What happened

Shares of Mylan (MYL) fell over 26% last year, according to data provided by S&P Global Market Intelligence. The generic drug manufacturer struggled to overcome its negative association in the national discussion related to drug pricing practices and became embroiled in an industrywide price-fixing lawsuit brought by 44 state attorneys general. 

The performance of the pharma stock looks even worse when considering that the S&P 500 delivered a 28.8% gain in 2019. Can plans to combine with Upjohn, the generic drug division of Pfizer (PFE -0.02%), provide relief to shareholders in 2020?

A man pounds his fist on a table next to a crumpled piece of paper and a tablet showing a declining stock chart.

Image source: Getty Images.

So what

Most of the stock's terrible performance last year can be traced back to the day (May 7) Mylan reported first-quarter 2019 operating results. The update made it clear that the business was still struggling to overcome severe headwinds facing generic drugs in the United States, which are being pressured by unsustainable levels of competition, manufacturing missteps, and changing distribution models. 

The barrage of bad news continued a week later when 44 state attorneys general alleged that generic drug manufacturers from Teva Pharmaceuticals to Lannett Company to Mylan engaged in a far-reaching price-fixing scheme covering dozens of drug products. 

In the final days of July, investors finally had something to look forward to: Mylan and Pfizer's Upjohn division agreed to combine operations. The idea is that bigger is better when it comes to successfully navigating the headwinds of the generic drug industry. The combined company, which will be called Viatris, is expected to generate pro forma revenue of at least $19 billion in 2020. 

Now what

For Mylan, the merger with Upjohn is also a rebranding effort, which could help given all of the negative news swirling around the company's current name. Whether it will be enough to respond to difficult market conditions for generic drug manufacturers or allow the combined company to more easily access Chinese markets (and whether that pays off as expected) remains to be seen.