Mylan Pharmaceuticals Inc., a subsidiary of Mylan Inc. (MYL), recently announced that it has launched its generic version of AstraZeneca's (AZN) Atacand HCT, a fixed dose combination hypertension therapy, after receiving final approval from the US Food and Drug Administration (FDA).
Mylan stated in its press release that it was the first company to submit a complete abbreviated new drug application (ANDA) to the US regulatory body containing a paragraph IV certification for the 32/25 mg dosage of the drug. Consequently, the generic player enjoys a 180-day period of marketing exclusivity on the 32/25 mg dosage of Atacand HCT. According to IMS Health, Atacand HCT generated US revenues of approximately $56.3 million for the 12 months ending September 30, 2012.
As of December 5, 2012, Mylan had 178 ANDAs pending FDA clearance, targeting $80.1 billion in branded sales annually. Mylan believes that about 35 of these pending abbreviated new drug applications (ANDAs) are first-to-file opportunities, representing approximately $21.2 billion in branded sales. The revenue figures are as per IMS Health for the 12 months ending June 30, 2012.
Our Recommendation
We are encouraged by Mylan’s geographic reach and product depth along with a robust generic product pipeline. However, we remain concerned about the company’s lackluster performance in the Europe, Middle East and Africa (EMEA) region.
Additionally, as most of the large branded drugs are due to lose patent exclusivity within the 2017-2018 period, we have little visibility on the growth prospects of generic companies like Mylan beyond that timeframe.
In view of these challenges we see limited upside from current levels and maintain our Neutral recommendation on Mylan. The stock carries a Zacks #2 Rank (Buy rating) in the short run.
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