Shares in US drugmaker Mylan rose by almost 10 per cent in after-hours trading yesterday as the firm reached a $465m settlement with the government over questions about its Epipen allergy treatment.
In a statement released last night, Mylan said it had reached an agreement with the US justice department and other government agencies over whether the company had overcharged Medicaid for the allergy drug. The terms of the settlement do not "provide for any finding of wrongdoing" on Mylan's part, the company said.
Last month, the Department of Justice said the company may have improperly classified Epipen as a generic drug for Medicaid rebate purposes, despite it being considered a brand-name drug for other purposes.
The settlement is the latest in a firestorm over major price hikes that has engulfed the pharma group over its Epipen line.
The cost of a standard two-pack of Epipens has risen to around $600 (£483) from $100 in 2009. Mylan acquired the rights to the drug in 2007.
Mylan chief executive Heather Bresch said:
This agreement is another important step in Mylan's efforts to move forward and bring resolution to all Epipen Auto-Injector related matters. The agreement is in addition to the significant steps Mylan has taken in relation to Epipen Auto-Injector over the past several weeks, including the unprecedented, pending launch of a generic version of Epipen Auto-Injector and expansion of our patient access programmes for this product.
The drugmaker also revised its full-year earnings guidance down yesterday, estimating its diluted earnings per share to be between $4.70 to $4.90, compared to the $4.85 to $5.15 previously.
Shares closed down 2.44 per cent to $35.94 yesterday, but rose 9.9 per cent to $39.50 in after-hours trading.