Mylan's
Foolish writers rarely get to say such things. Even for high-growth companies like Intuitive Surgical
But Mylan's growth was entirely extrinsic, stemming from its acquisition of Matrix in January of last year, and from the subsequent engulfing of Merck KGaA's generic-drug business in October. Those acquisitions -- especially the $6.7 billion all-cash deal for Merck's generics -- came at a cost. Adjusted diluted earnings per share slipped to just $0.11 (from $0.45 per share in the year-ago quarter) because interest expense jumped to $133 million (compared to just $10.5 million the year prior). In addition, the company now has more shares outstanding, since it made a public offering to pay for the acquisitions.
The good news is that Mylan has a plan to get its earnings headed back in the right direction. To save money -- that's what acquisitions are all about, right? -- it's shutting down multiple research and development and manufacturing sites.
More importantly, it's planning to sell off some of its assets to focus on its generic-drug business, and perhaps pay down some of that monster debt load. Yesterday, Mylan announced that it had sold its post-2010 royalties from recently approved Bystolic to partner Forest Labs
Mylan's new larger size should help it compete against the two big guns in generic drugs: Teva Pharmaceutical
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