Mylan (MYL) is No Generic When it Comes to Growth Potential - Barron's
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Mylan (Nasdaq: MYL) shares are turning higher Friday amid a bullish article from Barron's highlighting the growth potential in both the U.S. and emerging markets.
According to Barron's, Mylan is currently a show-me story on Wall Street which should easily be able to overcome all the Negative Nancie's.
Mylan is going for 9.7 times earnings, a 14 percent discount to its peers and 28 percent discount to the S&P 500 index.
Additionally, recent moves to improve cost controls, new product offerings, expansion of its small specialty-drug business, and increasing demand for generic drugs will all lead to potential upside for Mylan.
In late February, Mylan revealed its plans to achieve EPS of $6 per share by 2018, considerable growth from $2.04 reported in its fiscal 2011 period. And Mylan isn't resting on its laurels to get there. In 2012, the pharma plans to release 650 new products globally, following by an additional 500 more in 2013. Barron's said the launches next year should give Mylan about $1 billion in additional revs, which will bolster its efforts to get to $7.5 billion, up from $6.1 billion in 2011.
For 2013, Mylan is forecasting EPS of $2.75, compared with $2.66 expected on the Street.
Currently, Mylan is the third-largest generic drug maker in the world, just behind Teva Pharma (Nasdaq: TEVA) and Novartis' (NYSE: NVS) Sandoz. That means there's opportunity to steal market share from larger rivals which have also benefited following the expiration of many U.S. branded-drug patents.
About 91 percent of Mylan's overall revs come from generics, with the other 9 percent from branded specialty drugs. That's an important segment for Mylan and one Citi analyst sees the unit growing it's top-line by 31 percent to $750 million in 2012 led by sales of its EpiPen. EpiPen is a pre-filled syringe used to treat life-threatening allergic reactions caused by insect bites, foods, medications, latex, and other causes.
How big is the market for EpiPen? Barron's noted only 7 percent of 28 million patients with anaphylaxis risk carry the item, despite federal regulations that patients carry two of the syringes around with them at all times.
Aside from the EpiPen, Mylan still thrives on generics. Mylan currently has about 170 patents awaiting approval by the U.S. FDA for generics and Barron's sees markets like AIDS medications and biotech drugs as two huge markets.
With all the good, where's the bad? Barron's pointed to Europe for some strong headwinds. Additionally, Sanofi Aventis (NYSE: SNY) is fixing to launch a rival to the EpiPen and Mylan is still facing Copaxone litigation against Teva with its partner, Momenta Pharma (Nasdaq: MNTA).
Mylan's CEO Heather Bresch, however, said the company doesn't even need Copaxone to meet its financial goals. Investors are hoping she's right and with shares trading flat following its recent quarterly report, the support seems to be behind her.
Shares of Mylan are 1.6 percent lower Friday.
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According to Barron's, Mylan is currently a show-me story on Wall Street which should easily be able to overcome all the Negative Nancie's.
Mylan is going for 9.7 times earnings, a 14 percent discount to its peers and 28 percent discount to the S&P 500 index.
Additionally, recent moves to improve cost controls, new product offerings, expansion of its small specialty-drug business, and increasing demand for generic drugs will all lead to potential upside for Mylan.
In late February, Mylan revealed its plans to achieve EPS of $6 per share by 2018, considerable growth from $2.04 reported in its fiscal 2011 period. And Mylan isn't resting on its laurels to get there. In 2012, the pharma plans to release 650 new products globally, following by an additional 500 more in 2013. Barron's said the launches next year should give Mylan about $1 billion in additional revs, which will bolster its efforts to get to $7.5 billion, up from $6.1 billion in 2011.
For 2013, Mylan is forecasting EPS of $2.75, compared with $2.66 expected on the Street.
Currently, Mylan is the third-largest generic drug maker in the world, just behind Teva Pharma (Nasdaq: TEVA) and Novartis' (NYSE: NVS) Sandoz. That means there's opportunity to steal market share from larger rivals which have also benefited following the expiration of many U.S. branded-drug patents.
About 91 percent of Mylan's overall revs come from generics, with the other 9 percent from branded specialty drugs. That's an important segment for Mylan and one Citi analyst sees the unit growing it's top-line by 31 percent to $750 million in 2012 led by sales of its EpiPen. EpiPen is a pre-filled syringe used to treat life-threatening allergic reactions caused by insect bites, foods, medications, latex, and other causes.
How big is the market for EpiPen? Barron's noted only 7 percent of 28 million patients with anaphylaxis risk carry the item, despite federal regulations that patients carry two of the syringes around with them at all times.
Aside from the EpiPen, Mylan still thrives on generics. Mylan currently has about 170 patents awaiting approval by the U.S. FDA for generics and Barron's sees markets like AIDS medications and biotech drugs as two huge markets.
With all the good, where's the bad? Barron's pointed to Europe for some strong headwinds. Additionally, Sanofi Aventis (NYSE: SNY) is fixing to launch a rival to the EpiPen and Mylan is still facing Copaxone litigation against Teva with its partner, Momenta Pharma (Nasdaq: MNTA).
Mylan's CEO Heather Bresch, however, said the company doesn't even need Copaxone to meet its financial goals. Investors are hoping she's right and with shares trading flat following its recent quarterly report, the support seems to be behind her.
Shares of Mylan are 1.6 percent lower Friday.
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