Generic drugmaker Mylan slashed its full-year forecast today on falling prices for generic drugs and delays of new launches, sending shares down as much as nine per cent in pre-market trading.
The maker of the EpiPen allergy treatment revealed total revenues rose 16 per cent to $2.96bn (£2.28bn) in the second quarter, but analysts were expecting sales to reach $3.03bn according to Thomson Reuters.
Mylan's net earnings rose 67 per cent to $297m, or 55 cents per share. Excluding one-time items, the US-based company earned $1.10 per share. Analysts were expecting $1.16.
The company's shares fell 4.06 per cent to $30.50 in US morning trading.
Why it's interesting
Generic drugmakers in the US were hit by weakening prices in the quarter, and Mylan said it expects mid-single digit generic drug price drops worldwide and high-single digit falls in North America.
Mylan also said an uncertain US regulatory environment had caused it to push back major product launches in its full-year forecast to 2018. This includes key drugs like Advair, its generic version of a GlaxoSmithKline blockbuster, and Copaxone, Teva's multiple sclerosis drug.
The erosion of generic prices and a delay in the timing of key new product launches caused Mylan to lower its full-year adjusted earnings guidance to $4.30 to $4.70 per share from earlier estimates of $5.15 to $5.55 per share.
Last year Mylan came under fire for hiking the price of a two-pack of its anti-allergy EpiPens devices to $600.
The cost of a standard two-pack of EpiPens rose to around $600 from $100 in 2009. Mylan acquired the rights to the drug in 2007.
Mylan lost around 10 per cent off its share price before it said its US subsidiary would put out a generic version of the two-pack of EpiPens with a list price of $300.
What Mylan said
Mylan chief executive Heather Bresch said the entire healthcare sector is at an inflection point.
This is providing investors an opportunity to differentiate between pharmaceutical companies focused solely on generics and/or specialty medicines and those capable of delivering a broad and diverse portfolio across multiple channels in various geographies, which remains Mylan's strategy.
Looking ahead, we continue to have great confidence in our underlying business in every region and the opportunities we have for long-term growth.
Rajiv Malik, president of the company, added that Mylan has the strength to manage any headwinds that come its way because of its global integrated platform.
"By having always managed Mylan for long-term success, we have been able to harvest many exciting opportunities, the most recent of which include our Meda and Topicals business acquisitions, which continue to meet and exceed our expectations," Malik said.