Mylan Inc. (MYL) recently announced that its UK and Italian subsidiaries have launched its generic version of GlaxoSmithKline’s (GSK) drug, Epivir (lamivudine, 150 mg and 300 mg). This launch marks Mylan’s entry into the European HIV generics market.
Epivir is used for the treatment of adults and children infected with HIV, in combination with antiretroviral (ARV) therapy. According to IMS Health, Epivir generated revenues of approximately EUR3.4 million and EUR12.5 million in the UK and Italy, respectively, for the 12 months ending March 2012.
We note that Mylan derives 23.8% of its generic revenues from the Europe, Middle East and Africa (EMEA) region. It has a robust portfolio in this region which includes 350 products and 340 products in the UK and Italy, respectively, as of May 24, 2012.
Meanwhile, Mylan received clearance from Health Canada for its generic version of Actelion Pharmaceuticals Ltd.’s (ALIOF) Tracleer (bosentan).
Tracleer is indicated for the treatment of pulmonary arterial hypertension (PAH). According to IMS Health, Tracleer generated Canadian revenues of approximately $37.8 million for the 12 months ending March 31, 2012.
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 the 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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