Mylan Pharmaceuticals Inc., a subsidiary of generic pharma major Mylan Inc. (MYL), recently announced that it has received final approval from the U.S. Food & Drug Administration (FDA) for its generic version of Boehringer Ingelheim’s Viramune (nevirapine).
Viramune is approved for HIV-1 infection in combination with antiretroviral (ARV) treatment. According to IMS Health, Viramune generated U.S. revenues of approximately $116.6 million for the 12 months ending March 31, 2012.
Apart from Mylan, Prinston Inc., Hetero Labs Ltd III, Strides, Cipla and Aurobindo Pharma have gained approval to market their generic versions of Viramune.
Just a few days ago, Mylan Inc received final approval from the FDA to launch its generic versions of Plavix (clopidogrel), 75 mg and 300 mg. Plavix is sold by Bristol-Myers Squibb Co. (BMY) and Sanofi (SNY) and is approved for patients who have had a heart attack or stroke recently, or suffer from a partial or total blockage of an artery (peripheral artery disease).
According to IMS Health, Plavix generated U.S. revenues of approximately $6.7 billion for the 12 months ending March 31, 2012.
As of May 23, 2012, the company had 173 abbreviated new drug applications (ANDAs) pending clearance by the FDA, targeting $92 billion in sales annually. Mylan believes that about 38 of these ANDAs are first-to-file opportunities, representing approximately $25.5 billion in branded sales. The revenue figures are, as per IMS Health, for the 12 months ending Dec. 31, 2011.
Our Recommendation
We are encouraged by Mylan’s geographic reach and product depth along with a robust generic product pipeline. However, we are concerned about the company’s lackluster performance in Europe, the Middle East and Africa (EMEA) region.
Additionally, with most large branded drugs due to lose patent exclusivity within 2017-2018, we have little visibility on the growth prospects for generic companies like Mylan beyond that timeframe.
Thus, we prefer to remain on the sidelines and have a Neutral recommendation on Mylan. The stock carries a Zacks #3 Rank (Hold rating) in the short term.
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