Mylan Strategic Review Almost Done\, Shares Plunge on Forecast

Mylan Strategic Review Almost Done, Shares Plunge on Forecast

(Bloomberg) -- Mylan NV Chief Executive Officer Heather Bresch said the company is nearing the end of a strategic review, and that the drugmaker will do “everything and anything” to unlock value as sales decline and it works to overcome manufacturing problems at a key plant.

Shares of the maker of generic drugs plunged late Tuesday after the company said 2019 adjusted earnings will be $3.80 to $4.80, below the $5.02 average of Wall Street estimates. That’s a major cut from just a few years ago: As recently as 2017, the company had said its earnings would grow to $6 a share by 2018.

The board of directors’ strategic review committee is “looking at everything and anything that could unlock value,” Bresch said on a call with analysts. “They’re nearing the completion of the review.”

The shares were down 9.2 percent to $27.80 in late trading, wiping out almost all of the company’s gains this year.

The company has repeatedly trimmed its forecasts in a turbulent generic-drug market. Falling generic drug prices in the U.S. led the maker of copycat medicines last year to start reviewing strategic options such as a restructuring. On Tuesday, it said costs related to that effort affected fourth-quarter sales.

“It’s very difficult to look at the U.S. generic market and paint it with one brush,” Bresch said. “Portfolios are very different. There’s no question that value has been extracted out of the U.S. marketplace. We’ve seen that daily over the course over the last seven months.”

In the meantime, Mylan Chief Financial Officer Ken Parks said the company was looking at different ways of evaluating financial performance.

“We’re continuing to evaluate metrics other than EPS that better reflect how we manage and measure the performance of our business,” Parks said on the call.

In the past, Mylan has been able to rely on brand-name products like its EpiPen allergy shot to boost sales. But the pen has faced new competition and manufacturing shortages that have cut into revenue. A generic version of Copaxone, a treatment for multiple sclerosis, had “lower-than-expected” uptake, Mylan said in a release announcing the results.

A 16 percent drop in North American sales in the fourth quarter was related in part to continuing problems at a plant in Morgantown, West Virginia.

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