Mylan’s MYL second-quarter 2015 earnings (excluding special items) of 91 cents per share beat the Zacks Consensus Estimate of 87 cents. Earnings increased 32% from the year-ago quarter driven by higher revenues.
Revenues climbed 29% (36% on a constant currency basis) to $2.4 billion, in line with the Zacks Consensus Estimate. Mylan recorded year-over-year growth on the back of solid revenue growth at the Generics segment. Specialty segment also performed well. Foreign currency exchange rates negatively impacted revenues by $127 million in the second quarter of 2015.
Second Quarter in Details
Generics third-party net sales, derived from sales in North America, Europe and rest of the world, climbed 34% to $2.1 billion. Segmental third-party net sales grew 27% to $937.4 million in North America. New product launches, acquisitions and favorable pricing aided revenues.
Third-party net sales from the European market increased 44% to $571 million driven by net sales from the acquisition of Abbott's ABT non-U.S. developed markets branded generics business and new product sales, partially offset by unfavorable currency translations. Third party net sales from rest of the world rose 38% to $546.7 million. Segmental performance improved on the back of acquisitions, new product launches in Australia and Japan and increased sales of its antiretroviral products.
Third-party net sales at the Specialty segment jumped 5% to $301.9 million. Specialty segment sales were boosted by strong performance of its flagship product – EpiPen Auto-Injector – for severe allergic reactions. Sales of the product improved on increased volume.
Adjusted gross margin during the second quarter of 2015 expanded to 54% from 50% in the year-ago quarter on the back of new product introductions and net sales from acquisitions.
2015 Outlook Raised
Mylan raised its 2015 guidance. The company expects adjusted earnings per share in the range of $4.15 to $4.35 (previous guidance: $4.00 to $4.30). The Zacks Consensus Estimate for 2015 earnings is at $4.16.
Our Take
Mylan’s second-quarter earnings were better than expected. We are encouraged by strong sales at the Generics segment. However, we remain concerned about the company’s Specialty segment sales. The company expects to face generic competition for EpiPen Auto-Injector in the second half of 2015. Meanwhile, Mylan remains committed to acquiring Perrigo Company PRGO. The company has received the European regulatory approval to move forward with its proposed buyout. Investor focus is expected to remain on Mylan-Perrigo updates in the near term.
Mylan holds a Zacks Rank #3 (Hold). Ligand Pharmaceuticals Incorporated LGND is a well-ranked stock in the health care sector carrying a Zacks Rank #1 (Strong Buy).
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