Mylan says US healthcare market is ‘unsustainable’
Generic drugs giant falls far short of Wall Street forecasts with second-quarter profit
A shortage of Mylan’s emergency allergy shot EpiPen weighed on quarterly revenue. Photograph: Jim Bourg/Reuters
Pharmaceutical company Mylan said on Wednesday it was evaluating a wide range of options as it reported a quarterly profit that fell well short of Wall Street estimates.
Shares of the EpiPen maker and the world’s largest producer of HIV Aids medicine fell nearly 7 per cent to $36 in early trading.
“The negative trends playing out in the US marketplace are unsustainable for the healthcare system over the long term,” the company’s board said in a statement.
Mylan’s move comes against the backdrop of the Trump administration stepping up efforts to rein in exorbitant drug pricing that has long plagued the US healthcare system. Revenue from Mylan’s North America business slumped nearly 22 per cent to $1 billion in the second quarter.
The company’s board has formed a strategic review committee but has not set a timetable for evaluation of the alternatives.
“The restructuring that began in the second quarter is clearly late to address what has been a material change in the generics business that began in early 2016,” said RBC Capital Markets analyst Randall Stanicky.
A shortage of the drugmaker’s emergency allergy shot EpiPen also weighed on quarterly revenue, adding to pressure on sales from increased competition.
Manufacturing delays at a single Pfizer plant in St Louis, which produces the global supply of EpiPens, led to shortages of the emergency allergy treatment in North America, Europe and Canada earlier this year.
Mylan also disclosed that the US Food and Drug Administration had issued some observations following an inspection of its plant in Morgantown, West Virginia.
The company, which employs 1,700 people at five plants in Ireland, cut its full-year adjusted earnings per share forecast to a range of $4.55 to $4.90, from the $5.20 to $5.60 it previously expected. Analysts were expecting $5.25 per share, according to Thomson Reuters I/B/E/S.
Total revenue in the second quarter fell about 6 per cent to $2.76 billion, and missed the average analyst estimate of $2.96 billion. The company’s second-quarter profit slumped 87 per cent.
Excluding items, Mylan earned $1.07 per share, below the analysts’ average estimate of $1.22.