 in August. This move, though, lowered the bar for the company as it entered the third quarter.

Mylan showed that it could successfully jump this lower bar with its third-quarter results announced after the market closed on Monday. While there were still challenges in the quarter, the company made progress. Here are the highlights from Mylan's third-quarter update. 

Pills of varied colors and sizes with some in the middle arranged in the shape of a dollar sign

Image source: Getty Images.

Mylan results: The raw numbers

Metric 

Q3 2018 

Q3 2017 

Change (YOY)

Sales

$2.86 billion $2.99 billion

(4.2%)

Net income from continuing operations

$176.7 million $88.3 million

100.1%

Adjusted earnings per share (EPS)

$1.25 $1.10

13.6%

Data source: Mylan. YOY = year over year.

What happened with Mylan this quarter?

Mylan again posted a year-over-year decline in revenue. The U.S. was again the culprit, with North American sales falling 14% to $1.01 billion. There were several factors at play, including the implementation of new accounting standards, lower EpiPen sales resulting from generic products on the market, the sale of some contract manufacturing assets, a product losing exclusivity, and restructuring at Mylan's Morgantown, West Virginia, manufacturing facility. 

Europe wasn't as strong for Mylan in the third quarter as it was three months ago. Net sales in Europe came in at $1.04 billion -- essentially flat year over year. However, adjusting for currency fluctuations, Mylan's European sales grew 2% from the prior-year period.

The company's best performance continued to come from the rest of the world. Sales outside of North America and Europe increased 4% to $773.7 million. On a constant-currency basis, this revenue jumped 11%. The growth stemmed in large part from new product sales from Mylan's anti-retroviral therapy franchise.

Year-over-year comparisons for Mylan's bottom line looked much better, primarily thanks to help from Uncle Sam. The company's GAAP net income received a boost from income tax falling from $91.3 million in the year-ago period to $15.5 million in the third quarter.

What management had to say

Mylan CEO Heather Bresch said:

Mylan's third-quarter performance was in line with our expectations and we delivered solid year-over-year growth. Our confidence in the company's bright future extends well beyond any single factor or particular quarter, including the current, short-term macro market turbulence our industry is experiencing. Year to date, we have launched nearly 475 new products across our segments, including a record number of complex generics and biosimilars for Mylan. These medicines represent many different therapeutic categories, channels, and dosage forms.

She added:

We remain committed to our full-year 2018 guidance, and this confirmation is not dependent on any single product approval or launch. As we look ahead, we're very optimistic about our long-term growth prospects as we have secured almost all regulatory approvals necessary for our key 2019 product drivers around the world.

Looking forward

As Bresch stated, Mylan reaffirmed its full-year 2018 guidance provided in August. The company continues to project 2018 revenue between $11.25 billion and $12.25 billion with adjusted EPS for 2018 between $4.55 and $4.90.

CFO Ken Parks said the company will continue to focus on reducing its debt in the second half of 2018 and into next year. He stated that Mylan plans to "repay at least $1.2 billion of debt maturing through year-end 2019 and remain[s] fully committed to maintaining our investment grade credit rating."

Key things for investors to watch in the coming months include Mylan's European launch of its Humira biosimilar, Hulio, and a decision by the FDA on approval for its generic version of Advair. Success for these and other new products could add to Mylan's momentum.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Viatris Inc. Stock Quote
Viatris Inc.
MYL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.