EpiPen helps boost Mylan’s earnings
Mylan NV’s allergic-reaction remedy EpiPen led a sales increase in the second quarter at the drugmaker as it leans heavily on specialty medications and acquisitions to offset pricing pressure in generic drugs.
The Netherlands-based company, which is run from offices in Cecil, reported a 33 percent increase in sales in the April-June quarter from its specialty drug segment, which includes the popular EpiPen treatment for severe allergic reactions.
Sales of generic drugs grew by 4 percent as the introduction of products in North America and Europe made up for lower prices, the company said.
Higher sales led to an increase in profit. CEO Heather Bresch said the company’s performance “underscores the strategic value of Mylan’s diversification and scale as well as our differentiation within our industry.”
To counteract pricing pressure, Mylan — one of the world’s largest producers of generic pharmaceuticals — is diversifying by investing in branded products such as EpiPen and through acquisitions. Sales of generic drugs accounted for about 80 percent of Mylan’s revenue in the second quarter.
Last week, the company closed a $7.2 billion deal to buy Swedish specialty drugmaker Meda AB. One of Meda’s top-selling products is branded allergy drug Dymista. Meda gives Mylan an over-the-counter medicine business and operations in emerging countries such as China, Russia and Mexico.
Jeffrey Loo, an analyst at S&P Global Market Intelligence in New York, said overall prices on generic drugs declined slightly in the quarter, highlighting the importance to Mylan’s strategy of achieving higher sales from branded medicines.
“I think they see the pricing pressures on generic continuing,” Loo said. “So they think diversity, and particularly in the specialty space, could balance out some of the declines.”
But EpiPen’s fast growth could begin to moderate by the end of the year, Loo said. Mylan received a boost in sales when an EpiPen competitor, Sanofi’s Auvi-Q injector, was pulled from the market in November because of manufacturing problems.
And Bresch said Mylan faces a challenge from an increase in high-deductible health plans, which require patients to pay more money toward prescription drugs and other health costs before insurance coverage kicks in. A package of two EpiPens can cost $380.
“As employers shift more costs to employees and make everything come out of pocket, that’s where you’re seeing a lot of the noise around EpiPen,” Bresch told analysts on a conference call to discuss the quarterly results.
While EpiPen generates sales of $1 billion a year, Mylan is looking to other drug categories for growth. The company entered the dermatology space in June with the $1 billion acquisition of a skin-care business from Illinois-based Renaissance Holdings. One of the Renaissance unit’s top sellers is Denavir, a cream used to treat cold sores.
With the recent deals, Mylan sells more than 2,700 products, Bresch said. “We have no significant concentration in any single product or business segment,” she said.
Net income in the second quarter was $168.4 million, or 33 cents a share, compared with $167.8 million, or 32 cents a share, in the same period a year ago.
Excluding one-time costs related to acquisitions, Mylan reported adjusted net income of $1.16 a share — a result that beat analysts’ prediction of $1.14, according to data from Bloomberg.
Overall sales were $2.6 billion, up 8 percent from $2.4 billion a year ago.
Mylan’s financial results were released after stock markets closed Tuesday. The company’s stock price finished up 3 percent, but declined 2 percent in after-hours trading to $49 a share.
Alex Nixon is a Tribune-Review staff writer. Reach him at 412-320-7928 or email@example.com.