Mylan Inc. (MYL) swung to a third-quarter loss due to its $121
million settlement of a Medicaid-rebate case, masking higher
generic drug revenue.
But core results beat Wall Street estimates, prompting Mylan to
again boost its full-year earnings target, this time to a range of
$1.24 to $1.28 a share from $1.13 to $1.20.
Generic-drug use has risen as insurers, among others,
increasingly push for their purchase over higher-priced brand
names. But quality-control issues and shortages at several smaller
generic drug makers have allowed larger players like Mylan to grab
market share and boost prices, observers say.
Meantime, Standard & Poor's Ratings Services in September
raised Mylan's ratings closer to investment grade, citing the
company's successful integration of Merck KGaA's (MRK.XE) generics
business, which Mylan purchased for $6.7 billion in 2007.
Mylan swung to a loss of $40 million, or 13 cents a share, from
year-earlier profit of $182.4 million, or 47 cents a share.
Excluding items such as the settlement related to allegation it
underpaid rebates to Medicaid for several of the company's drugs,
earnings rose to 32 cents a share from 23 cents.
Revenue skidded 24% to $1.26 billion as the prior year included
$455 million from selling rights to hypertension drug Bystolic,
which Mylan co-developed with Forest Laboratories Inc. (FRX).
Excluding foreign-exchange impacts, revenue excluding the gain rose
9%.
Analysts surveyed by Thomson Reuters were expecting earnings,
excluding items, of 27 cents on revenue of $1.23 billion.
Excluding Bystolic and the charges, gross margin fell to 45.6%
from 46.7%.
Generics revenue rose 3.7%, with North America seeing a 9.2%
increase.
Mylan shares closed at $15.77 and didn't trade premarket. The
stock has more than doubled the past year.
-By Mike Barris, Dow Jones Newswires; 212-416-2330;
mike.barris@dowjones.com