Mylan (MYL): Cutting PT But EpiPen Drama Is Fully Discounted - Leerink
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Leerink Partners analyst, Jason Gerberry, reiterated his Outperform rating on shares of Mylan (NASDAQ: MYL) but cut his price target to $45.00 from $55.00 after reducing EpiPen estimates. He cut EpiPen sales forecasts by 33-45% (2017-21E) following recent company updates including MYL's planned launch of an authorized generic (AG) later this year.
EpiPen AG will be sold at ~33% lower net price vs. the brand and the analyst believes the threat of a generic is more realistic starting in 2018. His updated forecast calls for out-year (2018E-21E) sales in the $400-725m range, which assumes some value retention through the EpiPen follow-on product. Regarding EpiPen rebates to Medicaid, the analyst believes MYL has complied with the "letter of the law" but investors should factor a future settlement which he sees as preferential to a lingering government probe.
However, the analyst went on to say that he believes cash flows (ex. EpiPen) are sufficient to justify the current price leading him to maintain his Outperform rating.
Shares of Mylan closed at $38.47 yesterday.
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