Generic maker, Mylan Inc. (MYL) recently announced that its Indian subsidiary Mylan Laboratories has received tentative approval from the US Food & Drug Administration (FDA) for a fixed-dose combination of generic versions of Bristol Myers Squibb’s (BMY) drug Reyataz and Abbott Labs' (ABT) Norvir for the treatment of HIV/AIDS. The fixed drug combination has been pre-qualified to be used in treatment of experienced patients by the World Health Organization (WHO). It can also be used in combination with other antiretroviral (ARV) agents and will be eligible for purchase in certain developing countries. The drug was approved through the President's Emergency Plan for AIDS Relief (PEPFAR). The drug will boost Mylan’s already strong portfolio of ARV’s in India.
In a separate development, Mylan announced that Warner Chilcott Company (WCRX) filed a patent infringement lawsuit in connection with the abbreviated new drug application (ANDA) filed by Mylan and partner Famy Care Ltd. with the FDA for the generic version of Warner Chilcott’s oral contraceptive Generess Fe. Mylan believes it is the first company to file an ANDA for generic Generess Fe with the hope of being granted 180 days of marketing exclusivity once approved. Mylan has a partnership with Famy Care Ltd. for the development and supply of oral contraceptives.
Mylan also recently launched the generic version of Pfizer’s (PFE) hypertension tablets, Caduet. The branded drug recorded sales of $339 million for the trailing twelve months ended on September 30, 2011.
Our Recommendation
We currently have a Neutral long-term recommendation on Mylan. The shares carry a Zacks #3 Rank (short-term Hold rating). Mylan is one of the leading players in the US generics market. We are encouraged by the company’s geographic reach and product depth along with its robust generic product pipeline. Nevertheless, we are concerned about lackluster growth in the European generics business. We intend to remain watchful until better visibility is obtained on top-line growth prospects in Europe.
Moreover, competition in the generic segment is strong with players like Teva Pharmaceuticals (TEVA), Watson Pharma (WPI) and Sandoz, the generics arm of Novartis (NVS), in the field.
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