We are pleased to hear that Mylan (MYL) has begun to market the generic version of BenzaClin (1% Clindamycin and 5% Benzoyl Peroxide Gel) for acne treatment, which was originally manufactured by Sanofi-Aventis (SNY). The drug has been developed under an agreement between its subsidiary, Mylan Pharmaceuticals and Dow Pharmaceutical Sciences, a subsidiary of Valeant Pharmaceuticals International.

Earlier this month, Dow received the US Food and Drug Administration (FDA) approval for the generic drug. Although the approval is good news for the company, we do not expect it to contribute significantly to the top line since BenzaClin had total U.S. sales of about $221 million for the 12 months ending June 30 (as per IMS data).

This is the third approval for Mylan in the month of August. A few days back, Mylan’s subsidiary Matrix Laboratories received tentative approval from the FDA under the President’s Emergency Plan for AIDS Relief (PEPFAR) for launching the generic version of Gilead Sciences’ (GILD) Atripla meant for HIV treatment. This means Matrix’ product meets all the agency’s standards related to manufacturing quality, safety and efficacy. Although Matrix will not be able to market the product in the U.S. due to Gilead’s existing patents, the drug can be sold in many developing countries. Atripla is one of the best selling HIV drugs, which recorded $1.6 billion sales in 2008.

Apart from this, Mylan also received the FDA approval earlier this month for the generic version of GlaxoSmithKline‘s (GSK) migraine treatment drug Imitrex, which recorded ₤687 million (about $1120 million) sales in 2008.

Mylan is now the third-largest generic company in the world after the acquisition of Merck Generics and Matrix Labs. We expect the Merck Generics acquisition to contribute significantly to Mylan’s long-term growth and help the company expand its footprints in non-U.S. markets. We believe with the recent product approvals, Mylan will be able to maintain its top-line growth. In fact, after posting strong second quarter results, the company raised its full-year revenues and earnings guidance. We have a Neutral recommendation on the stock.

Read the full analyst report on “MYL”
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Read the full analyst report on “GILD”
Read the full analyst report on “GSK”
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