Mylan Inc. (MYL) recently obtained exclusive US rights for the distribution of plastic surgery and burn treatment products of Humeca. Humeca is a Netherlands-based company manufacturing products that repair skin defects.
Humeca’s modified MEEK micro grafting system is an extremely effective technique for skin transplantation compared to the commonly-used mesh graft technique. It is particularly used for treating patients with large burns for whom donor tissue is not easily available.
Humeca’s products will be distributed by Mylan’s subsidiary UDL Laboratories which is a part of the Mylan Institutional Business. UDL already possesses a portfolio of advanced wound and burn care products. The addition of Humeca’s products to Mylan’s portfolio will boost growth in this sector.
Mylan Institutional was formed by the combination of Bioniche Pharma Holdings Ltd. (acquired by Mylan in September 2010) and UDL Laboratories. Its product portfolio includes the specialty injectables of Bioniche Pharma and the unit dose capabilities of UDL Laboratories. Mylan Institutional is a part of the company’s North American Generics segment.
Mylan is one of the leading players in the US generics market with its Generics business consistently performing well. We believe this business will continue its growth trajectory on the back of a robust generic pipeline.
Mylan has over 1,500 products filed around the globe with the company expecting to launch 500 products globally in 2011. Mylan expects to launch 90 new products in North America, including 15 limited competition products of which 3 have already been launched with 180 days of exclusivity. These are generic versions of Pfizer’s (PFE) Vfend, Shionogi Pharma’s Sular and Bayer’s (BAYRY) Precose.
Key upcoming date-certain launches in the US include generic versions of Novartis’ (NVS) Femara (second quarter of 2011), Pfizer’s Effexor ER (June 2011) and Caduet (November 2011). We believe these drugs will augur well for Mylan’s revenues going forward.
Our Recommendation
We currently have a Neutral recommendation on Mylan, which is supported by a Zacks #3 Rank (short-term Hold rating). Mylan is one of the leading players in the US generics market. The company holds immense potential as many blockbuster drugs are slated to lose patent exclusivity in the forthcoming period. We are encouraged by the detailed pipeline disclosure provided by the company. However, we remain concerned about the lack of growth in the European generics business. We maintain our Neutral stance until we get better visibility on top-line growth prospects in Europe.
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